HomeMy WebLinkAbout10790RESOLUTION NO. 10790
A RESOLUTION APPROVING AMENDMENT NO. 1 BETWEEN THE CITY OF PUEBLO AND
PEDCO FOUNDATION, INC. RELATING TO THE DOSS AVIATION, INC. JOB CREATING
CAPITAL IMPROVEMENT PROJECT ( "PROJECT'), AUTHORIZING THE PRESIDENT OF THE
CITY COUNCIL TO EXECUTE SAME, TRANSFERRING $1,940,000.00 FROM THE 1992 -2006
SALES AND USE TAX CAPITAL IMPROVEMENT PROJECTS FUND FOR THE PROJECT,
REPEALING SECTION 6 OF RESOLUTION NO. 10740, AND ACCEPTING LEASE AMENDMENT
NO. 1 TO THE LEASE BETWEEN PEDCO FOUNDATION, INC. AND DOSS AVIATION, INC.
WHEREAS, by Resolution No. 10740 and Agreement dated May 22, 2006 between the City
and PEDCO Foundation, Inc. ( "Foundation Agreement') the City Council approved the Doss
Aviation, Inc. job creating capital improvement project and other related documents ( "Doss Aviation
Project'), and
WHEREAS, due to increased construction costs and delays occasioned in awarding
construction contacts, the cost of the Doss Aviation Project has increased, and
WHEREAS, at the request and upon the recommendation of PEDCO and its
representatives, City is willing to make available an additional $1,940,000.00 for the Doss Aviation
Project. NOW, THEREFORE,
BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, that:
SECTION 1
Amendment No. 1 dated as of July 24, 2006 between the City and PEDCO Foundation, Inc.
( "Amendment'), a copy of which is attached hereto, having been approved by the City Attorney as
to form, is hereby approved. The President of the City Council is authorized to execute the
Amendment in the name of the City and the City Clerk is directed to affix the seal of the City
thereto and attest same.
SECTION 2
Additional funds in the amount of $1,940,000.00 are hereby authorized to be transferred,
expended and made available to PEDCO Foundation, Inc. out of the 1992 -2006 Sales and Use
Tax Capital Improvement Projects Fund for the sole purpose of the Doss Aviation Project. 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 PEDCO Foundation, Inc. after receipt by the Director of Finance
of written requests for payment required by paragraph 3(b) of the Foundation Agreement.
SECTION 3
Section 6 of Resolution No. 10740 relating to the transfer and reservation of $2 million in
the 1992 -2006 Sales and Use Tax Capital Improvement Projects fund as and for capitalized and
prepaid maintenance, operating and staffing expenses associated with the Pueblo Airport fire
station ( "Pueblo Airport Fire Station Expenses ") is hereby repealed. The City Manager is directed
to include in each fiscal year budget commencing with the budget for fiscal year 2007 and for ten
(10) subsequent fiscal year budgets thereafter the sum of $200,000.00 for Pueblo Airport Fire
Station Expenses as a priority expenditure to be paid to the City out of the 1992 -2006 Sales and
Use Tax Capital Improvement Projects Fund and any amendment or extension thereof.
SECTION 4
Lease Amendment No. 1 to the May 22, 2006 Lease between PEDCO Foundation, Inc. as
Lessor and Doss Aviation, Inc. as Lessee in substantially the same form and content as distributed
to City Council at this meeting is hereby accepted.
SECTION 5
This Resolution shall become effective upon final approval and passage.
BY Barbara Vidmar
Councilperson
APPROVED:
President of City Council
ATTESTED BY:
CITY CLERK
INTRODUCED July 24, 2006
0
Background Paper for Proposed
RESOLUTION
D � 1 o
AGENDA ITEM # 4 1
DATE: July 24, 2006
DEPARTMENT: Law Department
TITLE
A RESOLUTION APPROVING AMENDMENT NO. 1 BETWEEN THE CITY OF
PUEBLO AND PEDCO FOUNDATION, INC. RELATING TO THE DOSS AVIATION,
INC. JOB CREATING CAPITAL IMPROVEMENT PROJECT ( "PROJECT "),
AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO EXECUTE SAME,
TRANSFERRING $1,940,000.00 FROM THE 1992 -2006 SALES AND USE TAX
CAPITAL IMPROVEMENT PROJECTS FUND FOR THE PROJECT, REPEALING
SECTION 6 OF RESOLUTION NO. 10740, AND ACCEPTING LEASE
AMENDMENT NO. 1 TO THE LEASE BETWEEN PEDCO FOUNDATION, INC.
