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HomeMy WebLinkAbout09404RESOLUTION NO. 9404 A RESOLUTION APPROVING A CONTRACT TO BUY AND SELL REAL ESTATE BETWEEN PUEBLO, A MUNICIPAL CORPORATION AND SANTA FE CROSSING, LLLP RELATING TO THE PROPERTY COMMONLY KNOWN AS 203 -227 NORTH SANTA FE, PUEBLO, COLORADO, AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO EXECUTE THE CONTRACT AND THE SPECIAL WARRANTY DEED CONVEY- ING TITLE TO THE PROPERTY TO SANTA FE CROSSING, LLLP WHEREAS, Pueblo, a Municipal Corporation ( "City ") is the owner of the property ( "Property") described in the attached Contract To Buy And Sell Real Estate dated September 24, 2001 ( "Contract "), and WHEREAS, the Santa Fe Crossings, LLLP ('Buyer ") desires to acquire the Property for rehabilitation and development for low and moderate income residential apartments and commercial uses ( "Project "), and WHEREAS, the City is willing to sell the Property to Buyer for the Project upon the terms and conditions contained in the Contract for a purchase price of $650,000 plus interest at seven (7) percent per annum evidenced by Buyer's Promissory Note payable out of excess cash flow from the Project as defined in the Promissory Note, and WHEREAS, the City Council hereby determines that the Property is surplus to the City's needs and it is in the best interest of the City and its residents that the Property be sold to the Buyer for the Project. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, that: SECTION 1 The Contract attached hereto, having been approved as to form by the City Attorney, is in all respects approved and confirmed, and the President of the City Council is authorized to execute and deliver the Contract in the name of the City. SECTION 2 The Promissory Note and Deed of Trust attached to the Contract are in all respects approved and confirmed. SECTION 3 The President of the City Council is authorized to execute and deliver a Special Warranty Deed in the name of the City conveying title to the Property to the Buyer in such form and content as the City Attorney shall approved. SECTION 4 The City Clerk is authorized and directed to attest all signatures and all acts of any official of the City Council or the City in connection with the documents herein approved and matters authorized by this Resolution. SECTION 5 This Resolution shall become effective upon final approval. INTRODUCED: September 24, 2001 By: Robert Sthilli / W'"' Lprident e City Council ATTESTED BY: City Clerk -2- BOO #- q City of Pueblo OFFICE OF THE CITY ATTORNEY 127 Thatcher Building PUEBLO, COLORADO 81003 Background Paper for Proposed RESOLUTION AGENDA ITEM # /? DATE: September 24, 2001 DEPARTMENT: Law Department TITLE A RESOLUTION APPROVING A CONTRACT TO BUY AND SELL REAL ESTATE BETWEEN PUEBLO, A MUNICIPAL CORPORATION AND SANTA FE CROSSING, LLLP RELATING TO THE PROPERTY COMMONLY KNOWN AS 203 -227 NORTH SANTA FE, PUEBLO, COLORADO, AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO EXECUTE THE CONTRACT AND THE SPECIAL WARRANTY DEED CONVEYING TITLE TO THE PROPERTY TO SANTA FE CROSSING, LLLP ISSUE Should the City Council approve the sale and transfer of 203 -227 North Santa Fe, Pueblo, Colorado to Santa Fe Crossing, LLLP for rehabilitation and development for low and moderate income residential apartments and commercial uses? RECOMMENDATION None. BACKGROUND The property commonly known as 203 -227 North Santa Fe, Pueblo, Colorado ( "Property ") was acquired by City from Pueblo County under the assumption that the Property could be rehabilitated and developed by the Housing Authority of the City of Pueblo ( "Authority ") for low and moderate income residential apartments and commercial uses ('Project "). The Authority is the developer for the Project and has created Santa Fe Crossings, LLLP as the entity to construct, operate and maintain the Project. The Authority will not fund any of the costs for the Project. Santa Fe Crossings, LLLP has no assets and the proposed permanent financing for the cost of the Project estimated to be $5,019,675, is as follows: Permanent Loan $1,400,000 Investors' Equity $2,266,464 City of Pueblo (Land & Buildings) $ 650,000 City of Pueblo (HOME Funds) $ 303,211 State Division of Housing (applied for) $ 300,000 State Historical Society (not applied for) 100,000 Total $5,019,675 Title to the Property needs to be transferred in early October 2001 in order to meet development commitments and for purposes of tax credits and investors' equity funding. However, there exists a number of unresolved matters before a construction loan commitment is obtained and the development of the Property may be undertaken, such as, committed revenues from the commercial portion of the Project through leases or capital contributions; approval of funding from the State Division of Housing and State Historical Society; commitment of equity investment; and phasing and allocation of costs for construction. FINANCIAL IMPACT City has or will advance $100,000 for Project "soft" costs which are to be repaid out of construction loan proceeds during the first quarter of 2002. If there is no construction loan, the $100,000 will not be repaid. City will make a $303,211 grant of HOME Funds to the Authority who will lend it to Santa Fe Crossings as part of the funding for the Project. The Promissory Note for the $650,000 purchase price for the Property plus interest at 7% per annum is payable out of the Project's excess cash flow. If not sooner paid, the Promissory Note and accrued interest are payable in full on December 31, 2019. Excess cash flow means all gross receipts from the Project less normal and customary operating costs, debt service payments on the Senior Loan and on deferred development fees, required increases to reserves, and other disbursements approved by the City. Based upon information available at this time, it is doubtful any excess cash flow will be available to make payments to the City on the Promissory Note. Included in the cost of the Project is a deferred development fee of $250,000 payable to the Authority out of excess cash flow prior to the City receiving any payments on the Promissory Note. The Promissory Note payable to the City in the amount of $650,000 is secured by a deed of trust which will be second and subordinate to the lien of the Senior Loan. If the Senior Loan is not paid and foreclosed upon, the City's second deed of trust lien will be discharged, subject to the City's right to redeem the Property from the foreclosure sale by paying the Senior Loan. The Senior Loan includes either the construction loan in the approximate amount of $1,700,000 or