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HomeMy WebLinkAbout11566RESOLUTION NO. 11566 A RESOLUTION APPROVING AN AGREEMENT BETWEEN PUEBLO, A MUNICIPAL CORPORATION, AND THE WATER COMPANY, LLC AND SPECIAL WARRANTY DEED RELATING TO A JOB CREATING CAPITAL IMPROVEMENT PROJECT, AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO EXECUTE SAME, AND TRANSFERRING $1,420,000 FROM THE 1992 -2011 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 $1,420,000 for the job creating capital improvement project with The Water Company, LLC 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. SFrTinN 9 The Agreement dated as of March 23, 2009 between the City of Pueblo and The Water Company, LLC and Special Warranty Deed relating to a job creating capital improvement project, copies of which are attached hereto, having been approved as to form by the City Attorney, are hereby approved. The President of the City Council is authorized to execute and deliver the Agreement and the Special Warranty Deed in the name of the City. The City Clerk is directed to affix the seal of the City thereto and attest same. SECTION 3 Funds in an amount of $1,420,000 are hereby authorized to be transferred, expended and made available to The Water Company, LLC out of the 1992 -2011 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 The Water Company, LLC after receipt (i) by the City Clerk of the documents required to be filed pursuant to paragraph 3(d) of the Agreement, and (ii) by the Director of Finance of written requests for payment required by paragraph 3(e) 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. INTRODUCED: March 23. 2009 By: Michael Occhiato COUNCILPERSON APPR 0' } �- PRESIDENTaf City Council A77TSTED DY: CITY CLERK ED Background Paper for Proposed RESOLUTION AGENDA ITEM # 26 DATE: March 23, 2009 DEPARTMENT: Law Department TITLE A RESOLUTION APPROVING AN AGREEMENT BETWEEN PUEBLO, A MUNICIPAL CORPORATION, AND THE WATER COMPANY, LLC AND SPECIAL WARRANTY DEED RELATING TO A JOB CREATING CAPITAL IMPROVEMENT PROJECT, AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO EXECUTE SAME, AND TRANSFERRING $1,420,000 FROM THE 1992 -2011 SALES AND USE TAX CAPITAL IMPROVEMENT PROJECTS FUND FOR SUCH PURPOSE ISSUE Should the City Council approve the job creating capital improvement project proposed by The Water Company, LLC and authorize the expenditure of $1,420,000.00 and the transfer of Lot 2, Pueblo Memorial Airport Industrial Park Subdivision, Third Filing, therefor? RECOMMENDATION PEDCO recommends approval of this project. BACKGROUND The Resolution approves an Agreement between the City and The Water Company, LLC ( "Company ") who will conduct its business of selling, manufacturing and developing patented water treatment devices at facilities located within Pueblo Memorial Airport Industrial Park. Company has committed to employ 140 full -time employees whose annual compensation shall average $65,000 including deferred compensation matching funds plus benefits for a period of seven years from March 1, 2011 ( "employment commitment'). Company will use good faith efforts to employ residents of the City and County of Pueblo as full -time employees including engaging in recruitment programs and posting of employment openings in the City of Pueblo. Company in awarding remodeling contracts shall allow local architects, engineers, subcontractors, contractors and material suppliers a reasonable opportunity to participate in competitive bidding or other selective procedures used by Company. City will convey to Company Lot 2, Pueblo Memorial Airport Industrial Park Subdivision, Third Filing, consisting of 6.15 acres including the 50,000 square foot spec building located thereon ( "Lot 2 "). City will convey Lot 2 "AS IS" "WITH ALL ITS FAULTS" and without any representation or warranty with respect to the condition of Lot 2 including the 50,000 square foot building, environmental or otherwise. City will make available $1,420,000 for remodeling the building. Company will execute and deliver to City its interest -free $1,380,000 promissory note payable in 60 monthly payments of $23,000 starting March 1, 2010. Company's total repayment obligation including the promissory note is $3,240,703 and will be secured by a first deed of trust on Lot 2. If Company defaults in its employment commitment, Company will repay to City a pro -rata share of the repayment obligation computed at $826.71 per Employee per quarter. PEDCO has evaluated the economic viability of this project and the Company and recommends that the City Council approve the project, Agreement and Special Warranty Deed. FINANCIAL IMPACT See Background. AGREEMENT THIS AGREEMENT entered into as of MAecJ 93 , 2009 between Pueblo, a municipal corporation (the "City ") -and The Water Company, LLC, a Delaware limited liability company (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 and real property with the City, and WHEREAS, the City has approved such application and will make funds and real property 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: I . Definitions. The following terms as used in this Agreement shall have the following meaning unless the context clearly indicates otherwise: "Employment Commitment Date" means March 1, 2011. "Facility" means the approximately 50,000 square foot building located on Lot 2, wherein Company will conduct its business operations in Pueblo County, Colorado. "Full -Time Employee" means a person who actually performs work at the Facility for not less than thirty (30) hours per week whether employed by Company or by an entity acting as an employee leasing agency to provide Full -Tinge 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 employee leasing agency to provide Full -Time Employees for Company who actually perform work at the Facility. The term "work at the Facility" includes time spent on short-term work related field assignments out of the Facility. "Lot 2" means Lot 2, Pueblo Memorial Airport Industrial Park Subdivision, Third Filing, Pueblo County, Colorado, consisting of 6.15:t acres, and all improvements thereon, including, without limitation, the Facility. The parties agree that the fair market value of Lot 2 is $900,000. "Quarter" means three consecutive calendar months commencing January 1, April 1, July I 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 total of business days in such Quarter. 