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HomeMy WebLinkAbout12378RESOLUTION NO. 12378 A RESOLUTION APPROVING THE AGREEMENT BETWEEN PUEBLO, A MUNICIPAL CORPORATION AND ROCLA CONCRETE TIE, INC. RELATING TO A JOB CREATING CAPITAL IMPROVEMENT PROJECT, AND IN CONNECTION THEREWITH, DESIGNATING PUEBLO MUNICIPAL RAIL CORPORATION AS AN AGENCY AND INSTRUMENTALITY OF THE CITY OF PUEBLO TO CONSTRUCT, OWN AND OPERATE CERTAIN RAIL TRACK AND FACILITIES, APPROVING AN AGREEMENT BETWEEN PUEBLO, A MUNICIPAL CORPORATION AND PUEBLO MUNICIPAL RAIL CORPORATION, AUTHORIZING THE PRESIDENT OF CITY COUNCIL TO EXECUTE SAID AGREEMENTS, AND TRANSFERRING $2,300,000 FROM THE 1992 – 2016 SALES AND USE TAX CAPITAL IMPROVEMENT PROJECTS FUND THEREFOR BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, that: SECTION 1. The City Council finds and determines that the expenditure of $2,300,000 for the job creating capital improvement project with Rocla Concrete Tie, Inc. described in the attached Agreement, meets and complies with the criteria and standards established by Ordinance Nos. 6391, 7583 and 7836 and will create employment opportunities justifying the expenditure of public funds. SECTION 2. The Agreement dated as of April 9, 2012 between Pueblo, a Municipal Corporation and Rocla Concrete Tie, Inc., a Texas corporation, relating to a job creating capital improvement project, a copy of which is attached hereto ("Agreement"), having been approved as to form by the City Attorney, is hereby approved. The President of the City Council is authorized to execute and deliver the Agreement in the name of the City and the City Clerk is directed to affix the seal of the City thereto and attest same. SECTION 3. The City Council hereby finds, determines and declares that the formation and creation of Pueblo Municipal Rail Corporation, a Colorado nonprofit corporation as an agency and instrumentality of the City of Pueblo to construct, reconstruct, repair, maintain and operate public rail facilities for and on behalf of the City of Pueblo is necessary for and will promote the public peace, welfare, health and safety. All actions heretofore taken by the officers and employees of the City in the formation of Pueblo Municipal Rail Corporation are hereby authorized, approved and ratified. SECTION 4. The Agreement between Pueblo, a Municipal Corporation and Pueblo Municipal Rail Corporation, a Colorado nonprofit corporation, in substantially the form attached hereto, (the "Rail Agreement"), with such minor changes as may be approved by the President of City Council and the City Attorney, is hereby approved. The President or Vice President of the City Council is authorized to execute and deliver the Rail Agreement in the name of the City of Pueblo, and the City Clerk is directed to affix the seal of the City of Pueblo thereto and to attest same. SECTION 5. Funds in the aggregate amount of $2,300,000 are hereby authorized to be transferred, expended and made available out of the 1992 – 2016 Sales and Use Tax Capital Improvement Projects Fund for the sole purpose of the job creating capital improvement project authorized herein and in the manner described in the Agreement and Rail Agreement. The funds hereby authorized to be transferred and expended shall be held by the City and released, disbursed and paid by the Director of Finance in the following manner: the sum of $2,200,000 shall be paid to Pueblo Municipal Rail Corporation pursuant to and in accordance with the terms of the Rail Agreement, and the sum of $100,000 is hereby transferred to City of Pueblo Capital Project ED 1201 for improvements to Lime Road. SECTION 6. 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 and Rail Agreement which are necessary or desirable to effectuate the transactions described therein. SECTION 7. This Resolution shall become effective upon passage and approval. INTRODUCED: April 9, 2012 BY: Steve Nawrocki COUNCIL PERSON Background Paper for Proposed RESOLUTION DATE:AGENDA ITEM # Q-5 April 9, 2012 DEPARTMENT: Law Department Thomas J. Florczak, City Attorney TITLE A RESOLUTION APPROVING THE AGREEMENT BETWEEN PUEBLO, A MUNICIPAL CORPORATION AND ROCLA CONCRETE TIE, INC. RELATING TO A JOB CREATING CAPITAL IMPROVEMENT PROJECT, AND IN CONNECTION THEREWITH, DESIGNATING PUEBLO MUNICIPAL RAIL CORPORATION AS AN AGENCY AND INSTRUMENTALITY OF THE CITY OF PUEBLO TO CONSTRUCT, OWN AND OPERATE CERTAIN RAIL TRACK AND FACILITIES, APPROVING AN AGREEMENT BETWEEN PUEBLO, A MUNICIPAL CORPORATION AND PUEBLO MUNICIPAL RAIL CORPORATION, AUTHORIZING THE PRESIDENT OF CITY COUNCIL TO EXECUTE SAID AGREEMENTS, AND TRANSFERRING $2,300,000 FROM THE 1992 – 2016 SALES AND USE TAX CAPITAL IMPROVEMENT PROJECTS FUND THEREFOR ISSUE Should City Council approve the Agreement between the City and Rocla Concrete Tie, Inc. ("Company") and a related agreement? The related agreement is an agreement between the City and Pueblo Municipal Rail Corporation which would act as an instrumentality of the City to construct and manage public rail facilities which will be used by Company. RECOMMENDATION PEDCO recommends that City Council approve the transaction. BACKGROUND The Company is a Texas corporation which must relocate from its Denver location and is interested in opening a concrete railroad tie manufacturing