HomeMy WebLinkAbout10229RESOLUTION NO. 10229
A RESOLUTION APPROVING AN AGREEMENT BETWEEN PUEBLO, A MUNICIPAL
CORPORATION, AND DENEEN & COMPANY RELATING TO A JOB CREATING CAPITAL
IMPROVEMENT PROJECT, AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO
EXECUTE SAME, AND TRANS - FERRING $283,000.00 FROM THE 1992 -2006 SALES AND USE
TAX CAPITAL IMPROVEMENT PROJECTS FUND FOR SUCH PURPOSE
BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, that:
SECTION 1 _
The City Council finds and determines that the expenditure of $283,000 for the job creating
capital improvement project with Deneen & Company described in the attached Agreement, meets
and complies with the criteria and standards established by Ordinance No. 6381 and will create
employment opportunities justifying the expenditure of public funds.
SECTION 2
The Agreement dated as of September 13, 2004 between the City of Pueblo and Deneen &
Company, a copy of which is attached hereto, having been approved as to form by the City
Attorney, is hereby approved, and the President of the City Council is authorized to execute and
deliver the Agreement in the name of the City:
SECTION 3
Funds in an amount of $283,000 are hereby authorized to be transferred, expended and
made available to Deneen & Company out of the 1992 -2006 Sales and Use Tax Capital
Improvement Projects Fund for the sole purpose of the job creating capital improvement project
and in the manner described in the attached Agreement. The funds hereby authorized to be
transferred and expended shall be released and paid by the Director of Finance to or for the benefit
of Deneen & Company after receipt (i) by the City Clerk of the documents required to be filed
pursuant to paragraph 2(c) of the Agreement and (ii) by the Director of Finance of written requests
for payment required by paragraph 2(d) of the Agreement.
SECTION 4_
Pursuant to the Agreement dated May 10, 2004 between the City and Pueblo Development
Foundation approved by Resolution No. 10120, the lease of the northerly five (5) acres of Lot 67,
Pueblo Memorial Airport Industrial Park Subdivision and 17,0000 square foot building by Pueblo
Development Foundation to Deneen & Company is hereby approved.
SECTION 5
The officers of the City are directed and authorized to perform any and all acts consistent
with the intent of this Resolution and attached Agreement to effectuate the transactions described
therein.
SECTION 6
This Resolution shall become effective upon final approval and passage.
INTRODUCED September 13. 2004
BY Michael Occhiato
/w. 44- 1D2Zq
Background Paper for Proposed
RESOLUTION
AGENDA ITEM # _'� S
DATE: September 13, 2004
DEPARTMENT: Law Department
TITLE
A RESOLUTION APPROVING AN AGREEMENT BETWEEN PUEBLO, A
MUNICIPAL CORPORATION, AND DENEEN & COMPANY RELATING TO A JOB
CREATING CAPITAL IMPROVEMENT PROJECT, AUTHORIZING THE PRESI-
DENT OF THE CITY COUNCIL TO EXECUTE SAME, AND TRANSFERRING
$283,000.00 FROM THE 1992 -2006 SALES AND USE TAX CAPITAL IMPROVE-
MENT PROJECTS FUND FOR SUCH PURPOSE
ISSUE
Should the City Council approve a job creating capital improvement project with
Deneen & Company?
RECOMMENDATION
Approve the Resolution and job creating capital improvement project.
BACKGROUND
By Resolution No. 10120, the City Council approved the purchase of Lot 67, Pueblo
Memorial Airport Industrial Park Subdivision (25.26 acres and 17,000 square foot
building) by Pueblo Development Foundation ( "PDF ") for $550,000 plus $5,000 for
related expenses, to be leased to prospective employers. PEDCO has negotiated
a lease of the northerly 5 acres of Lot 67 and the 17,000 square foot building
( "Leased Property ") with Deneen & Company ( "Company ") who has committed to
employ 40 full -time employees during a 7 -year period from November 1, 2007
( "Employment Commitment "). The Lease is a triple net lease for a term of 10 years
with monthly rent of $4,959. If Company does not default under the Lease or its
Employment Commitment and pays rent for 10 years ($595,080), PDF will transfer
title to the Leased Property to Company. Company has the option to purchase an
additional five (5) acres of land for $32,670 per acre or pursuant to another
employment commitment agreement with the City for an additional 6 full -time
employees. All rent and other payments received by PDF are to be held in trust and
paid to City less 5% for PDF expenses in participating in the transaction. PDF's
obligations are secured by a deed of trust on Lot 67.
Under the Agreement between the City and Company, City will advance $283,000
to Company ( "City Funds "), $108,098 for remodeling the 17,000 square foot
building, and $107,902 for equipment, and $75,000 for structural repairs to the floor
and roof of the 17,000 square foot building if required. If Company defaults in its
Employment Commitment it will repay City Funds on a pro -rata basis based upon
the number of full -time employees Company employs at its facility.
This job creating capital improvement project and financial details thereof as well
as the Lease and Agreement were negotiated and approved by PEDCO. PEDCO
recommends that the City Council approve this transaction and all related
documents.
FINANCIAL IMPACT
See Background above
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AGREEMENT
THIS AGREEMENT entered into as of September 13, 2004 between Pueblo, a municipal
corporation (the "City ") and Deneen & Company, a New Mexico Corporation (the "Company").
WHEREAS, Company has expressed a willingness to locate its business within the
Pueblo Memorial Airport Industrial Park, and in furtherance thereof has through the Pueblo
Economic Development Corporation made application for funds with the City, and
WHEREAS, the City has approved such application and will make funds available to
Company subject to and upon the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the foregoing and mutual covenants contained
herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, City 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:
"Employment Commitment Date" means the earlier of (i) three (3) years after the
Commencement date of the Lease, or (ii)November 1, 2007.
"Equipment" means business personal property acquired, installed, kept, maintained and
used by Company after date of this Agreement in the Facility having an exhaustible useful life of
more than three (3) years which can be determined or estimated with reasonable accuracy.
"Equipment" does not mean computer software development costs.
"Facility" means the approximately 17,000 square foot building located on the Property
wherein Company will conduct its business operations.
"Full -Time Employee" means a person who actually performs work at the Facility for not
less than thirty-two (32) 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 employees of an independent contractor acting as an agency to provide Full -Time
Employees for Company to perform work at the Facility.
"Lease" means an enforceable long -term lease of the Property between Company, as
Lessee and Pueblo Development Foundation, as Lessor for a term not less than 10 years.
"Property" means the northerly five (5) acres of Lot 67, Pueblo Memorial Airport
Industrial Park Subdivision, Pueblo County, Colorado, street address: 33800 United Boulevard,
Pueblo, Colorado, 81001.
"Quarter" means three consecutive calendar months commencing January 1, April 1, July
1 and October 1 of each calendar year.
"Quarterly Employees" means the sum of the aggregate number of Full -Time Employees
on each business day of a Quarter, divided by the sum of the business days in such Quarter.
2. City will advance to or for the benefit of Company funds in an amount not to
exceed $208,000.00 (the "City Funds "), subject to and contingent upon the following conditions
and covenants which Company agrees to perform and comply with:
(a) Company shall use $100,098 of the City Funds advanced for remodeling
the Facility.
(b) Company shall use $107,902 of the City Funds advanced for the acquisition
of Equipment by Company at fair market value from a reputable vendor in an arms length
transaction. Attached as Exhibit A is a list of Equipment which the Company proposes to acquire
and install in the Facility, with estimated costs of such Equipment. Any cost in excess of the
estimates on Exhibit A will be the responsibility of the Company. In the event the Company is
able to acquire the Equipment on the attached Exhibit A for a total amount less than the estimates
the Company may add other Equipment to that purchased in order to fully utilize the $107,902 to
be advanced by City. Company will give to City a first security interest in all equipment
purchased with City funds to secure Company's obligations under this Agreement and the Lease.
(c) Company shall file in the office of the City Clerk copies of the following:
(i) Company's certificate or other evidence of authority to transact business in the State of
Colorado issued by the Colorado Secretary of State, (ii) certified copy of the resolution of the
governing board of Company approving this Agreement, and authorizing its officers to execute
and deliver this Agreement in the name of Company, (iii) executed Continuing Guaranty, (iv)
executed copy of the Lease, and (v) evidence reasonably satisfactory to City that Company will
commence business operations at the Facility. The date of the last to occur of the filings required
under (i), (ii), (iii), (iv) and (v) of this Paragraph 2(c) shall be referred to herein as "Closing." If
Closing does not occur on or before September 30, 2004, or such later date as Company and City
shall mutually agree, City, at its sole option, may terminate this Agreement and City and Company
shall thereafter be released and discharged from all obligations hereunder.