the permanent take -out loan of approximately $1,400.000. -2- Lee R. Evett D U ID City Manager ED ° David J. Galli Assistant City Manager MEMORANDUM TO: President and Members of City Council FROM: Lee R. Evett, City Manager DATE: September 20, 2001 SUBJECT: Santa Fe Crossing — Commercial Space One City Hall Place Pueblo, Colorado 81003 Phone (719) 584 -0800 Fax (719) 584 -0850 As you know, the continuation of funding soft costs and the sale of the Santa Fe Crossing property are on the agenda for Monday, September 24. During various conversations, both at the staff level and with the Council, the subject of commercial space and the possibility that the City may acquire and/or lease the space has been put forward. We recognize that this is a serious issue for the Pueblo Housing Authority given the non - housing nature of the space; however, I cannot recommend, at this time, that the City in any way obligate themselves to occupy the space. I believe it is important to make the staff's position known to both parties prior to the Council's decision on continuing soft cost funding and/or sale of the property: cc: Jack Quinn, Executive Director, Housing Authority, Via Fax Jim Munch, Director of Planning CONTRACT TO BUY AND SELL REAL ESTATE THIS CONTRACT entered into as of September 24, 2001 between City of Pueblo, a Municipal Corporation, 1 City Hall Place, Pueblo, Colorado, 81003 (the "Seller ") and Santa Fe Crossing, LLLP, a Colorado limited liability limited partnership (the "Buyer "), WITNESSETH: Recitals A. Seller is the owner of the real property located in Pueblo County, Colorado, described in Exhibit "A" annexed hereto and made a part hereof (the "Seller's property "). B. Seller is willing to sell Seller's property to Buyer upon the terms and conditions hereinafter set forth. Agreement NOW, THEREFORE, in consideration of the foregoing Recitals and the mutual covenants contained herein, Seller and Buyer agree as follows: 1. Pro e . Seller agrees to sell and Buyer agrees to purchase Seller's property on the terms and conditions set forth in this Contract, together with all easements and other appurtenances thereto, and all improvements and attached fixtures thereon (herein collectively the "Property"). 2. Purchase Price and Terms The purchase price for the Property is $650,000.00, payable in U.S. Dollars by Buyer as follows: (a) Buyer executing and delivering the attached Promissory Note payable to Seller and attached Deed of Trust which shall be a deed of trust encumbering the Property second in priority only to a deed of trust securing payment of Buyer's initial construction loan in the approximate amount of $1,740,000 and/or initial permanent take -out loan in the approximate amount of $1,400,000 reasonably approved by Seller for the rehabilitation and development of the Property (the "Project "). 3. Inspection Buyer or any designee, shall have the right to have inspection(s) of the physical condition of the Property at Buyer's expense. Buyer is responsible for and shall pay for any damage which occurs to the Property as a result of such inspection. 4. Date of Closina The date of closing shall be September 28, 2001, or by mutual agreement at a later date ( "Closing Date "). The hour and place of Closing shall be as designated by mutual agreement of Buyer and Seller. 5. Transfer of Title Subject to execution and delivery of the Promissory Note and Deed of Trust at Closing and other documents as required herein and compliance by Buyer with the other terms and provisions hereof, Seller shall execute and deliver a Special Warranty Deed conveying to Buyer all of Seller's right, title and interest in and to the Property. 6. Condition of the Property Buyer agrees and acknowledges that: (a) Seller hereby disclaims any warranty or representation, express or implied, with respect to the Property or any aspect, portion or component of the Property, including, but not limited to: (i) the condition, nature or quality of the Property, including, but not limited to, the quality of soils on or under the Property; (ii) the fitness of the Property for any particular use; (iii) the presence or suspected presence of hazardous materials on, in, under or about the Property; (iv) the financial benefits, income, expenses, profits or losses to be achieved, derived or incurred as a result of the ownership, operation, leasing, renovating, or management of the Property; or (v) existing or proposed governmental laws or regulations applicable to the Property, or the further development or changing use thereof, including environmental laws and laws or regulations relating to zoning, land use, or building, or the existence of any approvals or authorizations of any kind or nature of or from any governmental authority. Seller also hereby disclaims any warranty or representation, express or implied, with respect to any surveys, reports, studies, or other documents pertaining to the Property delivered by Seller to Buyer. (b) In entering into this Contract Buyer agrees that it has not relied on any representation, statement or warranty of Seller, or anyone acting for or on behalf of Seller, and all matters concerning the Property have been or will be independently verified by Buyer. If Buyer purchases the Property, Buyer agrees that it shall have relied entirely on its own investigation, examination and inspection of the Property and all matters pertaining thereto; Buyer is purchasing the Property on an "AS IS" basis and in its condition on the Closing Date. 7. Closing Costs, Documents and Services Buyer and Seller shall pay their respective Closing costs and all other items required to be paid at Closing, except as otherwise provided herein. Buyer and Seller shall sign and complete all customary or required documents at or before Closing. Fees for real estate closing services, if any, shall not exceed $100.00 and shall be paid at Closing equally by Seller and Buyer. Any sales and use tax that may accrue because of this transaction shall be paid when due by Buyer. (a) At Closing, Buyer shall furnish certified copies of Buyer's organizational documents and other documents of Buyer authorizing the acquisition of the Property, approving this Contract and Buyer's Purchase Documents, authorizing the purchase of the Property contemplated hereby, and authorizing the execution and delivery of this Contract and Buyer's Purchase Documents by the appropriate and authorized officers, members or partners of Buyer in the name of and on behalf of Buyer. (b) Seller has or will advance to Buyer $100,000 for expenses associated with this transaction. At Closing, Buyer will execute and deliver to Seller, Buyer's promissory note payable to Seller in the amount of $100,000 payable with interest at seven (7) percent per annum upon the earlier of (i) Buyer obtaining a construction loan for the Project, or (ii) April 1, 2002. Prorations General taxes for the year of Closing, based on the taxes for the calendar -2- year immediately preceding Closing, assessments, water, sewer, utility charges and other usual and customary items shall be prorated to date of Closing. 