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HomeMy WebLinkAbout11353AS AMENDED 07/28/08 RESOLUTION NO. 11353 A RESOLUTION CONSENTING TO THE ASSIGNMENT AND ASSUMPTION OF THE MANAGEMENT AGREEMENT BETWEEN CITY OF PUEBLO AND PUEBLO MOTORSPORTS FROM PUEBLO MOTORSPORTS TO NEK ADVANCED SECURITIES GROUP, INC. AND AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO EXECUTE SAME BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, that: SECTION 1 _ The City consents to the assignment and assumption of the Management Agreement dated January 1, 1997 as amended and modified by Extensions of Management Agreement dated November 25, 2002, July 12, 2004 and January 8, 2008 (herein collectively the "Management Agreement ") between Pueblo Motorsports and NEK Advanced Securities Group, Inc. The Assignment Agreement attached hereto is hereby approved. SECTION 2_ The President of the City Council is hereby authorized to execute the consent and approval to the assignment and assumption set forth on the Assignment Agreement in the name of the City and the City Clerk is directed to affix the seal of the City thereto and attest same. SECTION 3_ This Resolution shall become effective upon final approval and passage. INTRODUCED July 28, 2008 Res. 11353 D p 1-"� AS AMENDED 07/28/o8 D Background Paper for Proposed RESOLUTION DATE: July 28, 2oo8 DEPARTMENT: Law Department TITLE A RESOLUTION CONSENTING TO THE ASSIGNMENT AND ASSUMPTION OF THE MANAGEMENT AGREEMENT BETWEEN CITY OF PUEBLO AND PUEBLO MOTORSPORTS FROM PUEBLO MOTORSPORTS TO NEK ADVANCED SECURITIES GROUP, INC. AND PPP( TING n L ETTER OF 01TE rr BETWEEN THE CITY Or PUEBLO AND NEK ADVANCED SECURITIES 6 . AND AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO EXECUTE SAME ISSUE Should City Council consent to the assignment and assumption of the Pueblo Motorsports Management Agreement and Letter of Intent with NEK Advanced Securities Group, Inc.? City Councilpersons Barbara Vidmar and Randy Thurston recommend that the assignment and assumption, and Letter of Intent be placed on the City Council agenda. BACKGROUND Pueblo Motorsports will assign its Management Agreement with the City for the motorsports facility known as Pueblo Motorsports to NEK Advanced Securities Group, Inc., and NEKAdvanced Securities Group, Inc. will assume the performance of the Management Agreement. City's consent and approval is required for such assignment and assumption. The current Management Agreement ends December 31, 20o8. City will enter into a Letter of Intent with NEK Advanced Securities Group, Inc. to negotiate on an exclusive basis for a long -term Lease /Management Agreement for the Pueblo Motorsports facility. FINANCIAL IMPACT None. ASSIGNMENT AGREEMENT THIS ASSIGNMENT AGREEMENT ( "Assignment ") is entered into this 22n day of July, 2008, by and between, Pueblo Motorsports, Inc., a Colorado nonprofit corporation ("PMI ") and NEK Advanced Securities Group, Inc., a New Mexico corporation, its subsidiaries or assigns ( "NEK "). WHEREAS, PMI is the property manager of the property known as the Pueblo Motor Sports Park located in Pueblo, Colorado (the "Park "), pursuant to that certain Management Agreement between PMI and the City of Pueblo, a Municipal Corporation (the "City "), dated January 1, 1997, and any extensions thereto, attached hereto as "Exhibit A" and incorporated herein by this reference (the "PMI Contract "); and WHEREAS, PMI desires to assign and NEK desires to assume all of PMI's rights under the PMI Contract in order to permit interim management of the Park by NEK while NEK and the City negotiate for the long -term lease and management of the Park, as contemplated under NEK's Letter of Intent to the City, dated July 22, 2008 (the "NEK LOI "). NOW THEREFORE, in consideration of the promises set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby are acknowledged, PMI and NEK agree as follows: 1. Assigmment and Acceptance Subject to the conditions of Section 2, PMI hereby grants, conveys, and assigns to NEK all of its rights, title and interest to and under the PMI Contract, and NEK hereby accepts the conveyance and assignment of all of PMI's rights, title and interest, to and under the PMI Contract. 2. Effective Date The parties understand and agree that the effectiveness of this Assignment is expressly conditioned upon the approval by City Council for the City of this Assignment and the NEK LOI at its next regularly scheduled meeting currently scheduled for July 28, 2008 (the "Effective Date "). Absent approval by the City Council by the Effective Date, this Assignment shall become null, void and of no force or effect unless agreed by the parties in writing. 