(d) Company shall file with City's Director of Finance written request for
payment certified to be true and correct by an officer of Company or its representative that the
amounts included in the request for payment have not been included in any prior request for
payment and (i) if for equipment, are for the actual cost of Equipment, identifying the Equipment
for which payment is sought, including invoices therefore and certificates of delivery and
installation in the Facility, together with documentation, satisfactory to City, establishing such
Equipment has an exhaustable useful life of three (3) or more years, and (ii) if for remodeling, are
for the actual cost of remodeling the Facility, identifying the remodeling for which payment is
sought, including certificates of the architect and contractor that the remodeling for which
payment is sought has been completed. All City Funds received by Company shall be deposited
in a separate account and held in trust by Company for the sole and only purpose of paying for the
purchase of Equipment and/or remodeling of the Facility.
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3. If Company is not in default under this Agreement and has met or complied with
its Employment Commitment, City is willing to advance up to an additional Seventy -Five
Thousand Dollars ($75,000.00) for potential structural repairs to the floor and or the roof of the
Building, should the same be required and as more fully set forth in the Lease. In the event the
City does advance any such additional funds and the Company should for any reason default on its
Employment Commitment set forth in paragraph 4 hereof, Company shall repay to the City a pro -
rata share of the City Funds advanced by the City, pursuant to this paragraph 3 based upon the
number of Full -Time Employees employed by Company at Facility, from and after the date of
such advance, and taking into account the amount of City Funds so advanced (the Conditional
Repayment Obligation), as follows:
(a) The total amount advanced by the City, pursuant to this paragraph 3, would be
divided by 40 and the resulting amount divided by the number of months of the Repayment Period
remaining after the date of the advance. This result would be multiplied by 3. The resulting
amount would be multiplied on a quarterly basis, for each Quarter in which the Company fails to
meet its Employment Commitment, by the number of Full -Time Employees, less than 40,
employed at the Facility by the Company for that Quarter. This amount would be then paid to the
City. As an example, if the City had advanced a total of Forty Thousand Dollars ($40,000) as
provided in this paragraph 3 in the first month of the Repayment Period and in that Quarter the
Company employed 30 Quarterly Employees the Company would pay to the City $40,006 =40=
$1,000 =84= $11.90= $35.71 (the amount per Quarterly Employee) x 10 (the number of Quarterly
Employees less than 40) = $357.10.
(b) Payment of amounts due, pursuant to this paragraph 3 shall be made in the same
manner as is provided in paragraphs 5 (b) and (c) below for Repayment Obligations.
(c) Notwithstanding anything herein to the contrary, if Company defaults in its
Employment Commitment, 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 Conditional Repayment Obligation due and owing together with
interest thereon from the date of default at the rate of ten (10) percent per annum, and for such
purpose, the entire balance of Company's Conditional Repayment Obligation shall be an amount
equal to 40 times the amount per Quarterly Employee, as determined pursuant to paragraph 3 (a)
above, multiplied by the remaining Quarters of the Repayment Period plus the amount of
Company's unpaid Quarterly Payments, if any. Company's Conditional Repayment Obligation is
absolute and unconditional and shall not be abated, reduced, diminished, modified, withheld or
otherwise offset for any cause or reason whatsoever.
(d) Except as otherwise provided in Paragraphs 8 and 14 hereof, City's
damages for breach of this paragraph 3, by Company, shall not exceed the amount advanced by
the City, pursuant to this Paragraph 3, plus interest, provided that the amount to be repaid shall
be reduced by the amount per Quarterly Employee, as determined by paragraph 3(a) above, times
40 for each Quarter Company meets its Repayment Obligation during the Repayment Period
remaining after the date of the advance by either (i) employing forty (40) Quarterly Employees at
the Facility, or (ii) paying Company's Quarterly Payments as provided in Paragraph 3(a) above for
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such Quarter.
4. Company acknowledges and agrees that the primary purpose of City in 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 after Commencement Date of the Lease continuously conduct its business operations and
employ Full -Time Employees at the Facility as follows: (i) during the period from
Commencement Date of the Lease to the Employment Commitment Date, Company shall use its
best efforts in good faith to employ as many Full -Time Employees as reasonably justified by its
business operations, and (ii) on and after the Employment Commitment Date, Company shall
employ not less than forty (40) Full -Time Employees at the Facility (the "Employment
Commitment ").
5. Notwithstanding anything contained in this Agreement to the contrary, if Company
shall for any reason default in its Employment Commitment set forth in Paragraph 4, Company
shall repay to City a pro -rata share of the City Funds advanced by City under Paragraph 2 hereof
based upon the number of Full -Time Employees employed by Company at the Facility (the
"Repayment Obligation "), as follows:
(a) During the seven (7) year period starting on the Employment Commitment
Date and ending eighty -four (84) months thereafter (the "Repayment Period ") Company shall pay
to City an amount each Quarter equal to the Quarterly Employees less than forty (40) Full -Time
Employees employed at the Facility by Company multiplied by $185.71 (the "Company's
Quarterly Payments "). For example, if for the second Quarter of the third year after the
Employment Commitment Date such Quarterly Employees is 30, the amount payable by
Company to City on or before the fifteenth (15th) day of the next calendar month would be (40 -
30) x $185.71 = $1857.10.
(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, or such other person
or location as the City may designate. 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 after the
Employment Commitment Date and for one calendar month after the Repayment Period,
Company will submit to City's Director of Finance Company's statements showing the Quarterly
Employees and their salaries 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 records relating to Company's employees employed at the Facility. Except
in the event of any action filed by City to enforce this Agreement, City shall treat such
information as confidential and shall not disclose (except pursuant to a subpoena or court order)
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such information to any party other than those City employees who have a need to know such
information.
(d) Notwithstanding anything herein to the contrary, if Company defaults in its
Employment Commitment, 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 from the date of default 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 40 times
$185.71 multiplied by the remaining Quarters of the Repayment Period plus the amount of
Company's unpaid Quarterly Payments, if any. 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.
(e) Except as otherwise provided in Paragraphs 3, 8 and 14 hereof, City's
damages for breach of this Agreement by Company shall not exceed $208,000.00 plus interest,
provided, however, that the $208,000.00 shall be reduced by $5,200.00 for each Quarter
Company meets its Repayment Obligation during the Repayment Period by either (i) employing
forty (40) Quarterly Employees at the Facility, or (ii) paying Company's Quarterly Payments as
provided in Paragraph 4(a) above for such Quarter.
6. All City Funds advanced to Company by City under this Agreement shall be
deemed to be a debt of Company payable to City until Company performs and discharges its
obligations hereunder including its Repayment Obligation contained in Paragraph 4.
7. (a) Prior to instituting any proceeding to enforce Company's Repayment
Obligation under Paragraph 4, 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.
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8. In the event of any litigation arising under this Agreement, the court shall award
to, and the prevailing party shall recover its costs together with all internal and out -of- pocket
expenses of any kind relating to the litigation including, but not limited to, reasonable attorney
fees. Venue for any such litigation shall be Pueblo County, Colorado. All such litigation shall
be filed in the District Court, County of Pueblo, State of Colorado and each party submits to the
jurisdiction of such District Court. To the extent allowed by law, each party waives its right to a
jury trial.
9. This Agreement expresses the entire understanding of the parties and supersedes
and abrogates any and all prior dealings and commitments, whether oral or written, with respect
to the subject matter of this Agreement and may not be amended or modified except in writing
signed by City and Company. Any waiver of any provision of this Agreement must be in writing
and signed by the party whose rights are being waived. No waiver of any breach of any provision
hereof shall be or be deemed to be a waiver of any preceding or subsequent breach of the same or
any other provision of this Agreement. The failure of either party to enforce or seek enforcement
of the terms of this Agreement following any breach shall not be construed as a waiver of such
breach.
10. This Agreement shall be construed in accordance with and be governed by the
laws of the State of Colorado without regard to conflict of law principles.
11. Any notices hereunder shall be sufficiently given if given in writing personally or
mailed by first class, registered, or certified 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, 503 N.
Main Street, Pueblo, Colorado, 81003, or
(b) if to the Company, Deneen & Company 33850 United Blvd., Pueblo, CO.
81001 or to such other person or address as either party shall specify in written notice given to
the other party pursuant to the provisions of this Paragraph 10.
12. 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 express written consent of the City,
which consent may be arbitrarily withheld, conditioned or delayed. Any assignment or attempted
assignment of this Agreement by Company without such consent shall be null and void.
13. The persons signing this Agreement in the name of and on behalf of Company
represent and warrant that they 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 with its terms.
14. Company represents and warrants that no person, entity, or organization has been
employed or retained or will receive or be paid, directly or indirectly, any commission,
6
percentage, contingent fee or any other remuneration payment or receipt of which is contingent
upon approval of this Agreement or City's advancement of City Funds to Company hereunder.
For breach or violation of this warranty, City shall have the right to terminate this Agreement, or
recover the full amount of such commission, percentage, contingent fee or other remuneration, or
to seek such other remedies legally available to City, which remedies shall be cumulative.