9. Possession Possession of the Property shall be delivered "AS IS" and "WHERE IS" to Buyer by Seller on Closing Date. 10. Time of Essence/Remedies Time is of the essence hereof. If any obligation is not performed there shall be the following remedies: (a) If Buyer is in Default Seller may elect to treat this Contract as cancelled, in which case all payments and things of value received hereunder shall be forfeited and retained on behalf of Seller. (b) If Seller is in Default Buyer may elect to treat this Contract as cancelled, in which case all payments and things of value received hereunder shall be returned. (c) Cancellation If either party elects to treat this Contract as cancelled because of the default of the other party, both parties shall be released from all obligations and obligations hereunder. 11. Representations and Warranties of Seller The Seller represents and warrants to Buyer as follows: (a) Seller has full power, capacity and authority to execute and deliver this Contract and all other documents required to be executed and delivered by Seller under this Contract (the "Seller's Documents ") and to perform its obligations hereunder and thereunder. (b) This Contract has been, and on the date of Closing the Seller's Documents will have been, duly authorized, executed and delivered by Seller and constitute, or will constitute, as the case may be, the legal and binding obligations of Seller, subject to applicable bankruptcy, insolvency, rehabilitation, liquidation, dissolution, reorganization, moratorium and similar laws affecting the rights of creditors generally, and to general equity principles. 12. Representations and Warranties of Buyer Buyer represents, warrants and covenants as follows: (a) Buyer has full power, capacity and authority to execute and deliver this Contract and all other documents required to be executed and delivered by Buyer under this Contract (the 'Buyer's Purchase Documents ") and to perform its obligations hereunder and thereunder. (b) This Contract has been, and on the date of Closing the Buyer's Purchase Documents will have been duly authorized, executed and delivered by Buyer and constitute, or will constitute, as the case may be, the legal, valid and binding obligations of the Buyer, subject to applicable bankruptcy, insolvency, rehabilitation, liquidation, dissolution, reorganization, -3- moratorium and similar laws affecting the rights of creditors generally, and to general equity principles. 13. Notices Any notice required or permitted to be given or delivered under this Contract shall be in writing and shall be given: (a) If to Seller, by personal delivery, or by the United States Postal Service, by certified mail, postage prepaid, addressed to: Thomas E. Jagger City of Pueblo 127 Thatcher Building Pueblo, Colorado 81003 Telephone No. (719)545 -4412 (b) If to Buyer, by personal delivery, or by the United States Postal Service, by certified mail, postage prepaid, addressed to: Jack Quinn, Executive Director Historic Renovation of Pueblo, Inc. 1414 N. Santa Fe (10th Floor) Pueblo, Colorado 81003 with copies to: Faegre & Benson, LLP Attention: William Callison, Esq. 370 Seventeenth Street, Suite 2520 Denver, Colorado 80202 or to such other address as any party may from time to time specify in a writing delivered to the other parties in the manner provided in this paragraph. Notices given hereunder shall be deemed given, in the case of personal delivery, on the date delivered, in the case of delivery by mail, on the second business day after delivery to the United States Postal Service. 14. Assignment This Contract shall not be assignable by Buyer without Seller's prior written consent. Except as so restricted, this Contract shall inure to the benefit of and be binding upon the parties and their respective heirs, personal representatives, successors and assigns. 15. Modification No subsequent modification of any of the terms of this Contract shall be valid or binding upon the parties or enforceable unless made in writing and signed by the parties. 16. Entire Contract This Contract constitutes the entire contract and agreement between the parties relating to the subject matter hereof, and any prior statements, representations or agreements pertaining thereto, whether oral or written, have been merged and integrated into this Contract. -4- 17. Captions The captions in this Contract are inserted for convenience of reference only and in no way define, describe or limit the scope or intent of this Contract or any of the provisions hereof. 18. Validity If any provision of this Contract shall be held to be invalid or unenforceable, the same shall not affect in any respect whatsoever the validity or enforceability of the remainder of this Contract. 19. Broker Buyer and Seller represent and warrant to each other that each has dealt with no broker with respect to the Property or in connection with the transaction contemplated hereby. Seller agrees to indemnify, defend and hold harmless from and against any and all claims, loss, liability, costs and expenses (including reasonable attorneys' fees), resulting from any claims that may be made against Buyer by any broker or other person claiming a commission, fee or other compensation by reason of the transaction contemplated hereby if the same shall arise by, through or on account of Seller. Buyer agrees to indemnify, defend and hold Seller harmless from and against any and all claims, loss, liability, costs and expenses (including reasonable attorneys' fees), resulting from any claims that may be made against Seller by any broker or other person claiming a commission, fee or other compensation by reason of the transaction contemplated hereby if the same shall arise by, through or on account of Buyer. 20. Applicable Law This Contract will be construed and enforced in accordance with the laws of the State of Colorado (without giving effect to its choice of law principles). 21. Interpretation Whenever the context so requires, the singular number shall include the plural and the plural the singular, and the use of any gender shall include all genders. 