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HomeMy WebLinkAbout09110RESOLUTION NO. 9110 A RESOLUTION APPROVING A MODIFICATION AGREE- MENT BETWEEN PUEBLO, A MUNICIPAL CORPORATION AND JONES TONES, INC. AND AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO EXECUTE SAME BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, that: SECTION 1 The Modification Agreement dated September 11, 2000 between Pueblo, a municipal corporation and Jones Tones, Inc. relating to a job creating capital improvement project at the Pueblo Memorial Airport Industrial Park, 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 Modification 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: September 11, 2000 Al Gurule Councilperson APP VED: President of the City Council MODIFICATION AGREEMENT THIS MODIFICATION AGREEMENT entered into as of September 11, 2000 between Jones Tones, Inc., a California corporation (herein "Company ") and Pueblo, a municipal corporation (herein "City "), WITNESSETH: RECITALS A. Company and City entered into an Agreement dated as of August 28, 1995 with respect to a job creating capital improvement project at Pueblo Memorial Airport Industrial Park (the "1995 Agreement "). B. City has advanced to or for the benefit of Company the sum of $500,000.00 (the "City Funds ") pursuant to the provisions of paragraph 3 of the Agreement and Company acknowledges receipt of City Funds. C. Company has experienced difficulties in meeting its Employment Commitment as defined in paragraph 4 of the 1995 Agreement and has requested City to modify the 1995 Agreement and Company's Repayment Obligation as defined in paragraph 5 of the 1995 Agreement. D. City is willing to modify the 1995 Agreement upon the terms and conditions set forth herein. AGREEMENT NOW, THEREFORE, in consideration of the foregoing Recitals and mutual covenants contained herein, Company and City agree as follows: 1. Paragraph 4 of the 1995 Agreement is amended to read as follows: 4. Company acknowledges and agrees that the primary purpose of City entering into this Agreement and the sole benefit to the City for making City Funds available to Company hereunder is the creation of jobs. Therefore, Company represents, covenants and agrees that it will employ not less than the number of Full -Time Employees at the Property during each Quarter set forth in the following schedule (the "Employment Commitment "): Quarters During Number of The Following Years Quarterly Employees 2000 (Third and Fourth Quarters) 50 2001 (Four Quarters) 55 2002 (Four Quarters) 55 2003 (Four Quarters) 60 2004 (Four Quarters) 65 2005 (Four Quarters) 70 2006 (First and Second Quarters) 75 2. Paragraph 5 of the 1995 Agreement is amended to read as follows: 5. Notwithstanding anything contained herein to the contrary, if Company shall for any reason default in its Employment Commitment set forth in paragraph 4 hereof, Company shall repay to City a pro -rata share of the $500,000.00 City Funds advanced to Company under paragraph 3 hereof based upon the number of Full -Time Employees employed by Company at the Property (the "Repayment Obligation ") as follows: (a) During the six (6) year period starting July 1, 2000 and ending June 31, 2006 (the "Repayment Period ") Company shall pay to City an amount each Quarter equal to the Quarterly Employees employed by Company at the Property less than the number of Quarterly Employees set forth in the schedule contained in paragraph 4 above multiplied by Three Hundred Fifty and No /100 Dollars ($350.00) (the "Company's Quarterly Payments "). For example, if for the first Quarter of 2002 the number of Quarterly Employees is 50, the amount payable by Company to City on or before the 15th day of the next calendar month would be $1,750.00 (55 - 50 x $350.00 = $1,750.00). (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 the Director of Finance of City, 1 City Hall Place, Pueblo, Colorado, 81003. All past due Company's Quarterly Payments shall bear interest at the rate of ten (10) percent per annum until paid. (c) 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 statements 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, City shall have access to Company's payroll records relating to Company's employment at the Facility. City will, however, respect the right of employees and Company as to confidentiality of personnel records. (d) If Company defaults in its Repayment Obligation, or any other provision of this Agreement, and such default is not cured within sixty (60) days after written notice specifying the default is given by City to Company, then in such event, City may declare the entire balance of Company's Repayment Obligation due and owing together with interest thereon at the rate of ten (10) percent per annum, and for such purpose, the entire balance of Company's Repayment Obligation shall be an amount equal to $350.00 times the number of Quarterly Employees set forth in the schedule contained in paragraph 4 above for each remaining Quarter of the Repayment Period plus the amount of Company's unpaid Quarterly Payments, if any, but in no event more than the $500,000.00 City Funds advanced by City under paragraph 3 hereof and interest as herein provided. Company's Repayment -2- Obligation is absolute and unconditional and shall not be abated, reduced, diminished, modified, withheld or otherwise offset for any cause or reason whatsoever. The $500.000 City Funds advanced to Company by City is and shall be deemed to be a debt of Company payable to City until Company performs and discharges its obligations hereunder including the Payment Obligation contained in this paragraph 5 and its repayment shall be secured by a perfected security interest in Company's equipment. Company shall provide all information and shall execute all documents and instruments required to grant to City a perfected security interest in Company's Equipment. 3. Paragraph 6 of the 1995 Agreement is amended to read as follows: 6. (a) Prior to instituting any proceeding to enforce Company's Repayment Obligation under paragraph 5, City shall notify Company in writing of its intention to institute such proceedings. Company may request relief from its Repayment Obligation by delivering to City within twenty (20) days after date of City's notice, Company's written request for relief specifying the grounds upon which such relief is sought together with documents supporting said grounds. Within ninety (90) days after receipt of Company's request, City will schedule a meeting with the City Council at which Company may appear. City will notify Company of the time and place of the meeting. Failure of Company to timely deliver its complete written request for relief or to appear at the scheduled meeting with the City Council shall entitle City to immediately institute proceedings to enforce Company's Repayment Obligation. (b) City Council may or may not, in its sole and absolute discretion, relieve Company, in whole or in part, from Company's Repayment Obligation. Any action taken by the City Council relating to a request for relief shall be final and binding on Company, and not subject to judicial review. Any such action by City Council is, and shall constitute, a legislative measure. Nothing contained in this paragraph 6 shall grant or be construed to grant to Company any right or claim to relief from its Repayment Obligation or hearing with respect thereto. (c) No delay by the City in scheduling a meeting, or failure by City to exercise its right to enforce this Agreement, including Company's Repayment Obligation, and no partial or single exercise of that right, shall constitute a waiver of that right. 4. Paragraph 8 of the 1995 Agreement granting Company options with respect to Lot 73, Pueblo Memorial Airport Industrial Park Subdivision is deleted and canceled in its entirety. 5. The 1995 Agreement as modified by this Modification Agreement shall remain in full force and effect binding upon and inuring to the benefit of the parties and their respective successors and assigns and may not be further amended except in writing signed by City and Company. -3- 6. The person signing this Modification Agreement on behalf of Company represents and warrants that such person and Company have the requisite power and authority to enter into, execute and deliver this Modification Agreement and that this Modification Agreement is a valid and legally binding obligation of Company enforceable against Company in accordance with its terms. Executed at Pueblo, Colorado, the day and year first above written. [SEAL] PUE , A MUNICI AL CORPORATION ATTES;': By City Yerk President of the City Council [SEAL] JONES TONES, INC. ATTEST: By Secretary resident F:\ CITY \AIRPORTVONETONE\MODIFCTN.WPD -`