AND DOSS AVIATION, INC.
ISSUE
Should the City Council authorize an additional $1,940,000 for the Doss Aviation
Project?
PEDCO recommends approval of the additional funds.
At the request and recommendation of PEDCO and its representatives, the City
Council by Resolution No. 10740 and Agreement dated May 22, 2006 between the
City and PEDCO Foundation approved the Doss Aviation, Inc. job creating capital
improvement project ( "Doss Aviation Project ") and authorized the transfer of
$11,150,000 out of the one -half cent sales and use tax fund for the Doss Aviation
Project for the following purposes: (a) $8,730,000 construction costs, and (b)
$2,420,000 employment economic incentive.
Due to increased construction costs and delays occasioned in awarding
construction costs, the construction costforthe Doss Aviation Project has increased
by approximately $3,525,891. To meet the increased construction costs, PEDCO
and its representatives have requested and recommend that the City authorize the
transfer of an additional $1,940,000 from the one -half cent sales and use tax fund
for the Doss Aviation Project. In order to makeup the balance of construction cost
increases Doss Aviation will contribute $1,546,000 for the project construction.
The additional $1,940,000 as well as the original $8,730,000 of City funds to be
used for the construction of the Doss Aviation Project plus 3% interest are to be
repaid to the City as part of the 132 monthly $124,830 rent payable by Doss
Aviation under its lease with PEDCO Foundation for the property and facilities.
If Doss Aviation exercises its option under the lease to purchase the property and
facilities, the purchase price is the greater of $14,020,000 or the appraised value.
The $14,020,000 represents $10,670,000 City Funds used for the construction of
the project and $3,350,000 PEDCO Foundation funds for the purchase of the
property. Doss Aviation will receive a credit against the purchase price in an
amount equal to 85% of rent paid under the lease and the greater of $1,546,000 or
9.932% of the appraised value of the Project. However, in no event will the
purchase price be less than $14,020,000 minus rent credits. This will assure that
in the event of purchase by Doss Aviation, the City and PEDCO will receive all funds
used in the purchase and construction of the project plus 15% of the amount of rent
paid. If Doss Aviation purchases the property it will secure its repayment obligation
and performance of its employment commitment agreement by a first deed of trust
on the property and project.
FINANCIAL IMPACT
See Background.
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AMENDMENT NO. 1
THIS AMENDMENT NO. 1 ( "Amendment ") entered into as of July 24, 2006 by and
between the City of Pueblo, a Municipal Corporation ( "City ") and PEDCO Foundation, Inc., a
Colorado nonprofit corporation ( "Foundation "), WITNESSETH:
WHEREAS, City and Foundation entered into an Agreement dated as of May 22, 2002
relating to the Doss Aviation Inc. project ( "Agreement "), and
WHEREAS, City and Foundation are desirous of amending certain provisions of the
Agreement.
NOW, THEREFORE, in consideration of the foregoing and mutual covenants contained
herein, City and Foundation agree as follows:
1. Paragraph 2 of the Agreement is amended to read as follows:
2. Cit, Fes City will make available and advance to Foundation, as needed,
an amount not to exceed $13,090,000,00 from the City's 1992 -2006 Sales and Use Tax
Capital Improvement Fund (the "City Funds ") to be used and expended solely for the
following purposes:
(a) remodeling the Building to meet and conform with the requirements
of the U.S. Air Force Initial Flight Screening Program No. FA 3002 -04 -R -009, including,
without limitation, training facilities, physical and personal security, lodging, dining and
physical fitness facilities to house and screen between 1200 -1700 Air Force officer students
per year and office space for a permanent -party military cadre that will oversee the students
while they are in residence at the Building (the "Building Remodeling ").
(b) site preparation, drainage, and construction of one (1) approximately
19,600 square foot hangar (the "Hangar ") and ramp on the Land to park, store and repair
aircraft used in training students assigned to the Initial Flight Screening Program,
construction of a new taxiway from the Easterly boundary of the Land to the existing
concrete pad connected to Runway 35, Pueblo Memorial Airport, and necessary and required
security fences (collectively the "Hangar Construction ").