15. In no event shall City, its officers, agents or employees be liable to Company for
damages, including without limitation, compensatory, punitive, indirect, special or consequential
damages, resulting from or arising out of or related to this Agreement or the performance or
breach thereof by City or the failure or delay of City in the performance of any covenant or
provision under this Agreement on its part to be performed. In consideration of City entering
into this Agreement, Company hereby waives and discharges City, its officers, agents and
employees from all claims for any and all such damages. No breach, default, delay or failure of
City under this Agreement shall be or be construed to be a waiver, discharge or release of
Company's Repayment Obligation under Paragraph 4 hereof with respect to the amount of City
Funds actually advanced or paid by City to or for the benefit of Company pursuant to Paragraph 2
hereof.
16. If any provision of this Agreement is declared by a court of competent jurisdiction
to be invalid or unenforceable, such determination shall not affect the other provisions of this
Agreement which shall remain in full force and effect.
17. Neither party shall be, or hold itself out as, agent of the other or as joint ventures
under this Agreement.
18. Each party acknowledges that this Agreement was fully negotiated by the parties
and, therefore, no provision of this Agreement shall be interpreted against any party because such
party or its legal representative drafted such provision.
19. The provisions of this Agreement are for the exclusive benefit of the parties
hereto and their successors and permitted assigns, and no third party shall be a beneficiary, or
have any rights by virtue of, this Agreement.
20. This Agreement may be executed in any number of counterparts, and each such
counterpart shall be deemed for all purposes to be an original, and all such counterparts shall
together constitute but one and the same original.
Executed at Pueblo, Colorado, the day and year first above written.
[SEAL] Pueblo, a Municipal Corporation
Attest: By ' Z
City erk Presiders f tfie City Council
fd
[SEAL]
Attest: I
Name: EA t Tx 1b&
Title: Secretary
STATE OF COLORADO )
COUNTY OF PUEBLO )
MM
o The foregoing instrument was acknowledged before me this 1 day of
2004 by Randy Thurston as President of the City Council and Gina Dutcher as
City Clerk of Pueblo, a municipal corporation.
my hand and official seal.
ss.
COUNTY OF PUEBLO )
The foregoing instrument was acknowledged before me this I o'�' of ",/,-
2004 by Gregory S. Deneen as President and L 0z 7�4 p EN ,6.o/' as secretary of
Deneen & Company
Witness my hand and official seal.
My commission expires: 2V / /4 //L3 - 7 .
[SEAL]
expires: A -D -Wl
NoYary Public
Notary
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�0]:1►1MMi;Il: oLejirIUFAR 'I
STATE OF COLORADO
CONTINUING GUARANTY
FOR VALUABLE CONSIDERATION, the receipt and sufficiency of which is hereby
acknowledged, and as inducement to the City of Pueblo, a municipal corporation (the "City ") to
enter into the attached Agreement dated September 13, 2004 between City and Deneen &
Company (the "Company ") (the "Agreement ") and advance to or for the benefit of Company the
sum of $208,000.00 pursuant to the terms and covenants of the Agreement, and as an inducement
to the City of Pueblo to advance funds for the purchase of Lot 67, Pueblo Memorial Airport
Industrial Park by Pueblo Development Foundation, and as an inducement to the Pueblo
Development Foundation to enter into a ten -year lease with Company for the northerly five (5)
acres of said Lot 67 and the 17,000 square foot building located thereon (the "Lease "), the
undersigned GREGORY S. DENEEN (the "Guarantor ") unconditionally guarantees and
promises to pay to City, or order, on demand, in lawful money of the United States, the full
amount of Company's Repayment Obligation described in and in accordance with the terms and
provisions of Paragraph 4 of the Agreement and all rent due and payable in accordance with the
terms and provisions of the Lease (collectively the "Indebtedness ").
The liability of Guarantor under this Guaranty shall not exceed at any one time the
principal sum of $760,000.00. This is a continuing irrevocable guaranty relating to the
Indebtedness, including successive transactions which shall either continue the Indebtedness or
from time to time modify or renew it. Any payment by Guarantor shall reduce his maximum
obligation hereunder.
The obligations of Guarantor hereunder are independent of the obligations of Company,
and a separate action or actions may be brought and prosecuted against Guarantor, whether action
is brought against Company or whether Company be joined in any such action or actions.
Guarantor acknowledges that the payment of the Indebtedness may extend beyond six (6) years
from the date of this Agreement. Guarantor hereby waives any defense to the enforcement of this
Guaranty based upon laches or any statutory or other period of limitation, provided, however,
that any such action to enforce this Guaranty shall be commenced on or before December 31,
2015.
Guarantor authorizes the City, without notice or demand and without affecting his
liability hereunder, from time to time to (a) renew, compromise, extend, accelerate or otherwise
change the time for payment of, or otherwise change or modify the terms of the Indebtedness or
any part there -of; (b) take and hold security for the payment of this Guaranty or the Indebtedness
guaranteed, and exchange, enforce, waive and release any such security; (c) apply such security
and direct the order or manner of sale thereof as City in its discretion may determine; and (d)
release or substitute any one or more of the Guarantors. City may without notice assign this
Guaranty in whole or in part.
Guarantor waives any right to require City to (a) proceed against Company; (b) proceed
against or exhaust any security held from Company; or (c) pursue any other remedy in City's
power whatsoever. Guarantor waives any defense arising by reason of any disability or other
defense of Company or by reason of the cessation from any cause whatsoever of the liability of
Company. Until the Indebtedness of Company to City shall have been paid in full, Guarantor
shall have no right of subrogation, and waives any right to enforce any remedy which City now
has or may hereafter have against Company, and waive any benefit of, and any right to participate
in any security now or hereafter held by City. Guarantor waives all presentments, demands for
performance, notices of non - performance, protests, notices of protest, notice of dishonor, and
notices of acceptance of this Guaranty.
Any debts or other financial obligations of Company now or hereafter held by Guarantor
are hereby subordinated to the Indebtedness of Company to City and such debts or other financial
obligations of Company to Guarantor, if City so requests, shall be collected, enforced and
received by Guarantor as trustee for City and be paid over to City on account of the Indebtedness
of Company to City but without reducing or affecting in any manner the liability of Guarantor
under the other provisions of this Guaranty.
Guarantor agrees that it is not necessary for City to inquire into the powers of Company
or the officers, directors, or agents acting or purporting to act on its behalf, and the Indebtedness
made or created in reliance upon the professed exercise of such powers is guaranteed hereunder.
Guarantor agrees to pay a reasonable attorneys' fee and all other costs and expenses which
may be incurred by City in the enforcement of this Guaranty.
Guarantor agrees that this Guaranty is a contract entered into in Pueblo County, Colorado.
The District Court for the County of Pueblo, State of Colorado shall have jurisdiction over any
suit or action which involves this Guaranty and venue in Pueblo County, Colorado shall be
proper. Guarantor consents to the personal jurisdiction of that Court and agrees that service of
process may be made upon Guarantor either within or without the State of Colorado.
Any notice hereunder shall be sufficiently given if given personally or mailed by certified
mail, postage prepaid, addressed:
(a) if to City, City Manager, City of Pueblo, 1 City Hall Place, Pueblo,
Colorado, 81003, or
(b) if to Guarantor, at the addresses shown after his respective signature
hereon,
or to such other addresses as any party hereto shall specify in written notice to the other parties.
Time is of the essence hereof. This Guaranty shall be binding upon and inure to the
benefit of City and Guarantor and their respective heirs, personal representatives, successors and
assigns.
IN WITNESS WHEREOF the undersigned Guarantor has executed this Guaranty in
Pueblo, Colorado this /0 day of S y, % .e- 1 2004.
STATE OF COLORADO )
ss.
COUNTY OF PUEBLO )
The foregoing instrument was acknowledged before me this f day of
2004 by
My commission expires: ?./ /Y�J
18 E ]
Notary
Social Security No. 'S?'►. 6 6 - ,C$ 8 $
EXHIBIT A.
DENEEN FOODS
1590 San Mateo Lana - Santa Fe. New Mexico 87505 - 505- 988 -1515 - Fax 505 - 988 -1300
Equipment - To Be Purchased - Pueblo, CO Location
Generally these are estimated costs for the purchase of used equipment.
Item Quanity Cost Total
Labeler- Juice
1
$11,500
$11,500
Filler - Juice
1
$7,500
$7,500
Juice Finisher
1
$4,450
$4,450
VCM 80 Chopper /Cutter
1
$7,500
$7,500
Schlueter - Steam Agitated Washer
1
$13,000
$6,000
Stainless Steel Pipes/pumps
1
$827
$627
Computers - Server *New
1
$3,125
$3,125
Computers - Terminals "New
2
$1,250
$2,500
Printers *New
2
$350
$700
FAX "New
1
$250
$250
40x40 Cooler
1
$11,250
$11,250
40x40 Freezer
1
$11,250
$11,250
Refrig. Compressors & Equipt.
