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HomeMy WebLinkAbout10782RESOLUTION NO. 10782 A RESOLUTION APPROVING AN AGREEMENT BETWEEN THE CITY OF PUEBLO AND VERISMA SYSTEMS, INC. RELATING TO A JOB CREATING CAPITAL IMPROVEMENT PROJECT, AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO EXECUTE SAME AND AUTHORIZING THE TRANSFER OF $120,000.00 FROM THE 1992 -2006 SALES AND USE TAX CAPITAL IMPROVEMENT PROJECT FUND THEREFOR WHEREAS, Pueblo Economic Development Corporation ( "PEDCO ") has presented to City Council a proposed job creating capital improvement project whereby Verisma Systems, Inc. will expand its business within the City of Pueblo and employ an additional 10 full -time employees during a seven year period starting January 1, 2008 ( "Project "); and WHEREAS, the Project and financial details thereof, were negotiated and approved by PEDCO, and WHEREAS, PEDCO has recommended to the City Council that the City Council approve the Project, Agreement and financial details relating thereto, and WHEREAS, based upon PEDCO's recommendation and representations made to the City by representatives of PEDCO with respect to the Project, City Council is willing to approve the Project, NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, that: SECTION 1 The City Council finds and determines that the job creating capital improvement project with Verisma Systems, Inc. described herein and in the attached Agreement meets and complies with the criteria and standards established by Ordinance No. 6381 ( "Ordinance ") and will create employment opportunities justifying the expenditure of public funds. SECTION 2 The Agreement dated as of July 10, 2006 between the City of Pueblo and Verisma Systems, Inc., a copy of which is attached hereto, having been approved as to form by the City Attorney, is hereby approved. The President of the City Council is authorized to execute and deliver the Agreement and all related required documents in the name of the City and the City Clerk is directed to affix the seal of the City to the Agreement and attest same. SECTION 3 Funds in an amount of $120,000.00 are hereby authorized to be transferred, expended and made available to Verisma Systems, Inc. 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 Verisma Systems, Inc. after receipt by the City Clerk of the documents required to be filed pursuant to paragraph 2(b) of the Agreement and (ii) by the Director of Finance of written requests for payment required by paragraph 2(c) of the Agreement. SECTION 4 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 5 This Resolution shall become effective upon final approval and passage. BY Randy Thurston Councilperson APPROVED: President of City Council ATTESTED BY: CITY CLERK INTRODUCED July 10, 2006 'iI1 1 I IS 1:D Background Paper for Proposed RESOLUTION AGENDA ITEM # 1 0 1 DATE: July 10, 2006 DEPARTMENT: Law Department TITLE A RESOLUTION APPROVING AN AGREEMENT BETWEEN THE CITY OF PUEBLO AND VERISMA SYSTEMS, INC. RELATING TO A JOB CREATING CAPITAL IMPROVEMENT PROJECT, AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO EXECUTE SAME AND AUTHORIZING THE TRANSFER OF $120,000.00 FROM THE 1992 -2006 SALES AND USE TAX CAPITAL IMPROVEMENT PROJECT FUND THEREFOR ISSUE Should City Council approve the job creating capital improvement project with Verisma Systems, Inc.? RECOMMENDATION PEDCO recommends that the City Council approve the project. BACKGROUND Verisma Systems, Inc. ( "Company ") currently conducts its software development and programming business in the City of Pueblo. Company is expanding its business and has committed to employ an additional 10 full -time employees having an average salary of $34,000 plus benefits during a seven year period starting January 1, 2008. City will make available to Company $120,000 out of the one -half cent sales tax revenue to purchase equipment for the expansion. Company currently employs 11 employees and with the additional 10 employees will employ 21 full -time employees. If Company defaults in its commitment to employ the additional 10 employees, Company will repay City funds based upon the number of employees actually employed less than the 10 additional employees. FINANCIAL IMPACT See Background. G�eT;i�h1�1�1►� THIS AGREEMENT entered into as of July 10, 2006 between Pueblo, a municipal corporation (the "City ") and Verisma Systems, Inc., a Delaware corporation (the "Company "). WHEREAS, Company has expressed a willingness to expand its business within the City of Pueblo, and in furtherance thereof has through the Pueblo Economic Development Corporation ( "PEDCO ") made application for funds with the City, and WHEREAS, PEDCO has recommended to the City Council that the City Council approve the application, and WHEREAS, the City, based upon PEDCO's recommendation, has approved such application and will make funds available to Company subject to and upon the terms and conditions of this Agreement, and WHEREAS, this Agreement represents Phase 1 of a potential multi -phase expansion of Company's business within the City of Pueblo. 