(c) architect and engineering fees and geotechnical material and testing.
(d) Foundation acknowledges and agrees that the $13,090,000.00 City
Funds includes the $2,420,000.00 to be advanced to Doss Aviation, Inc. by City under
separate agreement between City and Doss Aviation, Inc.
2. Subparagraphs (d), (e), (f), (g) and (h) of Paragraph 3 of the Agreement are amended
to read as follows:
(d) $8,730,000.00 of City Funds to be advanced by City to Foundation
hereunder plus interest at the rate of three percent (3 %) per annum shall be evidenced by
Foundation's first promissory note ( "First Promissory Note "). The First Promissory Note
and Foundations' obligations hereunder shall be secured by a first deed of trust or mortgage
lien on the Property superior to Foundation's Deed of Trust hereinafter described ( "First
Deed of Trust "), both in form and content approved by the City Attorney of City. In
addition, $1,940,000.00 of City Funds to be advanced to Foundation hereunder plus interest
at three percent (3 %) per annum shall be evidenced by Foundation's second promissory note
( "Second Promissory Note "). The Second Promissory Note shall be secured by a deed of
trust lien on the Property subordinate only to the First Deed of Trust ( "Second Deed of
Trust "), both in form and content approved by the City Attorney of City. The First
Promissory Note and First Deed of Trust and Second Promissory Note and Second Deed of
Trust shall provide that Foundation's obligation in respect to the indebtedness secured
thereby shall be limited solely to the value of the Property encumbered thereby, without right
to any deficiency claim or judgment against Foundation.
(e) The rent and option to purchase under the Lease shall be structured
so that City will be paid $10,670,000.00 ($13,090,000.00 less $2,420,000.00 employment
incentive) plus three percent (3 %) interest per annum in one hundred thirty-two (132) equal
consecutive monthly payments out of the monthly rent, or if purchased, the balance thereof
will be paid out of the purchase price paid by Doss Aviation, Inc. for the Property
(collectively the "City's Share "). All rent and other payments received by Foundation under
the Lease representing City's Share shall be held in trust by Foundation for the benefit of the
City and, immediately after receipt thereof by Foundation, Foundation shall deliver and, pay
City's Share of the rent and other payments to City's Director of Finance ( "Director ") for
deposit in the 1992 -2006 Sales and Use Tax Capital Improvement Project Fund. All City's
Share of such rent or other payments received by City shall be applied by the Director as
follows: First, to interest on the Foundation's First Promissory Note and Second Promissory
Note, Second, in reduction of principal of Foundation's Second Promissory Note, and Third,
in reduction of principal of Foundations First Promissory Note.
(f) In the event Doss Aviation, Inc. purchases the Property pursuant to any
option under the Lease, and the purchase price paid by Doss Aviation, Inc. is more than the
then balance of principal and interest on the First Promissory Note and Second Promissory
Note, plus the then balance of the Purchase Price plus accrued interest, less any credits
against the purchase price granted to Doss Aviation, Inc. under the Lease ( "Excess
Amount "), eighty percent (80 %) of the Excess Amount shall paid to City at closing of the
purchase of the Property by Doss Aviation, Inc.
(g) If Doss Aviation, Inc. performs its obligations under the Lease
including payment of rent thereunder during the original eleven (11) year term of the Lease
but does not purchase the Property pursuant to any option under the Lease, immediately upon
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the expiration of the original term of the Lease, Foundation shall convey to City marketable
fee simple title in and to an undivided eighty percent (80 %) interest in the Property free of
liens and encumbrances.
(h) If the Lease is extended by Doss Aviation, Inc. beyond the original
eleven (11) year term of the Lease, eighty percent (80 %) of the rent payable during the
extended term(s) shall be paid to City immediately upon receipt thereof by Foundation.
3. All other terms, covenants and provisions of the Agreement are by reference
incorporated herein as if set forth herein in full. The Agreement as modified by this Amendment No.
1 shall remain in full force and effect inuring to the benefit of and binding upon City and Foundation
and their respective successors.
Executed as of the day and year first above written.
[SEAL]
Attest: RJt
City C k
CITY OF PUEBLO
By
President of the City Council
PEDCO FOUNDATION, INC.