2. Conveyance of Lot 2 . City will convey title to Lot 2 to Company by special warranty deed in substantially the same form and content of the special warranty deed attached hereto as i J � : Exhibit "A" ( "Special Warranty Deed "). City and Company shall execute and acknowledge the Special Warranty Deed and City will cause the executed and acknowledged Special Warranty Deed to be recorded in the office of the Pueblo County Clerk and Recorder within ten (10) business days after Closing as described in paragraph 2(c) below. Company acknowledges and agrees as follows: (a) Other than warranty of title contained in the Special Warranty Deed, City hereby disclaims any warranty or representation, express or implied, with respect to Lot 2 or any aspect, portion or component thereof, including, but not limited to: (i) the condition, nature, quantity, , or quality of Lot 2, including, but not limited to, the condition of the Facility or the quality of soils onz or under the Lot 2; (ii) the fitness of Lot 2 for any particular use; (iii) the presence or suspected presence of hazardous materials or waste on, in, under or about Lot 2; (iv) the financial benefits, income, expenses, profits or`losses to be achieved, derived or incurred as a result of the ownership, operation, leasing, renovating; or management of Lot 2; or (v) existing or proposed governmental laws or regulations applicable to Lot 2, or the further development or changing use thereof, including environmental laws and laws or regulations relating to zoning, land use, or buildings, or the existence of any approvals or authorizations of any kind or nature of or from any governmental authority. City also hereby disclaims any warranty or representation, express or implied, with respect to any surveys, reports, studies, or other documents, if any, pertaining to Lot 2 delivered by City to Company. (b) Company has not relied on any representation, statement, or warranty of City, other than the warranty of title contained in the Special Warranty Reed, or anyone acting for or on behalf of City, and all matters concerning Lot 2 have been or will be independently verified by Company. Company shall have relied entirely on its own investigation, examination and inspection of Lot 2 and all matters pertaining thereto. Company is acquiring Lot 2 "AS IS" "WITH ALL ITS FAULTS" in its condition on the date the executed and acknowledged Special 'Warranty Deed is recorded. (c) In consideration of and as a condition precedent to City conveying title to Lot 2 to Company, Company will execute, acknowledge and deliver to City, contemporaneously with the execution of the Special Warranty Deed, the following: (i) Company's interest -free promissory note in the principal sum of $1,380,000.00 in substantially the same form and content of the promissory note attached hereto as Exhibit "B" ( "Promissory Note "). The agreed imputed interest at 2.06% per annum equals $73,472.92. Collectively the agreed principal sum and imputed interest under the Promissory Note equals $1,453,472.92. (ii) Company's deed of trust securing payment of the Promissory Note and Company's Repayment Obligation described in paragraph 5 hereof in substantially the same form and content of the deed of trust attached hereto as Exhibit "C" ( "Deed of Trust "). The Deed of Trust will be recorded immediately after the special warranty deed is recorded and shall be a first and valid deed of trust lien on Lot 2. (d) For purposes of Company's Repayment Obligation, Lot 2 has an agreed value of $1,600,000.00 (the "Real Estate Value "). 3. City Funds If Company is not in default under this Agreement or the Promissory Note, City will advance to or for the benefit of Company funds in an amount not to exceed $1,420,000.00 (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 used by Company solely for remodeling the Facility. (b) Company shall cause the Facility to be remodeled in an expeditious manner. The Facility shall be remodeled and fully operational by October 1, 2009, unless circumstances beyond Company's control delays such operational date but in no event later than January 1, 2010. (c) Company in awarding contracts for remodeling the Facility shall allow local architects, engineers, subcontractors, contractors and material suppliers a reasonable opportunity to participate in the competitive bidding, or other selection procedure used by Company. A similar provision with respect to qualified local subcontractors and material suppliers shall be included as part of the construction contracts for remodeling the Facility. For purposes hereof, the term "local" means having its principal place of business in the City or County of Pueblo, Colorado, and the term "qualified" means having all required - licenses, experience and bonding capacity to perform the work or supply the material (d) 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 body of Company approving this Agreement, the Promissory Note and Deed of Trust, and authorizing its officers to execute and deliver such documents in the name of Company, and (iii) documentation reasonably satisfactory to City °that Company has entered into valid and binding contracts for remodeling the Facility. The date of the last to occur of the filings required under (i), (ii) and (iii) of this paragraph 3(d) shall be referred to herein as "Closing." If Closing does not occur on or before May 1, 2009, 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. (e) As conditions precedent to the disbursement of City Funds to Company for remodeling the Facility, Company shall (i) file with the City Clerk all documents required by subparagraph (d) above and (ii) file 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 remodeling the Facility, identifying the work and materials for which payment is sought, including certificates of the contractor and/or architect that such work and materials have been completed and installed. All City Funds, if any, 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 remodeling the Facility. 