3. Liabilities Prior to Effective Date The parties understand and agree that the NEK shall not be liable for any duties, liabilities, losses, damages, claims, environmental contamination, costs and expenses, taxes, interest, awards, judgments and penalties (including, without limitation, legal costs and expenses and interest on the amount of any loss from the date suffered or incurred by PMI) (collectively, a "Loss ") existing as of, arising, resulting, or caused prior to the Effective Date by use or operation of the Park, PMI's management of the Park, or any other reason whatsoever. 4. Representations and Warranties (a) PMI hereby represents and warrants to NEK as of the Effective Date that: i. All requisite action has been taken, and necessary authorizations have been sought, by PMI in connection with this Assignment; and iii. It is has no knowledge, either express or implied, of any event or occurrence related to the Park, prior to the Effective Date, that would result in a Loss. (b) NEK hereby represents and warrants to PMI as of the Effective Date that all requisite action has been taken, and necessary authorizations have been sought, by PMI in connection with this Assignment. 5. PMI Indemnification PMI hereby agrees to indemnify and hold harmless NEK, and its officers, directors, employees, agents, successors and assigns for any Loss: (a) arising, resulting, existing as of, or caused prior to the Effective Date by use or operation of the Park, PMI's management of the Park, or any other reason whatsoever. Without limiting the foregoing, PMI agrees to indemnify and hold harmless NEK, and its officers, directors, employees, agents, successors and assigns against and from any and all Environmental Damages that may at any time be imposed upon, threatened against, incurred by or asserted or awarded against the NEK and arising from or out of (i) any Contamination, or threatened release of any Hazardous Substances or Contamination, on, in, under, affecting or migrating or threatening to migrate to or from all or any portion of the Property, any surrounding areas or other property or any persons; or (ii) any violation of, or noncompliance with, or alleged violation of, or noncompliance with, the Environmental Laws by the Park or PMI. (b) arising out of, resulting from or caused by any breach or the inaccuracy of any of the representations, warranties, covenants, or agreements contained in this Assignment. (c) As used in this paragraph, the term "Hazardous Substances" includes any element, compound, or chemical that is defined, listed or otherwise classified as a contaminant, pollutant, toxic pollutant, toxic or hazardous substance, extremely hazardous substance or chemical, hazardous waste or special waste under any federal, state, local or municipal laws, statutes, regulations, rules or ordinances imposing liability or establishing standards of conduct for protection of the environment ( "Environmental Laws "), and includes but is not limited to petroleum, solvents and asbestos. "Contamination" means the seeping, spilling, leaking, pumping, pouring, emitting, using, emptying, discharging, injecting, escaping, leaching, dumping, disposing, releasing or the presence of Hazardous Substances at, under or upon the Property or into the environment, or arising from the Property or migrating to or from the Property, which may require notification, treatment, response or removal action or remediation under any Environmental Laws. "Environmental Damages" shall mean all claims, judgments, damages, losses, penalties, fines, liabilities (including strict liability), encumbrances, liens, costs and expenses of investigation and defense of any claim, whether or not such claim is ultimately defeated, and of any good faith settlement, of whatever kind or nature, contingent or otherwise, matured or unmatured, foreseeable or unforeseeable, including reasonable attorneys' fees and disbursements and consultants' fees, any of which are incurred at any time, relating to the following: (i) damages for personal injury, or injury to property or natural resources, occurring upon or off of the Property, including lost profits, consequential damages, punitive damages, the cost of demolition and rebuilding of any improvements on real property, interest and penalties; 2 1 . (ii) reasonable fees incurred for the services of attorneys, consultants, contractors, experts, laboratories