Attest:
Secretary
Approved as to form:
City Attorne
By puw�lo
Chairman
-3-
PROMISSORY NOTE
US $1,940,000 00
Pueblo, Colorado
July 24, 2006
FOR VALUE RECEIVED, the undersigned, PEDCO Foundation, Inc , a Colorado nonprofit
corporation, 301 N Main Street, Pueblo, Colorado, 81003 (Borrower), promises to pay to the City
of Pueblo, a municipal corporation, 1 City Hall Place, Pueblo, Colorado, 81003, or order (Note
Holder) the principal sum of $1,940,000 00 U S Dollars, with interest on the unpaid principal
balance from date hereof, until paid, at the rate of three percent (3 %) per annum. Principal and
interest shall be payable at 1 City Hall Place, Pueblo, Colorado, 81003, Attention. Director of
Finance, or such other place as Note Holder may designate, in one hundred thirty -two (132)
consecutive monthly payments of $17,273 00 on the first day of each month hereafter, commencing
January 1, 2007 Such monthly payments of principal and interest shall continue until the entire
indebtedness evidenced by this Note is fully paid, provided, if not sooner paid or accelerated as
herein provided, the entire principal amount outstanding and accrued interest thereon, shall be due
and payable on January 1, 2018
Pavments received for application to this Note shall be applied first to the payment of accrued
interest and the balance applied in reduction of the principal amount hereof. Borrower agrees to pay
and Note Holder shall be entitled to collect all reasonable costs and expense of collection, including
but not limited to attorney fees.
If any payment required by this Note is not paid when due, the entire principal amount
outstanding and accrued interest thereon shall at once become due and payable at the option of Note
Holder without notice, notice being hereby expressly waived.
Borrower may prepay the principal amount outstanding under this Note, in whole or in part,
at any time without penalty
Presentment, notice of dishonor, and protest are hereby waived by Borrower and all other
makers, sureties, guarantors and endorsers hereof. This Note shall be the joint and several obligation
of Borrower and all other makers, sureties, guarantors and endorsers, and their respective heirs,
personal representatives, successors and assigns.
Borrower agrees to remain and continue to be bound for the payment of the principal, interest
and other sums provided for by the terms of this Note notwithstanding any assignment of this Note
by Note Holder, any extension or extensions of the time of or for the payment of said principal,
interest or other sums due and payable hereunder, or any change or changes in the amount or
amounts to be paid under and by virtue of the obligation to pay provided for in this Note, or any
change or changes by way of release or surrender of any collateral held as security for the payment
of this Note, or any change or changes by way of release of, agreement not to sue or suspension of
rights against any other person. Borrower hereby waives all and every kind of notice of such
assignment, extension or extensions, change or changes, release, surrender, agreement and
suspension and agrees that the same maybe made without the Joinder or approval of Borrower No
delay or omission on the part of Note Holder in exercising any right hereunder or under the Deed of
Trust shall operate as a waiver of such right.
Any notice to Borrower provided for in this Note shall be in writing and shall be given and
be effective upon (1) delivery to Borrower or (2) mailing such notice by certified mail, addressed to
Borrower at Borrower's address stated in the first paragraph of this Note, or to such other address
as Borrower may designate by notice to Note Holder Any notice to Note Holder shall be in writing
and shall be given and be effective upon (1) delivery to Note Holder or (2) by mailing such notice
by certified mail, to Note Holder at the address stated in the first paragraph of this Note, or to such
other address as Note Holder may designate by notice to Borrower
The indebtedness evidenced by this Note is secured by a Deed of Trust of even date and until
released said Deed of Trust contains additional rights of the Note Holder Such rights may cause
acceleration of the indebtedness evidenced by this Note Reference is made to said Deed of Trust
for such additional terms Said Deed of Trust grants rights to the real property located in the County
of Pueblo, State of Colorado described in Exhibit "A" attached hereto and incorporated herein as if
set out herein in full.
Notwithstanding anything contained in this Note to the contrary, Borrower's obligation in
respect to the indebtedness shall be limited wholly and solely to the value of the real property
described in the Deed of Trust, without any right in Note Holder to any deficiency claim or
judgment.
This Note shall be governed by and construed in accordance with the laws of the State of
Colorado, without regard to conflict of laws principles. Venue for any action under this Note shall
be Pueblo County, Colorado As used herein, the singular shall include the plural
[ Corporate Seal ] / I
Attest. �
_,•`�
Name BI 1 Cr,
Title Secretary
PE O Foundation, Inc.