22. Survival of Representation The representations of Seller contained in paragraph 11 shall survive the Closing of the transaction contemplated hereby. The representations, warranties and agreements of Buyer in this Contract will survive the Closing of the transaction contemplated hereby. 23. Counterparts This Contract may be executed in one or more counterparts, each of which shall constitute an original, but all of which, when taken together, shall constitute but one agreement. IN WITNESS WHEREOF, the parties have signed this Contract as of the day and year first above written. SE LLE BUYER PUEBL MUNICIP CORPORATION SANTA FE CROSSING, LLLP By Historic Renovations of Pueblo, Inc. General Partner BY 441 ent o the City Council -5- Attest City rk Approved as to form: City Att y r 'e By Gaspare arcia, President F:\ CITY\ HOUSING\ AUTHORI112001 \SFCRSSNG \CONTRACT.WPD —6— PROMISSORY NOTE Principal Amount: U.S. $650,000.00 Date of Note: September ,' , 2001 FOR VALUE RECEIVED, the undersigned Santa Fe Crossing, LLLP, hereinafter referred to as "Borrower ", and its successors in interest, promises to pay to Pueblo, a Municipal Corporation or order, hereinafter referred to as the "Note Holder ", the principal sum of Six Hundred Fifty Thousand and No /100 U.S. Dollars ($650,000.00) and interest on the principal balance outstanding from the date hereof until paid, at the rate of seven percent (7 %) per annum, and payable at the Note Holder's office at 1 City Hall Place, Pueblo, Colorado, 81003, or such other place as Note Holder may designate, in annual payments, made within 60 days after the close of each calendar year after calendar year 2001, equal to Excess Cash Flow received by Borrower for the prior calendar year from operation of the Santa Fe Crossing Project (the "Project "). Excess Cash Flow shall mean Borrower's gross receipts from and with respect to the Project, reduced by normal and customary operating costs, debt service payments (other than optional prepayments made without the Note Holder's consent) on the Senior Loan (as described herein) and on deferred development fees, required increases to reserves, and other disbursements with respect to the Project as the Note Holder may approve, in its sole discretion, as additional expense items with respect to the Project. If not sooner paid or accelerated as herein provided, the entire principal amount outstanding and accrued interest thereon, shall be due and payable on December 31, 2019. Borrower shall within sixty (60) days after the close of each calendar year after calendar year 2001, furnish to Note Holder financial statements certified by an officer of Borrower to be true and correct showing all assets and liabilities of Borrower and the Project, and all income and expenses of Borrower and the Project for the prior calendar year. This Note and all principal and interest payable hereunder are secured by a Deed of Trust of even date herewith upon real property, upon which the Project is located or to be located, and all improvements thereon, situated in the County of Pueblo, State of Colorado (hereinafter referred to as the "Property") and described more particularly in the attached Exhibit "A" and incorporated herein. The terms, conditions, covenants, provisions, stipulations and agreements of said Deed of Trust are hereby made a part of this Note by reference in the same manner and with the same effect as if they were fully set forth herein, and the Borrower hereby covenants and promises to abide by and comply with each and every covenant and condition set forth in this Note and the Deed of Trust. The Borrower reserves the right to prepay all or any part of the principal owing on this Note at any time or times without notice and payment of any premium or penalty. All payments received by Note Holder hereunder shall be applied first to payment of accrued interest and the balance thereof to the reduction of principal. Upon the occurrence of any of the following events, the entire unpaid principal hereof, together with all accrued interest thereon, shall, at the option of the Note Holder, and upon twenty 9 (20) days notice to Borrower, become at once due and payable and shall accrue interest at the default rate of twelve percent (12 %) per annum thereafter until paid in full, and no failure by the Note Holder to exercise such option shall be deemed or construed as a waiver of the right to exercise the same in the event of any subsequent default or breach: 1. Any default in the payment when due of any Excess Cash Flow. 2. Any breach or failure of the Borrower to perform within the allotted time any term or condition of this Note or the Deed of Trust. 3. If the Borrower shall be involved in financial difficulties as evidenced: (i) by an admission in writing of the Borrower's inability to pay its debts generally as they become due; (ii) by filing a petition in bankruptcy or for the adoption of an arrangement under the federal Bankruptcy Code (as now or in the future amended) or an admission seeking the relief therein provided; (iii) by making an assignment for the benefit of creditors; (iv) by consenting to the appointment of a receiver or trustee for all or a substantial part of the Borrower's assets or to the filing of a petition against the Borrower under said Bankruptcy Code; (v) by being adjudicated as bankrupt; (vi) by the entry of a court order appointing a receiver or trustee for all or a substantial part of the assets of the Borrower or approving as filed in good faith a petition filed against the Borrower under said Bankruptcy Code; (vii) by the assumption of custody or sequestration by a court of competent jurisdiction of all or substantially all of the assets of the Borrower; (viii) by an attachment for an amount in excess of $25,000 on any substantial part of the assets of the Borrower which shall not be discharged within thirty (30) days from the making thereof, or (ix) by a judgment or decree for the payment of money in excess of $25,000 being entered against the Borrower, or if an attachment, execution or levy is made upon any of the Borrower's assets and the judgment, execution or levy, as the case may be, is not discharged or stayed within thirty (30) days from the date of the judgment, attachment, execution or levy as the case may be. 4. If the Note Holder determines in the reasonable exercise of its discretion that the Borrower has abandoned or discontinued the initiation, construction or completion of the Project or the management and operation of the Project after its substantial completion. 