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
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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
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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
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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
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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,
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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
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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
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