1
$12,000
$12,000
Urschel Dicer /Sliver
1
$9,500
$9,500
Maw Flow Through Grill
1
$6,300
$6,300
Accumulator
1
$1,500
$1,500
Decumulator
1
$1,500
$1500
Linear Conveyor
1
$1,250
$1,250
Dry Filler
1
$3,500
$3,500
ForklHt
1
$4,500
$4,500
Air Compressor
1
$1,000
$1,000
$107,902
SWNRISE
t 7� - 14 A&
Salsa de Santa Fe
LEASE
THIS LEASE entered into as of September 13, 2004 by and between Pueblo
Development Foundation, a Colorado nonprofit corporation (the "Lessor ") and Deneen &
Company, a New Mexico Corporation (the "Lessee "), WITNESSETH:
WHEREAS, Lessor is or will be the owner of the northerly five (5) acres of Lot 67,
Pueblo Memorial Airport Industrial Park Subdivision, Pueblo County, Colorado, consisting of a
building containing approximately 17,000 square feet (the "Building ") located on approximately
5.0 acres of land (the "Land ") (collectively the Land and Building are referred to herein as the
"Leased Premises "), and
WHEREAS, subject to the covenants and conditions of this Lease, Lessor will remodel
the Building in accordance with plans and specifications therefor prepared by
tv 6" e�gdg&,rl (the Contractor) and approved by Lessor and Lessee, and
WHEREAS, Lessee is desirous of leasing and obtaining the option to purchase the
Leased Premises upon the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual promises, covenants and conditions
contained herein, Lessor and Lessee hereby agree as follows:.
Article 1. Leased Premises
1.01 Lessor hereby leases to Lessee and Lessee hereby leases from Lessor, subject to
the covenants, provisions and conditions herein, the Leased Premises.
1.02 This Lease and Lessee's use of the Leased Premises are subject to the easements,
rights -of -way, covenants, conditions, restrictions, reservations and limitations appearing of
record, and all applicable zoning and land use laws, ordinances, codes and regulations governing
and regulating the Leased Premises and its use.
Article 2. Buildinz Construction
2.01 Lessor shall cause the Building to be remodeled as herein provided (the
"Remodeling ") and shall pay the actual cost of Remodeling up to but not to exceed $100,098.00
(the "Maximum Construction Costs "). The Maximum Construction Costs consist of the
$100,098.00 to be advanced by City to or for the benefit of Company to be used for Remodeling
the Building pursuant to separate Agreement between Lessee and City of Pueblo (the "City ")
dated as of September 13, 2004, a copy of which is attached hereto as Exhibit "A" and
incorporated herein (the "City Agreement "). Capitalized terms used in this Lease shall have the
same meaning as those terms are used in the City Agreement or otherwise defined herein.
Page I of 18
2.02 All costs and expenses of Remodeling in excess of the Maximum Construction
Costs ( "Excess Construction Costs ") shall be the sole responsibility of Lessee and shall be paid
by Lessee to Lessor in cash or certified funds within five (5) days after such Excess Construction
Costs are incurred.
2.03 The Remodeling shall be designed and constructed
(a) in accordance with the plans, specifications therefor prepared by the
Contractor (the "Contractor's Plans ") and the construction contract documents with the General
Contractor approved by Lessee and Lessor (the "Construction Documents "). The Contractor's
Plans and Construction Documents after approval in writing by both Lessor and Lessee shall be
incorporated herein by reference, as if set out herein in full; and
(b) by a general contractor selected by Lessor after competitive bidding which
allow qualified local contractors to participate in the competitive bidding procedures (the
"General Contractor "). The selection of the Contractor and/or General Contractor, as they may
be variously referenced in this Lease, shall be made in compliance with the provisions of Section
3(h) of Ordinance No. 6381 of the Ordinances of the City of Pueblo. The General Contractor
shall to the extent feasible use local subcontractors and suppliers. The term "local" means
companies having their principal places of business in the City of Pueblo.
2.04 Lessor and Lessee shall cooperate in good faith to cause the Remodeling to be
substantially completed on or before October 31, 2004. The failure for any reason to
substantially complete the Remodeling by October 31, 2004 shall not affect the validity of this
Lease nor the obligations of Lessor and Lessee hereunder, and shall not constitute a breach or
default by Lessor hereunder.
2.05 All changes in the approved Contractor's Plans and Construction Documents shall
be approved by Lessor and Lessee. The failure of Lessor or Lessee to approve or reject any
proposed change in the Contractor's Plans or Construction Documents, or any modification
thereto, or any proposed change in the work within the general scope of construction
contemplated by the Construction Documents, within five (5) days after receipt thereof shall
constitute approval thereof, provided, however, that all changes which result in the construction
costs to be greater than the Maximum Construction Costs must be approved in writing by both
Lessor and Lessee, and Lessee shall pay to Lessor the cost of such change in cash or certified
funds within five (5) days after the approval of such change by Lessor and Lessee.
2.06 Whenever in this Article 2 or in any other Article of this Lease, the approval or
consent of Lessor or Lessee is required, such approval or consent shall not be unreasonably
withheld, conditioned or delayed.
Article 3. Term
The Term of this Lease shall be ten (10) years commencing upon the date that Lessor
notifies Lessee that Remodeling has been substantially completed (the "Commencement Date ")
Page 2 of 18
and ending ten (10) years thereafter, unless sooner terminated as provided herein (the
"Termination Date "). If Lessee does not agree that the Remodeling has been substantially
completed on the date specified in the notice from Lessor, Lessee shall promptly notify Lessor of
its objection to those matters which are not substantially completed. Lessor shall consider, in
good faith, Lessee's objections and shall either (i) extend the Commencement Date, or (ii)
respond with an explanation of why substantial completion has occurred and the Commencement
Date shall be the same as previously stated in Lessor's original notice. Lessor and Lessee
acknowledge and agree that certain obligations under various Articles of this Lease shall
commence prior to Commencement Date, including but not limited to Article 2, Building
Constriction, and Lessor and Lessee agree to and are bound by any such Articles prior to the
Commencement Date.
Article 4. Rent
4.01 Lessee shall pay to Lessor rent for the full term of $595,000.00 payable in
monthly installments of $4,959.00, in advance, without notice or demand, with the first monthly
installment due on Commencement Date, and subsequent monthly installments due on the same
day of each month thereafter.
4.02 All monthly rent and other payments required to be made by Lessee hereunder
which shall remain unpaid fifteen (15) days after their due dates shall bear interest at the rate of
ten percent (10 %) per annum until paid. All rent and other payments shall be made at or mailed
by United States mail to the following address: P. O. Box 1663, Pueblo, Colorado, 81002, or
such other address as Lessor may from time to time designate to Lessee in writing.
4.03 Lessee's obligation to pay rent to Lessor hereunder is absolute and unconditional
and rent shall not be offset, abated, reduced or withheld for any cause or reason whatsoever.
4.04It is the intent of the parties hereto that this Lease be a "triple net "lease with Lessor incurring
no obligation, monetary or otherwise, except for Remodeling under Article 2, and the provisions
of Article 4.05, hereof,
4.05 Lessor and Lessee have determined that during the term of this Lease it may be
necessary to make structural repairs to the floor and /or roof of the Building. Lessor and Lessee
agree that in the event it is reasonably determined that such repairs are required during the term
of this Lease the cost of such repairs shall be on a shared basis as set forth in this Article 4.05.
The maximum total amount in which the Lessor shall share is Seventy-Five Thousand Dollars
($75,000.00). The cost sharing shall be on a pro rata basis which will be adjusted annually on
the following basis.
Page 3 of 18
Lessor
Lessee
Year 1 of Lease
90%
10%
Year 2 of Lease
80%
20%
Year 3 of Lease
70%
30%
Year 4 of Lease
60%
40%
Year 5 of Lease
50%
50%
Page 3 of 18
Year 6 of Lease
40%
60%
Year 7 of Lease
30%
70%
Year 8 of Lease
20%
80%
Year 9 of Lease
10%
90%
As an example, if in year one of the lease Twenty Thousand Dollars of such repair
expenses were incurred the Lessor would pay Eighteen Thousand Dollars ($18,000.00) of such
expenses and the Lessee would pay Two Thousand Dollars ($2,000.00) of such expenses. In no
event shall the contribution of Lessor exceed Seventy -five Thousand Dollars ($75,000.00)
cumulatively over the term of the Lease. Lessee will, in the event it reasonably determines that
repairs qualifying under this Article 4.05 are necessary, notify the Lessor in writing of such
anticipated repairs and the estimated costs, prior to commencement of such repairs. The
contribution of the Lessor for such repairs will be advanced by the City for the benefit of the
Company. Lessee shall undertake and complete such repairs in compliance with all applicable
building codes.
Article 5. Use of Leased Premises
5.01 The Leased Premises shall be used and occupied by Lessee exclusively for
manufacturing purposes associated with or incident to Lessee's business activities.