facility within the City of Pueblo. The Agreement authorizes the expenditure of $2,300,000 from the 1992-2016 Sales and Use Tax Capital Improvement Projects Fund ("Funds"), $1,400,000 of which is designated as an employment incentive to Company which commits to employ at least one hundred (100) full-time employees whose annual compensation shall average at least $26,000. All but $100,000 of the transferred funds will be used to construct railroad lead track and switches which will be made available to Company and other companies on a non- exclusive basis. The track is being constructed approximately 4,000 feet longer than necessary for the Company in order to open the area to further industrial development and realize construction efficiencies. The remaining $100,000 will be made available for improvements to Lime Road, if required. In the event the Company defaults in its employment commitment, Company will repay the $1,400,000 economic incentive on a pro-rata basis without interest. The employment commitment date is April 1, 2014 and the repayment period is 7-years after the employment commitment date. The Resolution also approves an agent with a non profit corporation established for the purpose of entering into track agreements with the BNSF Railway. Such track agreements include contractual indemnity provisions which, if entered into by City, would create an unacceptable level of risk for the City. While there is no certainty that such a contracting structure would fully insulate the City from such indemnity risks, nevertheless, it is recommended the City proceed in this fashion. FINANCIAL IMPACT See Background. 4/5/2012 AGREEMENT THIS AGREEMENT ( "Agreement ") entered into as of April 9, 2012 between Pueblo, a municipal corporation (the "City ") and Rocla Concrete Tie, Inc., a Texas corporation (the "Company"). WHEREAS, Company has expressed a willingness to locate a manufacturing facility within an area to be annexed into the City of Pueblo, Colorado, and in furtherance thereof has, through the Pueblo Economic Development Corporation, made application to the City for funds and other economic incentives; and WHEREAS, in connection with its application, Company has committed to invest not less than $14,000,000.00, in new construction and fixed assets for a new manufacturing facility to be located within the annexed area, and to provide employment as described in section 6 of this Agreement; and WHEREAS, in reliance upon Company's commitments, City has approved such application and will make funds and other economic incentives available for the benefit of Company, subject to and upon the terms and conditions of this Agreement. NOW, THEREFORE, in consideration of the foregoing and the 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: 1. The following terms as used in this Agreement shall have the following meaning unless the context clearly indicates otherwise: "Commitment Period" means the period defined in Section 6(a) for the Employment Commitment. "Effective Date" means the date Company notifies the City in writing that Company has purchased and is the owner in fee simple of the Site upon which the Facility will be constructed. "Employment Commitment" shall have the meaning defined in Section 5. "Employment Commitment Date" means April 1, 2014. "Facility" means the manufacturing facility to be constructed by Company upon the Site wherein Company will conduct its manufacturing operations. "Full -Time Employee" means a person who actually performs work at the Facility for not less than thirty -five (35) hours per week while engaged as (a) an employee of Company or (b) an employee of an outside entity acting as an employment agency to provide such persons to Company for work at the Site. "Quarter" means three consecutive calendar months commencing January 1, April 1, July "Quarterly Employees" means the sum of the aggregate number of Full -Time Employees on each business day of a Quarter, divided by the sum of the aggregate business days in such Quarter. "Railroad Lead Track" means the railroad track which City shall cause to be constructed and which will be owned by City or its designee from its northerly connection with existing BNSF Railway mainline railroad track to its southerly connection with said mainline, to serve the Site and in an alignment and location determined by City with the approval of Company; and further provided, that the portions of the Railroad Lead Track located between each Clearance Point upon the Railroad Lead Track and its connection to the mainline may be owned by the BNSF Railway. "Site" means the undeveloped property at the south end of Pueblo located north of lime road and east of Interstate 25 which Company intends to acquire, annex into the City of Pueblo, and upon which it will construct the Facility. "Track Agreements" means all of the usual and customary agreements required in connection with industrial track projects and use of the Railroad Lead Track and connections thereto, including but not limited to Joint Use of Track Agreements, Industry Track Agreements, track maintenance agreements and similar instruments. 