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HomeMy WebLinkAbout8852RESOLUTION NO. 8852 A RESOLUTION APPROVING AN EXTENSION AGREEMENT BETWEEN THE CITY OF PUEBLO AND HYD -MECH PUEBLO, INC. RELATING TO REPAYMENT OBLIGATION BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, that: SECTION 1 The Extension Agreement dated as of June 1, 1999 between the City of Pueblo and Hyd- Mech Pueblo, Inc. relating to the extension of its repayment obligation, a copy of which is attached hereto, 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: City rk INTRODUCED: November 22, 1999 By Rich Golenda Councilperson AP M� Pr ident of the City Council NOVEMBER 22, 1999 - CITY COUNCIL BACKGROUND MEMORANDUM - RESOLUTION APPROVING AN EXTENSION AGREEMENT BETWEEN THE CITY AND HYD -MECH PUEBLO, INC. The attached Resolution approves an Extension Agreement dated as of June 1, 1999 between the City of Pueblo and Hyd -Mech Pueblo, Inc. (the "Company ") suspending Quarterly Payment for the period from May 1, 1999 to April 30, 2000 and extending its Repayment Period to October 31, 2005. The Company committed to employ 80 full -time employees but because of industry -wide machine tool business, it has been unable to meet its employment commitment and is currently employing 32 full -time employees. The Company's Repayment Obligation is secured by a deed of trust on its building. EXTENSION AGREEMENT THIS EXTENSION AGREEMENT entered into as of June 1, 1999 between the City of Pueblo, a municipal corporation (the "City "), Hyd -Mech Pueblo, Inc., a Colorado corporation and JRC, Limited Liability Company, a Colorado limited liability company (collectively herein the "Company "), WITNESSETH, WHEREAS, Company and City entered into an agreement dated December 12, 1994 and Addenda thereto dated as of April 17, 1995 and November 25, 1996 whereby City advanced funds to Company and Company agreed to repay the City funds if it did not meet its Employment Commitment thereunder (collectively the "Agreement "), and WHEREAS, Company has requested City to grant an extension with respect to Company's Quarterly Payments and Repayment Obligation under the Agreement, and WHEREAS, City is willing to grant such extension 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. The capitalized terms used herein shall have the same meaning as those terms are defined in the Agreement unless modified herein or the context otherwise requires. 2. As of May 1,1999 the balance of the Repayment Obligation is $502,844.19. Company acknowledges and agrees that (i) Company now owes and is indebted to City in the sum of $502,844.19 (the "Repayment Obligation "), and (ii) the performance of the Agreement and this Extension Agreement and the payment of the Repayment Obligation and Company's Quarterly Payments are secured by the Deed of Trust recorded in Book 2778, Page 218, Instrument No. 10657510 of the records of the Pueblo County Clerk and Recorder. 3. Notwithstanding anything to the contrary in the Agreement, the Agreement is hereby modified and amended as follows: (a) Company's Quarterly Payments accruing during the period from May 1, 1999 to April 30, 2000 shall be suspended, and the Repayment Period shall be extended to October 31, 2005. (b) During the balance of the Repayment Period as extended by (a) above, i.e., starting May 1, 2000 and ending October 31, 2005, Company shall pay to City an amount each Quarter equal to the Quarterly Employees less than eighty (80) employed at the Property by Company multiplied by $285.72 (the "Company's Quarterly Payment "). (c) Company further stipulates and agrees that if Company defaults in its Repayment Obligation or fails to pay any of Company's Quarterly Payments after May 1, 2000, and such default is not corrected within thirty (30) days after written notice specifying the default is given by City to Company, City may declare the entire balance of the Repayment Obligation due and owing together with interest thereon at the rate of ten percent (10 %) per year (the "Acceleration "). For such purpose, the "entire balance of Company's Repayment Obligation" shall be an amount equal to 80 times $285.72 multiplied by the remaining Quarters of the Repayment Period plus the amount of any unpaid Company's Quarterly Payments. Company's Repayment Obligation is absolute and unconditional and shall not be abated, reduced, diminished, modified, withheld or otherwise offset for any cause or reason whatsoever. The rights and remedies of the City under this Extension Agreement, Agreement, and Deed of Trust shall be cumulative. (d) The option to purchase granted to Company by paragraph 9(a) of the Agreement and the right of first refusal granted to Company by paragraph 9(b) of the Agreement are hereby terminated and canceled. 4. Company waives any and all applicable period of limitations, statutory or otherwise, and laches, and agrees not to assert any defense based thereon in 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 Company's Repayment Obligation and /or Quarterly Payments, provided any such action or proceeding shall be instituted on or before December 31, 2007. 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, 310 Keeler Parkway, Pueblo, Colorado, 81001, 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. 8. The persons signing this Extension 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 Extension Agreement and that this Extension Agreement, Agreement, and Deed of -2- Trust are valid and legally binding obligations of Company enforceable against the Company in accordance with their terms. 9. The Agreement 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, 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 ab ve written. [SEAL] PUE A MUNI IP L CORPORATION Attest: By � City _ �rk Pr sident of the City Council [SEAL] HYD -MECH PUEBLO, INC. a Colorad Cor orat' n Attest: By Secretary Vice Preside t JRC, LIMITED LIABILITY COMPANY By Mari ger -3- e -MECH BUS: (719) 948 -2032 FAX: (719) 948 -0197 November 1, 1999 Mr. Thomas E. Jagger City Attorney City of Pueblo 127 Thatcher Building Pueblo, Colorado 81003 Dear Tom: PUEBLO, INC. 310 KEELER PARKWAY PUEBLO, CO 81001 In response to your letter dated September 28, 1999 to David B. Shaw, the following information is submitted: Hyd -Mech Pueblo currently employs 32 people on a full time basis. The reason we asked for the extension is that the machine tool industry has been down over 40 percent year over year for the past year. Consequently, our sales have been dramatically down. We feel, however, that the market will improve in the next year and that sales will pick up. In the mean time, having to make the required payment this year would put a severe strain on our cash flow. We hope to continue to employ all of the people we have now and to grow in the near future. If we were granted the extension, we would be able to put the money back into the business and be in a much healthier position next year. I feel confident that we will add employees in the next year. If you should have any questions, please contact me. Thank you. Very truly yours, Rolf F. derson Vice Pr sident and General Manager NOV � 1999 D City of Pueblo OFFICE OF THE CITY ATTORNEY 127 Thatcher Building PUEBLO, COLORADO 81003 MEMORANDUM TO: Gina Dutcher, City Clerk FROM: City Attorney 2 RE: Hyd -Mech Pueblo, Inc. DATE: November 5, 1999 CITY CLERK "S �4� OFFICE Nov 0 8 1999 puaa co l N Enclosed please find original and 19 copies of Resolution with attachments regarding approval of Hyd -Mech of Pueblo, Inc.'s Extension Agreement. Also enclosed are two execution copies of the Extension Agreement dated June 1, 1999 between the City and Hyd -Mech. Once the Resolution has passed and City officials execute the Extension Agreement, please forward one copy to Rolf F. Anderson, Vice President and General Manager, Hyd -Mech Pueblo, Inc., 310 Keeler Parkway, Pueblo, Colorado, 8 100 1, keeping the other copy on file in your office. Thomas E. /JP Enclosures