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 January 1, 2008. "Equipment" means new business personal property described in the attached Exhibit "A" to be kept, maintained and used by Company after date of this Agreement in the Facility. "Facility" means the building wherein Company conducts its business operations within the City of Pueblo. "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. "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 $120,000.00 (the "City Funds "), subject to and contingent upon the following conditions and covenants which Company agrees to perform and comply with: (a) City Funds will be advanced by City solely for the acquisition of Equipment by Company during the period from August 15, 2005 to the Employment Commitment Date ( "Acquisition Period ") at fair market value from a reputable vendor in an arms - length transaction. Acquisition of equipment from any person or entity related to or a subsidiary of Company is not an arms- length transaction. (b) 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 and related documents in the name of Company, and (iii) executed Continuing Guaranty attached as Exhibit "B ". The date of the last to occur of the filings required under (i), (ii) and (iii) of this paragraph 2(c) shall be referred to herein as "Closing." If Closing does not occur on or before September 1, 2006, 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. (c) As a condition precedent to the disbursement of the $120,000.00 of City Funds for the acquisition of Equipment, Company shall file (i) with the City Clerk the documents required by (b) above, and (ii) with City's Director of Finance written request for payment certified to be true and correct by an officer of Company that the amounts included in the request for payment have not been included in any prior request for payment and are for the actual cost of Equipment, identifying the Equipment for which payment is sought, including invoices therefor and certificates of delivery and installation in the Facility. All City Funds, if any, received by Company to purchase Equipment (but not in reimbursement for Equipment purchased by Company and actually installed in the Facility) 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. 3. 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 date of this Agreement continuously conduct its business operations and employ Full -Time Employees at the Facility as follows: (i) during the period from date hereof to the Employment Commitment Date, Company shall employ not less than eleven (11) Full -Time Employees at the Facility, and (ii) on and after the Employment Commitment Date, Company shall employ not less than ten (10) additional Full -Time Employees (a total of twenty -one (2 1) Full -Time Employees) at -2- the Facility having an average annual salary of over $34,000.00 per year excluding benefits (collectively the "Employment Commitment "). For purposes hereof "annual salary" means regular salary plus overtime (excluding benefits) computed on an annualized basis. 4. Notwithstanding anything contained in this Agreement to the contrary, if Company shall for any reason default in its Employment Commitment set forth in paragraph 3, 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 "Company's 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 twenty -one (21) Full - Time Employees with an average salary of at least $34,000.00 per year excluding benefits employed at the Facility by Company multiplied by the quotient resulting from the division of the amount of City Funds actually advanced by City for purchase of equipment during the Acquisition Period by 280 ( "Company's Quarterly Payments "). Notwithstanding the foregoing, the maximum number of Full -Time employees upon which Company's Quarterly Payments during the Repayment Period are computed shall not exceed ten (10) Full -time Employees having an average annual salary of over $34,000.00, excluding benefits. (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 after date hereof and for one month after the Repayment Period 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 ( "Default Rate ") 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 average salary 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 Company's employment, City shall have access to Company's records relating to Company's employees employed at the Facility. Except for the number of Full -Time employees and their average salary or in the event of any action filed by City to enforce this Agreement, City shall treat Company's records as confidential and shall not disclose (except pursuant to a subpoena or court order) such information to any party other than those City employees who have a need to know such information. (d) Notwithstanding anything contained in this Paragraph 4 to the contrary, if Company defaults in its Employment Commitment or Repayment Obligation, 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 Default Rate -3- and for such purpose the entire balance of Company's Repayment Obligation shall be an amount equal to 10 times the quotient resulting from the division of the amount of City Funds actually advanced by City for purchase of equipment during the Acquisition Period by 280 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. 