HomeMy WebLinkAbout12864RESOLUTION NO. 12864
A RESOLUTION APPROVING AN EMPLOYMENT AGREEMENT
AND A FIRST AMENDMENT TO A SUBORDINATION
AGREEMENT BETWEEN PUEBLO, A MUNICIPAL
CORPORATION, AND BIG R HOLDINGS, INC., A COLORADO
CORPORATION, RELATING TO A JOB CREATING CAPITAL
IMPROVEMENT PROJECT, AUTHORIZING THE PRESIDENT
OF THE CITY COUNCIL TO EXECUTE SAID AGREEMENTS
AND TRANSFERRING $600,000 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 $600,000 for the
job creating capital improvement project with Big R Holdings, Inc. (“Big R”) described in
the attached Agreement, meets and complies with the criteria and standards
established by Section 14-4-85 of the Pueblo Municipal Code and will create
employment opportunities justifying the expenditure of public funds. The City Council
further finds and determines that it is appropriate for the City to enter into the attached
First Amendment to Subordination Agreement.
SECTION 2.
The Agreement dated December 23, 2013 between Pueblo, a Municipal
Corporation and Big R 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 First Amendment to Subordination Agreement
between Pueblo, a Municipal Corporation and Big R relating to a job creating capital
improvement project, a copy of which is attached hereto ("Subordination Agreement"),
having been approved as to form by the City Attorney, is hereby also approved. The
President of the City Council is authorized to execute and deliver the Agreement and
the Subordination 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.
Funds in the aggregate amount of $600,000 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.
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 to Big R in the manner
described in the Agreement.
SECTION 4.
The officers and staff of the City are directed and authorized to perform any and
all acts consistent with the intent of this Resolution and attached Agreement and
Subordination Agreement which are necessary or desirable to effectuate the
transactions described therein.
SECTION 5.
This Resolution shall become effective immediately upon final passage.
INTRODUCED: December 23, 2013
BY: Sandy Daff
Background Paper for Proposed
RESOLUTION
DATE: December 23, 2013 AGENDA ITEM # Q-1
DEPARTMENT: Law Department
Daniel C. Kogovsek, City Attorney
TITLE
A RESOLUTION APPROVING AN EMPLOYMENT AGREEMENT AND A FIRST AMENDMENT
TO A SUBORDINATION AGREEMENT BETWEEN PUEBLO, A MUNICIPAL CORPORATION,
AND BIG R HOLDINGS, INC., A COLORADO CORPORATION, RELATING TO A JOB
CREATING CAPITAL IMPROVEMENT PROJECT, AUTHORIZING THE PRESIDENT OF THE
CITY COUNCIL TO EXECUTE SAID AGREEMENTS AND TRANSFERRING $600,000 FROM
THE 1992-2016 SALES AND USE TAX CAPITAL IMPROVEMENT PROJECTS FUND
THEREFOR
ISSUE
Should City Council approve an employment agreement and a First Amendment to a
Subordination Agreement with Big R Holdings, Inc., a Colorado corporation (“Company”) with an
seven year employment commitment of thirty (30) additional employees and the expenditure of
$600,000 from the 1992-2016 Sales and Use Tax Capital Improvement Projects Fund (“Half
Cent Tax Fund”)?
BACKGROUND
The Company relocated its corporate headquarters and distribution center to Pueblo in 2010
and currently employs 40 persons. As an incentive for the 2010 relocation, the City provided the
Company with $564,000 in Half Cent Tax Funds. The Company is proposing an expansion of its
Pueblo facilities, which will result in 30 new jobs for 7 years.
The additional $600,000 incentive payment will be used to expand the Company’s offices and
distribution center. The City will retain a second mortgage on the Company’s headquarters,
located at 350 Keeler Parkway, Pueblo, CO 81001. In addition, the Company’s employment
commitment of 70 employees is secured by a $1,164,000 personal guarantee signed by B.
David Blain, Jr., the Company’s principal owner. The Company’s full-time employees’ annual
compensation and benefits shall average at least $48,416. The Company qualifies for incentives
under the City’s Half Cent Tax Fund criteria ordinance because the vast majority of its products
will be sold outside of Pueblo County.
RECOMMENDATION
PEDCO recommends that City Council approve the agreement.
FINANCIAL IMPACT
Payment of $600,000 in Half Cent Tax Funds to Big R Holdings, Inc.
AGREEMENT
THIS AGREEMENT entered into as of December 23, 2013 between Pueblo, a municipal
corporation (the "City ") and Big R Holdings, Inc., a Colorado corporation (the "Company ").
WHEREAS, Company has expressed a willingness to expand a distribution center and its
business administration offices within the City of Pueblo or the Pueblo Memorial Airport
Industrial Park, and in furtherance thereof has through the Pueblo Economic Development
Corporation made application for funds with the City, and
WHEREAS, the City has approved such application and will make funds available to
Company subject to and upon the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the foregoing and mutual covenants contained
herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, City and Company agree as follows:
1. The following terms as used in this Agreement shall have the following meaning
unless the context clearly indicates otherwise:
"Continuing Guaranty" means the Continuing Guaranty attached hereto.
