HomeMy WebLinkAbout08209Reception # 1845155
06/24/2010 03:01:36 PM
Substituted Copy: June 14, 2010
ORDINANCE NO. 8209
AN ORDINANCE ANNEXING THE AREA COMMONLY
KNOWN AS THE BLACK HILLS ANNEXATION PHASE
1 AND DESCRIBED AS EAST OF BACULITE MESA
ROAD AND NORTH OF PETE JIMENEZ PARKWAY
AND APPROVING AN ANNEXATION AGREEMENT
RELATING THERETO
WHEREAS, the City Planning and Zoning Commission has recommended that
the area described in Section 1 hereof be annexed to the City of Pueblo; and
WHEREAS, the City Council has heretofore found and determined by
Resolution that the Petition for Annexation and the area described in Section 1 hereof to
be in compliance with the notice and other applicable provisions of the Municipal
Annexation Act of 1965 and C.R.S. §31 -12 -104, 105 and 107(1); and
WHEREAS, the City Council has by Resolution found and determined that an
election is not required under C.R.S. §31 -12 -107 (2) and no additional terms and
conditions are to be imposed upon the area described in Section 1 other than those set
forth in the Petition for Annexation and the Annexation Agreement;
BE IT ORDAINED BY THE CITY COUNCIL OF PUEBLO, that:
SECTION 1.
The following described area situated in Pueblo County, Colorado, is hereby
annexed to Pueblo, a Municipal Corporation, subject to the terms and conditions set
forth in the Petition for Annexation and the Annexation Agreement, and the official map
of the City shall be amended to show such annexation:
AREA TO BE ANNEXED:
A parcel of land, located in the SE 1/4 of the SE 1/4 of Section 10, Township 20 South,
Range 64 West of the 6th P.M., County of Pueblo, State of Colorado, with all the
bearings contained herein based upon a bearing of N88 °01'15 "E, as measured between
the W 1/4 Corner of said Section 10, being marked on the ground by a 3 1/4" aluminum
cap on #6 rebar, PLS 10372, 1989, found in place, and the E 1/4 Corner of said Section
10, being marked on the ground by an original axle, found in place, said parcel being
more particularly described as follows:
Beginning at the Southeast Corner of said Section 10, being marked on the ground by a
3 1/4" aluminum cap, PLS 31161, JR ENG LTD, 2000, 20' W.C. West, found in place;
1. thence along the South line of said SE 1/4 of Section 10, S88 °04'42 "W, a distance of
330.19 feet, to a point, from where the accepted location of the E 1/16 Corner of said
Section 10 and Section 15, said Township and Range, bears S88 °04'42 "W, a distance
of 969.08 feet;
SECTION 4.
The City Council of the City of Pueblo hereby finds, determines and declares
that the health, safety and welfare of the People of Pueblo are dependent upon the
attraction of new private enterprises; that incentives are often necessary to attract
private enterprises; that providing such incentives stimulates economic development in
the City of Pueblo and results in the creation and maintenance of new jobs; that the
incentives offered to Petitioners Black Hills/ Colorado Electric Utility Company, LP and
Black Hills Colorado IPP, LLC (collectively, "Petitioner") to annex their properties to the
City of Pueblo, Colorado set forth and contained in the Annexation Agreement are in
the best interest of the City of Pueblo and its citizens and will promote the public
health, safety and welfare; that such incentives and annexation will increase the City's
tax base, the availability of electric energy for use within the City, and the opportunities
for employment for the citizens of the City of Pueblo; and that such incentives and
annexation will further the economic development of the City of Pueblo and provide
funding for much needed and required infrastructure within the City of Pueblo.
SECTION 5.
Pursuant to Article XX of the State Constitution and the Charter of the City of
Pueblo, the City Council of the City of Pueblo hereby finds, determines and declares
that the incentives, economic and otherwise, granted to Petitioners pursuant to and
under the Annexation Agreement to be local matters and all provisions of statutes of
the State of Colorado which might be in conflict with such incentives are hereby
superseded to the extent of any such conflict, and to the extent such provisions of the
statutes of the State of Colorado are not in conflict with such incentives, the City of
Pueblo chooses to apply such provisions.
SECTION 6.
Within thirty (30) days after the effective date of the Ordinance, the City Clerk
shall:
(a) File one copy of the annexation map with the original of this Ordinance in the office
of the City Clerk;
(b) File for recording three certified copies of this Ordinance and annexation map with
the Pueblo County Clerk and Recorder;
(c) File one certified copy of the annexation map and this Ordinance with the
Southeastern Colorado Water Conservancy District.
SECTION 7.
The officers of the City are hereby authorized and directed to take all other
actions necessary or appropriate, on behalf of the City, to effectuate the provisions of
this Ordinance and the Annexation Agreement.
2. thence parallel to the East line of said SE 1/4 of Section 10, N01°21'33'W, a
distance of 660.03 feet;
3. thence parallel to said South line of the SE 1/4 of Section 10, N88 °04'42 "E, a
distance of 330.19 feet, to a point on said East line of the SE 1/4 of Section 10, from
where said E 1/4 Corner of Section 10 bears N01 °21'33' W, a distance of 2008.56 feet;
4. thence along said East line of the SE 1/4 of Section 10, S01 °21'33 "E, a distance of
660.03 feet,
to the point of beginning.
Said parcel contains 5.003 acres, more or Tess.
PROPOSED NEW CITY LIMITS LINE:
Beginning at a point on the South line of said SE 1/4 of Section 10, from where the
Southeast Corner of said Section 10, being marked on the ground by a 3 1/4" aluminum
cap, PLS 31161, JR ENG LTD, 2000, 20' W.C. West, found in place, bears
N88 °04'42 "E, a distance of 330.19 feet;
1. thence parallel to the East line of said SE 1/4 of Section 10, N01°21'33'W, a
distance of 660.03 feet;
2. thence parallel to said South line of the SE 1/4 of Section 10, N88 °04'42 "E, a
distance of 330.19 feet, to a point on said East line of the SE 1/4 of Section 10, from
where said E 1/4 Corner of Section 10 bears N01°21'33'W, a distance of 2008.56 feet;
3. thence along said East line of the SE 1/4 of Section 10, S01 °21'33 "E, a distance of
660.03 feet,
to the point of terminus.
SECTION 2.
The owners of one hundred percent (100 %) of the property to be annexed have
petitioned for such annexation.
SECTION 3.
The Annexation Agreement in the form and content presented to the City Council
at this meeting is hereby authorized and approved. The President of the City Council is
hereby directed and authorized to execute and deliver the Annexation Agreement in the
name of the City and the City Clerk is directed to affix the seal of the City thereto and
attest same.
SECTION 8.
If any provisions of this Ordinance or Annexation Agreement shall be held or
deemed to be illegal, inoperative or unenforceable, the same shall not affect any other
provisions or provisions of this Ordinance or Annexation Agreement or render the
same invalid, inoperative or unenforceable, except as otherwise expressly provided in
the Annexation Agreement.
SECTION 9.
The City Council hereby consents to the inclusion of the annexed area in the
Southeastern Colorado Water Conservancy District pursuant to C.R.S. §37-45 -136
(3.6).
SECTION 10.
This Ordinance shall become effective immediately upon final passage, but shall
not become effective unless a fully signed Annexation Agreement is deposited by
Petitioner on or before June 15, 2010 with the City Clerk. The annexation shall be
effective for ad valorem tax purposes on and after January 1, 2011.
INTRODUCED: May 10, 2010
BY: Chris Kaufman /COUNCILPERSON
PASSED AND APPROVED: June 14, 2010
Substituted Copy: June 14, 2010
Background Paper for Proposed
ORDINANCE
DATE: MAY 10, 2010AGENDA ITEM # R-1
DEPARTMENT: PLANNING AND COMMUNITY DEVELOPMENT
JERRY M. PACHECO, DIRECTOR
TITLE
AN ORDINANCE ANNEXING THE AREA COMMONLY KNOWN AS THE BLACK
HILLS ANNEXATION PHASE 1 AND DESCRIBED AS EAST OF BACULITE MESA
ROAD AND NORTH OF PETE JIMENEZ PARKWAY AND APPROVING AN
ANNEXATION AGREEMENT RELATING THERETO
ISSUE
Shall the City Council approve the proposed annexation of property that is located east
of Baculite Mesa Road and north of Pete Jimenez Parkway?
RECOMMENDATION
The Planning and Zoning Commission, at their April 14, 2010 Regular Meeting, voted 6-
0to recommend approval. This Ordinance shall be approved upon final passage, but
shall not become effective unless a fully signed Annexation Agreement is deposited on
or before June 15, 2010.
BACKGROUND
Black Hills is requesting to annex a 257.32-acre site into the City to facilitate the
construction of a new 380 megawatt natural gas power plant, which includes four gas
fired turbines a switchyard and supporting facilities. The proposed annexation will be
conducted in three-phases; Phase 1 will annex 5.003-acres. Black Hills currently
purchases power from Xcel Energy; however their contract will end December 2011.
Because of this the proposed power plant will provide power to service the Southern
Colorado region.
FINANCIAL IMPACT
The City of Pueblo will be responsible for providing police and fire protection services to
the property. In addition, the public roads will be maintained by the City of Pueblo once
they have been constructed and accepted by the City.
Reception # 1845154
06/24/2010 03:01:36 PM Final_Snhetinitad
ANNEXATION AGREEMENT
Case No. A-10-03
This Annexation Agreement entered into as of May 10, 2010, by and between the City
of Pueblo, a Municipal Corporation (the "Cite and Black Hills /Colorado Electric Utility
Company, LP, a Delaware limited partnership, and Black Hills Colorado IPP, LLC, a South
Dakota limited liability company (each of them referred to as a `Petitionet' and collectively
referred to as the "Petitioners.