3 4. Employment Commitment Company acknowledges and agrees that the primary purpose of City in entering into this Agreement and the sole benefit to the City for conveying Lot 2 to Company and making City Funds available to Company hereunder is the creation of jobs. Therefore, Company represents, covenants, and agrees that (i) Company will on and after the Employment Commitment Date continuously during the Repayment Period, as described in paragraph 5 (a), conduct its business operations at the Facility and employ not less than one hundred forty (140) Full -Time Employees at the Facility whose annual compensation shall average at least $65,000.00 including deferred compensation matching funds plus benefits, and (ii) Company will use good faith efforts to employ residents of the City and County of Pueblo as Full -Time Employees including, without limitation, engaging in reasonable programs and posting of employment openings in the City of Pueblo (collectively the "Employment Commitment "). 5. Repayment Obligation 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 and/or Company's Promissory Note, Company shall repay to City a pro -rata share ofthe City Funds advanced by City under paragraph 2 hereof plus the Real Estate Value, 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 one hundred forty (140) Full -Time Employees employed at the Facility by Company, multiplied by $826.71 (the "Company's Quarterly Payments "). For example, if for the fourth Quarter of the third year after the Employment Commitment Date such Quarterly Employees is 100, the amount payable by Company to City on or before the fifteenth (15th) day of the next calendar month would be (140 - 100) x $826.71 = $33,068.40. (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, i 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 eight percent (8 0 /6) per annum ( "Default Interest "). (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 for the preceding Quarter and their annual salary, together with 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 and salary, City shall have access to Company's records relating to Company's employees employed at the Facility. (d) Notwithstanding anything contained in this paragraph 5 to the contrary, if 4 Company defaults in its Employment Commitment set forth in paragraph 4 or Company's Repayment Obligation set forth ,in this paragraph 5 or Company's Promissory Note described in paragraph 2(c)(i), and such default is not cured within sixty (60) days after the date of written notice specifying the default ' is given by ' City to Company, then in such event, the entire balance of Company's Repayment Obligation shall become due and payable without notice, notice being hereby expressly waived, together with Default Interest from the date of default, and for such purpose, the entire balance of Company's Repayment Obligation shall be an amount equal to 140 tinges $826.71 multiplied by the remaining Quarters of the Repayment Period plus the amount of Company's unpaid Quarterly - Payments, if any. In no event shall Company's Repayment Obligation be more than the actual - amount of City Funds advanced by City under paragraph .3 hereof plus the Real Estate Value and Default Interest as provided herein. 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. 6. Company, Debt. Company's Repayment Obligation 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 4, its Repayment Obligation contained in paragraph 5, and Company's Promissory Note described in paragraph 2(c)(i). Company's obligations under this Agreement including its Employment Commitment, Repayment Obligation and Promissory Note shall be secured by a perfected first deed of trust lien on Lot 2. 7. Enforcement (a) Prior to instituting any proceeding to enforce Company's Repayment Obligation under paragraph 5, 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 7 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, or Company's 5 Promissory Note, and no partial or single exercise of that right, shall constitute a waiver of that right. 8. Attorney Fees and Venue 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, 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. Entire Understanding and Waiver. This Agreement expresses the entire under- standing 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. 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. Governing Law 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. Notices 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, l City Hall Place, Pueblo, Colorado, 81003, with copy to Thomas E. Jagger, City Attorney, 503 N. Main, Suite 127, Pueblo, Colorado, 81003, or (b) if to the Company, The Water Company, LLC, 350 Keeler Parkway, Pueblo, Colorado, 81001, Attention: Richard L. Hoover; 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. Binding Effect 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. Enforceable Agreement of Company 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. 9 16 D 14. Contingent Fees 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 conveyance of Lot 2 to Company or 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, and/or to seek such other remedies legally available to City, which remedies shall be cumulative. 