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HomeMy WebLinkAbout8253RESOLUTION NO. 8253 A RESOLUTION APPROVING AN AGREEMENT BETWEEN PUEBLO, A MUNICIPAL CORPORATION, PUEBLO DEVELOP- MENT FOUNDATION AND MATRIXX MARKETING, INC., APPROVING AND AUTHORIZING THE CANCELLATION OF PUEBLO DEVELOPMENT FOUNDATION'S PROMISSORY NOTE PAYABLE TO PUEBLO, A MUNICIPAL CORPORATION AND RELEASE OF THE DEED OF TRUST SECURING PAYMENT THEREOF, AUTHORIZING THE TRANSFER OF FUNDS FROM THE 1992 -2001 SALES AND USE TAX CAPITAL IMPROVEMENT PROJECTS FUND TO THE CAPITAL IMPROVEMENT FUND, AND AUTHORIZING THE PRESI- DENT OF THE CITY COUNCIL TO EXECUTE SAME WHEREAS, the City acquired and then transferred title to the herein described real property ( "Property ") to Pueblo Development Foundation ( "PDF ") for lease to WATS Marketing of America, Inc. ( "WATS "), and WHEREAS, PDF entered into a lease of the Property with WATS; and WHEREAS, MATRIXX Marketing, Inc. ( "Matrixx "), the successor in interest to WATS now conducts and operates a business on the Property and has committed to employ at the Property for a period of five years 210 full -time employees in addition to the 677 full -time employees employed December 31, 1995 for a total of 887 full -time employees, and 90 part-time employees in addition to the 530 part-time employees employed at the Property for a total of 620 part-time employees ( "Employment Commitment "); and WHEREAS, in return for the Employment Commitment PDF has agreed to convey title to the Property to Matrixx and the City has committed to cancel PDF's Promissory Note payable to the City in the original principal amount of $548,546.54 now reduced to $356,879.95 and to release City's deed of trust lien on the Property securing payment of PDF's Promissory Note, in effect transferring the Property to Matrixx free and clear of City's lien in consideration of Matrixx's Employment Commitment; and WHEREAS, the Property is described as follows: Lots 1 to 11, inclusive, and Lots 14 to 26, inclusive, Block 54, Town of Bessemer, an addition to the City of Pueblo, together with all vacated alleys in said Block 54 lying between and adjoining Lots 1 to 11, inclusive, and lots 16 to 26, inclusive, Pueblo County, Colorado; street address: 1228 East Orman Avenue, Pueblo, Colorado; and WHEREAS, the above described transaction constitutes a job creating capital improvement project for which funds from the 1992 -2001 Sales and Use Tax Capital Improvement Projects Fund maybe used. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, COLORADO, that: SECTION 1 The Agreement entered into as of December 31, 1995 between the City, PDF and MATRIXX, a copy of which is 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 in the name of the City and the City Clerk is directed and authorized to affix the seal of the City thereto and attest same. SECTION 2 PDF's Promissory Note dated June 22, 1989 payable to the City in the principal sum of $548,546.54 ( "Promissory Note ") is hereby canceled and discharged, and the President of the City Council is authorized to execute and deliver to the Public Trustee of the County of Pueblo, Colorado a request for a release of PDF's Deed of Trust dated June 22, 1989 recorded in Book 2458, Page 664 of the Pueblo County records ( "Deed of Trust "). SECTION 3 The President of the City Council and other officers and officials of the City are authorized to execute and deliver all documents required to cancel and discharge the Promissory Note and release the Deed of Trust and to complete and consummate the transactions contemplated by and described in the Agreement. SECTION 4 The sum of $356,879.95 is hereby authorized to be transferred from the 1992 -2001 Sales and -2- Use Tax Capital Improvement Projects Fund to the City's Capital Improvement Fund. SECTION 5 This Resolution shall become effective upon final passage. ATTEST: City Clerk INTRODUCED: October 27, 1997 By saTmlpl cor�PiZinn Councilperson APPROVED: President the Ci y Council -3- AGREEMENT THIS AGREEMENT entered into as of December 31, 1995 between Pueblo Development Foundation, a Colorado nonprofit corporation (the "PDF "), Pueblo, a municipal corporation (the "City ") and MATRIXX Marketing Inc., an Ohio corporation (the "Company "). WHEREAS, Company has expressed a willingness to expand its business within the City of Pueblo, and in furtherance thereof has through the Pueblo Economic Development Corporation made application for transfer of property with the City and PDF, and WHEREAS, PDF is the owner of the property sought to be transferred to Company subject to a deed of trust for the benefit of the City, and WHEREAS, PDF is willing to transfer the