WITNES SETH
WHEREAS, the Petitioners are the owners of the real property located in Pueblo
County, Colorado, described in Exhibit "A' attached hereto and incorporated herein (the
`Property); and
WHEREAS, the Petitioners have submitted a petition for the annexation of the
Property to the City in connection with the Petitioners' ownership and operation of the Facility
(as defined in XIV of this Annexation Agreement) to provide energy and capacity to Black
Hills /Colorado Electric Utility Company, LP, to serve customers in its certificated service
territory (the "Stated Purpose; and
WHEREAS, Petitioner Black Hills /Colorado Electric Utility Company, LP and Black
Hilts Electric Generation, LLC and the City entered into a Pre - Annexation Agreement as of
December 28, 2009, which Pre - Annexation Agreement was approved by Ordinance No. 8129
adopted and passed by the City Council of City (City Council) on December 28, 2009; and
WHEREAS, Black Hills Electric Generation, LLC, a South Dakota limited company,
has assigned its rights under the Pre - Annexation Agreement to Black Hills Colorado IPP,
LLC, a South Dakota liability company, to which assignment the City has given its
conditional consent in reliance upon the Guaranty made by Black Hills Electric Generation,
LLC of even date herewith; and
WHEREAS, by Ordinances Nos. 8165 and 8166 adopted and passed on March 22,
2010, the City annexed certain lands owned by the City more specifically described in the
Ordinances (Corridor Property) abutting part of the Property, which Corridor Property was
acquired by the City by Warranty Deed and Right of Reversion dated March 3, 2010,
recorded March 10, 2010 at Reception No. 1835397 (Warranty Deed and Right of Reversioe
subject to the terms and conditions stated therein; and
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Final Substituted C May 24 2010
WHEREAS, as a condition precedent to the annexation of the Property, the Petitioners
and City have agreed to enter into a mutually acceptable annexation agreement setting forth
certain terms and conditions with respect to such annexation.
NOW, THEREFORE, in consideration of the foregoing, and the covenants and
conditions set forth herein, the City and Petitioners agree as follows:
I. REPRESENTATION AND WARRANTIES OF PETITIONERS
Petitioners hereby represent and warrant to, and covenant with, the City as follows:
(1) Petitioner Black Hills /Colorado Electric Utility Company, LP, is a Delaware
limited partnership, and Petitioner Black Hills Colorado IPP, LLC, is a South Dakota limited
liability company. Each Petitioner is qualified to conduct business in the State of Colorado.
(2) The Petitioners have good and marketable fee simple title to the Property
subject only to Permitted Encumbrances attached hereto as Exhibit`B'.'
(3) Each Petitioner is authorized to, and has taken all action required by it (a) to
annex the Property to the City, (b) to execute, deliver and perform its obligations under this
Annexation Agreement, and (c) to carry out and consummate all of the transactions
contemplated by this Annexation Agreement.
(4) As of its effective date, this Annexation Agreement when executed and
delivered, constitutes a valid and legally binding obligation of each Petitioner enforceable
against each Petitioner according to its terms.
(5) As to each Petitioner, neither the execution and delivery of this Annexation
Agreement nor the fulfillment of or compliance with its terms and conditions, nor the
consummation of the transactions contemplated hereby, conflicts with or results in a breach of
the terms, conditions or provisions or any restriction or any agreement or instrument to which
the Petitioner is bound, or constitutes a default under any of the foregoing.
(6) As to each Petitioner, there is no litigation pending, or to the knowledge of
Petitioner threatened, against the Petitioner or any person affecting the right of the Petitioner
to execute this Annexation Agreement or to comply with the provisions hereof.
(7) As to each Petitioner, the representations and warranties of that Petitioner
contained herein will be true and correct in all material respects as of the date of recording the
annexation plat and Ordinance of the City Council approving the annexation of the Property,
as if made on the date of such recording.
II. MASTER DEVELOPMENT PLAN
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Final Substituted Copy May 24, 2010
The City and the Petitioners acknowledge and agree that the entire Property is to be
included in a single subdivision consisting of not more than four lots, and Petitioners shall not
be required to file a Master Development Plan for the Property under Section 12- 4 -5(a) of the
Pueblo Municipal Code, unless Petitioner seeks to create more than four lots. Petitioners are
required to submit and have submitted a Development Plan for the subdivision to comply with
the special development area future land use classification of the Pueblo Regional
Development Plan.
III. ZONING AND SUBDIVISION
(1) The Property is to be included in a single subdivision (Subdivision), and an
application for such Subdivision has been submitted by the Petitioners. No subdivision of the
Property shall be approved prior to the time the ordinance annexing the Property is approved
on final presentation. Nothing in this Annexation Agreement shall be construed to be a
commitment, contractual or otherwise, of the City or City Council to approve the Subdivision
in accordance with the submitted application or any amendment thereto.
(2) The Property shall be zoned Heavy Industrial District (I -3) (1 -3 Zone District),
the land use classification most nearly corresponding to the land use classification into which
the Property has been (or will be) classified under the Citys comprehensive plan (Zoning).
The Property shall be subject to imposition of reasonable conditions in connection with the
zoning to I -3, including conditions concerning sounds, vibration, obnoxious or noxious odors,
dust, dirt or fly ash, noxious gases, glare or heat, and outdoor storage areas, and which do not
prevent use of the Property for the Stated Purpose.
(3) A petition to zone the Property has been filed by Petitioners. The Planning and
Zoning Commission may hear the petition for rezoning and make its recommendations
thereon prior to annexing the Property, but the proposed Zoning ordinance shall not be passed
on final presentation prior to the date the ordinance annexing the Property is approved on final
presentation.
(4) Petitioners shall submit and file all applications and accompanying maps,
engineering and other information required to accomplish and obtain approval of the
Subdivision and Zoning as soon as possible after the date the Substantial Compliance
Resolution is adopted by City Council and Petitioners shall thereafter diligently pursue such
applications through final approval.
(5) Petitioners acknowledge that as part of the consideration for annexation, they
have each agreed, and do hereby agree, that the provisions of §29 -20 -108, C.R.S. (2009) and
any similar statute hereafter enacted, shall not apply to the Facility as defined in Article XIV,
nor shall same apply to or preempt Citys land use regulations applicable to the Property and
the Facility; and as to the Property, Petitioners hereby waive all rights, timelines and other
provisions and benefits of said statutes otherwise available to Petitioners under said statutory
provisions.
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Final Substituted Copy May 24, 2010
IV. PUBLIC FACILITIES
(1) Petitioners shall construct and install, at the cost and expense of Petitioners, all
on -site improvements reasonably required by the City as a condition of approval of the
Zoning and Subdivision. All such improvements shall meet and comply with applicable City
Ordinances in effect at the time of installation of such improvements. Petitioners shall enter
into a detailed Subdivision Improvements Agreement setting forth the specific improvement
requirements.
(2) On or before January 1, 2012, Petitioners shall construct and install the
following off -site improvements:
(i) The westerly two lanes of a future four -lane divided roadway to serve as an
extension of 27` Lane, as described and shown on Exhibit"D'attached hereto
and made a part hereof, from Pete Jimenez Parkway to the southerly boundary
of the Property, fully complying with the 'Standard Construction Specifications
and Standard Details for City of Pueblo, Colorado, Revised March 28, 2005'
(Standard Specificationg). The location of the roadway within the Corridor
Property and construction requirements shall be as approved by the City's
Director of Public Works, and are generally described in said Exhibit` D'. The
roadway extension shall be made so that it provides sufficient right of way to
serve four lanes, sidewalks, center medians and drainage facilities.
(ii) A connecting water main to be constructed by Petitioner Black Hills /Colorado
Electric Utility Company, LP in the East -West Corridor as described in the
Warranty Deed and Right of Reversion ( Connecting Water Mairi), subject to
the terms and conditions stated therein.
(3) The Subdivision Plat of the Property identifies a road alignment for the future
extension of North 27 Lane through the Property. The City shall notify Petitioners no sooner
than commercial operation of the Facility and no later than year (1) year prior to the time that
the City desires that North 27 Lane be extended through the Property. Promptly after receipt
of such notice, Petitioners shall make application to modify the air permit boundary of the
Property established by the Colorado Department of Public Health and Environment, Air
Quality Control Division (`AQCD') air permit issued for the Facility (as defined below) to
permit the bifurcation of the Property such that the right -of -way for the road alignment and
portion of the Property to the West thereof is thereafter excluded from the air permit
boundary. Petitioners shall be required to dedicate the land for the road alignment upon
approval of such application. Petitioners shall dedicate a 150 foot wide right of way for the
extension of North 27 Lane by amendment of the Subdivision Plat for the Property. If
Petitioners or their successors re- subdivide the portion of the Property lying west of the road
alignment, they shall also design, construct and install the road extension.
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Final Substituted Copy May 24, 2010
(4) Prior to issuance of any certificate of occupancy for any building or structure
on the Property, Petitioners shall dedicate and construct all on -site improvements, including
roadways, drainage facilities, structures and other public improvements as required by the
Subdivision. Except as provided in the Pre - Annexation Agreement or this Annexation
Agreement, or required as conditions of the Zoning or Subdivision, or required by City
ordinances, no other improvements nor dedication of park lands (or payment in lieu of such
dedication) will be required of Petitioners; provided, however, that this provision may be
subject to modification in the future pursuant to City's reasonable exercise of its police
powers, or if required as a condition in connection with any future re- subdivision or rezoning
of the Property.