"Employment Commitment Date" means January 1, 2017.
"Equipment" means new business personal property and trade fixtures (including, but not
limited to forklifts, trucks, trailers, pickups, fixtures, racking, computers, office furniture, fax
machines, scanners, copiers, and other tangible personal property installed, kept, maintained and
used by Company in or in conjunction with the Facility, or a new facility, having an exhaustible
useful life of more than five (5) years which can be determined or estimated with reasonable
accuracy. "Equipment" does not mean computer software or computer software development
costs. "Equipment" also includes the cost of building remodeling, including but not limited to
electrical, plumbing, lighting, heating, cooling and other building improvements, new offices,
docks, doors, paint and other direct improvements to the Facility.
"Facility" means the distribution center and business administration offices located at the
Pueblo Memorial Airport Industrial Park, having a street address of 350 Keeler Parkway, Pueblo,
Colorado, 81001, or such other facility located within the City of Pueblo or the Pueblo Memorial
Airport Industrial Park, wherein Company will conduct its business operations.
"Full -Time Employee" means a person who actually performs work at the Facility for not
less than thirty -five (35) hours per week whether employed by Company or by an outside entity
acting as an agency to provide Full -Time Employees for Company.
"Quarter" means three consecutive calendar months commencing January 1, April 1, July
1 and October 1 of each calendar year.
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"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 business days in such Quarter.
2. If Company is not in default under this Agreement, City will advance to or for the
benefit of Company funds in the amount of $600,000.00 (the "City Funds "), subject to and
contingent upon the following conditions and covenants which Company agrees to perform and
comply with:
(a) City Funds will be advanced by City to Company for the expansion of or
improvements to its Facility or a new facility or for the acquisition of Equipment by Company at
fair market value from a reputable vendor in an arms - length transaction. Acquisition of
equipment from any person or entity related to or a subsidiary of Company is not an arms- length
transaction.
(b) 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(s) of the
governing board of Company approving this Agreement and the First Amendment to Deed of
Trust, and authorizing its officers to execute and deliver this Agreement and the First
Amendment to Deed of Trust and related documents in the name of Company, (iii) executed
Continuing Guaranty, and (iv) evidence reasonably satisfactory to City that Company will
expand business operations at the Facility. The date of the last to occur of the filings required
under (i), (ii), (iii) and (iv) of this paragraph 2(b) shall be referred to herein as "Closing." If
Closing does not occur on or before March 31, 2014, 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.
(c) As a conditions precedent to the disbursement of City Funds for the
acquisition of Equipment or remodeling or construction costs, Company shall file (i) with the
City Clerk the documents described in Paragraph (b) above, and (ii) with the City's Director of
Finance written request for payment certified to be true and correct by an officer of Company
that the amounts included in the request for payment have not been included in any prior request
for payment and are for the actual cost of construction or remodeling or for Equipment,
identifying the construction or remodeling or Equipment for which payment is sought, including
invoices therefore and certificates that such construction has occurred or the delivery and
installation of Equipment in the Facility, together with documentation, satisfactory to City,
establishing such Equipment has an exhaustible useful life of five (5) or more years. All City
Funds, if any, received by Company shall be deposited in a separate account and held in trust by
Company for the sole and only purpose of paying for construction or remodeling or the purchase
of Equipment.
3. Company acknowledges and agrees that the primary purpose of City in entering
into this Agreement and the sole benefit to the City for making City Funds available to Company
hereunder is the creation of jobs. Therefore, Company represents, covenants, and agrees that
Company will on and after the Employment Commitment Date continuously conduct its business
operations at the Facility and employ not less than seventy (70) Full -Time Employees at the
Facility whose annual compensation shall average at least $48,416.00. Company will use good
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faith efforts in accordance with its sound business practices to employ residents of the City of
Pueblo as Full -Time Employees including, without limitation, engaging in reasonable programs
and posting of employment openings in the City of Pueblo (collectively the "Employment
Commitment ").
4. Notwithstanding anything contained in this Agreement to the contrary, if
Company shall for any reason default in its Employment Commitment set forth in paragraph 3,
Company shall repay to City a pro -rata share of the City Funds advanced by City under
paragraph 2 hereof based upon the number of Full -Time Employees employed by Company at
the Facility (the "Repayment Obligation "), as follows:
(a) During the seven (7) year period starting on the Employment Commitment
Date and ending eighty -four (84) months thereafter (the "Repayment Period ") Company shall
pay to City an amount each Quarter equal to the Quarterly Employees less than seventy (70)
Full -Time Employees employed at the Facility by Company multiplied by $593.88 (the
"Company's Quarterly Payments "). For example, if for the second Quarter of the third year after
the Employment Commitment Date such Quarterly Employees is 60, the amount payable by
Company to City on or before the fifteenth (15th) day of the next calendar month would be (70 -
60) x $593.88 = $5,938.80.