property to Company and City is willing to release and discharge its said deed of trust upon the terms and conditions of this Agreement; NOW, THEREFORE, in consideration of the foregoing and mutual covenants contained herein, City, PDF and Company agree as follows: 1. The following terms as used in this Agreement shall have the following meaning unless the context clearly indicates otherwise: "City's Deed of Trust" means the Deed of Trust recorded August 28, 1989 in Book 2458 Page 664 of the records of the Pueblo County Clerk and Recorder securing payment of PDF's June 22, 1989 promissory note payable to City in the original principal sum of $584,546.54. "Property" means the real property described in the attached Exhibit "A" and all improvements thereon. "Full -Time Employee" means a person who performs work at the Property for not less than thirty (30) 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 nor persons performing work for less than thirty (30) hours per week (the "part -time employees "). "Quarterly Employees" means the sum of the number of Full -Time Employees employed at the Property by Company on each business day of a Quarter divided by the sum of the business days in such Quarter. "Quarter" means three consecutive calendar months. 2. PDF will transfer the Property to Company and City will release and discharge City's Deed of Trust, subject to and contingent upon: (a) The Property will be conveyed by PDF to Company by Quit Claim Deed, "AS IS ", "WHERE IS ", without any warranties, and subject to all taxes, liens, leases, condi- tions, restrictions, reservations, easements and encumbrances whether recorded or otherwise applicable to the Property, except City's Deed of Trust. Notwithstanding the foregoing, PDF will furnish Company with whatever records, title information and surveys which PDF may have. (b) Company assumes the risk of all claims, costs, liabilities, expenses (including without limitation, court costs and attorney fees), or demands of whatsoever nature or source for (i) any condition, defect, environmental problems or Hazardous Substances (as defined below), latent or obvious, now existing or hereafter discovered in, on, under or within the Property and (ii) the Property's non - compliance with any Environmental Laws (as defined below). (c) "Environmental Laws" as used herein will mean any local, state or federal law, rule, regulation, ordinance pertaining to environmental regulation, contamination or clean -up, including without limitation, "CERLCA ", "RCRA ", or state superlien or environmental clean -up statutes. As used herein, "Hazardous Substances" shall mean and include all hazardous and toxic substances, wastes or materials, any pollutants or contaminants, or other similar substances, or material which are included under or regulated by Environmental Laws. (d) Neither City nor PDF will furnish Title Insurance nor an Abstract of Title to the Property. (e) Closing shall take place on December 5, 1997 in Pueblo, Colorado at Transnation Title Insurance Co. at such time as City may designate. If Closing does not take place on the date above specified or such other date as the parties shall mutually agree in writing, this Agreement shall terminate and each party shall be released from all obligations hereunder. (f) At Closing: (i) PDF will deliver its executed Quit Claim Deed in recordable form conveying title to the Property to Company in form and content approved by Company's legal counsel, and certified copy of the resolution of its board of directors approving this Agreement and conveyance of the Property to Company and authorizing its officers to execute and deliver this Agreement and Quit Claim Deed in the name of PDF. (ii) City will deliver the original of City's Deed of Trust and PDF's June 28, 1989 Promissory Note secured thereby together with a Request For Release of Deed of Trust executed by its appropriate officer, and certified copy of the Resolution of City Council of City approving this Agreement and authorizing the release and discharge of City's Deed of Trust. (iii) PDF and /or the City will also deliver a Title Affidavit in a form typically required by Company's title insurance company, (iv) Company will deliver its executed first Deed of Trust on the Property in recordable form securing performance of all covenants and provisions of this Agreement on Company's part to be performed in form and content approved by City's legal counsel, Company's certificate of authority to transact business in the state of Colorado, and certified 2 copy of the resolution of its board of directors approving this Agreement and authorizing its officers to execute and deliver