2. If Company is not in default hereunder, City will, after the Effective Date, make arrangements and expend City funds for the final design and construction of the Railroad Lead Track and associated switches and facilities, subject to and contingent upon the following conditions and covenants which Company agrees to perform and comply with: (a) Company shall convey to City by warranty deed marketable title to the westerly 120 feet of the Site for the purpose of establishing a utility corridor and location for construction of the Railroad Lead Track (the "Rail and Utility Corridor "). 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 board of Company approving this Agreement and the Track Agreements, and authorizing its officers to execute and deliver this Agreement, the Track Agreements, and related documents in the name of Company, (iii) this Agreement and the Track Agreements executed by authorized officers of Company, and (iv) evidence reasonably satisfactory to City that Company will commence manufacturing operations at the Facility. The date of the last to occur of the filings required under (i), (ii), (iii), and (iv) of this section 2(a) shall be referred to herein as "Closing ". If either the Effective date or Closing does not occur on or before June 1, 2012, 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. (b) As a condition precedent to the disbursement of City Funds for the construction of the Railroad Lead Track, Company shall have conveyed the Rail and Utility Corridor and shall file with the City Clerk, the documents described in subsection (a) above. 3. (a) After the Effective Date and subject to Company's compliance with section 2, City will spend approximately $2,200,000 for the construction of the Railroad Lead Track and will cause same to be constructed and installed in accordance with plans and specifications approved by the City. Subject to Company's execution of the usual and customary Track Agreements, the Railroad Lead Track will be completed and available for Company's reasonable and nonexclusive use by December 31, 2012 or the date Company complies with section 2(b), whichever occurs later, provided, however, that if by reason of war, acts of God, casualties, storms, labor strikes or other labor difficulties, shortage or inability to obtain materials or equipment, inability to obtain necessary easements or road crossing permits, governmental approvals or restrictions, BNSF Railway requirements and approvals, Union Pacific Railroad requirements and approvals, contractor delay, or other causes beyond City's reasonable control, City is prevented from complying with this section, then, while so prevented, the requirements of this section shall be suspended and City's obligations under this section shall be extended for so long as it is so prevented from complying with this section. Upon completion, Company will be granted the non - exclusive right to use the Railroad Lead Track without payment of access charges to City. After its completion, use of the Railroad Lead Track by Company is on an "AS IS" and "WITH ALL FAULTS" basis, and neither City nor its designee shall have any continuing responsibility to repair or maintain it. Company shall maintain and keep the portions of the Railroad Lead Track which it uses in good working condition and repair, and in good, clean and safe condition; provided however, that it will not be responsible for maintenance within the BNSF Railway right of way. Company shall indemnify, defend and hold City, its officers, employees and agents harmless from and against any and all claims of liability for any injury or damage to any person or property resulting from or arising out of the condition of the Railroad Lead Track (i) located within the Rail and Utility Corridor adjacent to the Site, (ii) located upon the Site or (iii) use of any portion of the Railroad Lead Track by Company or its officers, employees, agents or contractors. (b) After the effective Date and subject to Company's compliance with section 2, City will also spend up to but not exceeding $ 100,000.00 for improvements to any portion of Lime Road which has been annexed into the City of Pueblo ( the "Lime Road improvements "). (c) City may reconvey the Rail and Utility Corridor to third parties or grant easements therein, in City's sole and absolute discretion, but subject to Company's rights under this Agreement and the Track Agreements. 4. City and Company stipulate and agree that the total economic incentives provided by City for the benefit of Company under this Agreement is $1,400,000.00, computed as follows: City Funds for that portion of Railroad Lead Track serving the Site on a non- exclusive basis - $1,300,000.00, and Lime Road improvements — $100,000.00 (the "Total Economic Incentives "). 