(5) Petitioners have no objection to and hereby consent, as provided by C.R.S. §31 -
25- 103(2)(1), to the inclusion of the Property in an urban renewal area established or sought
to be established by City in accordance with law within three (3) years of the date of this
Annexation Agreement, and, upon City's request, Petitioners agree to take all actions
necessary or desirable to accomplish said inclusion, provided that the inclusion of the
Property in an urban renewal area at the time the urban renewal area is established by the City
Council is accomplished pursuant to C.R.S. §31- 25- 107(1)(c)(II)(D) and does not result in (i)
the imposition of any taxes levied by any new governmental entity with the authority to levy
taxes upon property within the area on Petitioners, (ii) create an obligation on the part of
Petitioners to incur any expense, (iii) does not interfere with Petitioners' use of the property
for the Stated Purpose and (iv) does not impair the incentives and credits available to
Petitioners under Article XIV and any other incentive or credit arrangements entered into by
Petitioners with Pueblo County or other taxing authorities. The phrase`Smposition of taxes
levied by a new governmental entit)'does not include any general increase in taxes by any
existing taxing entity, nor the diversion or reallocation of tax revenues from taxing entities to
an urban renewal authority or other entity for or in connection with tax increment financing
for an urban renewal project. The parties acknowledge that the inclusion of the Property
within an urban renewal area may require payment of Property Taxes (as defined in Section
XIV (1)(a)) by Petitioners and refund to Petitioners of fifty percent (50 %) thereof by the
Urban Renewal Authority of Pueblo f `URAP') instead of such refund being made by City
pursuant to Section XIV (1) (e) of this Annexation Agreement, and such refund by URAP
instead of by City shall not be considered an impairment of incentives and credits. In the
event Petitioners fail or refuse to do so, City shall be entitled to seek specific performance of
this requirement from a court of competent jurisdiction, and shall be entitled to recover its
costs and attorney's fees in obtaining same.
V. UTILITIES
(1) Services. Except where a special use permit is issued as provided in Section
17- 4- 30(a)(1) of the Pueblo Municipal Code, all electric lines on the Property less than 30,000
volts shall be placed underground. Transformers, switching boxes, terminal boxes, meter
cabinets, pedestals, ducts and other facilities necessarily appurtenant to such underground
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Final Substituted Copy May 24, 2010
facilities may, with the approval of the Planning and Zoning Commission, be placed above
ground.
(2) Water Service. The City acknowledges that Petitioner Black Hills /Colorado
Electric Utility Company, LP has entered into a separate agreement with the Board of Water
Works of Pueblo, Colorado (Board) to provide potable water to the Property for the benefit of
the Property, which agreement was approved by the Board on March 16, 2010 and executed
on March 22, 2010 ( Water Agreement). The Parties agree that potable water service for the
Property shall be carried out pursuant to the Water Agreement and the terms of this
Annexation Agreement.
(3) Other Utility Service and Connections. Petitioners, through their internal
operations at the Property, will provide electricity service and individual sewage disposal
system service to their proposed facilities at the Property (Utility Serviceg') in full compliance
with law and applicable regulations. City agrees that, until such time as sewer mains exist
within four hundred (400) feet of the boundary line of Property, Petitioners have the right, but
not the obligation, to connect to the City's sanitary sewer system. In the event that Petitioners
request to connect to City's sanitary sewer system, the Petitioners shall pay all connection fees
and shall, at Petitioners' sole cost and expense, and in accordance with all permit and
excavation requirements, acquire and dedicate any necessary right of way, and construct all
sewer mains, lift stations and other sewer collection and transmission facilities from a point
designated by City on the Citys existing system to the Property, as well as any system
capacity improvements required to serve the Property. Thereafter, City will provide such
sewer service subject to and in conformity with the City's ordinances, rules and regulations
relating to its sanitary sewer system and services. Petitioners shall comply with all applicable
City requirements for the installation of mains, lines, stations, and any other appurtenant
sewer facilities in effect at the time of such request for sewer service. If, at any time, sewer
mains are otherwise constructed so as to be located within four hundred (400) feet of the
Property, Petitioners shall be required to comply with the provisions of Section 16 -7 -23 of the
Pueblo Municipal Code or any similar ordinance or provision subsequently enacted.
Petitioners will implement, operate and maintain a stormwater detention and drainage
facility on the Property ( Stormwater Facility'). Petitioners shall (i) properly operate and
maintain the Stormwater Facility on the Property as required by the Colorado Department of
Health and Environment and the City of Pueblo, (ii) apply for, obtain and hold a stormwater
discharge permit for the Stormwater Facility issued by the Colorado Department of Public
Health and Environment and fully comply with the requirements of such permit, (iii) insure
that the Stormwater Facility is not connected to or discharging stormwater into City owned or
managed stormwater facilities, City streets or rights of way or sanitary sewers, and (iv)
Petitioners promptly pay to City when due all monthly stormwater utility service charges.
Petitioners shall not at any time violate the City's stormwater utility ordinances (Chapter 12,
Title XVI of the Pueblo Municipal Code) as amended (Stormwater Ordinance.
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Final Substituted Copy May 24, 2010
(4) Fire Protection. Petitioners and the City agree that the City shall provide fire
protection, hazardous material response, and emergency medical services for the Property on
the same general terms and conditions the rest of the City receives; provided, however, that
due to the remote and distant location of the Property from City's existing fire stations,
response times may be substantially longer. The City further agrees that, upon Petitioners
making all required filings under City's Fire Code and payment of all fees to City under same,
City will cause its Fire Department to participate in periodic, but not more frequent than once
per year, training sessions at the Facility (as defined in Article XIV (1) (a)) so that the City's
Fire Department is able to provide fire protection services at the Facility.
(5) Waste Disposal. Petitioners shall apply for a Certificate of Designation in
connection with a wastewater treatment facility to be constructed by Petitioners on the
Property and shall not operate such facility until and unless authorized to do so pursuant to
such Certificate of Designation issued by the City. Petitioners shall not construct nor operate
any other separate solid waste disposal or treatment facility upon the Property until and unless
authorized to do so by a Certificate of Designation issued by City.
(6) No Disconnection. Petitioners stipulate and agree that they will not seek
disconnection of the Property and waive their rights, if any, to do so under Section 31 -12 -119,
C.R.S. based upon the City not providing (i) sanitary sewer services to the Property prior to
Petitioners' request to tap into City's sanitary sewer system and Petitioners' extension of sewer
mains to the Property, (ii) stormwater services to the Property prior to Petitioners' request to
connect to City's stormwater system and Petitioners' extension of City's stormwater system to
the Property, and (iii) repair and maintenance of 27th Lane until acceptance of same by the
City and expiration of all applicable warranty periods.
VI. COMPLIANCE WITH ORDINANCES
Except as otherwise specifically provided in this Annexation Agreement to the
contrary, the development, subdivision and zoning of the Property shall otherwise meet and
comply with all applicable ordinances, resolutions, regulations, and standards of the City now
existing or hereinafter enacted or amended.
VII. BINDING EFFECT
(1) The covenants, restrictions, and agreements herein set forth are covenants
running with the Property, shall run with and bind the Property, and shall extend to and be
binding upon the Petitioners and their successors, assigns and transferees. The Petitioners
expressly accept and agree to the covenants, restrictions, and agreements set forth herein by
execution of this Annexation Agreement and by the filing of its petition for annexation.
(2) If Petitioners default in any of their obligations under this Annexation
Agreement, including but not limited to any failure to make payment of all amounts
constituting the Payment in Lieu, or default in any dedication or off -site improvement
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Final Substituted Copy May 24, 2010
obligation hereunder or under the Subdivision Improvements Agreement, upon notice given
to Petitioners specifying the default, City may withhold any or all subdivision, land use and
other development approvals as well as building and occupancy permits for any building or
structure upon the Property, until the default or defaults have been corrected to the reasonable
satisfaction of the City. In addition thereto, the City may also pursue a remedy for specific
performance, injunction or declaratory judgment.
(3) If City defaults in any of its obligations under the Annexation Agreement,
upon notice given to the City specifying the default and providing a reasonable opportunity to
cure the alleged default, Petitioners may, at Petitionefs election, (i) pursue a remedy for
specific performance, injunction or declaratory judgment, or (ii) seek to disconnect the
Property under Article XII, The preceding remedies shall be exclusive and in lieu of all other
remedies available at law or in equity, including, without limitation, the recovery of damages
of any type or nature.
(4) Venue in any and all actions and proceedings related to this Annexation
Agreement shall be in the Pueblo County District Court, which court shall have personal and
subject matter jurisdiction for such purpose, and the parties hereto irrevocably submit to the
jurisdiction of such courts. The Court in any such action shall award to the prevailing party its
costs and expenses of litigation, including reasonable attorney fees, which award shall
become effective when the order of the Court is not appealed within the time allowed for such
appeal or is affirmed by a final, non - appealable order or judgment To the extent permitted by
law, City and Petitioners waive their right to jury trial.
VIII. AMENDMENTS
Amendments to this Annexation Agreement may only be made by a writing executed
by Petitioners and City and following formal petition to and approval by Resolution of the
City Council after such amendment has been submitted to and reviewed by the appropriate
City Departments and such Departments have submitted their findings and recommendations
to the City Council.
IX. SEVERABILITY
If any section, clause, or other provision of this Annexation Agreement is for any
reason determined to be invalid or unenforceable by any court of competent jurisdiction, such
determination shall not affect any of the remaining provisions of this Annexation Agreement.
In the event a provision is determined to be unconstitutional, illegal, unenforceable or
otherwise void, all other terms, covenants and conditions of this Annexation Agreement and
their application not adversely affected thereby shall remain in force and effect; provided,
however, that the Parties shall negotiate in good faith to attempt to implement a replacement
provision or an equitable adjustment in the provisions of this Annexation Agreement with a
view toward effecting the purposes of the provision by replacing the provision that is held
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Final Substituted Copy May 24, 2010
invalid, illegal, or unenforceable with a valid provision the effect of which comes as close as
possible to that of the provision that has been found to be invalid, illegal or unenforceable.
X. VESTED PROPERTY RIGHTS
(1) Since property rights may only be vested by the City pursuant to the provisions
of Chapter 12, Title XVII of the Pueblo Municipal Code, Petitioners and the City hereby
expressly acknowledge and agree that this Annexation Agreement does not (a) create or
establish a vested property right in or for the benefit of the Petitioners or their successors or
assigns, or with respect to the Property; or (b) constitute a site - specific development plan. The
terms` vested property righf'and"site- specific development plari'shall have the same meaning
as set forth in Section 17 -12 -2 of the Pueblo Municipal Code and§24 -68 -101, et seq., C.R.S.