15. City's Liability 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 Promissory Note or Company's Repayment Obligation under paragraph 5 hereof. Notwithstanding the foregoing, if Company meets and complies with all the covenants and conditions set forth in paragraph 3, and City defaults in advancing City Funds pursuant to paragraph 3, Company may seek recovery from City of the amount of such defaulted City Funds, but not for any other damages. 16. Invalid Provisions 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. Relations. hip The relationship between the parties is purely contractual. Neither party shall be, or hold itself out as, agent of the other or as joint ventures under this Agreement. 18. Negotiated Agreement 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. No Third Party Beneficiary 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. Execution. 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. Attest ". City" C Pueblo, a Municipal Corporation By a/ President of the City Council [SEAL] Attest:_ 4 Cr - - - - L By Name:—tD' o nr-aen 6 &n t �• THE WATER COMPANY, LLC, a Delaware Limited Liability Company Richard L. Hoover, President /CEO Attest: Name: g • L- A400 vim' At.- Title: 4 G.S G THE WATER COMPANY, LLC, a Delaware Limited Liability Company By - Richard L. Hoover, PresidenVCEO EXHIBIT " A " SPECIAL WARRANTY DEED a .Y e ' SPECIAL WARRANTY DEED THIS DEED, made this day of 200_ by and between Pueblo, a Municipal Corporation (herein "City ") and The Water Company, LLC, a Delaware limited liability company (herein "Company "), WITNESSETH: That City for and in consideration of the sum of $10.00 and other good and valuable consideration to City in hand paid by the Company, the receipt whereof is hereby confessed and acknowledged, has granted, bargained, sold and conveyed, and by these presents does grant, bargain, sell, convey and confirm unto the Company, its successors and assigns forever, all the real property situate, lying and being at Pueblo Memorial .Airport, County of Pueblo, State of Colorado, more particularly described as Lot 2, Pueblo Memorial Airport Industrial Park Subdivision, Third Filing (herein "Property), with all its appurtenances and improvements, and warrant the title to the'same against all and every person claiming the whole or any part thereof, by, through or under the City, subject to easements, rights of way, restrictions and reservations of record and easements for existing utilities, sanitary sewer, water, irrigation and natural gas lines on, over or under the Property and to the following covenants, conditions, and restrictions which are and shall be construed to be covenants running with the land described herein and binding upon the Company, its successors and assigns and inuring to the benef t of the City, its successors and assigns. 1. City reserves unto itself and its successors and assigns, for use and benefit of the public, a right of flight for the passage of aircraft in the airspace above the surface of the Property, together with the right to cause in the airspace above the surface of the Property such noise as be inherent in the operation of any aircraft now known or hereafter used for navigation of or flight in said airspace, and for use of the airspace above the surface of the Property for landing on, taking off from, or operation on or over: the Pueblo Memorial Airport. 2. Company expressly agrees for itself, its successors and assigns to restrict the height of structures, objects of natural growth and other obstructions on the Property, to a height of not more than 4,670 feet above the mean sea level. In the event this covenant is breached, City reserves the right to enter upon the Property at the expense of the Company to remove the offending structure or object and to cut the offending growth. 3. Company expressly agrees for itself, its successors and assigns, that it will prevent any use of the Property which would interfere with landing or, taking off of aircraft at the Pueblo Memorial Airport, or otherwise ,constitute an airport hazard. 4. The Property and its use are further subject to the following Restrictive Covenants: (a) The Property may be used only for industrial and manufacturing facilities and incidental office uses. The Property shall not be used for smelting or plating operations, or for the storage or processing of putrescble materials, or for any purpose or business which constitutes ,a nuisance, or which exceeds the state air pollution control standards for the facility. Gasoline or diesel fuel used in connection with the business conducted on the Property but not for sale at retail or wholesale may be stored on the Property in an environmentally sound manner. (b) Outdoor storage shall not be permitted except for storage of equipment used in the facility. Parking areas for vehicles and roads on the Property shall be paved. (c) The Property shall not be subdivided and no building or structure over sixty (64) feet in height shall be installed or constructed on the Property. (d) No structure or building shall be constructed or installed nearer than twenty - five (25) feet of the right of way line of Jetway Court, or twenty -fire (25) feet of the right of way line of any other abutting streets. There must be installed and maintained a minimum twenty -five (25) foot strip of living landscaped ground along and adjacent to Jetway Court, and twenty-five (25) feet adjacent to other abutting streets. Minimum side and rear yard set -backs shall be twenty-five (25) feet. Vehicular access to and from the Property shall be from Jetway Court. (e) Company shall keep and maintain the Property and all buildings, landscaping 2 r a and improvements located thereon in a good, clean, safe and orderly condition free of waste, rubbish, debris and trash, and enclose and screen from public view all outside storage and unsightly areas of the Property. (f) Company .shall comply with notifications and