5. Company acknowledges and agrees that the primary purpose of City in entering into this Agreement and the sole benefit to the City for making the Total Economic Incentives available to Company hereunder is the creation of jobs. Therefore, Company represents, covenants, and agrees that during the Commitment Period as defined in Section 6(a) Company will continuously conduct its business operations at the Facility and employ not less than one hundred (100) Full -Time Employees at the Facility each of whose salary and /or hourly wage compensation including overtime, but not including benefits, shall be at least $26,000.00 per 3 year (or approximately $12.50/hour) (the "Employment Commitment "). Provided, however, that if by reason of war, acts of God, casualties, severe and unusual weather, labor strikes or other substantial causes beyond Company's reasonable control, Company is prevented from conducting operations at the Facility during any Quarter, then, while so prevented, the Company's Employment Commitment for that Quarter shall be suspended and the Commitment Period shall be comparably extended for so long as Company is so prevented from conducting operations. Company shall also use good faith efforts in accordance with its sound business practices to (i) employ residents of the County of Pueblo as Full -Time Employees including, without limitation, engaging in reasonable programs and posting of employment openings in the City of Pueblo, and (ii) engage engineers, architects, contractors and suppliers whose principle places of business are located in Pueblo County, Colorado, in all construction work for or related to the Facility. 6. Notwithstanding anything contained in this Agreement to the contrary, if Company shall fail to meet the Employment Commitment, Company shall pay to City compensating amounts calculated as follows: (a) During the seven (7) year period starting on the Employment Commitment Date and ending eighty -four (84) months thereafter (the "Commitment Period ") Company shall pay to City a compensating amount for each Quarter in the Commitment Period calculated by subtracting the number of Quarterly Employees from the commitment of one hundred (100) Full - Time Employees and then multiplying the result by $500.00. For example, if for the second Quarter of the third year after the Employment Commitment Date the number of Quarterly Employees is 90 the amount payable by Company to City on or before the fifteenth (15th) day of the next calendar month would be (100 - 90) x $500.00 = $5,000.00. (b) Company's compensating 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 Commitment Period at the office of the Director of Finance of City, 150 Central Main Street, Pueblo, Colorado, 81003, or such other person or location as the City may designate. All past due compensating payments shall bear interest at the rate of eight percent (8 %) per annum ( "Default Interest ") until paid. (c) Within fifteen (15) days after the end of each Quarter during the Commitment Period, Company will submit to City's Director of Finance Company's statements showing the Quarterly Employees for the preceding Quarter and their salary and/or hourly wages, including overtime, together with the basis upon which Quarterly Employees and Company's compensating payment, if any, were computed certified by an officer of the Company to be true and correct. For purposes of verifying Company's statement, City shall have access to Company's applicable records. (d) If for any period exceeding ninety (90) calendar days during the Commitment Period (including any extensions thereof), Company ceases operations at the Site or substantially and materially defaults in its Employment Commitment by having ten (10) or fewer Quarterly Employees, City may accelerate payment of Company's compensating 4 payments and Company shall pay to City in a lump sum the amount of all compensating payments which have become due and would become due during the remainder of the Commitment Period, calculated based upon there being no Quarterly Employees for the duration of the Commitment Period. 7. (a) Prior to instituting any court action to enforce Company's obligations under this Agreement, City shall notify Company in writing of its intention to institute such action. Company may request relief from its obligations 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 of City ( "City Council ") at which meeting 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 obligations. (b) City Council may or may not, in its sole and absolute discretion, relieve Company, in whole or in part, from Company's obligations. 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 section shall grant or be construed to grant to Company any right or claim to relief from its obligations 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 obligations, and no partial or single exercise of that right, shall constitute a waiver of that right. 8. In the event of any litigation arising under this Agreement, each party shall bear its own costs and reasonable attorney fees. Exclusive venue for any such litigation shall be Pueblo County, Colorado. All such litigation shall be filed in the District Court in and for the 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. This Agreement expresses the entire understanding 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 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. 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. Any notices hereunder shall be sufficiently given if given in writing personally or 5 mailed by first class, registered, or certified mail, postage prepaid, addressed: (a) if to City, City Manager, City of Pueblo, 200 South Main Street, Pueblo, Colorado, 81003, or (b) if to the Company, Rocla Concrete Tie, Inc., 701 West 48 Avenue, Denver, Colorado, Attention: Peter Urquhart, President, 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 section 11. 12. 