(2) Notwithstanding the provisions of section (1) above, City expressly agrees that
Petitioners and their successors and assigns shall have the vested property right to undertake
and complete the development and use of the Property under the terms and conditions set
forth below only upon and after approval and issuance thereof by the City in compliance with
Citys ordinances, including, but not limited to, Chapter 12, Title XVII of the Pueblo
Municipal Code, of the following, to -wit: (i) Zoning, and (ii) Subdivision, all of which shall
collectively constitute a site specific development plan.
(3) In light of all relevant circumstances, including, but not limited to, the long-
term nature of the use of the Property and the extended periods involved in the tax credits and
exemptions with respect to the Property and Facility provided in Article XIV below, City
agrees to an extension of the vesting period for the vested property right granted in section (2)
above to a period of five (5) years after the date the Facility becomes Operational.
(4) The establishment of such vested property right shall not, however, preclude
the application of ordinances or regulations which are general in nature and are applicable to
all property subject to land use regulations by the City, including, but not limited to, building,
fire, plumbing, electrical, mechanical, water and sewer codes or ordinances. The absence of
any language from this Annexation Agreement concerning City's rights or authority under law
is not intended, and shall not be construed as, any waiver or relinquishment of , or estoppel
against enforcement of, requirements imposed or authorized, or which may be imposed or
authorized in the future, under any of City's subdivision or land use ordinances, or other
ordinances or codes enacted pursuant to City's police power.
XI. BUILDING PERMITS
All construction of improvements upon the Property shall be subject to and comply
with the City's building codes including the requirements for obtaining permits and payment
of all plan review and permit fees. Because such codes are administered by the Pueblo
Regional Building Department building permit applications, processing fees or requirements
for building permits shall be submitted by Petitioners to the Pueblo Regional Building
9
Final Substituted Copy May 24, 2010
Department, except that permits and approvals under the International Fire Code shall be to
the Fire Chief.
XII. DISCONNECTION
(1) Petitioners acknowledge and agree that upon annexation of the Property into
the City, the Property shall become subject to this Annexation Agreement, the Charter,
ordinances and rules and regulations of the City. In the event that (i) after application by
Petitioners and Petitioners' diligent effort to obtain same, Petitioners do not obtain the
Approvals listed on Exhibit C hereto, on terms and conditions that will not materially and
substantially impair the ability of Petitioners to utilize the Property for the Stated Purpose
within six (6) months after the effective date of this Annexation Agreement; (ii) the vested
property right granted by Section 2 of Article X or any material provision of Section 1 of
Article XIV is determined to be invalid or unenforceable by a final decision of a court of
competent jurisdiction; (iii) the City takes any final action in violation of any material
provision regarding vested rights as provided in Sections (2) and (3) of Article X; (iv) the City
takes any final action inconsistent with any material provision of Sections (1), (3) or (4) of
Article XIV or fails to take any action required of it under any material provision of Sections
(1), (3) or (4) of Article XIV; or (v) the Water Agreement terminates or is terminated as
provided therein, then it is agreed that Petitioners shall have the right to disconnect the
Property from the City subject only to the following: Petitioners shall file a verified written
petition with the City Clerk which states that one or more of the above conditions exist;
promptly upon receipt of such petition, the City shall have ninety (90) days to correct, remedy
or remove any condition claimed to exist. If the City disputes the existence of the claimed
condition, or fails or refuses to correct, remedy or remove same, then the City Council of City
shall thereafter schedule and provide notice to Petitioners of a public hearing before the City
Council; and, upon a determination by the City Council that Petitioners have shown by
competent evidence at the public hearing that any of the above conditions in fact exist, the
City shall within one hundred twenty (120) days after such determination enact all measures
necessary to accomplish such disconnection. Petitioners shall have the right to seek judicial
review under C.R.C.P. 106(a)(4) of any decision of the City Council determining that none of
the above conditions in fact exist and in the event Petitioners prevail in such appeal, the City
shall within one hundred twenty (120) days of a final judicial determination reconsider the
matter and take action in accordance with the decision of the Court.
For purposes of this Section (1), an action of the City shall be "final'thirty (30) days
after the vote of the City Council of City thereon.
(2) Except as otherwise provided in Section 6 of Article V, nothing in section (1)
above shall waive or limit the right of Petitioners to exercise any other right it may have to
disconnect the Property from the City pursuant to the provisions of Section 31 -12 -119,
C.R.S., or any other statute or ordinance applicable to Petitioners and the City which now
exists or may hereafter be enacted which authorizes disconnection from a home rule
municipality.
10
Final Substituted Copy May 24, 2010
(3) Upon disconnection of the Property, whether pursuant to Ordinance of the City
under section (1) above, or judgment from a court pursuant to section (2) above, the parties
expressly acknowledge and agree that from and after the effective date of the disconnection,
all zoning, permits, subdivisions, and other land use restrictions imposed upon the Property
by, through or under the City shall thereafter be immediately null and void, water service to
the Property by the Board of Water Works shall terminate and cease and the parties shall be
released and discharged from all future obligations and liabilities under this Annexation
Agreement, except that if disconnection is due to Petitioners' failure or inability to obtain all
approvals as provided in Section XII (1) (i) above, the obligation to refund the Payment in
Lieu as provided in Section XIV (1)(h) of this Annexation Agreement shall survive.
XIII. CONTRACTUAL NATURE OF ANNEXATION AGREEMENT
The terms, conditions and obligations of this Annexation Agreement are and shall be
construed to be purely contractual in nature, as terms, conditions and obligations voluntarily
agreed to by City and Petitioners prior to annexation of the Property to the City. The terms,
conditions and obligations imposed on Petitioners and the Property by this Annexation
Agreement are not nor shall they individually or cumulatively be construed to be conditions
upon granting land -use approvals within the meaning of sections 29 -20 -201 to 29 -20 -204,
C.R.S.
XIV. SPECIAL PROVISIONS
(1) Taxes, Incentives and Credits. In accordance with Colorado Constitution; the
Pueblo Municipal Code; the Pueblo City Charter; and the Colorado Revised Statutes, the
parties agree as follows:
(a) Definitions. The following terms shall have the following meaning as
utilized in this Article XIV and, except as otherwise limited below, throughout the
balance of the Annexation Agreement:
`FacilitT shall mean the real and personal property comprising up to two
90- megawatt LMS 100 natural gas fired power plants, up to two 100 megawatt
natural gas fired combined cycle power plants, a 115 KV switchyard, public
improvements and supporting facilities located upon the Property and the
extension of 27 Lane to the Property. The water main and public
improvements constructed off- site from the Property, other than the said
extension of 27 lane, shall not be considered part of the Facility. Prior to the
date the Facility becomes Operational, as that term is defined below, the
purchase or rental of personal property, including but not limited to,
equipment, supplies and other materials used in constructing the Facility or
incorporated therein shall be considered part of the Facility. Following the date
the Facility becomes Operational, the purchase or rental of personal property,
11
Final Substituted Co May 24 2010
equipment, supplies and other materials shall not be considered as part of the
Facility. The City and Petitioners have agreed to the provisions of this Article
XIV under the good faith belief that the Facility is a`new business facility'
within the meaning of Sections 31 -15 -903 and 39 -30 -105, C.R.S. and that the
Facility is located within an "enterprise zone' as such term is used in Title 39,
Article 30 of the Colorado Revised Statutes.
`Operational' shall mean the date that Petitioners have received from a
qualified independent third party consulting firm a certificate that any two
natural gas fired power plants comprising part of the Facility are ready for
commercial operation, or Petitioners have received notice from any regulatory
agency with appropriate jurisdiction that any two natural gas fired power plants
comprising part of the Facility may be placed into commercial operation
pursuant to standards published by the Federal Energy Regulatory
Commission and the Financial Accounting Standard Board applicable to
electric power generation facilities. Petitioners shall notify the City in writing
within twenty (20) calendar days after the Facility becomes Operational.
`Property Taxes'shall equal the City's mill levy multiplied by the
assessed valuation of the real and personal property for the Facility (Property
Taxes).
(b) Property Taxes during Construction of the Facility. Subject to the
provision of subparagraph (d) below, for the period from the effective date of this
Annexation Agreement through the property tax year in which the Facility becomes
Operational or through the 2012 property tax year (Property Tax Year meaning the
year in which property taxes are payable for the prior assessment year), whichever
occurs first (Construction Period), the City shall provide Petitioners with an annual
incentive Property Tax credit equal to 100 percent (100.0 %) of the Property Taxes.
(c) Property Taxes after Construction of the Facility. Subject to the
provision of subparagraph (d) below, commencing with the Property Tax Year
following the Construction Period, City will provide an annual incentive Property Tax
credit equal to fifty percent (50.0 %) of the Property Taxes for a period of five (5)
consecutive years.
(d) Annual Property Tax Credit. The obligation to provide the annual
incentive Property Tax credit set forth in subparagraphs (b) and (c) above is subject to
the following: (i) approval of each annual tax credit by the City Council of City
(without any liability to the City for failure to do so, except, that such failure, together
with a failure to issue a refund under subsection (f) below, shall allow Petitioners to
disconnect pursuant to Article XII above), and (ii) the annual credit shall be structured,
granted and implemented in such a manner that the credit and the amount thereof shall
not be or be construed to be City's fiscal year spending or revenue or a multiple - fiscal
12
Final Substituted Co May 24, 2010
year direct or indirect City debt or other financial obligation whatsoever under the
provisions of Article X, Section 20 of the Colorado Constitution. In each year the City
Council approves the credit described in (b) or (c) above, the City Council of the City
will transmit written notice of its approval of such credit as part of its annual
certification of its mill levy to the Board of County Commissioners of Pueblo County,
Colorado. Petitioners shall annually comply with Section 39 -4 -103, C.R.S. and
thereafter the actual value as determined by the administrator shall be apportioned
pursuant to Section 39 -4 -106, C.R.S. After apportionment, City and Petitioners agree
to cooperate in good faith with the Pueblo County Assessor and/or the Pueblo County
Treasurer to structure, grant and implement the annual property tax credit and the
amount thereof so that the credit and amount thereof shall not be or be construed to be
City's fiscal year spending or revenue under the provisions of Article X, Section 20 of
the Colorado Constitution.