(b) Company's Quarterly Payments, if any, shall be paid to the City without
notice, demand, deduction or setoff on or before the fifteenth (15th) day of the month after the
end of each Quarter during the Repayment Period and for one month thereafter at the office of
the Director of Finance of City, 1 City Hall Place, Pueblo, Colorado, 81003, or such other person
or location as the City may designate. All past due Company's Quarterly Payments shall bear
interest at the rate of eight percent (8 %) per annum ( "Default Interest ") until paid.
(c) Within fifteen (15) days after the end of each Quarter after the
Employment Commitment Date and for one calendar month after the Repayment Period,
Company will submit to City's Director of Finance Company's statements showing the Quarterly
Employees for the preceding Quarter and their annual salary, together with the basis upon which
Quarterly Employees and Company's Quarterly Payment, if any, were computed certified by an
officer of the Company to be true and correct. For purposes of verifying Company's
employment and salaries, City shall have access to Company's records relating to Company's
employees employed at the Facility.
(d) Notwithstanding anything contained in this Paragraph 4 to the contrary, if
Company defaults in its Employment Commitment and Company's Repayment Obligation, and
such default is not cured within sixty (60) days after written notice specifying the default is given
by City to Company, then in such event, the entire balance of Company's Repayment Obligation
shall become due and payable, without notice, notice being hereby expressly waived, together
with Default Interest from the date of default, and for such purpose, the entire balance of
Company's Repayment Obligation shall be an amount equal to 70 times $593.88 multiplied by
the remaining Quarters of the Repayment Period from and after the default date plus the amount
of Company's unpaid Quarterly Payments, if any, but in no event more than the amount of City
Funds advanced by City under paragraph 2 hereof plus Default Interest as herein provided.
Except as may be agreed by the City Council in its /their sole discretion (as contemplated under
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4811- 8237 - 5446.6
paragraph 6(b) hereof), Company's Repayment Obligation is absolute and unconditional and
shall not be abated, reduced, diminished, modified, withheld or otherwise offset for any cause or
reason whatsoever.
5. Company's Repayment Obligation under this Agreement, if any is owed, shall be
deemed to be a debt of Company payable to City until Company performs and discharges its
obligations hereunder including its Employment Commitment contained in Paragraph 3 and its
Repayment Obligation contained in Paragraph 4. Company's obligations under this Agreement,
including its Employment Commitment and Repayment Obligation, shall be secured by an
appropriate Deed of Trust to real estate owned by the Company. Contemporaneously with the
execution of this Agreement, Company shall execute and deliver to City, a second mortgage
security interest in the Facility, evidenced by a First Amendment to Deed of Trust, all in form
and content approved by City's Attorney (the "First Amendment to Deed of Trust ").
6. (a) Prior to instituting any proceeding to enforce Company's Repayment
Obligation under Paragraph 4, City shall notify Company in writing of its intention to institute
such proceedings. Company may request relief from its Repayment Obligation by delivering to
City within twenty (20) days after date of City's notice, Company's written request for relief
specifying the grounds upon which such relief is sought together with documents supporting said
grounds. Within ninety (90) days after receipt of Company's request, City will schedule a
meeting with the City Council at which Company may appear. City will notify Company of the
time and place of the meeting. Failure of Company to timely deliver its complete written request
for relief or to appear at the scheduled meeting with the City Council shall entitle City to
immediately institute proceedings to enforce Company's Repayment Obligation.
(b) City Council may or may not, in its sole and absolute discretion, relieve
Company, in whole or in part, from Company's Repayment Obligation. Any action taken by the
City Council relating to a request for relief shall be final and binding on Company, and not
subject to judicial review. Any such action by City Council is, and shall constitute, a legislative
measure. Nothing contained in this paragraph 6 shall grant or be construed to grant to Company
any right or claim to relief from its Repayment Obligation or a hearing with respect thereto.
(c) No delay by the City in scheduling a meeting, or failure by City to
exercise its right to enforce this Agreement, including Company's Repayment Obligation, and no
partial or single exercise of that right, shall constitute a waiver of that right.
7. In the event of any litigation arising under this Agreement, the court shall award
to the prevailing party its 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, 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.
8. 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
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4811 - 8237 - 5446.6
I _
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.
9. 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.
10. Any notices hereunder shall be sufficiently given if given in writing personally or
mailed by first class, registered, or certified mail, postage prepaid, addressed:
(a) if to City, City Manager, City of Pueblo, 200 S. Main Street, Pueblo, CO
81003 with a copy to City Attorney, 1 City Hall Place, Pueblo, Colorado 81003, or
(b) if to the Company, 350 Keeler Parkway, Pueblo, Colorado, 81001,
attention Adam Carroll.
or to such other person or address as either party shall specify in written notice given to the other
party pursuant to the provisions of this paragraph 10.