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 City, which consent shall not be unreasonably withheld. Any assignment or attempted assignment of this Agreement by Company without such consent shall be null and void. No such assignment nor City's consent thereto shall release or discharge Company from any obligation or liability under this Agreement. 13. 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. 14. 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 providing the Total Economic Incentives hereunder, or any part thereof. 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. 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 obligations. Notwithstanding the foregoing, City acknowledges that if City defaults in any material covenant of this Agreement, Company will suffer injury which cannot be adequately remedied by an action at law for monetary damages and in such event Company shall have the right, without the showing of any special damages or posting of bond, to seek and be 6 granted specific enforcement thereof, but not damages of any type or nature. 16. 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. Neither party shall be, or hold itself out as, agent of the other or as joint venturers under this Agreement. 18. 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. 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. 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 Agreement. Executed at Pueblo, Colorado, the day and year first above written. [Remainder of page intentionally left blank.] 7 - [SEAL ] Pueblo, a Municipal Corporation Attest: 101 �� City Jerk wide of th- ity C • cil [SEAL] ROCLA CONCRETE TIE,INC., a Texas rporation i 4 Attest: B Y _ Name: Peter Urquhart Title: President 8 AGREEMENT THIS AGREEMENT is entered into as of April 9, 2012 between the City of Pueblo, a municipal corporation ( "City ") and Pueblo Municipal Rail Corporation, a Colorado nonprofit corporation ( "Corporation "), WITNESSETH: WHEREAS, Rocla Concrete Tie, Inc. ( "Rocla ") intends to conduct and operate a new manufacturing facility within an area proposed for annexation to City, and WHEREAS, City will advance funds to Corporation for construction and installation of a new Railroad Lead Track and associated facilities as hereinafter provided, which will be capable of allowing non - exclusive rail service for Rocla's adjacent facility, and WHEREAS, Corporation is willing to accept City's Funds for and undertake the acquisition, development and construction of the Railroad Lead Track; NOW, THEREFORE, in consideration of the foregoing and mutual covenants contained herein, City and Corporation agree as follows: 1. Property Acquisition. City and Corporation will cooperate in Corporation obtaining from the owners of the land where the Railroad Lead Track is to be located either marketable fee simple title to such land as described in Exhibit "A" hereto, (the "Land "), or an easement upon, over and across the Land for the construction, use, maintenance, repair and replacement of the Railroad Lead Track, including use by rail carriers and the public ( "Easement "). 2. City Funds. City will make available and advance to Corporation, as needed, an amount not to exceed $2,200,000 from the City's 1992 -2016 Sales and Use Tax Capital Improvement Projects Fund (the "City Funds ") to be used and expended solely for the following purposes: (a) Site preparation, drainage and grading of the Land; (b) Architect and engineering fees and geotechnical services ( "A & E fees ") for design and preparation of construction contract and plans and specifications for the construction of the Railroad Lead Track upon the Land, and for necessary switches to connect the Railroad Lead Track to mainline rails of the BNSF Railway; (c) Construction and installation of the Railroad Lead Track upon the Land and installation of said switches, including sitework, construction, all railroad services, insurance, flagging and safety and compliance with rail requirements. 3. Conditions to Advancement of City Funds. City Funds will be advanced and paid for the purposes set forth in paragraph 2 hereof, subject to and contingent upon the following conditions and covenants which Corporation agrees to meet and comply with: (a) All contracts, except those to be performed by BNSF Railway, for the construction of the Railroad Lead Track and associated switches shall be awarded after competitive proposals which allows qualified local contractors to participate in the competitive proposal procedures. (b) As a condition precedent to the disbursement of City Funds, Corporation shall file with the City's Director of Finance written requests for payment certified to be true and correct by an officer of Corporation or its representative 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 items generally described in paragraph 2, identifying the cost incurred and purpose thereof, including certificates of the architect or contractor that the work for which payment is sought has been completed and, if the request is for payment of A &E Fees, identifying the services performed, including invoices therefor. City may make payments on behalf of Corporation as disburser. (c) City Funds will not be disbursed or made available to Corporation under this Agreement until after (i) Corporation