this Agreement and Deed of Trust in the name of Company. (v) Each party shall pay one third of Closing fees. (vi) Since Company is in possession of the Property under the Lease (as defined below) requiring Company to pay all taxes and utilities, taxes and utilities will not be prorated. (g) In the event Company shall for any reason within five (5) years after Closing either (i) not conduct business in, on or within the Property for a period of sixty (60) consecutive days or one hundred - twenty (120) days in any consecutive twelve (12) month period, or (ii) close its facilities at the Property, Company shall, at its option, either (iii) convey title to and possession of the Property to City by special warranty deed free of liens and encumbrances except those existing at Closing, or (iv) pay to the City the sum of $650,000. Company shall deliver to City either (vi) the special warranty deed duly executed and acknowledged in form and content reasonably satisfactory to City's legal counsel or (vii) the sum of $650,000 within thirty (30) days after notice from City of the occurrence of either event (i) or (ii) above, and upon receipt thereof by City, Company's Repayment Obligation under paragraph 4 of this Agreement shall terminate. (h) All parties stipulate and agree that for purposes of this Agreement the market value of the Property is $650,000. 3. 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 iobs. Therefore, Company represents and commits that it will employ at the Property for a period of five years from the Closing two hundred ten (210) Full -Time Emplo ;Tees in addition to the six hundred seventy -seven (677) Full -Time Employees currently employed at the Property for the Total of eight hundred eighty -seven (887) Full Time Employees and ninety (90) Part-Time Employees in addition to the five hundred thirty (530) Part -Time Employees employed at the Property for the Total of six hundred twenty (620) Par- Time Employees (the "Employment Commitment "). 4. Notwithstanding anything contained herein to the contrary, if Company shall for any reason default in its Employment Commitment set forth in paragraph 3 hereof, Company shall repay to City a pro -rata share of the market value of the Property based upon the number of Full -Time Employees employed by Company at the Property (the "Repayment Obligation "), as follows: (a) During the fifty -four (54) month period starting on the earlier of (i) the end of the calendar month in which Company employs 887 Full -Time Employees at the Property or (ii) six (6) months after Closing and ending fifty -four (54) months thereafter (the "Repayment Period ") Company shall pay to City an amount each Quarter during the Repayment Period equal to the Quarterly Employees less than 887 multiplied by $171.96 (the "Company's Quarterly Payments "). For example, if for the Quarter ending June 1999 the Quarterly Employees is 700, the amount payable by Company to City on or before July 15, 1999 would be (887 - 700) x $171.96 = $32,156.52. (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 Director of Finance of City, 1 City Hall Place, Pueblo, Colorado, 81003. Timely Quarterly Payments shall not bear interest. All past due Company's Quarterly Payments shall bear interest at the rate of ten (10) percent per annum until paid. (c) Company shall notify City in writing that it is employing 887 Full -Time Employees within fifteen (15) days after the calendar month in which Company employs 887 Full -Time Employees at the Property. 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 statement showing the Quarterly Employees for the preceding Quarter and the basis upon which Quarterly Employees and Company's Quarterly Payment, if any, were computed certified by an officer of the Company to be true and correct. For purposes of verifying such employment, the Company shall provide the City with copies of Company's quarterly payroll statement. City will, however, respect the right of employees as to confidentiality of personnel records. (d) The Repayment Obligation under this Agreement shall be and is hereby deemed to be a debt of Company payable to City until Company performs and discharges its obligations hereunder including, without limitation, its Repayment Obligation contained in this paragraph 4 and its obligation under paragraph 2(g) above, and the performance and payment of such obligation shall be secured by a first deed of trust on the Property. 