5. If the Borrower does not obtain adequate financing for the Rehabilitation and development of the Project on or before July 1, 2002. The Borrower, and any and all endorsers, sureties, guarantors and assumers hereof, hereby jointly and severally waive presentment, protest, notices of dishonor and of protest, and all defenses whatsoever on the ground of any extension(s) of the time of payment or of the due dates of this Note, in whole or in part, before or after maturity, with notice, it being further agreed by the Borrower and all such parties that they will pay all collection expense, court costs, and reasonable attorneys' fees -2- which may be incurred by the Note Holder in the collection or enforcement of this Note or any part hereof. The indebtedness evidenced by this Note is and shall be subordinate in right of payment to the prior payment in full of the indebtedness evidenced by the initial construction loan and /or initial permanent take -out loan for the rehabilitation and development of the Project approved by Note Holder (the "Senior Loan"). The Deed of Trust securing this Note is and shall be subject and subordinate in all respects to the liens, terms, covenants and conditions of the Deed of Trust securing the Senior Note. Any notice to Borrower provided for in this Note shall be in writing and shall be given and be effective upon (1) delivery to Borrower or (2) mailing such notice by certified mail, addressed to Borrower at 1414 N. Santa Fe (10th Floor), Pueblo, Colorado, 81003, or to such other address as Borrower may designate by notice to the Note Holder. Any notice to the Note Holder shall be in writing and shall be given and be effective upon (1) delivery to Note Holder or (2) by mailing such notice by certified mail to the Note Holder at the address stated in the first paragraph of this Note, or to such other address as Note Holder may designate by notice to Borrower. This instrument shall be governed by the laws of the State of Colorado and venue for any dispute or action regarding its enforcement, terms and conditions shall be Pueblo County, Colorado. Executed and delivered this ono day of September, 2001. BORROWER: SANTA FE CROSSING, LLLP By Historic Renovations of Pueblo, Inc., C; General Partner e By G sa pare B ' cia, President F:\ CITY \HOUSINGWUTHORTT12001 \SFCRSSNG\P -NOTE. WPD -3- PROMISSORY NOTE U.S. $100,000.00 Pueblo, Colorado September ;?, 2001 FOR VALUE RECEIVED, the undersigned Borrower promises to pay to the City of Pueblo or order, (Note Holder) the principal sum of One Hundred Thousand and No /100 U.S. Dollars ($100,000.00), with interest on the unpaid principal balance from date hereof, until paid, at the rate of seven (7) percent per annum. Principal and interest shall be payable at 1 City Hall Place, Pueblo, Colorado, 81003, or such other place as the Note Holder may designate, upon the earlier of (i) Borrower obtaining a construction loan for the rehabilitation and development of the Santa Fe Crossing Project, or (ii) April 1, 2002. Payments received for application to this Note shall be applied first to the payment of accrued interest, and the balance applied in reduction of the principal amount hereof. The Note Holder shall be entitled to collect all reasonable costs and expense of collection and /or suit, including, but not limited to reasonable attorneys' fees. Borrower may prepay the principal amount outstanding under this Note, in whole or in part, at any time without penalty. Any partial prepayment shall be applied against the principal amount outstanding and shall not postpone the due date of this Note. Presentment, notice of dishonor, and protest are hereby waived by Borrower and all other makers, sureties, guarantors and endorsers hereof. This Note shall be the joint and several obligation of Borrower and all other makers, sureties, guarantors and endorsers, and their heirs, personal representatives, successors and assigns. Any notice to Borrower provided for in this Note shall be in writing and shall be given and be effective upon (1) delivery to Borrower or (2) mailing such notice by certified mail, addressed to Borrower at 1414 N. Santa Fe (10th Floor), Pueblo, Colorado, 81003, or to such other address as Borrower may designate by notice to the Note Holder. Any notice to the Note Holder shall be in writing and shall be given and be effective upon (1) delivery to Note Holder or (2) by mailing such notice by certified mail to the Note Holder at the address stated in the first paragraph of this Note, or to such other address as Note Holder may designate by notice to Borrower. This instrument shall be governed by the laws of the State of Colorado and venue for any dispute or act w garding.its enforcement, terms and conditions shall be Pueblo County, Colorado. \r - BORROWER: SANTA FE CROSSING, LLLP By Historic Renovations of Pueblo, Inc., General Partner By Gaspare Bar ia, President SPECIAL WARRANTY DEED THIS DEED made this 24 day of September, 2001 between the City of Pueblo, a municipal corporation duly organized and existing under the laws of the State of Colorado, of the County of Pueblo and State of Colorado, of the first part, and Santa Fe Crossings, LLLP, a Colorado limited liability limited partnership, of the County of Pueblo and State of Colorado, of the second part whose legal address is 1414 North Santa Fe Avenue (10 Floor), Pueblo, Colorado, 81003: WITNESSETH, That the said party of the first part, for and in consideration of the sum of Six Hundred Fifty Thousand and no/I 00 Dollars ($650,000.00), to the said party of the first part, in hand paid by the said party of the second part, the receipt whereof is hereby confessed and acknowledged, has granted, bargained, sold and conveyed, and by these presents does grant, bargain, sell, convey and confirm unto the said party of the second part, its successors and assigns forever, all the lots or parcels of land, situate, lying and being in the County of Pueblo and State of Colorado, described on the attached Exhibit "A" which is incorporated herein, also known by street and number as: 203 -207 North Santa Fe Avenue, Pueblo, Colorado, 81003. Together with all and singular the hereditaments and appurtenances thereunto belonging, or in anywise appertaining, and the reversion and reversions, remainder and remainders, rents, issues and profits thereof, and all the estate, right, title, interest, claim and demand whatsoever, of the said party of the first part, either in law or equity, of, in and to the above bargained premises, with the hereditainents and appurtenances; TO HAVE AND TO HOLD the said premises above bargained and described, with the appurtenances, unto Santa Fe Crossings, LLLP, the said party of the second part, its