review requirements of the Federal Aviation Administrationprior to the construction, modification or alteration of any building or structure on the Property. (g) Company shall, at its own expense, cause all utilities and roads used or to be used on the Property to be extended from adjacent streets, installed on the Property, and kept and maintained in good order and condition. (h) Company shall pay to City a combined service fee for services and facilities now furnished by City at the Pueblo Memorial Airport, namely:.; public street maintenance, fire protection, and street lighting established by Section 3 -1 -14 of the Pueblo Municipal Code payable monthly. City may, from time to time, reduce or eliminate any or.. all of the services or facilities presently being furnished and may modify, increase, or decrease the annual combined service fee provided (i) such services and fee shall be non - discriminatory among other tenants and owners of land at Pueblo Memorial Airport receiving such services and facilities, and (ii) such fee shall be reasonable in relation to City's actual cost and expense of furnishing the services and facilities then being furnished. City's cost may include the cost of capital improvements amortized over the useful life of the improvements. If wastewater discharged from the Property is transported through City's wastewater collection system and treated at City's waste water treatment facilities, Company and the wastewater so transported and treated shall be subject to the same restrictions, limitations, . conditions, fees, and charges as other users of City's sanitary sewer system and facilities. Company shall only discharge domestic wastewater into the City's sanitary sewer system. (i) Company, shall provide for storm water drainage which shall include the construction and installation of storm water detention facilities on the Property. The detention facility shall be capable of storing the developed on -site runoff from, a 100 -year frequency storm. The maximum release rate from the detention facility at the ponding depth corresponding to the 10- year volume shall be .30 cfs /acre and 1.00 cfs /acre for the 100 -year ponding depth. All calculations and details shall conform with the City of Pueblo Storm Drainage Criteria Manual. The point of discharge from the detention facility shall be at a location approved by the Director of Public Works. (j} Before commencing the construction, installation or alteration of any building, structure, parking facility, outdoor sign, or other permanent improvement, or landscaping on the Property, the Company shall submit to and have approved by the City in writing the site plans and plans and specifications therefor. _City's approval will not be unreasonably withheld. In the event the City or its designated representatives shall fail to approve or disapprove such plans and specifications within twenty - five (25) working days after they have been received by the City, such approval will not be required and this covenant will be deemed to have been complied with. Company shall use its best efforts to assure that all buildings constructed on the Property will be p a architecturally and aesthetically compatible with buildings constructed at the Pueblo Memorial Airport industrial park since 1985. All buildings, improvements and activities on the Property shall be constructed and conducted in compliance with all applicable federal, state and local law, regulations, and codes. (k) City reserves the right to waive all or any part of these Restrictive Covenants. 5. At the request of City, Company shall meet and in good faith confer with City concerning the annexation of the Property to the City when the Pueblo Memorial Airport, or any part thereof, including without limitation, the Property becomes eligible for annexation. 6. Invalidation of any one of the foregoing covenants, conditions, restrictions or reservations by judgment or court order or otherwise shall not affect any of the other of said covenants, reservations, restrictions or conditions which shall remain in full force and eff ect. 7. City shall have the right to enforce the restrictions, covenants and conditions hereof by injunction or other lawful procedure and to recover damages, costs, expenses, including reasonable attorney fees, resulting from any violation thereof or arising out of their enforcement. [ S E A L ] THE 'WATER COMPANY, LLC, a Delaware Limited lability Company ATTEST: By Name: & Name: Office: f o.:� /e E o Office: [SEAL] PUEBLO, A MUNICIPAL CORPORATION ATTEST: By President of the City Council City Clerk 4 ti COUNTY OF P��� e-- ) ) ss. STATE OF COLORADO } The foregoing in trument was acknowledged before me this 10 day of tAa rG(! , 200 �' by L; 1 o 6 V e- r as r e s i d e and as of The Water Company, LLC, a Delaware limited liability company. Witness any hand and official seal. My commission expires: My Comm Expires 08/01/2011 �s �v [SEAL] otary Public cn A �C) ®� C O COUNTY OF PUEBLO z )Ss. STATE OF COLORADO ) The foregoing instrument was acknowledged before me this day of , 200 . by as President of the City Council, and as City Clerk of Pueblo, Colorado, a Municipal Corporation. Witness my hand and official seal. My commission expires: [SEALI Notary Public 5 D architecturally and aesthetically compatible with buildings constructed at the Pueblo Memorial Airport industrial park since 1985. All buildings, improvements and activities on the Property shall be constructed and conducted in compliance with all applicable federal, state and local law, regulations, and codes. (k) City reserves the right to waive all or any part of these Restrictive Covenants. 5. At the request of City, Company shall meet and in good faith confer with City concerning the annexation of the Property to the City when the Pueblo Memorial Airport, or any part thereof, including without limitation, the Property becomes eligible for annexation. 