By A�v�n� k
Nam es A. n udle v
Title ` Chairman
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EXHIBIT "A"
Parcel B, Lot Line Rearrangement No 2005 -005, a vacation and replat of Lots 23 and 24,
Pueblo Memorial Airport Industrial Park Subdivision, Pueblo County, State of Colorado, according
to the plat thereof filed for record June 5, 2006 at Reception No 1678289 in the office of the Pueblo
County Clerk and Recorder, Street Address No 1 William White Boulevard, Pueblo, Colorado,
81001
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DEED OF TRUST
14P
THIS DEED OF 'TRUST, Dated July 24, 2 0 0 6 between
PEDCO Foundation, Inc , a corporation organized
and existing under the laws of the State of
�ogO orge"in whose address is 301 N Main Street, Pueblo
Colorado, 81003
*County of Pueblo and State of Colorado and the
PUBLIC TRUSTEE of the County or City and County in which the property described below is situated, in the State of Colorado
Witness:
The grantor, to secure a promissory note or notes, hereinafter referred to in the singular, dated
for the total principal sum of $1 , 9 4 0, 0 0 0 0 0
dollars payable to the order of City of Pueblo, a municipal corporation
the beneficiary herein whose address is 1 City Hall Place, Pueblo, Colorado, 81003
after the date thereof,
with interest thereon from the date thereof at the rate of three (3) percent per annum principal and interest payable
in 132 consecutive monthly installments of $17,273 00 commencing
January 1, 2007,
does hereby grant and convey unto said Public Trustee the kWXba[CdcxPbxckproperty situate in the County
of Pueblo State of Colorado,Xo described in Exhibit "A" attached
hereto and incorporated herein as if set forth herein in full
also known by street and number as: No 1 William White Boulevard, Pueblo, CO $1001
assessor's schedule or parcel number
TO HAVE AND TO HOLD the same together with all appurtenances, in trust nevertheless, that in case of default in the payment of said note or any part thereof or interest
thereon, or in the performance of any covenants hereinafter set forth, then upon the beneficiary (note holder) filing notice of election and demand for sale, said Public Trustee
after advertising notice of said sale weekly, for not less than four weeks in some newspaper of general circulation in said county, shall sell said property in the manner provided
by law in effect at the time of filing said notice and demand, at public auction for cash, at any proper place designated in the notice of sale. Out of the proceeds of said sale said
Trustee shall retain or pay first all fees, charges and costs and all moneys advanced for taxes, insurance and assessments, oron any prior encumbrance, with interest thereon, and
pay the principal and interest due on said note rendering the overplus (if any) unto the grantor and after the expiration of the time of redemption, said Trustee shall execute and
deliver to the purchaser a deed to the property sold. The beneficiary may purchase said property or any part thereof at such sale.
The grantor covenants that at the time of delivery of these presents, he is seized of said property in fee simple, and that said property is free of encumbrances, except
easements, rights of way, conditions, restrictions and covenants
of record
The grantor also covenants that he will keep all buildings insured with a company approved by the beneficiary for fire and extended coverage in an amount equal to the unpaid
balance of said note with loss payable to the beneficiary, will deliver a copy of the policy to the beneficiary and will pay all taxes and assessments against said property and
amounts due on prior encumbrances. If grantor shall fail to pay insurance premiums, taxes or amounts due on prior encumbrance, the beneficiary may P the same and all
amounts shall become additional indebtedness due hereunder; and in case of foreclosure, he will pay an attorney s fee of a reasonable amount
Should the beneficiary hereunder be made a party to any action affecting this deed of trust or the title to said property, the grantor agrees that all court costs and a reasonable
attorney s fee paid by the beneficiary shall become additional indebtedness due hereunder and the grantor does hereby release and waive all claims in said property as a
homestead exemption or other exemption now or hereafter provided by law.
If all or any part of the property or an interest therein is sold or transferred by the grantor without beneficiary's prior written consent, excluding (a) the creation of a lien or
encumbrance subordinate to this Deed of Trust, (b) the creation of a purchase money security interest for household appliances, (c) a transfer by devise, descent or by operation
of law upon the death of a joint tenant or (d) the grant of any leasehold interest of three years or less not containing an option to purchase, beneficiary may, at beneficiary's
option, declare all the sums secured by this Deed of Trust to be immediately due and payable. Beneficiary shall have waived such option to accelerate if, prior to the sale or
transfer, beneficiary and the person to whom the property is to be sold or transferred reach agreement in writing that the credit of such person is satisfactory to beneficiary and
that the interest payable on the sums secured by this Deed of Trust shall he at such rate as beneficiary shall request.