successors and assigns forever. And the said City of Pueblo, party of the fast part, does covenant, grant, bargain and agree e to and with the said party of the second part, its successors and assigns, the above bargained premises in the quiet and peaceable possession of said party of the second part, its successors and assigns, against all and every person or persons lawfully claiming or to claim the whole or any part thereof, by, through or under the said party of the first part to WARRANT AND FOREVER DEFEND. DOCUMENTARY FEE: Exempt, Section 39- 13- 104(1)(a), C.R.S. IN WITNESS WHEREOF, the said party of the first part has caused its corporate name to be hereunto subscribed by the President of the City Council and its corporate seal to be hererunto affixed, attested by its City Clerk, the day and year first above written. (SEAL) Pu By Attest: �. .. City erk COUNTY OF PUEBLO ) ) ss. STATE OF COLORADO ) The foregoing instrument was acknowledged before me this day of September, 2001 by Al Gurule as President of the City Council and Gina Dutcher as City Clerk of the City of Pueblo, a municipal corporation. Witness my hand and official seal. My commission expires: [SEAL] Notary Public -2- z)_ IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII ®40600 sl:e5$ ChrisC.Munoz PuabloCtyClkMac TD R 25.00 D 0.00 DEED OF TRUST THIS DEED OF TRUST, made as of .Snak aC'L 018' 2001, between Santa Fe Crossing, LLLP, a Colorado limited liability limited partnership, whose address is 1414 N. Santa Fe (10th Floor), Pueblo, Colorado, 81003, hereinafter referred to as "Grantor ", and the Public Trustee of the County of Pueblo, in the State of Colorado, hereinafter referred to as "Trustee ", WITNESSETH: WHEREAS, the Grantor has executed its Promissory Note, hereinafter referred to as the "Note ", of even date for the principal sum of Six Hundred Fifty Thousand and No /100 U.S. Dollars ($650,000.00), payable to the order of the City of Pueblo, a Municipal Corporation, whose address is I City Hall Place, Pueblo, Colorado, 81003, which amount is an indebtedness of Grantor payable with interest in accordance with the terms of said Note; and, WHEREAS, the Grantor is desirous of securing performance of all obligations of Grantor under said Note and payment of the indebtedness as specified therein. NOW, THEREFORE, the Grantor, in consideration of the premises and for the purpose aforesaid, does hereby grant, bargain, sell and convey unto Trustee in trust forever, for the use and benefit of the City of Pueblo, a Municipal Corporation (the "Beneficiary"), the property, situate in the County of Pueblo, State of Colorado, described on the attached Exhibit "A ", also known as street and number 203 -227 North Santa Fe, Pueblo, Colorado, 81003. TO HAVE AND TO HOLD the same, together with all and singular the privileges and appurtenances thereunto belonging: In Trust Nevertheless, That in case of default in the Note or any part thereof or payment as specified therein, according to the tenor and effect of said Note, or in the payment of principal or interest on the Senior Loan (as described herein), or in case of violation or breach of any of the terms, conditions, covenants or agreements herein contained, the Beneficiary hereunder may declare a violation of any of the covenants herein contained and elect to advertise said property for sale and demand such sale, then, upon filing notice of such election and demand for sale with the Trustee, who shall upon receipt of such notice of election and demand for sale cause a copy of the same to be recorded in the recorder's office of the county in which said real estate is situated, it shall and may be lawful for said Trustee to sell and dispose of the same (en masse or in separate parcels, as the said Trustee may think best), and all the right, title and interest of Grantor, its successors or assigns therein, at public auction at the south front door of the Court House, in the County of Pueblo, State of Colorado, or on said premises, or any part thereof as may be specified in the notice of said sale, for the highest and best price the same will bring in cash, four weeks' public notice having been previously given of the time and place of such sale, by advertisement, weekly, in some newspaper of general circulation at that time published in said County of Pueblo, a copy of which notice shall be mailed within ten days from the date of the first publication thereof to the Grantor at the address herein given and to such person or persons appearing to have acquired a subsequent record interest in said real estate at the address given in the recorded instrument; where only the county and state is given as the address then such notice shall be mailed to the county seat, and to make and give to the purchaser or purchasers of such property at such sale, a certificate or certificates in writing describing such property purchased, and the sum or sums paid therefor, and the time when the purchaser or purchasers (or other person entitled thereto) shall be entitled to a deed or deeds therefor, unless the same shall be redeemed as is provided by law; and said Trustee shall, upon demand by the person or persons holding the same certificate of purchase, when said demand is made, or upon demand by the person entitled to a deed to and for the property purchased, at the time such demand is made, the time for redemption having expired, make and execute to such person or persons a deed or deeds to the said property purchased, which said deed or deeds shall be in the ordinary form of a conveyance, and shall be signed, acknowledged and delivered by the said Trustee, as grantor, and shall convey and quit -claim to such person or persons entitled to such deed, as grantee, the said property purchased as aforesaid and all the right, title, interest, benefit and equity of redemption of the Grantor, its successors and assigns therein, and shall recite the sum or sums for which the said property was sold and shall refer to the power of sale therein contained, and to the sale or sales made by virtue thereof; and in case of an assignment of such certificate or certificates of purchase, or in case of the redemption of such property, by a subsequent encumbrancer, such assignment or redemption shall also be referred to in such deed or deeds; but the notice of sale need not be set out in such deed or deeds and the said Public Trustee shall, out of the proceeds or avails of such sale, after first paying and retaining all fees, charges and costs of making said sale, pay to the Beneficiary hereunder or the legal holder of the indebtedness, all moneys and amounts