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Home My WebLink About8743RESOLUTION NO. 8743 A RESOLUTION APPROVING AN EXTENSION AGREEMENT BETWEEN PUEBLO, A MUNICIPAL CORPORATION AND IRON PHOENIX CORPORATION RELATING TO A JOB CREATING CAPITAL IMPROVEMENT PROJECT AND AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO EXECUTE SAME BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, that: SECTION 1 The Extension Agreement dated as of June 1, 1999 between Pueblo, a Municipal Corporation and Iron Phoenix Corporation relating to a job creating capital improvement project, a copy of which is attached hereto and incorporated herein, having been approved as to form by the City Attorney, is hereby approved. SECTION 2 The President of the City Council is authorized to execute and deliver the Extension Agreement in the name of the City and the City Clerk is directed to affix the seal of the City thereto and attest same. ATTEST. MCI 1 INTRODUCED: June 28 1999 By Al Guru 1 e Councilperson AP VED: + 1 President of the City Council JUNE 28, 1999 COUNCIL AGENDA CITY COUNCIL BACKGROUND MEMORANDUM The attached Resolution approves an Extension Agreement between the City and Iron Phoenix Corporation (the "Corporation "). The City, Wheelstar Corporation, and Corporation on October 11, 1994 entered into a job- creating capital improvement project agreement under which the City was to advance $400,000 to renovate buildings and property purchased from Rockwool Industries, Inc. ( "Property "). Company agreed to employ an additional 40 full -time employees. The City actually advanced $235,359 before the project, through no fault of Wheelstar Corporation, failed. According to Corporation, it has spent approximately $785,000 of its and Wheelstar's funds remodeling the Property. The City funds are secured by a deed of trust on the Property. Wheelstar Corporation has been dissolved and the Corporation is the owner of the Property. The Corporation has proposed to use City and its own funds to construct a public access road serving the Property and City's other adjacent real property and has requested additional time to finalize such proposal. The Extension Agreement grants a one -year extension to finalize its proposal without obligating City to accept same, and confirms the Corporation owes the City $235,359 plus interest at 8% from June 1, 2000 which is secured by the Deed of Trust. EXTENSION AGREEMENT This Extension Agreement entered into as of June 1, 1999 between the City of Pueblo, a municipal corporation (the "City "), and Iron Phoenix Corporation, a Colorado corporation (the "Company ") WITNESSETH, WHEREAS, Wheelstar Corporation (the "Wheelstar ") and City entered into an agreement dated October 11, 1994 whereby City advanced funds to Wheelstar and Wheelstar agreed to repay the City funds if it did not meet its Employment Commitment thereunder (the "Agreement "), and WHEREAS, Company assumed and agreed to perform the Agreement and make the payments under the Agreement and executed its deed of trust as security for such performance and payment which was recorded December 29, 1994 in Book 2776, Page 697 of the records of the Pueblo County Clerk and Recorder (the "Deed of Trust "), and WHEREAS, Wheelstar has been dissolved and is no longer a viable legal entity under the laws of the State of Colorado, and WHEREAS, Wheelstar and Company are in default under the Agreement and Deed of Trust and Company has requested City to defer filing any action or proceeding to enforce the Agreement and Deed of Trust, and WHEREAS, City is willing to defer filing any such action or proceeding subject to and upon the terms and conditions herein set forth, NOW THEREFOR, in consideration of the foregoing and mutual covenants contained herein, City and Company agree as follows: 1. City advanced to Wheelstar pursuant to the terms of the Agreement the sum of $235,359.00. Company acknowledges, stipulates and agrees that it is now indebted to and owes City the sum of $235,359.00 (the "Indebtedness "). 2. Company has made a preliminary proposal to City with respect to the repayment of the Indebtedness by applying same to the cost of constructing a public access road (the "Road ") serving Company's properties and properties of the City (the "Preliminary Proposal "). 3. Company has requested additional time to finalize the details of the Preliminary Proposal including a time table for and cost of constructing the Road. City agrees to defer any action or proceeding to enforce the Agreement and Deed of Trust and collect the Indebtedness for a reasonable period of time not to exceed one year from date of this Extension Agreement to June 1, 2000 in order to allow additional time for Company to finalize its Preliminary Proposal and for the City to either accept, modify or reject, in its sole discretion, the Preliminary Proposal as modified. 4. Notwithstanding anything contained herein to the contrary, Company further acknowledges, stipulates and agrees that: (a) the City has not by entering into this Extension Agreement or by any other acts or conduct, or statements made by City's officers, employees or agents (i) accepted or indicated that City will accept the Preliminary Proposal or any modification thereto, or (ii) in any manner waived, released or discharged Company from its obligations under the Agreement and Deed of Trust, including without limitation the payment of the Indebtedness. (b) the Indebtedness shall accrue interest at the rate of eight (8) percent per annum from June 1, 2000 until paid in full. (c) Company waives any and all applicable period of limitations, statutory of otherwise, laches, and all other defenses to any action or proceeding the City may take or institute to enforce this Extension Agreement, the Agreement and Deed of Trust and /or to collect the Indebtedness, provided any such action or proceeding shall be instituted on or before December 31, 2005. (d) Company waives any and all right to a notice and hearing set forth in paragraph 6 of the Agreement. (e) Company shall diligently finalize the Preliminary Proposal. 5. This Extension Agreement shall be construed in accordance with and governed by the laws of the State of Colorado. 6. 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, with copy to Thomas E. Jagger, City Attorney, 127 Thatcher Building, Pueblo, Colorado, 81003, or (b) if to the Company, 520 Van Buren St., Pueblo, Colorado, 81004 or to such other address as either party shall specify in written notice given to the other party. 7. Time is of the essence hereof. This Extension 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 Extension Agreement or any interest herein. Any assignment of this Extension Agreement by Company shall be null and void. -2- 8. The persons signing this Extension Agreement on behalf of Company represents and warrants that such persons and Company have the requisite power and authority to enter into, execute, and deliver this Extension Agreement and that this Extension Agreement, Agreement and Deed of Trust are a valid and legally binding obligation of Company enforceable against the Company in accordance with their terms. 9. The Agreement and Deed of Trust as modified by this Extension Agreement shall remain in full force and effect provided that in the event of any conflict between the provisions of this Extension Agreement and the Agreement and /or Deed of Trust, the provisions of this Extension Agreement shall control to the extent of such conflict. Executed at Pueblo, Colorado, the day and year first above written. [SEAL] ATTEST: City C k y4 Proms, -P R:) �o . ;e rt7 [SEAL] fit, , - f* ATTEST: Secretary PUE O A MUNIC L ORPORATION By l l l President of the City Council IRON PHOENIX CORPORATION, a Colorado Corporation By ( Q om. *I- President -3-