6. Invalidation of any one of the foregoing covenants, conditions, restrictions or reservations by judgment or court order or otherwise shall not affect any of the other of said covenants, reservations, restrictions or conditions which shall remain in full force and effect. 7. City shall have the right to enforce the restrictions, covenants and conditions hereof by injunction or other lawful procedure and to recover damages, costs, expenses, including reasonable attorney fees, resulting from any violation thereof or arising out of their enforcement. [SEAL] C O Qt el;� 4) J ` / [SEAL] ATTEST: City Clerk THE 'CATER COMPANY, LLC, a Delaware Limited Liability Company Name: Office: PUEBLO, A MUNICIPAL, CORPORATION President of the City Council 4 COUNTY OF PUEBLO ) ) ss. STATE OF COLORADO ) The foregoing instrument was acknowledged before me this Lo 4� day of M C' r-C 200_ by as and as _ (?_ t t �� � 0M c g=M of The Water Company, LLC, a Delaware limited liability company. Witness my hand and official seal. My commission expires: IQ - I �­ c�o g T 1 _ 'i_Y �1. �N Ilne.+�PN..�.dl+...,.8gn�.61.7+ LAURIE SCOL RB NOTARY P!177'..I STATE OF C'3.. i j �pltl..>• uNDwtlOr.. ll>. �pi�v. NN•+ agl1�. �. NN ..:.o�NN,w.....�yp.,�.n1iN«�vtl �Y COUNTY OF PUEBLO } ) ss. STATE OF COLORADO ) iz 1 otary Pu is The foregoing instrument was acknowledged before me this day of_ 200 by as President of the City Council, and as City Clerk of Pueblo, Colorado, a Municipal Corporation. Witness my hand and official seal. My commission expires: [SEAL] Notary Public 5 o EXHIBIT "B" PROMISSORY NOTE PROMISSORY NOTE U.S. $1 Pueblo, Colorado .2009 FOR VALUE RECEIVED, The Water Company, LLC, a Delaware limited liability company (Borrower) promises to pay Pueblo, a Municipal Corporation, or order, (Note Holder) the principal sum of One Million Three Hundred Eighty Thousand and No /100ths Dollars (U.S. $1,380,000.00), without interest. Principal shall be payable at the City Finance Office, 1 City Hall Place, Pueblo, Colorado, 81003, or such other place as the Note Holder may designate, in sixty (60) monthly payments of Twenty -Three Thousand and No /100ths Dollars (U.S. $23,000.00), due on the 1st day of each month, beginning March 1, 2010. Such payments shall continue until the entire indebtedness evidenced by this Note is fully paid; provided, however, if not sooner paid, the entire principal amount outstanding shall be due and payable on March 1, 2015. Borrower shall pay to the Note Holder a late charge of three percent (3 %) of any payment not received by the Note Holder within fifteen (15) days after the payinent is due. Payments received for application to this Note shall be applied first to the payment of late charges, if any, second to the payment of Default Interest at the rate specified below, if any, and the balance applied in reduction of the principal amount hereof. If any payment required by this Note is not paid when due, and such payment is not paid within sixty (60) days after the date of written notice specifying the amount of the unpaid payment is given by Note Holder to Borrower, then in such event, the entire principal amount outstanding shall at once become due and payable without notice, notice being hereby expressly waived, together with interest at the rate of eight percent (8 %) per annum from the date of nonpayment ( "Default Interest "). The Note Holder shall be entitled to collect all reasonable costs and expense of collection and /or suit, including, but not limited to reasonable attorneys' fees. Venue for any action to enforce this Note shall be Pueblo County, Colorado. All such actions 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. 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 successors and assigns. Any notice to Borrower provided for in this Note shall be in writing and shall be given and be effective upon (1) delivery to Borrower or (2) mailing such notice by certified mail, addressed to Borrower at the Borrower's address stated below, or to such other address as Borrower may designate by notice to the Note Holder. Any notice to the Note Holder shall be in writing and shall be given and be effective upon (1) delivery to Note Holder or (2) by mailing :a such notice by certified mail, to the Note Holder at the address stated in the first paragraph of this Note, or to such other address as Note Holder may designate by notice to Borrower. 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 following described property located in the County of Pueblo, State of Colorado: Lot 2, Pueblo Memorial Airport Industrial Park Subdivision, Third Filing, Borrower's Address: 350 Keeler Parkway, Pueblo, Colorado, 81001. BORROWER THE WATER COMPANY, LLC a Delaware Limited Liability Company 47 B Richard L. Hoover, President /CEO EXHIBIT "C" DEED OF TRUST 4. r 4 1,00 $ M 911: !1 T S INDENTURE, is made as of , 2009, between The Water Company, LLC, a Delaware limited liability company, whose address is 350 Keeler Parkway, Pueblo, Colorado, 81001, hereinafter referred to as "Grantor," and the Public Trustee of the County of Pueblo, State of Colorado, hereinafter referred to as Public Trustee, WITNESSETH, THAT, WHEREAS, Grantor executed its Promissory Note of even date ( "Promissory Note ") and that certain Agreement dated as of even date ( "Agreement ") whereby collectively Grantor agreed to pay to Pueblo, a municipal corporation, the beneficiary herein, whose address is 1 City Hall Place, Pueblo, Colorado, 81003 ( "Beneficiary "), after date thereof, the maximum aggregated amount of $3,240,756.00 ( "Indebtedness ") together with default interest, if any, at the rate of eight percent (8 %) per annum, payable in accordance with the terms and provisions of the Promissory Note and Agreement. AND AS, the Grantor is desirous of securing payment of the Indebtedness to the Beneficiary; NOW THEREFORE, the Grantor, in consideration of the