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
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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.
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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
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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
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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.
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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
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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
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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.
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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
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al
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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