5.02 Lessee shall use the Leased Premises in a careful, safe and proper manner in
compliance with all laws and regulations applicable to the Leased Premises and Lessee's use
thereof. Lessee shall not cause, maintain or permit any nuisance or waste in, on, or about the
Leased Premises.
5.03 Lessee shall not abandon nor cease to conduct business on the Leased Premises
for any period longer than 180 consecutive days.
Article 6. Condition of Premises
6.01 IT IS UNDER -STOOD AND AGREED THAT LESSOR IS NOT MAKING
AND HAS NOT AT ANY TIME MADE ANY WARRANTY OR REPRESENTATION OF
ANY KIND OR CHARACTER, EXPRESS OR IMPLIED, WITH RESPECT TO THE LEASED
PREMISES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTY OR
REPRESENTATION AS TO HABITABILITY, MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, TITLE (OTHER THAN THE COVENANT OF QUIET
POSSESSION SET FORTH IN ARTICLE 19), ZONING, PHYSICAL OR ENVIRONMENTAL
CONDITIONS, UTILITIES, GOVERNMENTAL APPROVALS, THE COMPLIANCE OF THE
LEASED PREMISES WITH GOVERNMENTAL LAWS, THE TRUTH, ACCURACY OR
COMPLETENESS OF ANY DOCUMENT OR OTHER INFORMATION PROVIDED TO
LESSEE BY ANY OTHER PERSON, OR ANY OTHER MATTER OR THING REGARDING
THE LEASED PREMISES.
6.02 The taking of possession of the Leased Premises by Lessee after Commencement
Date shall be conclusive evidence that the Remodeling has been completed in compliance and
Page 4 of 18
accordance with the approved Contractor's Plans and Construction Documents, that Lessee
accepts the Leased Premises in its then present condition "As Is, Where Is, With All Faults" and
that the Leased Premises are in good and satisfactory condition at the time such possession was
taken.
6.03. Notwithstanding the foregoing the provisions of Article 4.05 are not superceded and
in the event of a conflict in the interpretation of the provisions of this Lease the provisions of
Article 4.05 shall control.
Article 7. Alterations and Improvements
7.01 Lessee shall not make any additions, alterations or improvements in or to the
Leased Premises ( "Alterations ") without Lessor's prior written consent. Lessee shall not permit
or allow any lien to be filed or recorded against the Leased Premises or Lessor's interest therein,
and Lessee shall fully cooperate with Lessor in obtaining the protection afforded Lessor under
Section 38 -22 -105, C.R.S. All Alterations made in or to the Leased Premises by Lessee shall
become part of the Leased Premises and be surrendered with the Leased Premises at the
termination of this Lease.
7.02 All equipment, fixtures and improvements of a detachable or temporary nature
installed or placed upon the Leased Premises by Lessee, including trade fixtures, shall remain the
property of Lessee, subject to Lessee's right, at its option, to remove same not later than ten (10)
days after termination of this Lease. Lessee, at its expense, shall promptly repair any damage
resulting from such removal. The failure of Lessee to remove its equipment, fixtures and
detachable improvements within ten (10) days after termination of this Lease shall, at the option
of Lessor, be deemed an abandonment of such property and Lessor may dispose of such property
as the Lessor, in its sole discretion, may determine.
Article 8. Repairs and Maintenance
8.01 Except for Remodeling as provided in Article 2 hereof, and the provisions of
Article 4.05, hereof, , Lessor shall not be obligated to repair, maintain or alter the Leased
Premises or any part thereof. Lessee, at its expense, shall keep and maintain the Leased
Premises, including, without limitation, the Building, structural components, roofs, walls,
fixtures, and electrical, heating, mechanical, plumbing and air conditioning systems, and adjacent
sidewalks and parking area, in good condition and repair and in a good, clean and safe condition
at all times during the effective term of this Lease and return the same to Lessor at Termination
Date in as good condition and state of repair as the same were in as of Commencement Date,
except for ordinary wear.
8.02 If Lessee becomes obligated to make repairs which are or may be covered by any
manufacturer's or General Contractor's warranty issued to or for the benefit of Lessor, Lessor
will assign and transfer to Lessee its interest in any such warranty for the purpose of making such
repairs. If any such warranty may not be legally assigned, Lessor, at the request and expense of
Lessee, will in good faith enforce such warranty on behalf of Lessee.
Page 5 of 18
8.03 If Lessee becomes obligated to make repairs caused by an occurrence covered by
the insurance described in Article 12, the net proceeds of such insurance shall be made available
to Lessee to offset the cost of such repairs.
Article 9. Right of Entry
Lessor, or Lessor's officers, employees, agents and representatives, as the case may be,
may enter the Leased Premises during normal business hours upon prior written notice to Lessee,
except notice shall not be required in case of emergency, such as fire.
Article 10. Assignment
Lessee shall not voluntarily or by operation of law assign all or any part of the Lease or
Lessee's interest therein without the express written consent of Lessor, which consent will not be
unreasonably withheld. Lessor may withhold its consent if the proposed assignee's financial
standing and responsibility at the time of the proposed assignment is insufficient in the Lessor's
sole discretion to give assurance of performance and compliance with all terms and conditions of
this Lease and the City Agreement. Upon such an assignment and consent, Lessee shall be
released from all obligations arising or occurring under this Lease after the effective date of such
assignment and consent, provided that such assignee shall execute, acknowledge and deliver to
Lessor an assumption agreement in form and substances satisfactory to Lessor, whereby assignee
agrees to observe, perform and keep all the terms, provisions, covenants and conditions required
to be observed, performed and kept by Lessee hereunder and under the City Agreement. Any
assignment or attempted assignment of the Lease or any interest herein by Lessee without
Landlord's express written consent shall be null and void. Notwithstanding the foregoing,
Lessee may not assign or transfer the right to obtain title to the Leased Premises under Article 17
independent or separate from an assignment or transfer of the Lease as a whole.
Article 11. Insurance and Indemnification
11.01 Lessee shall indemnify and hold Lessor harmless from and defend Lessor against
any and all claims or liability, including cost of defense and reasonable attorney fees, for any
injury or damage to Lessee or its officers, agents or employees, or to Lessee's property, or to any
third person, or to the property of any third person: (a) occurring in, on or about the Leased
Premises or any part thereof by or from any cause whatsoever except injury or damage caused by
the wrongful or intentional acts of Lessor, its officers or employees; or (b) arising out of or
resulting from the Leased Premises, or any condition thereon, or from Lessee's use and
occupancy of the Leased Premises, or any equipment therein or appurtenances thereto, or any
activity conducted thereon.
11.02 Lessee shall secure and maintain in full force and effect, at its expense, during the
Tenn of this Lease, commercial liability insurance including personal injury, property damage
and contractual coverage in the minimum amount of $2,000,000 combined single limits naming
Lessor as an additional insured.
Page 6 of 18
11.03 Lessee shall secure and maintain during the Term of this Lease Colorado
Workers' Compensation insurance or other similar coverage in the statutorily mandated amounts.
11.04 A copy of each insurance policy, or certificate thereof, issued by an association or
company authorized to issue such policy or policies under the laws of the State of Colorado
containing a provision prohibiting cancellation or material modification of the insurance except
after thirty (30) days' notice to Lessor, shall be delivered to the Lessor within thirty (30) days
after date of this Lease, and thereafter the Lessee will furnish to Lessor evidence of the
continuance of the insurance coverage required herein within a reasonable time after the same
has been issued.
Article 12. Fire and Extended Coverage Insurance
12.01 Lessee shall, at its expense, during the Term of this Lease, secure and maintain in
full force and effect "All- Risk" casualty insurance (including, without limitation, fire, extended
coverage and boiler insurance) upon the Leased Premises. Such insurance shall be in an amount
not less than the full replacement value of the Building and improvements (without deduction for
physical depreciation), and issued by an insurance company or association authorized to issue
such policies under the laws of the State of Colorado and approved by Lessor, shall contain a
deductible of not more than $15,000.00 and a standard Colorado mortgagee clause in favor of
Lessor, and shall not be subject to cancellation, reduction or modification upon less than thirty
(30) days' written notice to Lessor. Such insurance, by its terms or by endorsement, shall waive
any right of subrogation of the insurer against Lessor, its officers, agents and employees, for any
loss or damage resulting from covered perils. Lessee will furnish to Lessor evidence of such
insurance and its continuance during the Term of this Lease.
12.02 Lessee shall, at its expense, secure and maintain fire and extended coverage
insurance on all fixtures, equipment and improvements installed by Lessee on the Leased
Premises. Such insurance, by its terms or by endorsement, shall waive any right of subrogation
of the insurer against Lessor, its officers, agents and employees, for any loss or damage resulting
from covered perils.