5. 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 Employment Commitment contained in Paragraph 3 and its Repayment Obligation contained in Paragraph 4. Company's obligations under this Agreement including its Employment Commitment and Repayment Obligation shall be secured by a perfected first security interest in the Equipment. Contemporaneously with the execution of this Agreement, Company shall execute and deliver to City Company's Security Agreement, Financing Statement and other documents required to perfect a first security interest in the Equipment all in form and content approved by City's Attorney (the "Security Agreement "). 6. (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. 7. In the event of any litigation arising under this Agreement, the court shall award to the prevailing party its costs and 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, H 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. 8. 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. 9. 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. 10. 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, 503 N. Main Street, Suite 127, Pueblo, Colorado, 81003, or (b) if to the Company, President, Verisma Systems, Inc., 301 N. Main Street, Pueblo, Colorado, 81003, 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. 11. 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. 12. 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 legally binding obligation of Company enforceable against Company in accordance with its terms. 13. 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, 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 -5- 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, and/or to seek such other remedies legally available to City, which remedies shall be cumulative. 14. 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. 15. 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. 16. Neither party shall be, or hold itself out as, agent of the other or as joint ventures under this Agreement. 17. 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. 18. 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. 19. 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] Attest: By City rk PUEB a Municipal Corporation President of the City Council [SEAL] VERISMA SYSTEMS, INC., a Delaware Corporation M Attest: g C In "I-p— Lf Name: ame: j C ' �e 5 <- rt 4 v-,eY Title: Title: fG ✓y [SEAL] -7- I verisma systems, inc. Capital Acquisitions City Sales Tax Funding Purchased: Description Quantity Costleach Total Cost 8/15105 to Date Quantity IT Equipment Personal computers Laptops 10 $ 2,000.00 $ 20,000.00 Desktops 15 $ 2,500.00 $ 37,500.00 $ 1,505.96 1 Dell laptops 14 $ 1,899.79 $ 26,597.06 Printers Laser printers Scanners Portables Flatbeds Fujitsu portables Servers Server Server (archive /mirror) Peripheral equipment Battery backups Hard drive for server (backup) Firewall Network switches CD /DVD duplicator Total IT Telephone Equipment Voice PBX Telephones & related equipment Telephones & related equipment Data Routers Tota Telephone Business Office Equipment Document preparer (fold /insert) FAX machines FAX machines Total Business Office Furniture & Fixtures Tables /chairs Service Center Sales/Accounting Future hires Corporate Storage/equipment cabinets Service Center Future hires /expansion for postage meter 5 $ 1,200.00 $ 6,000.00 10 $ 1,000.00 $ 10,000.00 $ 4,941.21 3 $ 18,000.00 $ 54,000.00 8 $ 798.47 $ 6,387.76 1 $ 25,000.00 $ 25,000.00 1 $ 25,000.00 $ 25,000.00 3 $ 1,000.00 $ 3,000.00 2 $ 500.00 $ 1,000.00 1 $ 3,000.00 $ 3,000.00 2 $ 2,000.00 $ 4,000.00 2 $ 1,500.00 $ 3,000.00 $ 224,484.82 1 $ 6,500.00 $ 6 $ 11,000.00 $ 2,775.63 $ 12,000.00 3 $ 2,200.00 $ 6,600.00 $ 29,500.00 1 $ 20,000.00 $ 20,000.00 2 $ 700.00 $ 1,400.00 1 $ 1,048.00 $ 1,048.00 $ 22,448.00 $ 15,000.00 $ 13,806.05 $ 6,000.00 $ 30,000.00 $ 16,913.00 $ 4,000.00 $ 5,000.00 $ 2,000.00 $ 5,000.00 1 $ 1,500.00 $ 1,500.00 5 Total Furnishings $ 79,413.00 GRAND TOTAL S 355 845.82 $ 29,028.85 CQy Agmement mdp 061306 6/13120062:09 PM Exhibit „A„ CONTINUING GUARANTY 1. 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 as of July 10, 2006, between City and Verisma Systems, Inc., 301 N. Main Street, Pueblo, Colorado, 81003, a Delaware Corporation (the "Company ") (the "Agreement ") and advance to or for the benefit of Company the sum of $120,000.00 pursuant to the terms and covenants of the Agreement, the undersigned Michael D. Pugh, and James C. Moore II (the "Guarantors ") provide the following continuing guarantee. 2. Guarantors, jointly and severally, absolutely and unconditionally guarantee and promise to pay to City, or to City's 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 (the "Indebtedness "), provided that City has first made efforts to obtain repayment of the Indebtedness as provided in Section 4 below. 