11. 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 (except for assignments to entities controlling,
controlled by or under common control of the Company, which the Company can do solely upon
providing written notice to the City) without the express written consent of the City, which
consent may be arbitrarily withheld, conditioned or delayed. Any assignment or attempted
assignment of this Agreement by Company without such consent shall be null and void.
However, if Company proposes to assign this Agreement to a purchaser of its business, the
transaction is an arms - length transaction, the purchaser assumes and agrees to perform
Company's obligations under this Agreement, and the assignment shall not waive, release or
discharge Guarantor's obligations under the Continuing Guaranty, then, in such events, the
assignment may be made with the express written consent of the City, which consent may not be
unreasonably withheld. The City shall have the right to determine that said proposed purchaser
is credit worthy, has sufficient business experience in the retail sector, and is capable of
performing Company's obligations under this Agreement.
12. 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.
13. Company represents and warrants that no person, entity, or organization has been
employed or retained or will receive or be paid, directly or indirectly, any commission,
percentage, contingent fee or any other remuneration, payment or receipt of which is contingent
upon approval of this Agreement or City's advancement of City Funds to Company hereunder.
For breach or violation of this warranty, City shall have the right to terminate this Agreement, or
recover the full amount of such commission, percentage, contingent fee or other remuneration,
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4811 - 8237 - 5446.6
and /or to seek such other remedies legally available to City, which remedies shall be cumulative.
14. 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 Repayment Obligation under paragraph 4 hereof with respect to the amount of City
Funds actually advanced or paid by City to or for the benefit of Company pursuant to paragraph
2 hereof.
Notwithstanding the above, in the event of breach of this Agreement by the City,
Company shall have the right to request specific performance of this Agreement by the City, but
not damages.
15. 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.
16. Neither party shall be, or hold itself out as, agent of the other or as joint venturers
or partners under this Agreement.
17. 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.
18. 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.
19. This Agreement may be executed in any number of counterparts, and each such
counterpart shall be deemed for all purposes to be an original, and all such counterparts shall
together constitute but one and the same original.
20. Company hereby assumes and agrees to pay the obligations of Big R of Lamar,
Inc. in the Agreement between the City and Big R of Lamar, Inc. dated October 1, 2009.
Company further agrees to be bound by all conditions and covenants in the Agreement between
the City and Big R of Lamar, Inc. dated October 1, 2009.
Executed at Pueblo, Colorado, the day and year first above written.
[SEAL] Pueblo, a Municipal Corporation
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4811- 8237 - 5446.6
[ S E iA L, �_° Pueblo, a Mun <_ . rp, ation
fittest: '^* ®, - t1,,_,. By r _ a ,,
a- j2 c T Clerk I / en` -City Council
[ S E AL] BIG R HOLD! GS, INC.,
a Colorado co ration
A���1_ /_�•_ _ By
Name: Karla Blain Name: Bryce David Blain
Title: Secretary Title: President
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4811 - 8237 - 5446.7
CONTINUING GUARANTY
FOR VALUABLE CONSIDERATION, the receipt and sufficiency of which is hereby
acknowledged, and as inducement to the City of Pueblo, a municipal corporation (the "City ") to
enter into the attached Agreement dated December 23, 2013 between City and Big R Holdings,
Inc., a Colorado corporation (the "Company ") (the "Agreement ") the undersigned Bryce David
Blain (the "Guarantor ") unconditionally guarantees and promises to pay to City, or order, on
demand, in lawful money of the United States, the full amount of Company's Repayment
Obligation described in and in accordance with the terms and provisions of Paragraph 4 of the
Agreement, together with any repayment obligation that may remain outstanding by Big R of
Lamar, Inc. ( "Big R Lamar ") to the City pursuant to that certain agreement between the City and
Big R Lamar dated October 1, 2009 (the "2009 Agreement ") (collectively, the "Indebtedness ").
This Guaranty replaces in its entirety that certain Continuing Guaranty provided by Mike Carroll
and the Guarantor dated as of October 1, 2009.
The liability of Guarantor under this Guaranty shall not exceed at any one time the
principal sum of $1,164,000. This is a continuing irrevocable guaranty relating to the
Indebtedness, including successive transactions which shall either continue the Indebtedness or
from time to time modify or renew it; provided, however, that any payment by Guarantor shall
reduce Guarantor's maximum obligation hereunder.
The obligations of Guarantor hereunder are independent of the obligations of Company,
and a separate action or actions may be brought and prosecuted against Guarantor, whether action
is brought against Company or whether Company be joined in any such action or actions.
Guarantor acknowledges that the payment of the Indebtedness may extend beyond six (6) years
from the date of this Agreement. Guarantor hereby waives any defense to the enforcement of this
Guaranty based upon laches or any statutory or other period of limitation, provided, however, that
any such action to enforce this Guaranty shall be commenced on or before December 31, 2030.