Article 13. Taxes and Assessments
13.01 Lessee shall promptly pay and discharge as they become due and before
delinquency any and all property taxes, assessments, charges, liens, levies or excises, whether
general or special or ordinary or extraordinary, of every name, nature and kind whatsoever,
including all governmental charges of whatsoever name, nature or kind, which may be levied,
charged or imposed, or which may become a lien or charge on or against the Leased Premises or
any part thereof, the leasehold interest of Lessee herein, or the improvements situated on the
Leased Premises during the effective period of this Lease. General property taxes shall be
prorated for periods falling within the Term of this Lease. Notwithstanding the foregoing, Lessee
shall have no responsibility to pay and/or discharge any mechanics' liens arising out of or
relating to failure to pay for Remodeling made by Lessor prior to Commencement Date, provided
Lessee has paid to Lessor all Excess Construction Costs.
Page 7of18
13.02 Lessee shall pay before delinquency any and all property taxes levied or charged
against any of the personal property belonging to it and situated on the Leased Premises or used
in connection with the operation and maintenance of the Building on the Leased Premises.
13.03 Lessee shall have the right to contest or review, by legal proceedings at its own
expense, and if necessary in the name of Lessor, or in such other manner as it may deem suitable,
any tax, assessment, levy or charge herein agreed to be paid by Lessee under this Article 13.
Lessee may defer payment of any such contested item if in connection with the proceeding
instituted by Lessee there shall have been obtained a stay of the collection of the item so
contested. In the event of such contest, Lessee shall give Lessor written notice prior to the
commencement of any such contest which shall be at least ten (10) days prior to delinquency of
the item in contest and, on request of Lessor, Lessee shall give to Lessor a good and sufficient
surety bond indemnifying Lessor and the Leased Premises against any such tax, assessment, levy
or other charge and from any cost, liability or damage arising out of such contest. In the event
any notices of proposed increases in taxes, assessments, levies or charges which are the
obligation of Lessee are received by Lessor, it shall promptly, but in no event later than 45 days
after receipt thereof, forward the same to Lessee in order that Lessee may proceed with payment
or contest procedures within the periods provided for such purposes.
13.04 All rebates or refunds on account of any tax assessments, levy or charge required
to be paid and paid by Lessee shall belong to Lessee, and Lessor will, on request of Lessee,
execute any documents which may be necessary in order to secure the recovery of any such
rebates or refunds and shall promptly pay over to Lessee any such rebates or refunds that may be
received by Lessor whether received before or after the end of this Lease.
13.05 Lessee shall furnish Lessor within thirty (30) days after any amount is payable by
Lessee under this Article 13, official receipts of the appropriate taxing authority or lienholder or
other proof satisfactory to Lessor evidencing such payments as are required under this Article 13.
Article 14. Utilities
Lessee shall pay before delinquent City of Pueblo's combined service fee and all charges
for sewer, water, gas, electricity, telephone and all other utility services famished to or used in or
supplied to the Leased Premises. Lessor shall not be obligated to furnish or provide any utilities,
facilities or services of any kind.
Article 15. Damage to or Destruction of Premises
15.01 If, during the Term of this Lease, the Leased Premises shall be damaged to such
an extent that the repair of such damage and the restoration of the Leased Premises can be
accomplished, with reasonable diligence, within one hundred eighty (180) days after such
damage, Lessee shall promptly repair such damage and cause the Leased Premises to be restored
to their condition prior to the event causing the damage. If, during the Term of this Lease, the
Leased Premises shall be destroyed or damaged, or partially destroyed or damaged, without
Page 8 of 18
Lessee's fault to such an extent that the repair of such destruction or damage and the restoration
of the Leased Premises cannot be accomplished, with reasonable diligence, within one hundred
eighty (180) days after destruction or damage, then Lessee shall promptly notify Lessor in writing
of such fact within forty -five (45) days after the date of such destruction or damage, and Lessee
shall thereafter have the right, during a period of thirty (30) days following such notification, to
terminate this Lease by written notice to the Lessor, declaring this Lease to be terminated
provided, however, that, as a condition precedent to such termination, all proceeds of insurance
required to be maintained by Lessee under Article 12.01 shall be paid to Lessor, or, if Lessee fails
to maintain the insurance required to be maintained by Lessee under Article 12.01, an amount
equal to the insurance proceeds which would have been available but for such failure shall be
paid by Lessee to Lessor. Unless such notice of immediate termination shall be given within
such 30 -day period, this Lease shall continue in full force and effect and Lessee shall promptly
repair such destruction or damage and cause the Leased Premises to be restored to their condition
prior to the event causing the destruction or damage. In the event the Leased Premises are
destroyed or damaged, or partially destroyed or damaged without Lessee's fault, the monthly rent
payable by Lessee shall be abated proportionately according to the floor area of the Leased
Premises which is useable by Lessee. Such abatement shall continue for the period commencing
with such damage or destruction and ending when Lessee completes repair work or
reconstruction, provided Lessee diligently commences and expeditiously completes the repair
work or reconstruction.
15.02 Lessee shall make the repairs, restoration or rebuilding as expeditiously as
possible in accordance with plans and specifications submitted to and approved in writing by
Lessor and in compliance with all applicable laws, regulations and codes.
Article 16. Eminent Domain
If the whole or substantial part of the Leased Premises shall be taken or condemned by
any competent authority for any public or quasi - public use or purpose under any statute or by the
right of eminent domain, or purchased under threat of such taking, then this Lease shall terminate
on the date when the condemning authority takes possession of the Leased Premises or the
substantial part thereof so taken. There shall be no apportionment of the award for taking or
condemnation, the entire award going to Lessor, provided Lessee shall have the right to recover
any award which may be made for damages to or condemnation of Lessee's movable trade
fixtures, equipment, furniture and furnishings or payments for relocation, if any.
Article 17. Transfer of Title
If Lessee is not in default under this Lease and/or the City Agreement, and if Lessee has
continuously conducted its business on the Leased Premises and met and complied with Lessor's
Employment Commitment set forth in Paragraph 3 of the City Agreement for the full 10 -year
Term of this Lease, Lessor will convey title to the Leased Premises to Lessee by quit claim deed
subject to Article 18.
Article 18. Conditions of Title Convene
Page 9 of 18
18.01 Title to the Leased Premises will be conveyed subject to the following conditions
and requirements:
(a) Title shall be conveyed no later than 30 days after the last day of the Term
of this Lease;
(b) Conveyance shall be made by quit claim deed; subject to easements, taxes,
rights -of -way, conditions, covenants, restrictions, reservations, and limitations of record and
those created by acts of defaults of Lessee; any matters contained in the Subdivision Plat for
Pueblo Memorial Airport Industrial Park; and standard printed exceptions 1 through 4 contained
in owner's title insurance customarily issued in Pueblo County, Colorado.
(c) LESSEE ACKNOWLEDGES AND AGREES THAT LESSOR SHALL
CONVEY TO LESSEE AND LESSEE SHALL ACCEPT THE LEASED PREMISES "AS IS,
WHERE IS, AND WITH ALL FAULTS." LESSEE HAS NOT RELIED AND WILL NOT
RELY ON, AND LESSOR IS NOT LIABLE FOR OR BOUND BY, ANY EXPRESS OR
IMPLIED WARRANTIES, GUARANTIES, STATEMENTS, REPRESENTATIONS OR
INFORMATION PERTAINING TO THE LEASED PREMISES OR RELATING THERETO
MADE OR FURNISHED BY LESSOR, OR AGENT REPRESENTING OR PURPORTING TO
REPRESENT LESSOR, TO WHOMEVER MADE OR GIVEN, DIRECTLY OR
INDIRECTLY, VERBALLY OR IN WRITING. LESSEE REPRESENTS TO LESSOR THAT
LESSEE HAS CONDUCTED, OR WILL CONDUCT PRIOR TO CONVEYANCE, SUCH
INVESTIGATIONS OF THE LEASED PREMISES, INCLUDING BUT NOT LIMITED TO,
THE PHYSICAL AND ENVIRONMENTAL CONDITIONS THEREOF, AS LESSEE DEEMS
NECESSARY TO SATISFY ITSELF AS TO THE CONDITION OF THE LEASED
PREMISES AND THE EXISTENCE OR NONEXISTENCE OR CURATIVE ACTION TO BE
TAKEN WITH RESPECT TO ANY HAZARDOUS OR TOXIC SUBSTANCES ON OR
DISCHARGED FROM THE LEASED PREMISES, AND WILL RELY UPON SAME AND
NOT UPON ANY INFORMATION PROVIDED BY OR ON BEHALF OF LESSOR OR ITS
AGENTS OR EMPLOYEES WITH RESPECT THERETO. LESSEE SHALL ASSUME THE
RISK THAT ADVERSE MATTERS, INCLUDING BUT NOT LIMITED TO,
CONSTRUCTION DEFECTS AND ADVERSE PHYSICAL AND ENVIRONMENTAL
CONDITIONS, MAY NOT HAVE BEEN REVEALED BY LESSEE'S INVESTIGATIONS,
AND, UPON CONVEYANCE, SHALL BE DEEMED TO HAVE WAIVED, RELINQUISHED
AND RELEASED LESSOR FROM AND AGAINST ANY AND ALL CLAIMS, DEMANDS,
CAUSES OF ACTION (INCLUDING CAUSES OF ACTION IN TORT), LOSSES,
DAMAGES, LIABILITIES, COSTS AND EXPENSES (INCLUDING ATTORNEYS' FEES
AND COURT COSTS) OF ANY AND EVERY KIND OR CHARACTER, KNOWN OR
UNKNOWN, WHICH LESSEE MIGHT HAVE ASSERTED OR ALLEGED AGAINST
LESSOR AT ANY TIME BY REASON OF OR ARISING OUT OF ANY CONSTRUCTION
DEFECTS, PHYSICAL CONDITIONS, VIOLATIONS OF ANY APPLICABLE LAWS
(INCLUDING ANY ENVIRONMENTAL LAWS) AND ANY AND ALL OTHER ACTS,
OMISSIONS, EVENTS, CIRCUMSTANCES OR MATTERS REGARDING THE LEASED
PREMISES. LESSOR AGREES THAT SHOULD ANY CLEANUP, REMEDIATION OR
Page 10 of 18
REMOVAL OF HAZARDOUS SUBSTANCES OR OTHER ENVIRONMENTAL
CONDITIONS ON THE LEASED PREMISES BE REQUIRED BY ANY GOVERNMENTAL
ENTITY AFTER THE DATE OF CONVEYANCE, SUCH CLEAN -UP, REMOVAL OR
REMEDIATION SHALL, AS BETWEEN LESSOR AND LESSEE, BE THE
RESPONSIBILITY OF AND SHALL BE PERFORMED AT THE SOLE COST AND
EXPENSES OF LESSEE. THE COVENANTS AND REPRESENTATIONS OF LESSEE SET
FORTH IN THIS ARTICLE 18.01(c) SHALL SURVIVE THE RECORDATION OF THE
QUIT CLAIM DEED AND SHALL NOT BE MERGED INTO THE QUIT CLAIM DEED
UPON ITS RECORDATION.