and all other costs and expenses incurred in connection with investigation, remediation or post - remediation monitoring, operation and maintenance, of any Hazardous Substances or Contamination or violation of any Environmental Laws including the preparation of any feasibility studies or reports or the performance of any cleanup, remediation, removal, response, abatement, contaminant, closure, restoration, treatment, investigation work or monitoring work required by any Environmental Laws, or reasonably necessary to make full economic use of the Property or any other property or otherwise expended in connection with such conditions, and further including any reasonable attorneys' fees, costs and expenses incurred in enforcing this Agreement or collecting any sums due hereunder, (iii) any additional costs that NEK believes are necessary to protect against, eliminate or mitigate the risk posed by a release or threatened release of Regulated Substances or Contamination on, in, under or affecting the Property into the air, any body of water, any other public domain or any surrounding or adjoining areas; (iv) any costs incurred to comply, in connection with all or any portion of the Property or any area surrounding or adjoining the Property, with all Environmental Laws; (v) liability to any third persons or governmental agency for costs expended in connection with the items referenced in clause (ii) above; and (vi) diminution in the value of the Property, and damages for the loss of business and restriction on the use or adverse impact on the marketing of rentable or usable space or of any amenity of the Property. (d) PMT further agrees to pay the premium for NEK to purchase a Pollution Legal Liability insurance policy naming NEK as the first named insured, with a term of no less than three years, with a deductible of no more than $25,000 per claim, and with coverage of no less than $250,000 per claim. 6. Miscellaneous (a) Amendments and Supplements This Assignment may not be amended, modified, or supplemented by the parties hereto in any manner, except by an instrument in writing signed by NEK and the PMI. (b) Governing Law and Venue The parties agree that this Assignment will be governed by the law of the State of Colorado, and that proper jurisdiction for any suit, action, or proceeding arising out of or related to this Assignment shall be the federal and state courts of the State of Colorado. The parties further agree that venue for any suit, action, or proceeding arising out of related to this Assignment shall only lie in Pueblo, Colorado. The prevailing party in any action to enforce the terms hereof shall be entitled to recover all reasonable attorneys fees and costs incurred in such action. (c) Entire Agreement This Assignment and the documents and instruments and other agreements among the parties hereto as contemplated by or referred to herein constitute the entire agreement among the parties with respect to the subject matter hereof and supersede all other prior W 1 agreements and understandings, both written and oral, between the parties with respect to the subject matter hereof. (d) Binding Effect; Assignability This Assignment shall be binding upon and inure to the benefit of the parties hereto and their respective permitted successors and assigns. This Assignment is not intended to confer upon any person other than the parties hereto (and such parties' and members' respective successors and assigns) any rights or remedies hereunder, except as otherwise expressly provided herein. Neither this Assignment nor any of the rights and obligations of the parties hereunder shall be assigned or delegated, whether by operation of law or otherwise, without the prior written consent of all parties hereto. (e) Validity The invalidity or unenforceability of any provision of this Assignment shall not affect the validity or enforceability of any other provisions of this Assignment, each of which shall remain in full force and effect. (f) Counterparts This Assignment may be executed in one or more counterparts, all of which together shall constitute one and the same assignment. IN WITNESS WHEREOF, PMI and NEK have executed this Assignment on the date first above written. PMI: NEK: Pueblo Motorsports,Inc. a Colorado nonprofit corporation By: Its kcs I 1)(-N7 APPROVED: The City Council for the City of Pueblo By. ` y Its: President Date: '2- 2- R - O 1% 4 NEK Advanced Securities Group, Inc. a New Mexico rporation By Its: /; S if r= EXHIBIT A See the Attached Copy of the "PM-1 Contract"