premises and for the purpose aforesaid, does hereby grant, bargain, sell and convey unto the said Public Trustee in trust forever, the following described real property, together with all improvements thereon, whether now existing or hereafter constructed and installed (herein collectively the "property ") situate in the County of Pueblo, State of Colorado, to wit:. Lot 2, Pueblo Memorial Airport Industrial Park Subdivision, Third Piling, also known by street and number as: 3 Jetway Court, Pueblo, Colorado, 81001; assessor's schedule or parcel number: 426006002. TO HAVE AND TO HOLD the same, together with all and singular the privileges and appurtenances thereunto belonging, in trust nevertheless, that: a) in case of default in the payment of the Indebtedness or any part thereof, or in the payment of the interest thereon according to the tenor and effect of said Agreement and Promissory Note, or b) in. case default shall be made or violation or breach of any of the terms, conditions, covenants or agreements herein. contained, the Beneficiary may declare a violation of any of the covenants herein contained and may elect to advertise said property for sale, and demand such sale by filing a notice of election and demand for sale with the Public Trustee. Upon receipt of such. notice of election: and demand for sale, the Public Trustee shall cause such notice to be recorded in the recorder's Office of the county in which said property is situated. The Public Trustee shall then give public notice of the time and place of sale by advertisement to be published for four weeps (once each week for five successive weeks) in some newspaper of general circulation at that time published in Pueblo County, the county in which said property is located. A copy of such notice shall be mailed to all persons entitled to receive notice as provided by law. It shall and may then be lawful. for the Public Trustee to sell said property for the highest and best price the property will bring in cash and to dispose of the said property (en masse or in separate parcels, as the said Public Trustee may think best), together with all the right, title and interest of the Grantor therein, at public auction at any place as may be specified by statute and designated in. the notice of sale. The Public Trustee shall make and give to the purchaser of such property at such sale, a certificate of purchase as required by law. Unless the property is redeemed, the public trustee shall execute and record a confirmation deed to the holder of the certificate of purchase no less than fifteen business days after the date of sale or, if later, the expiration of all redemption periods and the receipt of all statutory fees and costs. The Public Trustee shall, out of the proceeds of such sale and. after first paying and retaining all fees, charges and costs of making said sale, pay to the Beneficiary hereunder, the Indebtedness and interest due thereon according to the tenor and effect of the Agreement and Promissory Note, and all moneys advanced by such Beneficiary for insurance, taxes and assessments, with interest thereon at eight (8) per cent per annum, rendering the overplus, if any, unto those persons entitled thereto as a. matter of law. Said sale as evidenced by the confirmation deed executed and recorded by the Public Trustee shall operate as a perpetual bar, both in law and equity, against the Grantor and all other persons claiming the said property, or any part thereof, by, from, through or under the Grantor. The Beneficiary may purchase said property or any part thereof; and it shall not be obligatory upon the purchaser at any such sale to see to the application of the purchase money. The Grantor covenants with and warrants to the Public Trustee, that at the time of the ensealing of and delivery of these presents the Grantor is well seized of the said lands, tenements and property in fee simple, and has good right, full power and lawful authority to grant, bargain, sell and convey the same in the manner and form as aforesaid; hereby fully and absolutely waiving and releasing all rights and claims the Grantor may have in or to said lands, tenements and property as an exemption under and by virtue of any act of the General Assembly of the State of Colorado or of the United States Congress, now existing or which may hereafter be passed in relation thereto, and that the same are free and clear of all liens and encumbrances whatever, except those easements, rights - of -way, reservations, restrictions, covenants, conditions, and liens and encumbrances caused by the acts or defaults of Beneficiary of record. The Grantor further warrants to the Public Trustee the quiet and peaceable possession of said property against all persons who may lawfully claim the whole or any part thereof, and that the Grantor shall and will forever defend the title to said property against such person or persons. 2 Until payment in full of the Indebtedness, the Grantor shall timely pay all taxes and assessments levied on the property and will keep all improvements that may be on said lands insured against any casualty loss, including extended coverage, in a company or companies, meeting the net worth requirements of the Beneficiary hereof in an amount which will yield to the Beneficiary, after . reduction by co- insurance provisions of the policy, if any, not less than the then total Indebtedness. Each policy shall contain a loss payable clause namin the Beneficiary as mortgagee and shall further provide that the insurance may not be canceled upon less than ten days written notice to the Beneficiary. At the option of the Beneficiary, the original policy or policies of insurance shall be delivered to the Beneficiary as further security for the Indebtedness. Should the Grantor fail to insure and deliver the policies or to pay taxes or assessments as the same fall due, the Beneficiary may make any