(e) Refund In Lieu of Annual Property Tax Credit. If the annual incentive
property tax credit cannot be structured, granted and implemented as set forth in (d)
above, and City receives the full amount of Property Taxes without deduction for the
annual property tax credits described in (b) or (c) above, City, subject to the provisions
of subparagraph (f) below, will annually refund to Petitioners an amount equal to the
annual property tax credit described in (b) and (c) above, which amount shall be
refunded before December 31 of the Property Tax Year.
(f) Annual Refund. The obligation of the City to pay or make any annual
refund described in (e) above is subject to the following: (i) Citys receipt of the full
amount of Property Taxes without deduction for the annual property tax credit
described in (b) or (c) above for the year of refund, (ii) funds being annually
appropriated and budgeted by the City Council of City for purposes of each refund
(without any liability to the City for failure to do so, except that such failure shall
allow Petitioners to disconnect pursuant to Article XII above), and (iii) each annual
refund and the amount thereof is intended to be a refund of property tax revenue
generated by or attributable to the Facility. If City has excess revenue in any fiscal
year under the provisions of Article X, Section 20 of the Colorado Constitution
identified and attributable to property tax revenue or other revenue generated by the
Facility and received by City in such fiscal year ( Facility Excess Revenud), that
portion or all of the refund for such fiscal year in an amount not to exceed the Facility
Excess Revenue shall be and be construed to be a refund of Facility Excess Revenue
under Article X, Section 20 of the Colorado Constitution for that fiscal year. The
parties stipulate and agree that the refunds provided for herein and in (e) above do not
create nor constitute a multiple- fiscal year direct or indirect City debt or other
financial obligation whatsoever under Article X, Section 20 of the Colorado
Constitution.
(g) Payment In Lieu of Sales and Use Tax. Petitioners, in such proportion
as they shall determine, shall pay to City in lieu of sales and use taxes related to the
13
Final Substituted Copy May 24, 2010
construction, installation, acquisition and equipping of the Facility the amount of U.S
$7.5 Million (the "Payment in Lieu "). The Payment in Lieu shall be made in two
separate installments as follows:
(i) U.S $4.6 Million previously paid by Petitioners to City pursuant to the
Pre - Annexation Agreement, which City acknowledges was timely paid by
Petitioners in the proper amount ( "Partial Payment "); and
(ii) U.S. $2.9 Million to be paid in cash or certified funds on or before
October 1, 2010 ( "Balance Payment "); provided, however, that at the request
of the City, in City's sole and absolute discretion, the Balance Payment shall be
postponed until January 2, 2011.
If not paid when due the Balance Payment shall accrue interest at the rate of eight (8)
percent per annum until paid in full.
(h) Refund of Payment in Lieu. Upon notification to the City by
Petitioners that, despite Petitioners' diligent filing of appropriate applications and
supporting documents therefor and payment of all applicable fees : (A) Petitioners are
unable to obtain one or more Approvals identified on Exhibit C required to construct
and install any substantial part or all of the Facility on terms and conditions that will
not materially and substantially impair the ability of Petitioners to utilize the Property
for the Stated Purpose or materially and substantially increase Petitioners' cost to so
utilize the Property, (B) Petitioners are legally prohibited from constructing the
Facility by injunction or other court order ( "Order ") that is not appealed within the
time allowed for such appeal or is affirmed by a final, non - appealable order or
judgment or (C) City fails to adopt Ordinance No. 8187, City shall promptly refund
the Partial Payment, less $100,000.00 thereof as compensation to the City for its
legal, technical, and administrative expenses and staff time, and, if the Balance
Payment has been made at such time of notification, the Balance Payment ( "Refund ").
If the City fails to take any lawful action reasonably required and necessary to effect
such Refund within eighteen (18) months, Petitioners shall be entitled to a remedy for
specific performance or declaratory judgment to effect or obtain such Refund, but not
to obtain recovery of any other damages of any type or nature, with each party to pay
its own costs and attorney's fees. Except as provided above, the Payment in Lieu shall
be irrevocable and nonrefundable for any cause or reason and shall be kept and
retained by the City notwithstanding the disconnection of the Property or any other
provision of this Annexation Agreement to the contrary.
(i) Sales and Use Tax Exemption.
(A) The City hereby acknowledges that the adoption of Ordinance
No. 8187 amending Chapter 4 of Title XIV of the Pueblo Municipal Code (the
14
Final Substituted Copy May 24, 2010
"Ordinance ") granting: an exemption from sales and use tax on tangible
personal property purchased, stored, used, or consumed by Petitioners, their
vendors, suppliers, contractors, sub - suppliers and sub - contractors in the initial
construction and equipping of a new electric power generation facility of up to
380 megawatts constructed on or after June 1, 2010 and before January 1,
2012 ( "electric power generation facility "), is a material factor in the decision
by Petitioners to annex the Property into the City. As such, City hereby
covenants and agrees that so long as the Property remains annexed to the City
it will not prior to the time the Facility becomes Operational, or the 2012
Property Tax Year, whichever comes first, undertake any action to amend,
modify or repeal the exemption granted under the Ordinance to the detriment
of Petitioners as they apply to the Facility. Petitioners acknowledge that the
exemption does not apply to the water main, and public improvements
constructed off- site from the Property.
(B) Within thirty (30) days after the effective date of the Ordinance
or this Annexation Agreement, the City will issue an exemption certification
that Petitioners may provide to all contractors, subcontractors, vendors,
suppliers, sub - suppliers and other agents employed or working in connection
with the construction, operation or maintenance of the Facility to ensure that
no sales or use taxes are collected or paid on tangible personal property
purchased, stored, used, or consumed for the Facility contrary to the exemption
granted under the Ordinance.
(j) Exemption from Sales and Use Taxes for Natural Gas, Steam, and
Water. The City hereby acknowledges and agrees that in accordance with Section 14-
4- 77(7), Pueblo Municipal Code, the purchase and sale of natural gas, steam and water
for use in electric power generation at or from the Facility are and will be considered
exempt from City sales and use taxes; except that natural gas, metered electricity,
steam or water used for lighting or space heating and other utilities in the Facility
shall not be exempt.
(k) Consistent with Article XVI(3) of this Annexation Agreement, the tax
credits /tax exemptions provided to Petitioners by this Annexation Agreement shall
also inure to the benefit of any of Petitioners' assigns.
(2) Environmental Acknowledgment. Petitioners will comply with all applicable
federal and state environmental laws, rules and regulations in the operation of the Facility.
(3) Noise. The City has adopted noise regulations, currently codified as Sec. 11 -1-
607 of the Pueblo Municipal Code (as now or hereafter adopted the "City Noise Ordinance ").
The Facility is also regulated by state noise regulations, currently codified as Section 25 -12-
103, C.R.S. (as now or hereafter adopted the "State Noise Statute ") Petitioners agree that the
15
Substituted Page 6 14, 2010
Facility, and all elements thereof shall comply with both the State Noise Statute and the City
Noise Ordinance, whichever is most restrictive.
(4) Contractors and Labor
All work on the Property and the Facility shall be performed by qualified union
contractors who have entered into enforceable collective bargaining agreements with trade
unions, as more fully set forth in and subject to the terms of that certain Memorandum of
Understanding dated June 10, 2010 ( "MOU ") executed by Black Hills Electric Generation,
LLC ("BHEG"), the subsidiary of Black Hills Corporation responsible for the construction of
the Facility, as attached hereto as Exhibit "E" and incorporated herein by reference.
Petitioners shall ensure that BHEG performs in accordance with the MOU. BHEG has the
right to perform the general contractor services itself or to hire a third -party general contractor
selected by a competitive solicitation process, which third -party general contractor need not
be a union contractor.
XV. EFFECTIVE DATE.
This Annexation Agreement shall become effective on the date City Council of City
approves by ordinance the annexation of the Property to the City. or such later date as if
provided by law.
XVI. MISCELLANEOUS.
(1) Notice. All notices or other communications hereunder shall be sufficiently
given and shall be deemed given when personally delivered, or mailed or registered or
certified mail, postage prepaid, addressed as follows:
[Remainder of page left blank intentionally.]
16
Final Substituted Copy May 24, 2010
(a) if to the City: Department of Public Works - City of Pueblo
211 East "D" Street
Pueblo, Colorado 81003
Attention: Director of Public Works
with a copy to: City Attorney
503 N. Main Street, Suite 203
Pueblo, Colorado 81003
(b) if to the Petitioner: Black Hills /Colorado Electric Utility Company, LP
1515 Wynkoop Street
Suite 500
Denver, Colorado 80202
with a copy to: General Counsel
Black Hills Corporation
625 Ninth Street
Rapid City, SD 57709
(c) if to the Petitioner: Black Hills Colorado IPP, LLC
1515 Wynkoop Street
Suite 500
Denver, Colorado 80202
with a copy to: General Counsel
Black Hills Corporation
625 Ninth Street
Rapid City, SD 57709
or to such other address as either party by written notice given hereunder may designate.
(2) Governing Law. This Annexation Agreement shall be governed and construed
in accordance with the laws of the State of Colorado, without regard to conflict of law
principles.