Guarantor authorizes the City, without notice or demand and without affecting his liability
hereunder, from time to time to (a) renew, compromise, extend, accelerate or otherwise change
the time for payment of, or otherwise change or modify the terms of the Indebtedness or any part
there -of; (b) take and hold security for the payment of this Guaranty or the Indebtedness
guaranteed, and exchange, enforce, waive and release any such security; (c) apply such security
and direct the order or manner of sale thereof as City in its discretion may determine; and (d)
release or substitute any one or more of the Guarantor. City may without notice assign this
Guaranty in whole or in part.
Guarantor waives any right to require City to (a) proceed against Company; (b) proceed
against or exhaust any security held from Company; or (c) pursue any other remedy in City's
power whatsoever. Guarantor waives any defense arising by reason of any disability or other
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4817 -1924- 6358.7
•
defense of Company or by reason of the cessation from any cause whatsoever of the liability of
Company. Until the Indebtedness of Company to City shall have been paid in full, Guarantor (a)
shall have no right of subrogation relating to any amounts paid by Guarantor under this Guaranty
and (b) waives (i) any right to require that the City enforce any remedy which City now has or
may hereafter have against Company and (ii) any benefit of, and any right to participate in, any
security now or hereafter held by City. Guarantor waives all presentments, demands for
performance, notices of non - performance, protests, notices of protest, notice of dishonor, and
notices of acceptance of this Guaranty.
Guarantor agrees that it is not necessary for City to inquire into the powers of Company or
the officers, directors, or agents acting or purporting to act on its behalf, and the Indebtedness
made or created in reliance upon the professed exercise of such powers is guaranteed hereunder.
Guarantor agrees to pay a reasonable attorneys' fee and all other costs and expenses which
may be incurred by City in the enforcement of this Guaranty.
Guarantor agrees that this Guaranty is a contract entered into and to be performed in
Pueblo County, Colorado. The District Court for the County of Pueblo, State of Colorado shall
have exclusive jurisdiction over any suit or action which involves this Guaranty and exclusive
venue for any such suit or action shall be Pueblo County, Colorado. Guarantor consents to the
personal jurisdiction of that Court and agree that service of process may be made upon Guarantors
either within or without the State of Colorado. To the extent permitted by law, Guarantor waives
all rights to jury trial.
Any notice 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, CO
81003, with a copy to City Attorney, 1 City Hall Place, Pueblo, CO 81003, or
(b) if to Guarantor, to Dave Blain, Big R Holdings, Inc., 350 Keeler Parkway,
Pueblo, CO 81001.
or to such other addresses as any party hereto shall specify in written notice to the other parties.
Time is of the essence hereof. This Guaranty shall be binding upon and inure to the
benefit of City and Guarantor and their respective heirs, personal representatives, successors and
assigns. The plural shall include the singular.
IN WITNESS WHEREOF the undersigned Guarantor has executed this Guaranty in
Pueblo, Colorado this So day of December, 2013.
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4817 -1924- 6358.7
Name: Bryce Dav d Blain
Signature:
Address: 350 Keeler Parkway Pueblo, CO 81001
STATE OF COLORADO )
ss.
COUNTY OF PUEBLO )
The foregoing instrument was acknowledged before me this ,20` day of December,
2013 by Bryce David Blain.
Witness my hand and official seal.
My commission expires: q - 1 — 2131 1 1 .
[SEAL] _ \
r���•T..... ��1 1 Notary Public
•
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�% ` ` O •;. 1 Q: . ...." - OP
My Commission Expires 08/17/2014
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4817 -1924- 6358.7
FIRST AMENDMENT TO SUBORDINATION AGREEMENT
This first amendment to subordination agreement ( "Subordination First Amendment ") dated
effective as of December 23, 2013, amends to the extent provided herein that certain
subordination agreement ( "Subordination Agreement ") dated February 8, 2011 made by the City
of Pueblo ( "Subordinator ") for the benefit of Wells Fargo Bank, N.A. ( "New Lender "). Terms
not otherwise defined herein shall have the meanings assigned to them in the Subordination
Agreement.
RECITALS
WHEREAS, pursuant to the terms of that certain agreement dated October 1, 2009
between the Subordinator and Big R of Lamar, Inc., a Colorado corporation ( "Big R Lamar "),
the Subordinator advanced funds in the amount of $564,000 to Big R Lamar (the "2009
Agreement "); and
WHEREAS, the obligations of Big R Lamar under the 2009 Agreement are secured by a
Deed of Trust granted by Big R Properties, LLC, a Colorado limited liability company
( "Grantor ") pursuant to which Subordinator is the beneficiary, recorded on December 21, 2009
in the Official Records of Pueblo County at Reception No. 1828194. The Deed of Trust is
amended by that certain First Amendment to Deed of Trust dated of even date herewith; and
WHEREAS, the First Amendment to Deed of Trust provides that in addition to securing
the obligations of Big R Lamar under the 2009 Agreement, the Deed of Trust now secures the
obligations of Big R Holdings, Inc., a Colorado corporation ( "Holdings ") under that certain
agreement between Holdings and the Subordinator dated of even date herewith (the "2013
Agreement "), whereby Subordinator will advance to or for the benefit of Holdings funds in the
amount of $600,000; and
WHEREAS, both Big R Lamar and Holdings are affiliates of Grantor, and Grantor has
determined that entering into this First Amendment is in Grantor's interest.