5. (a) City Council of City may, in its sole discretion, extend the date on which the Repayment Period begins or relieve Company, in whole or in part, from Company's Repayment Obligation set forth in paragraph 4, 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 ccntrol. The findings and decision of the City Council solely with respect to the matters set forth in this paragraph 5(a) shall be final and binding upon Company and City. (b) Prior to instituting any proceedings to enforce Company's Repayment Obligation under paragraph 4, City shall notify Company in writing of its intention to institute such proceedings. If Company desires to seek relief pursuant to paragraph 5(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 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 any relief under this paragraph 5 or 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 2 of that right. 6. Any breach or violation of any term or provision of this Agreement other than the payment of money may be restrained or enforced by injunction without the showing of any special damages or other adequate remedy at law. 7. In the event of any litigation arising out of this Agreement, the court shall award to the prevailing parry 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. 8. 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 PDF, City and Company. 9. This Agreement shall be construed in accordance with and governed by the laws of the State of Colorado. 10. 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; (b) if to the Company, 2121 North 117th Avenue, Omaha, Nebraska, 68165; with a copy to 201 East Fourth Street, Cincinnati, Ohio 45202 Attention: Legal Counsel, or (c) if to PDF, Post Office Box 1663, Pueblo, Colorado, 81002, or to such other address as either party shall specify in written notice given to the other parry. 11. 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 without the written approval of the City. Any assignment or attempted assignment of this Agreement by Company without the written approval of the City shall be null and void. Notwithstanding anything to the contrary in this Agreement, Company may, upon written notice to, but without the consent of, the City or PDF, assign this Agreement to: (i) an affiliate of Company, (ii) any entity controlling, controlled by, or under common control with Company, or (iii) a successor to all or substantially all the assets of Company, assuming and agreeing to perform the obligations of Company under this Agreement. No such assignment shall release or discharge Company from its obligations under this Agreement. 12. Brokers. All parties represents to the other parties that no real estate broker, consultant, finder or like agent has any interest in this transaction. All parties indemnify and hold the other parties harmless from and against all claims, losses, liabilities and expenses, 5 including reasonable attorney's fees, arising out of any claim by any broker, consultant, finder or like agent with whom the indemnifying party has dealt or negotiated. 13. Representations and Warranties. PDF and City represent and warrant to Company that PDF and City have full power and authority to perform and comply with the terms of this Agreement and neither the execution and delivery of this Agreement nor its performance will conflict with or result in the breach of any contract or agreement to which either PDF or City is a party or by which either PDF or City is bound. 14. The persons signing this Agreement on behalf of Company represent and warrant that such persons 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 it is terms. Company represents and warrants to PDF and City that Company is successor by way of merger to WATS Marketing of America, Inc., tenant under that certain Lease dated July 3, 1989 with PDF, as landlord, a short form of which was recorded September 19, 1989 in Book 2461, Page 347 of the records of Pueblo County, Colorado (the "Lease "). At the Closing, the Lease shall terminate and the parties shall be released from all obligations under the Lease except the tenant's obligation for indemnification under Article 7 of the Lease, but including Company's liability for accrued rent under the Lease. 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] PUEBLO, A MUNICIPAL CORPORATION ATTEST: By City ^ k r [SEAL] Preside of thetity Council PUEBLO DEVELOPMENT FOUNDATION ATTE By Se etary [SEAL I, ATTEST --� ecretary 0373324.05 President MATRIXX MARKETING, INC. By C/ Pre s' and Chief Executive Officer 31 EXHIBIT A (Legal Description) Lots 1 to 11, inclusive, and Lots 14 to 26, inclusive, Block 54, Town of Bessemer an Addition to the City of Pueblo, together with all vacated alleys in said Block 54 lying between and adjoining Lots 1 to 11, inclusive and Lots 16 to 26, inclusive, Pueblo County, Colorado. Street Address: 1228 East Orman Avenue, Pueblo, Colorado. 0373324.05 7