(3) No Third Party Beneficiaries. Nothing in this Annexation Agreement
expressed or implied is intended to or shall be construed to confer upon, or to give to, any
person other than the City and the Petitioners and their respective successors and assigns any
right, remedy or claim under or by reason of this Annexation Agreement or any covenant,
condition or stipulation hereof; and all the covenants, agreements and stipulations in this
Annexation Agreement contained by and on behalf of the City or the Petitioners shall be for
the exclusive benefit of the City and the Petitioners and their respective successors and
assigns, including parties to whom a Petitioner assigns certain of the rights and benefits set
forth in this Annexation Agreement. No assignment of any interest in this Annexation
Agreement by Petitioner shall relieve Petitioner of any of its obligations hereunder.
17
Final Substituted Copy May 24, 2010
(4) Singular, Plural. Unless the context requires otherwise, words denoting the
singular may be construed as denoting the plural. Words of the plural may be construed as
denoting the singular. Words of one gender may be construed as denoting the other gender, if
applicable.
(5) Entire Agreement. All prior discussions, representations, understandings and
agreements, whether oral or written, between the parties with respect to the subject matter of
this Annexation Agreement are merged in this Annexation Agreement, which constitutes the
entire agreement between the parties.
(6) Confirmation Statements. Upon written request from Petitioners accompanied
by payment in advance of City's estimated technical and legal expenses and payment for City
staff time involved for investigation, research and preparation, the City will provide to
Petitioners, or Petitioners' designee, a certificate or other written statement (in form sufficient
for recording) evidencing that Petitioners have, to the best of City's knowledge at that time,
performed their obligations under this Annexation Agreement or identifying those items
which remain outstanding under this Annexation Agreement.
(7) Assignment. Petitioners shall not assign this Annexation Agreement or any of
their respective rights and obligations hereunder without the written consent of the City In
order to obtain such consent, the assigning Petitioner shall provide to City with the request for
consent sufficient information showing that the proposed assignee has the technical and
financial ability to perform the obligations of that Petitioner under this Annexation
Agreement. Consent may be denied by City if, based upon the information provided, it
reasonably determines that the assignee appears either not technically or financially qualified
or able to perform the obligations of that Petitioner under this Annexation Agreement.
This Annexation Agreement is executed effective as set forth in Article XV.
[ S E‘ A ] PUEBLO, a Municipal Corporation
j
Attest: _ �''�ik `f . By Or .
-- -City Ae lerk - 'resident of the City Council
APPROVED AS TO FORM:
. r
City Attorney
Black Hills/ Colorado Electric Utility
Compa ` , , LP
By: _� ►s :s If
Title: EdlitagSar <r
18
Final Substituted Copy May 24, 2010
Black Hills Colorado IPP, LLC
By: �1
Title: uP'
STATE OF Colorado )
) ss.
COUNTY OF Pueblo )
The foregoing instrument was acknowledged before me this 14th day of
June , 2010 , Lawrence W. Arpnri n , as President of City
Council and Gina Dutcher as City Clerk of Pueblo, a Municipal Corporation.
'''''S''''' ' : fitness my hand and official seal.
N,OTi R), mmission expires: & /'7///
,^_.rte JL4 ---.
• =•�� • y Public
'.'•' E OF COLORADO )
) ss.
COUNTY OF PUEBLO )
The foregoing instrument was acknowledged before me this 14th day of
June , 20 10 , b Stuart Wevik as
Vice President of Electric Utilities - Black Hills /Colorado.Electric
Utility Company, LP
Witness my hand and official seal
My commission expires: August 18, 2011
[SEAL]
Nota Public
STATE OF COLORADO )
) ss.
COUNTY OF PUEBLO )
19
Final Substituted Copy May 24, 2010
The foregoing instrument was acknowledged before me this 14th day of
June , 20 10 , by Mark Lux as
Vice President of Power Delivery — Black Hills /Colorado Electric
Utility Company, LE
Witness my hand and official seal.
My commission expires: August 18, 2011
[SEAL]
- 1 11111.
Notar 'ublic
Final Substituted Copy May 24, 2010
EXHIBIT A TO ANNEXATION AGREEMENT
LEGAL DESCRIPTION
All of the SW 1/4 of Section 11, Township 20 South, Range 64 West of the 6th P.M., and
The N 1/2 of the N 1/2 of the NW 1/4 of the SE 1/4 and all of the E 1/2 of the SE 1/4 of
Section 10, Township 20 South, Range 64 West of the 6th P.M.,
all in the County of Pueblo, State of Colorado.
Further described as follows:
A parcel of land, located in the N'/zof the N 1/2 of the NW 1/4 of the SE 1/4, and all of the E
1/2 of the SE 1/4 of Section 10, and the SW 1/4 of Section 11, thereof, all being located in
Township 20 South, Range 64 West of the 6th P.M.,
County of Pueblo, State of Colorado, with all the bearings contained herein based upon a
bearing of N88 "E, as measured between the C 1/4 Corner of said Section 10, being
marked on the ground by a 3 1/4" aluminum cap on #6 rebar, PLS 10372, 1991, found in
place, and the E 1/4 Corner of said Section 10, being marked on the ground by an original
axel, found in place, said parcel being more particularly described as follows:
Beginning at said E 1/4 of Section 10; thence along the East -West centerline of said Section
11, N8908'58 "E, a distance of 2746.60 feet, to the C 1/4 Corner of said Section 11; thence
along the North -South centerline of said Section 11, S0(P30'09 "E, a distance of 2656.10 feet to
the S 1/4 of said Section 11; thence along the South line of the SW 1/4 of said Section 11,
S88'53'11 "W, a distance of 2706.81 feet, to the SE Corner of said Section 10, being marked on
the ground by a 3 1/4" aluminum cap on #6 rebar, JR ENG LTD, PLS 31161, 2000, 20'
Witness Corner (West), found in place; thence along the South line of the SE 1/4 of said
Section 10, S88'04'42 "W, a distance of 1299.26 feet, to the E 1/16 Corner of said Section 10
and Section 15, said Township and Range, being marked on the ground by and original axel,
found in place; thence along the West line of the E 1/2 of the SE 1/4 of said Section 10,
N01°25'38 "W, a distance of 2333.84 feet, to the C- N -N -SE 1/256 Corner of said Section 10;
thence along the South line of the N 1/2 of the N 1/2 of the NW 1/4 of the SE 1/4 of said
Section 10, 588°01'41 "W, a distance of 1302.05 feet, to the N -N -S 1/256 Corner of said
Section 10; thence along the North -South centerline of said Section 10, N01°29'44 "W, a
distance of 333.24 feet, to said C 1/4 Corner of Section 10; thence along the East -West
centerline of said Section 10, N88 "E, a distance of 2604.89 feet, to the point of
beginning.
Said parcel contains 256.282 acres, more or less.
21
Final Substituted Copy May 24, 2010
EXHIBIT B
EXCEPTIONS
The Policy or policies to be insured will contain exceptions to the following unless the same
are disposed of to the satisfaction of the Company.
1. Rights or claims of parties in possession, not shown by the public records.
2. Easements or claims of easements, not shown by the public records.
3. Discrepancies, conflicts in boundary lines, shortage in area, encroachments, or any facts,
which a correct survey and inspection of the premises would disclose, and which are not
shown by the public records.
4. Any lien, or right to a lien, for services, labor or material heretofore or hereafter furnished,
imposed by laws and not shown by the public records.
5. Defects, liens, encumbrances, adverse claims or other matters, if any, created first appearing
the public records or attaching subsequent to the effective date hereof; but prior to the date the
proposed insured acquires of record for value the estate or interest or mortgage thereon
covered by this commitment.
6. Unpatented mining claims, reservations or exceptions in patents, or an act authorizing the
issuance thereof; water rights, claims or title to water.
7. Payment of all taxes and assessments currently due and payable, if any.
8. Easements for public utilities, drainage, access, and other purposes, as shown on the recorded
subdivision plat.
9. Title to all minerals within and underlying the premises, together with all mining and drilling
rights and other rights, privileges and other immunities relating thereto.
10. Any and all existing roads, highways, ditches, canals, reservoirs, wells, railroad tracks ,
pipelines, water lines, power lines, telephone lines, and any and all rights of way or easements
therefore.
11. Any and all leases and tenancies.
22
Final Substituted Co May 24, 2010
EXHIBIT C
LIST OF REQUIRED PERMITS AND APPROVALS
Payment of all annexation fees and costs to City.
Final, fully executed (by all parties thereto), and uncontested agreement with the Board of
Water Works of Pueblo, Colorado for the supply of potable water to the Property;
The final and uncontested Zoning of the Property in accordance with Article III(2) of this
Annexation Agreement;
Final and uncontested passage of an ordinance approving a Subdivision of the Property in
accordance with Article III (1) of this Annexation Agreement;
A final and uncontested Special Area Plan in accordance with Article III(2) of this
Annexation Agreement;
The final and uncontested State Department of Public Health and Environment, Air Quality
Control Division air permit.
Army Corp of Engineers permit to cross waters of the United States
State Stormwater Construction Permit
The foregoing are collectively referred to as the "Approvals"
The term` uncontested'as used herein means that no appeal, action, lawsuit or other claim
(collectively, a "Clairri) has been asserted or filed in a court of competent jurisdiction or with
any body with appropriate jurisdiction within the applicable appeal period after the
occurrence or granting of any such Approval but in no event later than one hundred eighty
(180) days thereafter. Notwithstanding the foregoing, if a Claim has been timely filed or
asserted, then the Approval shall only be considered"uncontested'when such Claim is
dismissed or resolved to uphold the Approval sought by or previously granted to Petitioner by
a final, non - appealable order or judgment issued in such litigation or proceeding, or the
dismissal of the litigation or proceeding, with no further right of appeal.