It is agreed that in case of default in payment of said principal or interest or a breach of any of the covenants herein, then said principal sum hereby secured and interest thereon
may at the option of the beneficiary become due and payable at once, anything in said note to the contrary notwithstanding and possession of said property will thereupon be
delivered to the beneficiary, and on failure to deliver such possession the beneficiary shall be entitled to a receiver for said property who may be appointed by any court of
competent jursidict'ron.
Whenever used herein the singular number shall include the plural, the plural the singular, and the use of any gender shall be applicable to all genders. All of the covenants
herein shall be binding upon the respective heirs, personal representatives, successors and assigns of the parties hereto
Executed the day and year first above written.
Attest Q�
6ecre
Name.
STATE OF COLORADO
Countyof Pueblo
PEDCQ Foundation, Inc
�oww o (' `� U.,A
Titl -• Chni r•rran
1 ss
The foregoing instrument was acknowledged before me this 18th day of July, 2006 is
b James A Dudley as Chairman and Bill Croley
as,, a �taV'y of PEDCO Foundation, Inc , a Colorado nonprof
[V u91�w 2/1407 Witness my hand and official seal
3' • . p U
* 1- Vnver, inset it3'apd'
UH�% "
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• wrltl :.dress of p0n&VthiNewly Created Legal Description (§ 38- 35- 106.5, C.R.S.)
No. 923C.'RReyj DEED OF TRUST (Public Trustee) with Due on Sale Clause
Notary Public
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Bradford Publishing, 1743 Wazee St. Denver, CO 80202 — (303) 292 -2500 — 8 -98
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EXHIBIT "A"
Parcel B, Lot Line Rearrangement, No 2005 -005, a vacation and replat of Lots 23 and 24,
Pueblo Memorial Airport Industrial Park Subdivision, Pueblo County, State of Colorado,
according to the plat thereof filed for record June 5, 2006 at Reception No 1678289 in the office
of the Pueblo County Clerk and Recorder, Street Address No 1 William White Boulevard,
Pueblo, Colorado, 81001
LEASE AMENDMENT NO 1
THIS LEASE AMENDMENT NO 1 ( "Amendment ") entered into as of July 24, 2006 by
and between PEDCO Foundation, a Colorado corporation ( "Lessor ") and Doss Aviation, Inc., a
Texas corporation (the "Lessee "), WITNESSETH.
WHEREAS, Lessor and Lessee entered into a Lease dated as of May 22, 2006 ( "Lease "),
and
WHEREAS, Lessor and Lessee are desirous of amending the Lease.
NOW, THEREFORE, in consideration of the foregoing and mutual covenants contained
herein, Lessor and Lessee agree as follows
Article 2.01 and 2.02 of the Lease are amended to read as follows.
2.01 Lessor shall cause the Building remodeling, Hangar Construction, fencing
and other improvements to be completed as herein provided (the "Remodeling ") and shall
pay the actual cost of Remodeling, including architectural and engineering fees up to but
not to exceed $13,090,000 00 (the "Maximum Construction Costs "). The Maximum
Construction Costs consist of the $13,090,000 00 to be advanced by City to be used for
Remodeling pursuant to an Agreement between Lessor and City of Pueblo (the "City ")
dated as of May 22, 2006 and modified by Amendment No. 1 dated July 24, 2006
(collectively, the "Lessor's City Agreement "), and the separate agreement between the
City of Pueblo and Lessee dated May 22, 2006 A copy of the Agreement between
Lessee and the City of Pueblo is attached to the Lease as Exhibit "A" and incorporated
herein (the "City Agreement "). Capitalized terms used in this Amendment shall have the
same meaning as those terms are used in the City Agreement and Lessor's City
Agreement or otherwise defined herein.