NOW THEREFORE, Subordinator hereby agrees as follows:
1. Subordinator hereby covenants and agrees for the benefit of New Lender that the
Deed of Trust as amended by the First Amendment to Deed of Trust, and all of Subordinator's
rights thereunder and under that certain Continuing Guaranty made by Bryce David Blain, Jr.
dated as of December 2-3, 2013, are and shall be in all respects subordinate, secondary, inferior
and junior to the lien of the New Deed of Trust of New Lender, recorded on February 14, 2011
in the Official Records of Pueblo County at Reception No. 1867338 and to the rights of Wells
Fargo Bank, N.A. ( "Wells Fargo "), under that certain Credit and Security Agreement by and
among Wells Fargo and (among other entities) Big R Lamar dated as of October 30, 2009, as
amended by that certain Amended and Restated Credit and Security Agreement by and between
Wells Fargo and Holdings dated as of March 15, 2013 (together, the "2009 and 2013
Agreements ") and all deeds of trust, security agreements and other documents and instruments
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4834- 8283 - 3942.5
executed and delivered in connection with the 2009 and 2013 Agreements, as all of such
agreements, documents and instruments may be amended, modified, supplemented or extended
from time to time.
2. Except as modified in this Subordination First Amendment, all other terms and
provisions of the Subordination Agreement are and shall remain in full force and effect as
written.
SUBORDINATOR:
City of Pueblo, a municipal corporation
By: s
ame: S G. Nawrocki
Title: President of the City Council
STATE OF COLORADO )
ss.
COUNTY OF PUEBLO )
The foregoing instrument was acknowledged before me this 23rd_day of December,
2013, by Stephen G. Nawrocki as President of the City Council of the City of Pueblo, a
municipal corporation.
My commission expires: Witness my hand and official seal:
itt4/1.e.17 .a?ci *76 1 7 4 'War
OTARY PUBLIC IN AND FOR
THE STATE OF COLORADO
JJEANETTE R. GONZALES
NOTARY PUBLIC
STATE OF COLORADO
NOTARY ID 20134016224
MY COMMISSION EXPIRES MARCH 29, 2017
2
4834 - 8283 - 3942.5
Reception 1966908
02/05/2014 02:29 :18 PM
re: Rso ution 12864
re: Deed of Trust Reception 1828194
FIRST AMENDMENT TO DEED OF TRUST
This first amendment to deed of trust ( "First Amendment ") dated effective as of December 23,
2013, amends to the extent provided herein that certain deed of trust ( "Deed of Trust ") dated
December 18, 2009 granted by Big R Properties, LLC, a Colorado limited liability company (the
"Grantor ") to the Public Trustee of the County or City and County in which the following
property (the "Subject Property ") is situated, in the State of Colorado:
Lot 33, Pueblo Memorial Airport Industrial Park Subdivision, Pueblo County, Colorado,
commonly known as 350 Keeler Parkway, Pueblo, CO 81001
RECITALS
WHEREAS, as referenced therein, the Deed of Trust was granted by Grantor to secure
Big R of Lamar, Inc.'s performance of all obligations under that certain agreement dated October
1, 2009 between Big R of Lamar, Inc. and the City of Pueblo (the "2009 Agreement "). The City
of Pueblo is the Beneficiary under the Deed of Trust and this First Amendment. As indicated in
the Deed of Trust, wherever the Deed of Trust references the terms "promissory note," "note," or
"indebtedness," such words shall, individually or jointly, be deemed and construed to be the
2009 Agreement; and
WHEREAS, the Grantor is an affiliate of each of the Grantor and Big R Holdings, Inc., a
Colorado corporation ( "Holdings ") and Grantor has determined that entering into this First
Amendment is in Grantor's interest; and
WHEREAS, Holdings and the City of Pueblo will enter into an agreement (the "2013
Agreement ") whereby the City of Pueblo (also referred to as "Pueblo, a municipal corporation"
or the "City ") will advance to or for the benefit of Holdings funds in the amount of $600,000
(referenced in the 2013 Agreement as the "City Funds "), subject to and contingent upon the
conditions and covenants set forth in the 2013 Agreement with which Holdings agrees to comply
and perform; and
WHEREAS, the City of Pueblo requires as a condition to the 2013 Agreement and to
advancing the City Funds thereunder that the obligations of Holdings under the 2013 Agreement
be secured by the Subject Property; and
WHEREAS, this First Amendment is hereby executed by Grantor to secure the
obligations of Holdings to the City of Pueblo under the 2013 Agreement.