23
Final Substituted Copy May 24, 2010
EXHIBIT D
TO ANNEXATION AGREEMENT
(General Description of Roadway Improvements and Location)
24
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MEMORANDUM OF UNDERSTANDING
This: memorandum of understanding ("MOU") is entered into this 10 day ofiune,
2010, by and between Black Hills Electric Generation, LLC ( "BHEG"), the subsidiary of Black
Hills Corporation responsible for the construction of the Facility described below and the
following Pueblo, Colorado companies: K.R. Swerdfeger Construction, ine.,'Vision Mechanical,
1 Vitiouston Constriction company, Pueblo BlecMos, MSSM Company, and Industrial
Constructors/Managers Inc. (collectively, the "Contractor Consortium").
WHEREAS, BUG is responsible for the construction of two 90- megawatt LMS 100
natural gas fired power plants -which will be owned by Black Hills/Colorado Electric Utility
Company, LP and up to two 100 megawatt natural gas fired combined cycle power plants which
will be owned by Black Hills Colorado IPP, LLC (collectively, the "Facility") and proposes to
construct the Facility on certain real property currently not located within the city limits of
Pueblo, Colorado (the "Site"), and
WHEREAS, Black Hills/Colorado Electric Utility Company, LP and Black Hills Electric
Generation, LLC ("Petitioners") and the City of Pueblo, Colorado ("City") entered into a Pre -
Annexation Agreement as of December 28, 2009, which Pre- Annexation Agreement was
approved by Ordinance No. 8129 adopted and passed by the City Council on December 28,
2009; and
WHEREAS, annexation to the City is required in order lbr the Pueblo Water Board, a
City enterprise, to provide water to the Site, and
WHEREAS, Petitioners submitted a petition for the annexation of the Site to the City;
and
WNF,REAS, BHEO assigned its rights as a Petitioner wader �h Annexation
g guarantee
to
Black Hills Colorado IPP, LLC and the City accepted such assignment subject.
of BHEG, and
WHEREAS, as required by the Pre- Annexation Agreement, annexation is conditioned on
the negotiation and execution of an acceptable Annexation Agreement by ibe Petitioners and the
City, and
WHEREAS, the City and Petitioners are at an impasse with the City Council concerning
Article XIV(4)(b) of the Annexation Agreement which, over the objection of the Petitioners,
requires Petitioners to require each major contractor to enter into a project lather agreement with
the Colorado Building Trades Council providing for fair and living wages and benefits to be paid
to workers involved in the construction and commissioning of the Facility, and
WHEREAS, the City Council took pubilo testimony from organized labor and others at
its meeting on May 24, 2010, but, •es a result of the impasse, the City Council declined to vote on
the annexation ordinances and encouraged the Petitioners to find a compromise position with
organized labor, and
WHEREAS, the Contractor Consortium is concerned that a PLA will not guarantee that
local Pueblo union contractors and union laborers will be able to work on the Site and the
Facility and desire the opportunity to competitively bid to work on the Site and the Facility, and
WHEREAS, the Contractor Consortium contacted BHEG and proposed an alternative to
a PLA that would increase the opportunity for local union contractors and laborers to work on
the site and the Facility, and
WHEREAS, BHEG and the Contractor Consortium desire to document this alternative
proposal and to work together to present and support this alternative proposal to the Pueblo City
Council.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties agree as follows:
1. The Contractor Consortium members represent and warrant to BHEG that they
each have labor agreements with their unions that include (i) no strike, no walkout clauses, (ii)
no subsistence and travel provisions, (iii) right to call provisions that allow them to select the
workers assigned to a project, (iv) and other terms and conditions which the Contractor
Consortium believe will allow them to provide competitive bids utilizing local union labor.
2. The Contractor Consortium members acknowledge and agree they have not built
any gas turbine power plants and do not have the experience or capability to serve as the general
contractor for the construction of the Facility on the Site. They further agree that BHEG has the
right to perform the general contractor services itself or to hire a third -party general contractor
selected by a competitive solicitation process.
3. BHEG agrees that if the City Council approves the annexation (i) conditioned on
all work on the Site and Facility being performed by qualified union contractors, and (ii) on
terms and conditions otherwise acceptable to Petitioners, all work on the Site and the Facility
shall be performed by qualified union contractors subject to availability of union contractors
within the State of Colorado. BHEG shall require its general contractor, if any, to utilize only
qualified union contractors for all work on the Site and the Facility.
4. The Contractor Consortium acknowledges and agrees that a competitive
solicitation process will be used to select the qualified union contractors who work on the Site
and the Facility. There will be separate competitive solicitations for separate components of the
work (i.e., civil, mechanical, engineering, etc.). Each member of the Contractor Consortium
acknowledges and agrees that it must participate in such competitive solicitation process if it
wants to work on the Site or Facility and is not guaranteed to be a winning bidder. Each member
of the Contractor Consortium further acknowledges and agrees that in order to be able to bid, it
must be able to comply with all bidder qualification requirements including, but not limited to,
•
2
bonding requirements. KO t rccs to rrcqualify the member of the Conpaclor Consortium
by conduoting such due diligence as necessary to determine whether cad to whatextent each
membergtialiflca;lo bid and will advise..eaok. nber BIIEG'sdetcrrninatiott_asto that
member as promptly as rcasnnabty posst e.
S. • The Contractor:Cou$ortium will supportthis Memorondum.of Understandiag ea.
cernprptruse alternative position 10 a' A. and . will use:rts best sffarts to a8 the Pctitioncrs
**got apFovrd.oif the .tuutexatlon,on th terms and conditions set f'otth;in this Meniorandum
of Understandinga ld without a PLA rcgwxerncait. Hach member'of the.Corttractor Consortium
w41 nlso use its bet : eforts 10 support'thls Memoranduul of undcirettutdulg rn iieu of a MA :to
the Coolorado Building Trades Couttcll and •wty ather.organized tabor orother groups or
snstihitronc opposing any alternative other than PLA, Finally, each member oftlle Coutractar
Consurtrtrm will support Black. 111s/Colorado Electric in..conndaiioin Wilt the : pending vote on its.
Ftinehiinwith the: City of Pueblo,
fs. TWs Mwpbraiidgrtr oyUndt:.txtand'utg is sttbJccc:ta i'ctitioners obtaining approval
of tbe annexation from the City Councd on terms and eoadrttons accept0l0.10 Petitioners.. In. ihc:
event .Petitioners:do not obtain such" ppt'ova1, this MannratiditM of Understanding sha]l null
and void. f.�- go►�a{ -- 0/..Z .0.Ontraotee;-ifntr '
Vision'Mc'ch "e r./. . % •
•
Date: /tnip .
HW Houston Construction Co. •
sy: xIU
Title: ;VT
Date: 6.•' • / //Q _.._.
Industrial Constructors/Managers, inc.
•
y:
Title: irr . _.
Date: / r _ --
3
Swenifsgor Cimsittmotion, Ino.
/1 a
et .
1100;
NO; 4
mesm compoy
By:
Thiel Zialle e t
Dale: • Le- 't •
Pueblo Clot:trios-
By:
Mug / 42/
Black Hills BIecttic Ocnoration,
, 114444 e . V
1 0
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fUte: •
4
GUARANTY AGREEMENT
This Guaranty Agreement (this "Guaranty ") is made by BLACK HILLS ELECTRIC
GENERATION, LLC, a South Dakota limited liability company ( "Guarantor "), in favor of the
City of Pueblo, a Colorado municipal corporation ( "Counterparty ").
RECITALS
A. Black Hills Colorado IPP, LLC, a South Dakota limited liability company ( "Debtor ") and
Counterparty are or may become parties to a Pre - Annexation Agreement dated December
28, 2009 and an Annexation Agreement dated May 10, 2010 (collectively, the
"Agreement ").
B. Debtor is wholly -owned by Guarantor and will receive substantial and direct benefits
from the transactions contemplated by the Agreement(s) and has agreed to enter into this
Guaranty to provide assurance for the payment obligations of Debtor in connection with
the Agreement(s) and to induce Counterparty to enter into the Agreement(s).
NOW, THEREFORE, in consideration of good and valuable consideration, the adequacy, receipt
and sufficiency of which are hereby acknowledged, Guarantor hereby agrees as follows:
1. Guaranty. Guarantor hereby unconditionally, irrevocably and absolutely guarantees the
punctual payment when due (subject to written demand in accordance with Paragraph 6
below) of Debtor's payment obligations arising under any Agreement, as such Agreement
may be amended or modified by agreement between Debtor and Counterparty from time
to time (collectively, the "Guaranteed Obligations "); provided, however, that the total
liability of Guarantor hereunder, regardless of any amendment or modification to any
Agreement, is limited to the lesser of (a) the Guaranteed Obligations under all
Agreements or (b) $10,000,000, plus all interest, reasonable attorneys' fees, and /or costs
of collection, if any, required by such Agreement to be paid by Debtor in the collection of
Guaranteed Obligations. In addition, subject to the limitations above, Guarantor shall
reimburse Counterparty for all sums paid to Counterparty by Debtor with respect to such
Guaranteed Obligations that Counterparty is subsequently required to return to Debtor or
a representative of Debtor's creditors as a result of Debtor's bankruptcy, insolvency,
reorganization, liquidation, receivership, or similar proceeding. Guarantor's obligations
and liability under this Guaranty shall be limited to payment obligations only and
Guarantor shall have no obligation to perform under any Agreement, including, without
limitation, to sell, deliver, supply or transport gas, electricity or any other commodity.
If all or a part of any payment made by Guarantor to Counterparty hereunder is later
determined to have been improper because such amount was not actually owed by Debtor
to Counterparty under the Agreement, or such payment was otherwise unjustified,
Counterparty shall repay such amount to Guarantor within ten (10) business days after
written demand by Guarantor together with any interest, if any, required by the
Agreement to be paid by Counterparty in the collection of such amount.