due, according to the tenor and effect thereof, and all moneys advanced by such Beneficiary or legal holder of said indebtedness for insurance, taxes and assessments, with interest thereon at 12 per cent per annum, rendering the overplus, if any, unto the said Grantor, its successors or assigns; which sale or sales and said deed or deeds so made shall be a perpetual bar, both in law and equity, against the Grantor, its successors and assigns, and all other persons claiming the said property, or any part thereof, by, from, through or under said Grantor, or any of them. The Beneficiary or holders of the indebtedness may purchase said property or any part thereof; and it shall not be obligatory upon the purchaser or purchasers at such sale to see to the application of the purchase money. If a release deed be required, it is agreed that Grantor, its successors and assigns, will pay the expense thereof. And the Grantor, for itself and for its successors and assigns covenants and agrees to and with the Trustee, that at the time of the ensealing of and delivery of these presents it is well seized of the said land and tenements in fee simple, and has good right, full power and lawful authority to grant, bargain, sell and convey the same in the manner and form as aforesaid; and that the same are free and clear of all liens and encumbrances whatsoever. Grantor shall and will Warrant and Forever Defend the above bargained property in the quiet and peaceable possession of the said Trustee, his successors and assigns, against all and every person or persons lawfully claiming or to claim the whole or any part thereof subject only to the exceptions listed on Exhibit B and incorporated herein (the "Permitted Exceptions "). 757y 16 3 IIIIIIIIIIIIIIIIIIIIIIIIIIIVIIIIIIIIIIIIIVIIIIIIIIIII P g Ofi 0f 5 ChrisC.Muncz PumbloCtyClURso TD 11.051 R 25.00 D 0.00 And that during the continuance of said Note or the indebtedness arising thereunder, the said Grantor will in due season pay all taxes and assessments levied on said property; all amounts due on account of principal and interest on prior encumbrances, if any; and will keep all buildings that may at any time be on said lands, insured against loss by fire with extended coverage endorsements in a company authorized to issue such insurance in the State of Colorado, for such sum or sums as such company or companies will insure for, not to exceed the amount of said indebtedness and any prior encumbrances, except at the option of said Grantor, with loss, if any, payable to the Beneficiary hereunder, as its interest may appear, and will deliver the policy or policies of insurance to the Beneficiary hereunder, as further security for the indebtedness aforesaid. And in case of the failure of Grantor to thus insure and deliver the policies of insurance, or to pay such taxes or assessments or amounts due or to become due on any prior encumbrances, if any, then the Beneficiary may procure such insurance, or pay such taxes or assessments or amount due upon prior encumbrances, if any, and all moneys thus paid, with interest thereon at 12 per centum per annum, shall become so much additional indebtedness, secured by this Deed of Trust, and shall be paid out of the proceeds of the sale of the property aforesaid, if not otherwise paid by Grantor, and Beneficiary may for such failure declare a violation of this covenant and agreement. If all or any part of the property or an interest therein is sold or transferred by Grantor without Beneficiary's prior written consent, excluding the creation of a lien or encumbrance subordinate to this Deed of Trust, Beneficiary may, at Beneficiary's option, declare all the sums secured by this Deed of Trust to be immediately due and payable. AND THAT IN CASE OF ANY DEFAULT beyond any applicable cure period, Whereby the right of fore- closure occurs hereunder, the Trustee or the Beneficiary or holder of certificate of purchase, shall at once become entitled to the possession, use and enjoyment of the property aforesaid, and to the rents, issues and profits thereof, from the accruing of such right and during the pendency of foreclosure proceedings and through the period of redemption, if any there be; and such possession shall at once be delivered to the Trustee or the Beneficiary or the holder of the certificate of purchase on request, and on refusal, the delivery of such possession may be enforced by the Trustee or the Beneficiary or holder of the certificate of purchase by any appropriate civil suit or proceeding, and the Trustee or Beneficiary or the holder of the certificate of purchase, or any thereof, shall be entitled to a Receiver for said property, and of the rents, issues and profits thereof, after such default, including the time covered by foreclosure proceedings and the period of redemption, if any there be, and shall be entitled thereto as a matter of right without regard to the solvency or insolvency of the Grantor or of the then owner of said property and without regard to the value thereof, and such Receiver may be appointed by any court of competent jurisdiction upon ex parte application and without notice -- notice being hereby expressly waived - -and all rents, issues and profits, income and revenue therefrom shall be applied by such Receiver to the payment of the indebtedness hereby secured, according to the law and the orders and directions of the Court. AND, That in case of default in any of said payments of principal or interest beyond any applicable cure period, according to the tenor and effect of said Note aforesaid, or any part thereof, or of a breach or violation of any of the covenants or agreements herein, by the Grantor, its successors or assigns, then and in that case the whole of the indebtedness hereby secured, and the interest thereon to the time of the sale, may at once, at the option of the Beneficiary or the legal holder of the indebtedness, become due and payable, and the said property be sold in the manner and with the same effect as if said indebtedness had matured, and that if foreclosure be made by the Public Trustee, a reasonable attorney's fee for services in the supervision of said foreclosure proceedings shall be allowed by the Public Trustee as part of the cost of foreclosure, and if foreclosure be made through the courts a reasonable attorney's fee shall be taxed by the court as a part of the costs of such foreclosure proceedings. Notwithstanding any other provision of this Deed of Trust to the contrary, Grantor and Beneficiary hereby expressly agree that this Deed of Trust is subject to and subordinate in all respects to the deed of