NOW THEREFORE, Grantor hereby agrees as follows:
1. The Deed of Trust, as amended by this First Amendment, shall continue to secure
the obligations of Big R of Lamar, Inc. to the City of Pueblo under the 2009 Agreement.
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2. The Deed of Trust, as amended by this First Amendment, also shall secure the
obligations of Holdings to the City of Pueblo under the 2013 Agreement.
3. Except as modified in this First Amendment, all other terms and provisions of the
Deed of Trust shall remain in full force and effect as written.
GRANTOR:
Big R Properties, LLC
By:
Y
. David Blain, Jr.,
Manager
STATE OF COLORADO )
ss.
COUNTY OF PUEBLO )
The foregoing instrument was acknowledged before me this day of December, 2013,
by B. David Blain, Jr., as Manager of Big R Properties, LLC, a Colorado limited liability
company.
My commission expires: Witness my hand and official seal:
(—] 20 {
o HO w , ` NOTARY PUBLIC IN AND FOR
i ; G • 'eb TA R y S�� ,'I THE STATE OF COLORADO
•
•
#
•
I �) e e
qtr °.A G •' ,
My Commission Expires 08117/2014
2
4825- 0667 - 4198.3
Reception 1966909
02/05/2014 02:29 :18 PM
LIMITED CONSENT AND WAIVER TO DEED OF TRUST
THIS LIMITED CONSENT AND WAIVER TO DEED OF TRUST (this "Waiver ") dated as
of December 1 5, 2013 is entered into between Big R Properties, LLC, a Colorado limited liability
company whose address is 350 Keeler Parkway, Pueblo, CO 81001 (the "Grantor "), and Wells Fargo
Bank, National Association, whose address is Greeley West, 5801 West 11 `h Street, Greeley, CO 80634
( "Wells Fargo ").
RECITALS
A. The Grantor is the borrower on a promissory note dated February 10, 2011 made by
Grantor to Wells Fargo in the original principal amount of $1,788,835.41 (the "Note "). The Note is
secured by (1) a Deed of Trust dated February 10, 2011 (the "Deed of Trust ") pursuant to which Grantor
granted a security interest to and for the benefit of Wells Fargo in certain Real Property described
thereunder, which Deed of Trust was recorded in the Official Records of the Pueblo County Clerk and
Recorder on February 14, 2011 at Reception Number 1867338 and (2) an Assignment of Rents
( "Assignment of Rents ") pursuant to which Grantor granted a security interest to and for the benefit of
Wells Fargo in and to the Rents (as defined therein), which Assignment of Rents was recorded in the
Official Records of the Pueblo County Clerk and Recorder on February 14, 2011 at Reception Number
1867339. Terms not otherwise defined herein shall have the meanings assigned to them in the Deed of
Trust.
B. The Grantor has advised Wells Fargo that it its affiliate, Big R Holdings, Inc.
( "Holdings ") intends to enter into an agreement with the City of Pueblo (the "2013 Agreement "), whereby
the City of Pueblo will advance to or for the benefit of Holdings funds in the amount of $600,000
(referenced in the 2013 Agreement as "City Funds "), subject to and contingent upon the Company's
compliance with and performance of certain conditions and covenants as set forth therein.
C. As a condition to the City of Pueblo's willingness to enter into the 2013 Agreement and
to advance the City Funds thereunder, the City of Pueblo has required that Holdings secure its obligations
under the 2013 Agreement by the Real Property covered by the Deed of Trust.
D. Grantor has determined that allowing the Real Property to serve as collateral for the
obligations of Holdings to the City of Pueblo under the 2013 Agreement is in the interest of Grantor.
E. Grantor hereby requests Wells Fargo's consent to amend that certain deed of trust made
by Grantor to the City of Pueblo dated December 21, 2009 (the "Pueblo Deed of Trust "), which Pueblo
Deed of Trust was recorded in the Official Records of the Pueblo County Clerk and Recorder on February
14, 2011 at Reception Number 1828194, to secure the obligations of Holdings under the 2013 Agreement
with the Real Property, subject to the terms and conditions set forth herein.
In consideration of the mutual covenants and agreements herein contained, the parties hereto
agree as follows:
1. Limited Waiver and Consent. Grantor has requested and Wells Fargo hereby consents to
Grantor's entering into the First Amendment to Deed of Trust from Grantor for the benefit of the City of
Pueblo (substantially in the form of the First Amendment to Deed of Trust attached hereto as Exhibit A),
and agrees to waive any default or Event of Default that might otherwise be deemed to occur under the
Deed of Trust, the Assignment of Rents, or any other Loan Documents, arising from the Grantor's
entering into such First Amendment to Deed of Trust. As a condition to Wells Fargo's consent to this
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Nig momividiezmigoormiartiolglim,
• Waiver, Grantor shall require that the City of Pueblo execute a First Amendment to the Subordination
Agreement made by the City of Pueblo for the benefit of Wells Fargo dated as of February 8, 201 1 and
recorded in the Official Records of the Pueblo County Clerk and Recorder on February 14, 2011 at
Reception Number 1867340 (the "Subordination Agreement "), whereby the City of Pueblo agrees that in
addition to the subordination of its rights under the original Pueblo Deed of Trust, it subordinates its
rights under the attached First Amendment to Deed of Trust. The First Amendment to Subordination
Agreement shall be substantially in the form attached hereto as Exhibit B.