2. Guaranty Absolute. The liability of Guarantor under this Guaranty shall be absolute,
irrevocable and unconditional, irrespective of:
(a) any defect or deficiency in any Agreement or any other documents executed in
connection with any Agreement;
(b) any modification, extension or waiver of any of the terms of any Agreement;
(c) any change in the time, manner, terms or place of payment of or in any other term
of, all or any of the Guaranteed Obligations, or any other amendment or waiver of
or any consent to departure from any Agreement or any other agreement or
instrument executed in connection therewith;
(d) any sale, exchange, release or non - perfection of any property standing as security
for the liabilities hereby guaranteed or any liabilities incurred directly or
indirectly hereunder or any setoff against any of said liabilities, or any release or
amendment or waiver of or consent to departure from any other guaranty, for all
or any of the Guaranteed Obligations;
(e) except as to applicable statutes of limitation, failure, omission, delay, waiver or
refusal by Counterparty to exercise, in whole or in part, any right or remedy held
by Counterparty with respect to any Agreement or any transaction under any
Agreement; or
(f) any change in the existence, structure or ownership of Guarantor or Debtor, or
any bankruptcy, insolvency, reorganization, liquidation, receivership or similar
proceeding affecting Debtor or its assets.
The obligations of Guarantor hereunder are several and not joint with Debtor or any other
person, and are primary obligations for which Guarantor is the principal obligor. There
are no conditions precedent to the enforcement of this Guaranty, except as expressly
contained herein. It shall not be necessary for Counterparty, in order to enforce payment
by Guarantor under this Guaranty, to exhaust its remedies against Debtor, any collateral
pledged by Debtor, any other guarantor, or any other person liable for the payment or
performance of the Guaranteed Obligations. This Guaranty is one of payment and not of
collection and shall apply regardless of whether recovery of all such Guaranteed
Obligations may be discharged, or uncollectible in any bankruptcy, insolvency,
reorganization, liquidation, receivership or similar proceeding affecting Debtor or its
assets.
Without limiting Guarantor's own defenses and rights hereunder, Guarantor reserves to
itself all rights, setoffs, counterclaims and other defenses to which Debtor is or may be
entitled to arising from or out of the Agreements or otherwise, except as limited herein
and except for defenses arising out of the bankruptcy, insolvency, reorganization,
liquidation, receivership or similar proceeding affecting Debtor or its assets.
2
•
3. Waiver. Guarantor hereby waives:
(a) notice of acceptance of this Guaranty, notice of the creation or existence of any of
the Guaranteed Obligations and notice of any action by Counterparty in reliance
hereon or in connection herewith;
(b) notice of the entry into any Agreement between Debtor and Counterparty and
notice of any amendments, supplements or modifications thereto; or any waiver of
consent under any Agreement, including waivers of the payment and performance
of the obligations thereunder;
(c) notice of any increase, reduction or rearrangement of Debtor's obligations under
any Agreement or notice of any extension of time for the payment of any sums
due and payable to Counterparty under any Agreement;
(d) except as expressly set forth herein, presentment, demand for payment, notice of
dishonor or nonpayment, protest and notice of protest or any other notice of any
other kind with respect to the Guaranteed Obligations; and
(e) any requirement that suit be brought against, or any other action by Counterparty
be taken against, or any notice of default or other notice be given to, or any
demand be made on, Debtor or any other person, or that any other action be taken
or not taken as a condition to Guarantor's liability for the Guaranteed Obligations
under this Guaranty or as a condition to the enforcement of this Guaranty against
Guarantor.
4. Subrogation. Guarantor shall be subrogated to all rights of Counterparty against Debtor
in respect of any amounts paid by Guarantor pursuant to the Guaranty, provided that
Guarantor waives any rights it may acquire by way of subrogation under this Guaranty,
by any payment made hereunder or otherwise (including, without limitation, any
statutory rights of subrogation under Section 509 of the Bankruptcy Code, 11 U.S.C. §
509, or otherwise), reimbursement, exoneration, contribution, indemnification or any
right to participate in any claim or remedy of Counterparty against Debtor or any
collateral that Counterparty now has or acquires, until all of the Guaranteed Obligations
shall have been irrevocably paid to Counterparty in full. If (a) Guarantor shall perform
and shall make payment to Counterparty of all or any part of the Guaranteed Obligations
and (b) all the Guaranteed Obligations shall have been paid in full, Counterparty shall, at
Guarantor's request, execute and deliver to Guarantor appropriate documents necessary
to evidence the transfer by subrogation to Guarantor of any interest in the Guaranteed
Obligations resulting from such payment by Guarantor.
5. Notices. All demands, notices and other communications provided for hereunder shall,
unless otherwise specifically provided herein, (a) be in writing addressed to the party
receiving the notice at the address set forth below or at such other address as may be
designated by written notice, from time to time, to the other party, and (b) be effective
upon delivery, when mailed by U.S. mail, registered or certified, return receipt requested,
postage prepaid, or personally delivered. Notices shall be sent to the following addresses:
3
If to Counterparty:
City of Pueblo
Attn: City Manager
1 City Hall Place
Pueblo, Colorado 81003
With a copy, that shall not constitute notice, to:
City Attorney
503 N. Main Street
Suite 203
Pueblo, Colorado 81003
If to Guarantor:
Black Hills Electric Generation
Attn: Mark L. Lux
Vice President -Power Generation
1515 Wynkoop
Suite 500
Denver, Colorado 80202
With a copy, that shall not constitute notice, to:
Black Hills Corporation
Attn: General Counsel
625 Ninth Street
Rapid City, South Dakota 57701
6. Demand and Payment. Counterparty is not entitled to make demand upon Guarantor
until a default occurs in payment of any Guaranteed Obligations by Debtor to
Counterparty. Any demand by Counterparty for payment hereunder shall be in writing,
reference this Guaranty, reference the Guaranteed Obligations, and signed by a duly
authorized representative of Counterparty and delivered to Guarantor pursuant to Section
5 hereof. There are no other requirements of notice, presentment or demand. Guarantor
shall pay, or cause to be paid, such Guaranteed Obligations within ten (10) business days
of receipt of such demand.
7. No Waiver; Remedies. Except as to applicable statutes of limitation, no failure on the
part of Counterparty to exercise, and no delay in exercising, any right hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other right. The
remedies herein provided are cumulative and not exclusive of any remedies provided by
law.
4
t
8. Term; Termination. This Guaranty shall continue in full force and effect from the
Effective Date until (i) a refund is required to be made by the counterparty pursuant to
paragraph 5 of the Pre - Annexation Agreement, (ii) a refund of the Payment in lieu is
required to be made by the Counterparty pursuant to Section XIV(1)(h) of the
Annexation Agreement, or (iii) the on -site and off -site public improvements described in
the Annexation Agreement (except for the construction of the extension of 27 Lane
within the Property as defined in the Annexation Agreement) have been accepted by the
Counterparty, whichever occurs first (the "Termination Date "); provided, however, that
the termination of this Guaranty shall not affect Guarantor's obligations hereunder with
respect to any transaction entered into prior to such Termination Date, and this Guaranty
shall remain in full force and effect until all Guaranteed Obligations arising with respect
to such transactions have been fully satisfied.
9. Assignment; Successors and Assigns. Guarantor and Counterparty shall not assign their
rights hereunder without the prior written consent of the other party, and any assignment
without such prior written consent shall be null and void and of no force or effect. This
Guaranty shall be binding upon and inure to the benefit of the each party hereto and their
respective successors and permitted assigns.
10. Amendments; Miscellaneous. Subject to Guarantor's right to terminate this Guaranty
pursuant to Paragraph 8, no amendment of this Guaranty shall be effective unless in
writing and signed by Guarantor and Counterparty. No waiver of any provision of this
Guaranty or consent to any departure by Guarantor therefrom shall in any event be
effective unless such waiver shall be in writing and signed by Counterparty. Any such
waiver shall be effective only in the specific instance and for the specific purpose for
which it was given.
11. Caption. The captions in this Guaranty have been inserted for convenience only and shall
be given no substantive meaning or significance whatsoever in construing the terms and
provisions of this Guaranty.
12. Representation and Warranties.
Guarantor represents and warrants as follows:
(a) Guarantor is duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation and has full corporate power to execute,
deliver and perform this Guaranty.
(b) The execution, delivery and performance of this Guaranty have been and remain
duly authorized by all necessary corporate action and do not contravene
Guarantor's constitutional documents or any contractual restriction binding on
Guarantor or its assets.
(c) This Guaranty constitutes the legal, valid and binding obligation of Guarantor
enforceable against Guarantor in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other laws of general
5
•
applicability relating to or affecting creditor's rights and to general equity
principles.
13. Foreign Currency Obligations. Subject to the limitation of Guarantor's total liability set
forth in Paragraph 1 hereof, the Guarantor shall make payment in the currency in which
the Company is required to pay its payment obligations (the "Original Currency "). For
the purposes of calculating Guarantor's total liability hereunder and applying the
limitation on Guarantor's total liability, the value of the payment obligation in the
Original Currency shall be converted to U.S. Dollars by the Guarantor at the rate equal to
the applicable spot exchange rate of a large commercial bank located in Canada or the
United States on the date that payment is made by the Guarantor.
14. Governing Law. This Guaranty shall be governed by, and construed in accordance with,
the laws of the State of Colorado without regard or reference to the conflict of laws
principles of any jurisdiction. However, if any provision of this Guaranty shall be
prohibited by or invalid under such law, such provision shall be ineffective to the extent
of such prohibition or invalidity without invalidating the remainder of such provision or
the remaining provisions of this Guaranty.
15. Entire Agreement. This Guaranty constitutes the entire agreement and understanding
between Guarantor and Counterparty with respect to the Guaranteed Obligations and
supersedes and replaces in its entirety any and all guaranties previously issued by
Guarantor to Counterparty with respect to the Guaranteed Obligations, or any part of
them.
IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be duly executed and
delivered by its duly authorized representative effective as of this 10 day of May, 2010
( "Effective Date ").
BLACK HILLS ELECTRIC GENERATION, LLC
By: ZXV
Naive: Garner M. A derson
Title: VP, Treasurer and Chief Risk Officer
6