Article 19. Option to Purchase Additional Five Acres.
If Lessee is not in default under this Lease and/or the City Agreement, and if Lessee has
continuously conducted its business on the Leased Premises and met and complied with Lessee's
Employment Commitment set forth in Paragraph 3 of the City Agreement, Lessee may purchase
an additional five acres (the Parcel) from Lessor, subject to the terms and conditions set forth in
this Article 19. The Parcel will be adjacent to the Leased Premises the precise configuration and
location of the Parcel to be determined by mutual agreement of Lessor and Lessee. The price for
the Parcel shall be either $32,670 per acre or, the commitment of Lessee to provide employment
for an additional 6 (six) individuals, per acre, pursuant to an agreement mutually acceptable to
the City and Lessee and, in the event Lessee chooses to provide additional employment in
consideration for the Parcel, an agreement between Lessee and the City, in a form similar to the
City Agreement attached hereto, except the employment commitment date in such agreement
will commence upon the effective date of that agreement. Any such additional written
agreement for acquisition of the Parcel will include a provision similar to Article 18 of this
Lease. Should the Lessor and Lessee or the Lessee and the City be unable to resolve all
necessary terms in such additional agreements neither Lessor, Lessee nor the City will be bound
to proceed with such a sale and purchase of the Parcel.
Article 20. Quiet Possession
Lessee shall, and may peacefully have, hold and enjoy the Leased Premises, subject to the
other terms hereof, provided that Lessee pays the monthly rent herein recited and performs all of
Lessee's covenants and agreements contained herein and in the City Agreement.
Article 21. Default
21.01 In the event of default at any time by Lessee in the payment of the monthly rent
herein provided for or in the performance of any other of its covenants herein contained or
contained in the City Agreement, Lessor shall have the right, after thirty (30) days' notice in
writing to Lessee and Lessee's failure within said thirty (30) day period to cure said default, or if
said default does not relate to the payment of money and cannot by its nature be cured within said
thirty (30) day period, to undertake and diligently pursue action to cure said default, to either:
Page 11 of 18
(a) terminate this Lease and re -enter and take possession of the Leased
Premises, and/or
(b) pursue any remedy whatsoever provided by law; and/or
(c) re -enter and take possession of the Leased Premises and use its best efforts
to relet the same for and on account of Lessee for the then full remaining portion of the
unexpired Term of this Lease or for any shorter period, and to collect and receive payment of rent
therefor, but no such re -entry or re- letting shall be construed as a termination of this Lease or as a
release of Lessee from Lessee's obligation to pay monthly rent provided for in this Lease, or from
Lessee's obligation to perform any other covenant herein contained. It expressly being
understood and agreed that in the event of any such re -entry or re- letting by Lessor such re -entry
or re- letting shall not operate to terminate this Lease or alter the obligation of Lessee to perform
its covenants and to pay monthly rent pursuant to the terms hereof unless Lessor expressly so
elects pursuant to paragraph 21.01(a) above. Lessor shall in no way be responsible or liable for
any failure to re -let the Leased Premises, or any part thereof, or for any failure to collect any rent
due upon such re- letting. No notice from lessor hereunder or under a forcible entry and detainer
statute or similar law constitutes an election by Lessor to terminate this Lease unless such notice
specifically so states. Lessor reserves the right following any such re -entry and/or reletting to
exercise its right to terminate this Lease; and/or
(d) cure the default on Lessee's behalf and at Lessee's expense, in which
event, all costs, expenses and reasonable attorney's fees incurred by Lessor in curing the default
together with interest thereon at the rate of ten (10) percent per annum shall constitute additional
rent payable to Lessor by Lessee upon demand.
21.02 If Lessor does not elect to terminate this Lease but takes possession as provided
for in Article 21.01(c), Lessee shall pay to Lessor the monthly rent and other charges at the times
and in the manner as herein provided which would be payable if such repossession had not
occurred, less the net proceeds, if any, of any re- letting of the Leased Premises after deducting all
Lessor's reasonable expenses including, without limitation, all repossession costs, brokerage
commissions, legal expenses, attorneys' fees, alteration and repair costs and expenses of
preparation for such re- letting.
21.03 In the event the parties hereto become involved in a dispute arising out of this
Lease, or the performance or breach thereof, the Court shall award costs, expenses, and attorney
fees to the prevailing party.
21.04 If Lessee violates any of the terms and provisions of this Lease or defaults in any
of its obligations hereunder other than the payment of monthly rent or other sum payable
hereunder, such violation may be restrained or such obligation enforced by injunction at the
instance and request of Lessor without the showing of any special damages or an inadequate
remedy at law.
Article 22. Waiver and Time of Essence
Page 12 of 18
No waiver of any breach or breaches of any provision, covenant or condition of this Lease
shall be construed to be a waiver of any preceding or succeeding breach of such provision,
covenant or condition, or of any other provision, covenant or condition. Acceptance of monthly
rent or partial monthly rent by Lessor shall not constitute a waiver of any then existing or
subsequent breach or default. Time is of the essence for each and every provision, covenant and
condition herein contained and on the part of Lessee to be done and performed.
Article 23. Assignment by Lessor
Lessor shall have the right to transfer and assign, in whole or in part, all its right and
obligations hereunder and in the Leased Premises, and in such event and upon Lessor's transferee
assuming Lessor's obligations hereunder no further liability or obligation shall thereafter accrue
against Lessor hereunder. Lessor shall give Lessee written notice of its intent to make an
assignment or transfer of this Lease and a copy of the express (written) assumption agreement
between Lessor and assignee or transferor.
Article 24. Subordination to Mortgage
This Lease shall be and is hereby made subordinate to any mortgage or deeds of trust of
Lessor which may now or hereafter encumber the Leased Premises and to all renewals,
modifications, consolidations, replacements and extensions thereof. This clause shall be self -
operative and no further instrument of subordination need be required by any mortgagee. This
clause shall be for the benefit of any mortgagee. In confirmation of such subordination, however,
Lessee shall, at Lessor's request, execute promptly any appropriate certificate, subordination
agreement or instrument that Lessor may request. Lessee hereby constitutes and appoints Lessor
the Lessee's attorney -in -fact to execute any such certificate, subordination agreement or
instrument for and on behalf of Lessee. Notwithstanding the fact that this Lease is and shall be
subordinate as provided above, Lessee will as a result of the enforcement of the default or
foreclosure provisions of such mortgage or deed of trust, including conveyance by deed in lieu of
foreclosure, automatically become the Lessee of the person or party succeeding to the interest of
Lessor without change in the terms or other provisions of this Lease and Lessee agrees to attorn
to such party; provided, however, that such mortgagee or successor in interest shall not (i) be
bound by any amendment or modification to this Lease made without the written consent of such
mortgagee or such successor in interest; (ii) be liable for any previous act or omission by Lessor
under this Lease; or (iii) be subject to any offset which shall theretofore have accrued to Lessee
against Lessor. Lessee further agrees, upon demand, to execute such nondisturbance and
attornment agreements as any such mortgagee or successor shall request. The provisions of this
Article shall not alter or otherwise affect or modify the option to purchase granted by Articles 17
and 18 of this Lease nor shall the provisions of this Article operate to increase or otherwise alter
the purchase price to be paid by Lessee upon exercise of the option in accordance with the
provisions of Articles 17 and 18.