3. The liability of Guarantors under this Guaranty shall not exceed at any one time the principal sum of $120,000.00. 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 Guarantors shall reduce their maximum obligation hereunder. 4. The obligations of Guarantors hereunder are independent ofthe obligations of Company, and a separate action or actions may be brought and prosecuted against Guarantors, jointly or severally, whether action is brought against Company or whether Company be joined in any such action or actions, provided that City has first taken the following two steps, simultaneously or in whatever order City may choose: (1) made reasonable, good faith efforts to obtain payment of the Indebtedness from Company, and (2) made reasonable, good faith efforts to proceed against or exhaust any collateral held from Company and to sell any such collateral. For purposes hereof, "reasonable, good faith efforts" does not include (i) bringing any action against Company, (ii) proceeding or exhausting any collateral in which City does not have for any reason a first prior perfected security interest, and (iii) the sale of any collateral which, in the sole discretion of City, is not economically feasible. All costs and expenses incurred by City in taking either or both of the actions described in this paragraph, including without limitation, reasonable attorney fees, shall be added to and become part of the Indebtedness. Any funds obtained by City from Company or from proceeding against or exhausting any security or collateral held from Company shall be applied to the Indebtedness. 5. Guarantors authorize City, without notice or demand and without affecting their liability hereunder, from time to time to (a) renew, extend, accelerate or otherwise change the time for payment of the Indebtedness, and (b) release or substitute any one or more of the Guarantors. City may without notice assign this Guaranty in whole or in part. 6. Guarantors waive any defense arising by reason of any disability or other defense of Company or any Guarantor or by reason of the cessation from any cause whatsoever of the liability of Company or any Guarantor. Guarantors waive any defense to the enforcement of this Guaranty based upon laches or any statutory or other period of limitation, provided, however, that any action to enforce this Guaranty shall be commenced on or before December 31, 2012. Until the Indebtedness of Company to City shall have been paid in full, Guarantors shall have no right of subrogation, and waive 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. Guarantors waive all presentments, demands for performance, notices of non- performance, protests, notices of protest, notice of dishonor, and notices of acceptance of this EXHIBIT "B" Guaranty. 7. Guarantors agree 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. 8. Guarantors agree to pay a reasonable attorney's fee and all other reasonable costs and expenses which may be incurred by City in the enforcement of this Guaranty. 9. EACH GUARANTOR AGREES THAT THIS GUARANTY IS A CONTRACT ENTERED INTO IN PUEBLO COUNTY, COLORADO, AND ITS CONSTRUCTION, INTERPRETATION AND ENFORCEMENT SHALL BE CONSTRUED AND DETERMINED UNDER THE LAWS OF THE STATE OF COLORADO. EACH GUARANTOR AGREES THAT THE DISTRICT COURT IN AND FOR THE COUNTY OF PUEBLO, STATE OF COLORADO SHALL HAVE JURISDICTION OVER ANY SUIT OR ACTION WHICH INVOLVES THIS GUARANTY AND EXCLUSIVE VENUE IN PUEBLO COUNTY, COLORADO SHALL BE PROPER. EACH GUARANTOR CONSENTS TO THE PERSONAL JURISDICTION OF SUCH COURT AND WAIVES ANY OBJECTION RELATING TO IMPROPER VENUE OR FORUM NON CONVENIENS TO THE CONDUCT OF ANY PROCEEDINGS BY SUCH COURT. EACH GUARANTOR WAIVES PERSONAL SERVICE OF ANY PROCESS ON HIM AND CONSENTS THAT A SERVICE OF PROCESS SHALL BE MADE BY REGISTERED MAIL, RETURN RECEIPT REQUESTED, DIRECT TO GUARANTOR A THE ADDRESS APPEARING AFTER HIS SIGNATURE AND SERVICE SO MADE SHALL BE DEEMED COMPLETED FIVE (5) BUSINESS DAYS AFTER SAME SHALL HAVE BEEN (I) POSTED AS AFORESAID, OR (II) DELIVERED BY ANY OTHER PROCESS PERMITTED BY APPLICABLE LAW. 10. Any notice hereunder (except service of process) 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 Guarantors, at the addresses shown after their respective signatures hereon, or to such other addresses as any party hereto shall specify in written notice to the other parties. 11. Time is of the essence hereof. This Guaranty shall be binding upon and inure to the benefit of City and Guarantors and their respective heirs, personal representatives, successors and assigns. [Signature Lines on Next Page] -2- IN WITNESS WHEREOF the undersigned Guarantors have executed this Guaranty as of 2006. Name: James C. Moore II Signature: Address: Verisma Systems, Inc., 301 North Main Street, Suite 303 Pueblo, Colorado 81003 Name: Michael D. Pugh Signature: A� o Address: 301 North Main Street, Suite 303 Pueblo, Colorado 81003 -3-