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)
business days after such Excess Construction Costs are incurred, except that, Lessee shall
deposit with Lessor the sum of $1,546,000 00 in cash or certified funds ( "Lessee Funds ")
within five (5) business days after written request therefor is given by Lessor to Lessee;
provided, however, that such request shall not be made by Lessor until at least 80% of the
Maximum Construction Costs have been committed or expended by Lessor for the
Remodeling. Lessor and Lessee acknowledge that the Lessee Funds constitute Excess
Construction Costs necessary and required for the Remodeling.
2. Article 4 01 of the Lease is amended to read as follows
401 Lessee shall pay rent in the total amount of $16,477,660 00, payable, in
advance and without notice, in one hundred thirty -two (132) equal monthly payments of
$124,830 00 commencing on the Overall Commencement Date and continuing on the
same day of each consecutive month thereafter during the eleven (11) year term of this
Lease. For the period beginning on the Phase One Commencement Date or the date
Phase One is ready for occupancy by Lessee, whichever occurs later, and ending on the
Overall Commencement Date, Lessee shall pay rent in the amount of $14,668 per month
($0.60 per square foot per month) based on 24,448 square feet. City's share of rent and
other payments received by Lessor under this Lease shall be held in trust for the benefit
of City, and immediately after receipt thereof shall be paid to City as provided in the
Lessor's City Agreement.
Articles 17 04 and 17 05 of the Lease are amended to read as follows:
17 04 The purchase price shall be the greater of (a) an amount equal to the
appraised value of the Leased Premises on or not more than ninety (90) days prior to the
Designated Purchase Date as determined by an independent appraiser qualified in
appraising commercial real property who is a Colorado certified general appraiser and
Member Appraisal Institute (MAI), selected by mutual agreement of Lessor, Lessee and
City of Pueblo, or (b) $14,020,000.00 If Lessor, Lessee, and City of Pueblo are unable
to mutually agree as to such appraiser within twenty (20) days after delivery of Lessee's
notice of exercise of option, Lessee may, at its cost and expense (including attorney fees),
petition the District Court, County of Pueblo, State of Colorado, to select after notice and
hearing an appraiser from alist of three (3) appraisers consisting of the appraisers
designated by Lessor, Lessee and City of Pueblo. All fees and costs of the appraiser
selected by mutual agreement or by the Court shall be paid by Lessee. After receipt of
the appraisal made by the selected appraiser, Lessee may decline to purchase the Leased
Premises upon written notice given to Lessor and City of Pueblo prior to the Designated
Purchase Date. Such declination shall not prevent Lessee from purchasing the Leased
Premises in accordance with the provisions of this Article 17 and Article 18 on any
subsequent anniversary of the Overall Commencement Date.
17 05 Subject to the limitations set forth in this Article 17 05, Lessee shall be
granted a credit against the purchase price as follows:
(a) an amount equal to eighty -five percent (85 %) of the rental
payments made by Lessee pursuant to Article 4 01 hereof during the term of this Lease
up to the Designated Purchase Date ( "Rent Credits "), and
(b) the greater of (a) $1,546,000 00, or (b) 9.932% of the appraised
value of the Leased Premises determined in accordance with the appraisal method set
forth in Article 17 04 above;
provided, however, that in no event shall the purchase price by less than $14,020,000 00
2
minus Rent Credits.
4 All other terms, covenants and provisions of the Lease are by reference
incorporated herein as if set forth herein in full. The Lease as modified by this
Amendment No 1 shall remain in full force and effect inuring to the benefit of and
binding upon Lessor and lessee and their respective successors and approved assigns.
Executed as of the day and year first written above.
LESSEE
DOSS AVIATION, INC
By a-
Frank G Hunter
President/CEO
STATE OF COLORADO )
ss.
COUNTY OF PUEBLO )
LESSOR
EDCO FOUNDATION
O " 1 6 W k�
es A. Dudley
V tChairman
The foregoing instrument was acknowledged before me this 18'"' day of July, 2006 by
James A. Dudley as Chairman of PEDCO Foundation, Inc., a Colorado nonprofit corporation.
Witness my hand and official seal.
My commission expires: 2- 1�Yl'o?
[SEAL]
No tdy Public
STATE OF COLORADO )
) ss.
COUNTY OF EL PASO )
The foregoing instrument was acknowledged before me this 1 6 4 - day of July, 2006 by
Frank G Hunter as President/CEO of Doss Aviation, Inc., a Texas Corporation.
Witness my hand and official seal.
My commission expires.
[SEAL]
tary Public
4