Article 25. Estoppel Certificate
Page 13 of 18
At Lessor's request, Lessee will execute either an estoppel certificate addressed to
Lessor's mortgagee or any prospective successor of Lessor, or a third -party agreement among
Lessor, Lessee and said mortgagee or successor, certifying to such facts (if true) regarding the
status and terms of this Lease as may be requested, and agreeing to such notice provisions and
other matters as such mortgagee or successor may reasonably require in connection with Lessor's
financing or the conveyance of the Leased Premises.
Article 26. Notices
All notices, demands or communications of any kind which may be required or desired to
be served, given or made by Lessee upon or to Lessor, under the terms of or in connection with
this Lease, shall be sufficiently served, given or made (as an alternative to personal service upon
Lessor) if such notice, demand or communication is sent by certified United States mail,
addressed to:
Pueblo Development Foundation
Post Office Box 1663
Pueblo, Colorado 81002
(or to such other person or address as may hereafter from time to time be designated for this
purpose by Lessor to Lessee in writing). All notices, demands or communications of any kind
which may be required or desired to be served, given or made by Lessor upon or to Lessee, under
the terms of or in connection with this Lease, shall be sufficiently served, given or made (as an
alternative to personal service upon Lessee) if such notice, demand or communication is sent by
certified United States Mail, addressed to:
Deneen & Company
33850 United Blvd
Pueblo, CO 81001
(or to such other person or address as may hereafter from time to time be designated for this
purpose by Lessee to Lessor in writing).
Article 27. Environmental Provisions
27.01 For the purpose of this Lease, "Hazardous Materials" means any hazardous or
toxic substance, material or waste which is or become regulated by any local government
authority, the State of Colorado or the United States government and shall include, but not be
limited to (1) substances defined as "hazardous waste," "restricted hazardous waste," "hazardous
substance" or "hazardous material" under any applicable federal, state or local law or regulation
(`Environmental Regulations "), (2) asbestos - containing materials, (3) PCBs, (4) petroleum or
petroleum based products, and (5) lead.
27.02 Lessee will comply with Environmental Regulations that are applicable to the
Lessee and its use of the Leased Premises. No activity shall be undertaken by the Lessee, its
Page 14 of 18
employees, agents, licensees, invitees, contractors or subcontractors, on all or any portion of the
Leased Premises which would cause or permit: (i) the presence, use, generation, release,
discharge, storage or disposal of any Hazardous Material in, on, under, about, or from the Leased
Premises or any part thereof in violation of any Environmental Regulations; (ii) any portion of
the Leased Premises to become a hazardous waste treatment, storage or disposal facility without
receiving proper governmental authorization, and in compliance with all Environmental
Regulations; or (iii) the discharge of pollutants or effluents into any water source or system, or
the discharge into the air of any emissions without receiving proper governmental authorization,
and in compliance with all Environmental Regulations, including, without limitation, the Federal
Water Pollution Control Act, U.S.C. Section 1251 et seq. and the Clean Air Act, 42 U.S.C.
Section 7401 et sea.
27.03 Lessee agrees to defend, indemnify and forever hold harmless the Leased
Premises, City and Lessor, and their respective agents, successors, and assigns, as their interest
may appear, from all claims, losses, damages, penalties, expenses and costs, including, but not
limited to, attorneys' fees, remedial, and cleanup costs, incurred by reason of the use, storage,
generation, release, discharge, maintenance, disposal, or removal of Hazardous Materials in, on,
under, about, or from the Leased Premises, or any part thereof, by Lessee, its employees, agents,
licensees, invitees, contractors and subcontractors. The provisions of Article 26 shall expressly
survive the expiration of the Term or other termination of this Lease.
Article 28. Miscellaneous Provisions
28.01 Colorado Law This Lease shall be governed by the laws of the State of Colorado
and shall be construed in accordance therewith without reference to such State's choice of law
and/or conflict of law principles.
28.02 Writing for Waiver or Modification No provision of this Lease may be waived or
modified except by an agreement in writing signed by the waiving party. A waiver of any term
or provision shall not be construed as a waiver of any other term or provision.
28.03 Binding Effect This Lease sets forth the entire and complete understanding and
agreement of the parties hereto. Lessee acknowledges and agrees that it has not relied upon any
statements, representations, agreements or warranties of Lessor except such as are expressed
herein. This Lease shall be binding on the parties, their successors and approved assigns.
28.04 Construction Throughout this Lease, the singular shall include the plural; the
plural shall include the singular; and the masculine and neuter shall include the feminine,
wherever the context so requires.
28.05 Text to Control The headings of sections are included solely for convenience of
reference. If any conflict between any heading and the text of this Lease exists, the text shall
control.
Page 15 of 18
28.06 Severability If any provisions of this Lease is declared by any court of competent
jurisdiction to be invalid for any reason, such invalidity shall not effect the remaining provisions.
On the contrary, such remaining provisions shall be fully severable, and this Lease shall be
construed and enforced as if such invalid provisions had never been inserted in the Lease.
28.07 Venue and Jury Trial Lessor and Lessee agree that the venue for all actions or
causes of action relating to this Lease or the Leased Premises shall be in Pueblo County,
Colorado. All such actions shall be filed in the District Court, County of Pueblo, State of
Colorado and Lessor and Lessee submit to the jurisdiction of that Court. To the extent allowed
by law, each party waives its right to a jury trial.
28.08 Lessee's Warranties The persons signing this Lease on behalf of Lessee represent
and warrant that such parties and Lessee have the requisite power and authority to enter into,
execute and deliver this Lease and that this Lease is a valid and legally binding obligation of
Lessee enforceable against Lessee in accordance with its terms.
28.09 Time of Essence Time shall be of the essence as to the performance of all terms,
conditions and obligations under this Lease.
28.10 Third Parties The provisions of this Lease are and will be for the benefit of
Lessor and Lessee only and not for the benefit of any third party, and accordingly, no third party
shall have any right or remedy hereunder or the right to enforce any provision of this Lease.
28.11 Brokerage Commission Lessor and Lessee each represent to the other that they
have not entered into any agreement or incurred any obligation in connection with this Lease
transaction which might result in the obligation to pay a brokerage commission to any brother.
Each party shall indemnify and hold the other party harmless from and against any claim or
demand by any broker or other person for bringing about this Lease who claims to have dealt
with such indemnifying party, including all expenses incurred in defending any such claim or
demand (including reasonable attorney's fees).
28.12 Representatives Lessee designates Mr. Gregory S. Deneen as its representative
with authority to act for and on behalf of Lessee. Lessor designates Joseph A. Fortino its
representative with authority to act for and on behalf of Lessor. Either party may, by written
instrument given to the other party pursuant to Article 26, change such party's designated
representative.
28.13 In order to serve the southerly portion of Lot 67, Pueblo Memorial Airport
Industrial Park Subdivision, there is hereby reserved by Lessor easements over the Leased
Premises and the five (5) acres of optioned land for road, sewer and utility purposes. The exact
location of such easements shall be determined by Lessor, provided such locations shall not
unreasonably interfere with Lessee's use of the Leased Premises and the five (5) acres optioned
land, as contemplated by this Lease.
IN WITNESS WHEREOF, Lessor and Lessee, by their duly authorized representatives,
have executed this Lease on the day and year first above written.
Page 16 of 18
PUEBLO DEVELOPMENT FOUNDATION
By
Name: Iosep A. Fortino
Title: President
[SEAL]-
Attest:
Name:
Title: Si,,e -I'Ar&
STATE OF COLORADO
COUNTY OF PUEBLO
ss.
DENEE COMP
By
N Qnn
Title: President
[SEAL]
Attest:
Name: 0 ''T'f
Title: _ /L�+r4 4
The foregoing instrument was acknowledged befo e me this / day of
2004 by Joseph A. Fortino as President and , 4 64& t X j e an
as S retary of Pueblo Development Foundation, a Colorado nonprofit corporation.
Witness my hand and official seal.
My commission expires: S U
[SEAL]
STATE OF COLORADO )
ss.
COUNTY OF PUEBLO )
v ` /" / A-4i1-/
Notary Publi6/ j
The foregoing instrument was acknowledged before me this ��`d"ay of
2004 by Gregory S. Deneen as President and 60i 7N A& V&C-4/ as secretary of
Deneen & Company,
Witness my hand and official seal.
My commission expires` - � .
N&ry Public
Page 17 of 18
EXHIBIT "A"
AGREEMENT BETWEEN CITY OF PUEBLO AND DENEEN & COMPANY,
Page 18 of 18