has acquired marketable fee simple title to the Land, (ii) Rocla and City has entered into an agreement under which Rocla has made an employment commitment which has been approved by Resolution of the City Council (the "Incentive Agreement "), and (iii) Corporation has executed and delivered to City the Promissory Note and Deed of Trust described in (d) below. (d) The entire amount of City Funds to be advanced by City to Corporation hereunder shall be and constitute a debt of Corporation to City and evidenced by Corporation's promissory note ( "Promissory Note "). The Promissory Note and Corporations' obligations thereunder shall be secured by a first deed of trust or mortgage lien upon the Land superior to all other liens and claims, and shall be approved by the City Attorney of City as to both form and content. The Promissory Note and Deed of Trust shall provide that Corporation's obligation in respect to the indebtedness secured thereby shall be limited solely to the value of the Land and improvements encumbered thereby, without right to any deficiency claim or judgment against Corporation. (e) Corporation shall cause the Railroad Lead Track and associated facilities to be constructed in accordance with plans and specifications approved by the City, and it shall undertake and perform all obligations of the City under Section 3(a) of the Incentive Agreement between City and Rocla. Corporation shall enter into all Track Agreements with BNSF Railway necessary for the connection and use of the Railroad Lead Track, as well as any Track Agreements with Rocla which are necessary or desirable to enable Rocla to enjoy non - exclusive reasonable use of the Railroad Lead Track. (f) Corporation shall manage, maintain and control the use of the Railroad 2 Lead Track, and is hereby authorized to enter into additional Track Agreements with other users and to charge all users thereof use and maintenance fees to cover the cost of operation, maintenance and repair of the Railroad Lead Track. 4. Inalienability of Land. Corporation will not voluntarily or involuntarily mortgage, encumber, lease or sublease, or extend or renew any lease or sublease, assign, sell or otherwise transfer the Land, Easement or improvements thereon, or any part thereof, without the prior written consent of the City Council of City. Any such mortgage, encumbrance, lease or sublease or renewal or extension, assignment, sale or other transfer without the prior written consent of the City Council of City shall be void and unenforceable. The City Council of City does hereby consent to Corporation entering into Track Agreements for use of the Railroad Lead Track. Upon City's request to Corporation, Corporation will convey marketable fee simple title to the Land, Easement and improvements to City, or such person or entity as City may designate, by special warranty deed free of all liens and encumbrances, except the Deed of Trust, general taxes for the year in which such conveyance takes place, and liens and encumbrances created or caused by the acts or defaults of City. The covenants of this paragraph shall be and construed to be covenants running with the land, and Corporation shall at the request of City execute and record an instrument to that effect in form and substance approved by the City Attorney. 5. Events of Default. The following shall be "events of default" under this Agreement and the term "event of default" and "default" shall mean any one or more of the following events: (a) Failure of Corporation to observe and perform any covenant, condition or agreement on its part to be observed or performed under this Agreement, Promissory Note, Deed of Trust, or a Track Agreement other than as referred to in (a) above, for a period of sixty (60) days after written notice specifying such failure and requesting that it be remedied is given to Corporation by City; provided, however, that if the failure stated in the notice cannot be corrected within the sixty day period and corrective action is instituted by Corporation within the sixty day period and diligently pursued until the failure is corrected, no event of default shall have happened. 6. Remedies on Default. Whenever any event of default shall have happened and be continuing, City shall have the right, at its option, without any further notice or demand, to take whatever action at law or in equity may appear necessary or desirable to enforce its rights and Corporation's obligations hereunder, including without limitation, foreclosure of the Deed of Trust. No remedy herein conferred or reserved to City is intended to be exclusive and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement and the Deed of Trust or now or hereafter existing at law or in equity. No delay or omission to exercise any right or power occurring upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right or power may be exercised from time to time and as often as may be deemed expedient. 7. Entire Understanding. This Agreement expresses the entire understanding of the 3 parties and supersedes any and all prior dealings and commitments with respect to the subject matter of this Agreement and may not be amended except in writing signed by City and Corporation. 