2. Limitations on Waiver. The execution, delivery and effect of this Waiver is limited as
written and neither such execution, delivery and effect nor any other act or omission by Wells Fargo in
connection herewith (a) constitutes a consent to or waiver of (except as expressly set forth herein) any
action, circumstances, term, condition or event that may exist, that may have occurred prior to the date of
the effectiveness of this Waiver or may occur in the future, (b) constitutes a consent to (except as set forth
herein) any amendment or modification of any term or condition of the Deed of Trust, the Assignment of
Rents, or any other Loan Document, or (c) impairs, prejudices or otherwise adversely affects any right,
power or remedy that Wells Fargo now has or may have in the future under or in connection with the
Deed of Trust, the Assignment of Rents, or any other Loan Document.
3. Confirmation. The provisions of the Deed of Trust, the Assignment of Rents and the
other Loan Documents shall remain in full force and effect following the effectiveness of this Waiver.
4. Execution, Delivery and Performance. The Grantor's execution, delivery and
performance of this Waiver as contemplated herein (i) is within its power and (ii) is legal and, after giving
effect to this Waiver, does not conflict with, result in any breach of, constitute a default under or, except as
otherwise provided herein, result in the creation of any lien upon any property of Grantor under the
provisions of: (A) its organizational documents, (B) any order, judgment, decree or ruling of any court,
arbitrator or governmental authority applicable to Grantor or its property, or (C) any agreement or
instrument to which Grantor is a party or by which it or any of its properties may be bound or any statute
or other rule or regulation of any governmental authority applicable to it or its properties, except where
such conflict, breach, default or lien could not reasonably be expected to have a material adverse effect.
5. Authorization. This Waiver has been duly authorized, executed and delivered by Grantor
and constitutes the legal, valid and binding obligation of Grantor, enforceable in accordance with its
terms, except that enforceability may be limited by applicable bankruptcy, reorganization, arrangement,
insolvency, fraudulent conveyance, moratorium or other similar laws affecting the enforceability of
creditors' rights generally and subject to the availability of equitable remedies.
6. Ratification and Affirmation. Grantor hereby (a) represents that, after giving effect to
this Waiver, no Events of Default shall have occurred and be continuing under the Loan Documents as of
the date of this Waiver and (b) ratifies and affirms its obligations under, and acknowledges, renews and
• extends its continued liability under, the Deed of Trust, the Assignment of Rents and the other Loan
Documents, and agrees that the Deed of Trust, the Assignment of Rents and the other Loan Documents
remain in full force and effect, subject to the consents and waivers contained herein.
7. Counterparts; Integration; Effectiveness.
(a) This Waiver may he executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of which when taken together
shall constitute a single contract.
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�[t't��ditf����lY 1 111
(b) This Waiver, the Deed of "Trust, Assignment of Rents, and the other Loan
Documents constitute the entire contract among the parties relating to the subject matter hereof and
thereof and supersede any and all previous agreements and understandings, oral or written, relating to the
subject matter hereof and thereof.
(c) This Waiver shall become effective as of the date first above written and
thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns. Delivery of an executed counterpart of a signature page of this Waiver by
facsimile or electronic mail shall be effective as delivery of a manually executed counterpart of this
Waiver.
8. Severability. Any provision of this Waiver held to be invalid, illegal or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of the remaining provisions
hereof or thereof; and the invalidity of a particular provision in a particular jurisdiction shall not
invalidate such provision in any other jurisdiction.
9. Successors and Assigns. The provisions of this Waiver shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and assigns permitted by the Deed of
Trust, Assignment of Rents and other Loan Documents.
[SIGNATURES BEGIN NEXT PAGE]
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Gilbert Ortiz Clerk /Recorder, Pueblo County, co III �� i : i , 1 P�5 fimpiii I r ®iI! poilyi, ®iii 1
IN WEI NESS WHEREOF, each of Wells Fargo and Grantor hereby execute this Waiver by the
signatures of their authorized signatory and members, as applicable, as of the date and year first above
written.
WELLS FARGO BANK, BIG R PROPERTIES, LLC
NATIONAL ASSOCIA'T'ION
I
..: ..._ . _,,,,,_ :,,,,z.,.. By_ i
Na ic: Erica 1-Ferman Bruce David Blain, Jr., Member
Its: Authorized Signatory
Vie fir esidertz` •
41110. - - - --- - - = `, •
Karla 13Ia' I. Member ---
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4845-1922-8594.2