trust ( "First Deed of Trust ") upon the said property securing payment of an initial construction loan and/or initial permanent take -out loan for the rehabilitation and development of the above described property approved by Beneficiary ( "Senior Loan"), and to all liens, terms, covenants and conditions of the First Deed of Trust and to all advances which may hereafter be made pursuant to the Senior Loan and First Deed of Trust including all sums advanced for the purpose of (a) protecting or further securing the lien of the First Deed of Trust, curing defaults by the Grantor under the First Deed of Trust or for any other purpose expressly permitted by the First Deed of Trust or (b) the initial constructing, renovating, repairing, fumishing, fixturing or equipping the said property. The terms and provisions of the First Deed of Trust are paramount and controlling, and they supersede any terms and provisions hereof in conflict therewith. If any notice of default under the Note or this Deed of Trust or notice of acceleration of the maturity of the indebtedness is given to Grantor, irrespective of any legal obligation to do so, a copy of said notice shall also be given to the holder of the Senior Loan; provided, however, that nothing in this paragraph is intended, nor shall it be construed, to grant any rights whatsoever to Grantor or create any condition precedent to the exercise of any right or remedy by the Beneficiary; nor shall any noncompliance with the requirements of this paragraph constitute any defense against enforcement of the Note or this Deed of Trust, including without limitation, Beneficiary's right to accelerate maturity of the entire indebtedness and sale of the said property. Any notice to Grantor provided for in this Deed of Trust shall be in writing and shall be given and be effective upon (1) delivery to Grantor or (2) mailing such notice by certified mail, addressed to Grantor at the Grantor's address stated in the first paragraph of this Deed of Trust, or to such other address as Grantor may designate by notice to the Beneficiary. Any notice to the Beneficiary shall be in writing and shall be given and be effective upon (1) delivery to Beneficiary or (2) by mailing such notice by certified mail to the Beneficiary at the address stated in the second paragraph of this Deed of Trust, or to such other address as Beneficiary may designate by notice to Grantor. Should any provisions of this Deed of Trust be found to violate the statutes or court decisions of the State of Colorado, or of the United States, such provision shall be deemed to be amended to comply with and conform to such -2- statutes and decisions. IIIIII VIII IIIIII IIIIII III VIII IIIIIII III VIII IIII IIII 1 1 0/12/2001 / 11:05$ ChrisC.Munoz PuebloCtyClURee TD R 25.00 D 0.00 IN WITNESS WHEREOF, the Grantor has hereunto set its hand and seal the day and year first above written. GRANTOR: BORROWER: SANTA FE CROSSING, LLLP By Historic Renovations of Pueblo, Inc., General Partner By Gaspare Bar c&, , President The foregoing instrument was acknowledged before me this . day of %fedew, b er — 2001 by Gaspare Barcia as President of Historic Renovations of Pueblo, Inc., General Partner of Santa Fe Crossing, L.L.L.P. Witness my hand and official seal. My commission expires: 9 IS BARBARA L. BERNARD NOTARY PUBLIC ` STATE OF COLORADO My commission expires 9- 132002 12 136T M. 0 91 F:\ CITY\ HOUSTNGW. UTHORIT12001 \SFCRSSNG\DEEDTRST.WPD -3- rn tt STATE OF COLORADO COUNTY OF PUEBLO ss. GRANTOR: BORROWER: SANTA FE CROSSING, LLLP By Historic Renovations of Pueblo, Inc., General Partner By Gaspare Bar c&, , President The foregoing instrument was acknowledged before me this . day of %fedew, b er — 2001 by Gaspare Barcia as President of Historic Renovations of Pueblo, Inc., General Partner of Santa Fe Crossing, L.L.L.P. Witness my hand and official seal. My commission expires: 9 IS BARBARA L. BERNARD NOTARY PUBLIC ` STATE OF COLORADO My commission expires 9- 132002 12 136T M. 0 91 F:\ CITY\ HOUSTNGW. UTHORIT12001 \SFCRSSNG\DEEDTRST.WPD -3- IIIIIIIII 1406176 page: 4 of IIIIIIIIIIIIIIIIIIIIIIII 10/12/2001 9 00 1.05E Chrisc.mu IIIIIII ChrisC.Munoz Puab1oCtyC1k6 Rec TD R 25.00 EXHIBIT "A" LEGAL DESCRIPTION PARCEL 1: Lot 1 and the South 1/2 of Lot z, Block 29 in that part of the rnt Civil City of Pueblo Which was surveyed and platted by H. M. Fosdick, Engineer, for the probate judge of said Pueblo County, in March 1869, County of Pueblo State of Colorado, and that portion of Second Street in said City adjoinijng said lot; bounded and described as €ollows, to-wite COMMENCING at tb.e SE Corner of said Lot 11 thence South along the W861t line of Santa Fe Avenue, 10 feet; thence West parallel with the South line of said Lot 1, 120 feet to the 'East line of an alley in said block; thence north along the Fast line of said alley 10 feet to the SW corner of said Lot 1; thence Bast along the South line of said Lot 1, 120 feet to the POINT OF BEGIMIN , County of Pueblo,. State of Colorado PARCEL 2: The North 1/2 of Lot 2, and the South 1/2 of Lot 3, Block 29, in that part of the prevent City of Pueblo which was surveyed and platted by H. M. Fosdick, Civil Engineer, for the Probate Judge of Pueblo County, March 1869, County of Pueblo, state of Colorado. PARCEL 3: The North 1/2 of Lot 3, all of Lot 4 and the South 8.23 feet of Lot 5 Block 29, in that part of the present city of Pueblo which was surveyed- and platted by H. M. Fosdick, Civil Engineer, for the Probate Judge of Pueblo County, March 1869, County of Pueblo, State of Colorado. PARCEL 4; The North 33.87 feet of Lot 5 and the South 16 feet 2 inches of Lot 6 Block 29 in that part of the present City of Pueblo which was surveyed and platted by H. M. Fosdick, Civil Engineer, for the Probate judge of said Pueblo County, in March 1869,County of Pueblo, State of Colorado. TOGETHER with vacated streets and alleys adjacent to the above property if any. IIIIIIIIIIIIIIIII 1406 1:05t IIIIIII VIII IIIIII IIIIIIIIIVI II iI R 25.00 0 0.00 ChrisC.Munoz Pueb1cCtyC1k&RGc TD EXHIBIT `B" PERMITTED EXCEPTIONS 1. Any and all rights of the owner of the property adjoining the subject property on the South 1 l /2 of Lot 1 and the North'' /2 of Lot 1 arising from the existence of a party wall partly located on the subject property as described in Agreement recorded April 17, 1882 in Book 36 at Page 41. (Affects Parcel 1) 2. Party Wall Agreement recorded in Book 701 at Page 180, at Instrument No. 43 058 1. (Affects Parcel 2) 3. Any question as to the size or location of subject property and as to the encroachment of subject property onto adjoining property.