8. Applicable Law. This Agreement shall be construed in accordance with and governed by the laws of the State of Colorado, without regard to conflict of laws principles. 9. Notices. Any notices hereunder shall be sufficiently given if given personally or mailed by certified mail, postage prepaid, addressed: (a) if to City: City Manager, City of Pueblo, 200 S. Main Street, Pueblo, Colorado, 81003, with a copy to City Attorney, 503 N. Main Street, Suite 203, Pueblo, Colorado, 81003, or (b) if to the Corporation: Pueblo Municipal Rail Corporation, 150 Central Main Street, Pueblo, Colorado, 81003, Attention: President, or to such other address as either party shall specify in written notice given to the other party. 10. Representations of Corporation. (a) The persons signing this Agreement, Promissory Note and Deed of Trust in the name of and on behalf of Corporation represent and warrant that they and Corporation have the requisite power and authority to enter into, execute, and deliver this Agreement, Promissory Note and Deed of Trust, and that this Agreement, Promissory Note and Deed of Trust are valid and legally binding obligations of Corporation enforceable against Corporation in accordance with their terms. (b) Corporation 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 by City or City's advancement of City Funds to Corporation 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, or to seek such other remedies legally available to City, which remedies shall be cumulative. 11. City's Liability. In no event shall City, its officers, agents or employees be liable to Corporation 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, Corporation hereby waives and discharges City, its officers, agents and employees from any and all claims for any and all such damages. City shall not be liable for the acts of Corporation, nor for any liability whatsoever arising under any Track 4 Agreement entered into by Corporation. 12. Severability. 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. 13. No Third Party Beneficiary. The provisions of this Agreement are and will be for the benefit of City and Corporation only and not for the benefit of any third party, and accordingly, no third party shall have any right or remedy hereunder or the right to enforce any provision of this Agreement. 14. Binding Effect. Time is of the essence hereof. This Agreement shall be binding up and inure to the benefit of the City and Corporation and their respective successors. Corporation may not assign this Agreement nor any of its rights hereunder. 15. Execution in Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. Executed at Pueblo, Colorado, the day and year first above written. PUEBLO, A MUNICIPAL CORPORATION PUEBLO MUNICIPAL RAIL CORPORATION • BY �I /LIB By -,..10A613 _m- Pre sid- t o the ' ity Council P -siden ,.- Attest:.N., Attest: f City Jerk Secretary Approved as to form: r — 7 -" Cr r bileti/V" - City Atto 5 EXHIBIT A A 125 foot wide strip of land along the entire west side of the following described parcel and which is immediately adjacent to the right -of -way of the Burlington Northern and Santa Fe Railroad: A portion of the SE 1/4 of Section 36, Township 21 South, Range 65 West and a portion of the NE 1/4 of Section 1, Township 22 South, Range 65 West of the 6th P.M. County of Pueblo, State of Colorado and being more particularly described as follows: Commencing at the Northeast corner of Lot 1, Vestas Towers America, according to the recorded plat thereof, as filed for record at Reception No. 1821580 in the Pueblo County records; said point also being on the Westerly right -of -way line of the Burlington Northern and Santa Fe Railroad (Line Segment No. 0477); thence S. 03 °00'08" W., along the Easterly line of said Lot 1 and the Westerly right -of- way line of the Burlington Northern and Santa Fe Railroad, a distance of 1361.98 feet to the Point of Beginning; thence S. 86 °59'52" E., a distance of 325.00 feet; thence S. 03 °00'08" W., a distance of 1393.87 feet to a point on the South line of the SE 1/4 of said Section 36, Township 21 South said point also being on the North line of the NE 1/4 of Section 1, Township 22 South; thence S. 88 °25'10" E., along said South line of the SE 1/4 of Section 36, Township 21 South and the North line of the NE 1/4 of Section 1, Township 22 South, a distance of 1000.31 feet; thence S. 03 °00'08" W., a distance of 2455.66 feet to a point on the Northerly right -of -way line of Lime road, according to the recorded Quit Claim Deed, as filed for record at Reception No. 1744576 in the Pueblo County records; thence S. 41°45'01" W., along the Northerly right -of -way line of said Lime road, a distance of 190.30 feet to a point on the South line of the NE 1/4 of said Section 1, Township 22 South; thence N. 88 °31'41" W., along said South line of the NE 1/4 of said Section 1, Township 22 South, a distance of 1206.32 feet to a point on the Easterly line of said Lot 1 and the Westerly right -of -way line of the Burlington Northern and Santa Fe Railroad (Line Segment No. 0477); thence N. 03 °00'08" E., along the Easterly line of said Lot 1 and the Westerly right -of -way line of the Burlington Northern and Santa Fe Railroad, a distance of 4005.35 feet to the Point of Beginning. EXCEPTING THEREFROM: All of the Burlington Northern and Santa Fe Railroad right -of -way. 6