such payments or procure any such insurance, and all monies so paid with interest thereon at the rate of eight (8) per cent per annum shall be added to and become a part of the Indebtedness secured by this Deed of Trust and may be paid out of the proceeds of the sale of the property if not paid by the Grantor. In addition, and at its option, the Beneficiary may declare the Indebtedness secured hereby and this Deed of Trust to be in default for failure to procure insurance or make any of the payments required by this paragraph. IN CASE OF ANY DEFAULT whereby the right of foreclosure occurs hereunder, the Beneficiary or holder of the certificate of purchase shall at once become entitled to the possession, use and enjoyment of the property aforesaid, and to the rents, issues and profits thereof, from the accruing of such right and during the pendency of foreclosure proceedings and the period of redemption, if any. Such possession shall at once be delivered to the Beneficiary or the holder of the certificate of purchase on request. Upon refusal, delivery of such possession may be enforced by the Beneficiary or the holder of the certificate of purchase by any appropriate civil suit or proceeding. The Beneficiary or holder of the certificate of purchase shall be entitled to a Receiver for said property, and of the rents, issues and profits thereof, after such default, including the time covered by foreclosure proceedings and the period of redemption, if any, and shall be entitled thereto as a matter of right without regard to the solvency or insolvency of the Grantor or of the then owner of said property and without regard to the value thereof. Such Receiver may be appointed by any court of competent jurisdiction upon ex parte application and without notice B notice being hereby expressly waived B and all rents, issues and profits, income and revenue therefrom shall be applied by such Receiver to the payment of the Indebtedness hereby secured, according to the law and the orders and directions of the court. IN THE CASE OF ANY DEFAULT in the payment of the Indebtedness or any part thereof according to the tenor and effect of said Agreement and Promissory Note, or of a breach of violation of any of the covenants or agreements herein by the Grantor, which default or breach shall remain uncured for thirty (30) days or more after the Beneficiary has mailed notice thereof by certified mail, postage prepaid, to Grantor at its address set forth herein or personally delivered to Grantor, the whole of said principal sum of the Indebtedness hereby secured and the interest thereon. to the time of the sale may at once, at the option of the Beneficiary, without notice, notice being hereby expressly waived, become due and payable, and the said property be sold in the manner and with the same effect as if said Indebtedness had matured. If foreclosure be made by the Public Trustee, attorney =s 3 y 4 M f�Y P 4 fees in the sum of $15,000.00 for services in the supervision of said foreclosure proceedings shall be allowed by the Public Trustee as part of the cost of foreclosure; and if foreclosure be made through the courts, a reasonable attorney =s fee shall be taxed by the court as a part of the cost of such foreclosure proceedings. Venue for any foreclosure made through the courts shall be Pueblo County, Colorado, and shall be filed in the District Court, County of Pueblo, State of Colorado. Grantor and Beneficiary hereby submit to the jurisdiction of said District Court To the extent allowed by law, Grantor and Beneficiary each waive its right to a jury trial. IT IS FURTHER UNDERSTOOD AND AGREED that if a release of this deed of trust is required, the Grantor will pay the expense thereof; and that all of the covenants and agreements herein contained shall extend to and be binding upon the successors and assigns of the respective parties hereto. Executed on M.4, - r�k 2009. [SEAL] ATTEST: OFFICE: STATE OF r(a 0 ) ) ss. COUNTY OF • � ,� ) THE WATER COMPANY, LLC a Delaware Limited Liability Company By - Richard L. Hoover, President/CEO The foregoing instrument was acknowledged before me this 6 � day of 2009, by Richard L. Hoover as President and CEO of The Water Company, a Delaware Limited Liability Company. Witness my hand and official seal. My commission expires: My Commission Expires 08101 91 W. Q ,�,........! O� otary Public ot 4 C 0`„® al g re; fees in the sum of $15,000.00 for services in the supervision of said foreclosure proceedings shall be allowed by the Public Trustee as part of the cost of foreclosure; and if foreclosure be made through the courts, a reasonable attorney =s fee shall be taxed by the court as a part of the cost of such foreclosure proceedings. Venue for any foreclosure made through the courts shall be Pueblo County, Colorado, and shall be filed in the District Court, County of Pueblo, State of Colorado. Grantor and Beneficiary hereby submit to the jurisdiction of said District Court. To the extent allowed by law, Grantor and Beneficiary each waive its right to a jury trial. IT IS FURTHER UNDERSTOOD AND AGREED that if a release of this deed of trust is required, the Grantor will pay the expense thereof; and that all of the covenants and agreements herein contained shall extend to and be binding upon the successors and assigns of the respective parties hereto. Executed on [SEAL] 2009. ATTEST: c in 4 OFFICE: ��1,s d axm,,rc���ct THE WATER COMPANY, LLC a Delaware Limited Liability Company By Richard L. Hoover, President /CEO STATE OF CQ }� a cP U ) !® RR+ tlOd® NO��yR��pp��NpayR� •pq +yR��Cl +plt$R ss. LAURIE SCOLERI NOTARY PUBLIC I COUNTY OF STATE OF C'0 0rRtADO i IN RNa•- .Np�+rp+ The foregoing instrument was acknowledged before me t ' �� � k- da y of L� Gt rC , 2009, by �`ma a s .� tr ie Water Company, a Delaware Limited Liability Company. Witness my hand and official seal. I My commission expires: G(�„ / I d0 Jt Notary ublic 2