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Home My WebLink About13232RESOLUTION NO. 13232 A RESOLUTION APPROVING A SUBORDINATION AGREEMENT MADE BY THE CITY OF PUEBLO FOR THE BENEFIT OF ROCLA CONCRETE TIE, INC. A TEXAS CORPORATION AND ITS LENDER, COBIZ BANK, A COLORADO CORPORATION AND AUTHORIZING THE PRESIDENT OF CITY COUNCIL TO EXECUTE SAME BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, that: SECTION 1. The Subordination Agreement made by Pueblo, a Municipal Corporation for the benefit of Rocla Concrete Tie, Inc., a Texas corporation, and its lender, CoBiz Bank, a Colorado corporation, 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 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 2. 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 Subordination Agreement which are necessary or desirable to effectuate the transactions described therein. SECTION 3. This Resolution shall become effective immediately upon final passage. INTRODUCED: _ May 11, 2015 BY: Ed Brown City Clerk’s Office Item # M-11 Background Paper for Proposed Resolution COUNCIL MEETING DATE: May 11, 2015 TO: President Stephen G. Nawrocki and Members of City Council CC: Sam Azad, City Manager VIA: Gina Dutcher, City Clerk FROM: Daniel C. Kogovsek, City Attorney SUBJECT: A RESOLUTION APPROVING A SUBORDINATION AGREEMENT MADE BY THE CITY OF PUEBLO FOR THE BENEFIT OF ROCLA CONCRETE TIE, INC. A TEXAS CORPORATION AND ITS LENDER, COBIZ BANK, A COLORADO CORPORATION AND AUTHORIZING THE PRESIDENT OF CITY COUNCIL TO EXECUTE SAME SUMMARY: Attached is a Resolution approving a Subordination Agreement authorizing the President of City Council to execute same for the benefit of Rocla Concrete Tie, Inc., a Texas corporation (“Rocla”) and its lender, CoBiz Bank, a Colorado corporation. PREVIOUS COUNCIL ACTION: The Pueblo City Council has previously given Rocla economic incentives from the City’s Half Cent Sales Tax Economic Development Fund on April 4, 2012; February 25, 2013; September 23, 2013 and December 8, 2014. BACKGROUND: Under the September 23, 2013 Employment Agreement, Rocla granted the City a Second Deed of Trust to Rocla’s property located at 3201 Lime Rd., Pueblo, CO 81004 to secure Rocla’s employment commitment. Rocla wishes to refinance its debt obligations and Rocla has requested that the City continue to subordinate the City’s Deed of Trust on real estate to the Senior Deed of Trust held by CoBiz Bank. FINANCIAL IMPLICATIONS: None. The City will continue to retain its Second Deed of Trust on Rocla’s real property. Rocla’s employment commitment is primarily secured by the City’s first security interest in equipment purchased by Rocla with Half Cent Sales Tax funds. BOARD/COMMISSION RECOMMENDATION: Not applicable to this Resolution. STAKEHOLDER PROCESS: Not applicable to this Resolution. ALTERNATIVES: If the Resolution is not approved, Rocla will not be able to re-finance its debt obligations. RECOMMENDATION: The Pueblo Economic Development Corporation recommends approval of this Resolution. Attachments: Resolution and proposed Subordination Agreement Reception 2004944 05/20/2015 08:16:28 AM When recorded, return to: Edward J. Adkins Markus Williams Young & Zimmermann LLC 1700 Lincoln Street, Suite 4550 Denver, CO 80203 SUBORDINATION AGREEMENT THIS SUBORDINATION AGREEMENT (this "Agreement") is made and entered into effective as of the 14th day of May, 2015, by and between (i) PUEBLO, a Colorado municipal corporation ("Pueblo"), and (ii) COBIZ BANK, a Colorado corporation dba CoBiz Structured Finance, acting in its capacity as agent (the "Agent") for the lenders parties to that certain Second Amended and Restated Loan and Security Agreement dated as of May 14, 2015 among Rocla Concrete Tie, Inc., a Texas corporation ("Rocla"), Agent and the lenders from time to time parties thereto. RECITALS: The following are the recitals on which this Agreement is based, and each Recital is incorporated into this Agent. A. WHEREAS, Rocla executed and delivered to Agent that certain Amended and Restated Deed of Trust, Security Agreement, Financing Statement, Assignment of Rents and Leases and Fixture Filing dated September 27, 2013 which has been recorded on October 15, 2013 at Reception No. 1957899-2013, of the Official Records Pueblo County, State of Colorado, and any renewals, amendments, modifications, or extensions thereof (in each case without notice or the consent of Pueblo), now or hereafter executed, including, but not limited to, that certain Modification of Amended and Restated Deed of Trust, Security Agreement, Financing Statement, Assignment of Rents and Leases and Fixture Filing dated as of May 14, 2015, between Agent and Rocla (the "Senior Deed of Trust"). The Senior Deed of Trust encumbers certain real property located in Pueblo County, State of Colorado legally described on Exhibit A attached hereto and made a part hereof ("Real Property"). B. WHEREAS, Rocla executed and delivered to Pueblo that certain Deed of Trust dated September 27, 2013 (the "Subordinate Deed of Trust") which has been recorded on October 21, 2013 at Reception No. 1958546-2013, of the Official Records Pueblo County, State of Colorado. The Subordinate Deed of Trust encumbers the Real Property. C. WHEREAS, Agent and Pueblo now desire to enter into this Agreement to set forth each party's relative priority with respect to the Senior Deed of Trust and the Subordinate Deed of Trust, in each case as may be renewed, amended, modified or extended from time to time. NOW THEREFORE, in consideration of the mutual benefits accruing to the parties hereto and other good and valuable consideration, the receipt, adequacy and sufficiency of which is hereby acknowledged, it is hereby declared, understood and agreed as set forth in the following paragraphs. tZ0030942/3 1 2004944 Page 2 of 5 05/20/2015 08:16:28 AM 1. Senior Deed of Trust Superior. That the Senior Deed of Trust shall unconditionally be and remain at all times a lien or charge on the Property, prior and superior in all respects to the lien or charge of the Subordinate Deed of Trust. 2. No Other Agreements. That this Subordination Agreement shall be and is the whole and only agreement between the parties hereto with regard to the subordination of the lien or charge of the Subordinate Deed of Trust to the lien or charge of the Senior Deed of Trust and shall supersede and cancel, but only insofar as would affect the priority between the Senior Deed of Trust and the Subordinate Deed of Trust, any prior agreements as to such subordination. 3. Subordination. Pueblo declares, agrees and acknowledges that Pueblo intentionally waives, relinquishes, and subordinates the lien or charge of the Subordinate Deed of Trust in all respects in favor of the lien or charge of the Senior Deed of Trust and understands that in reliance upon, and in consideration of, this waiver, relinquishment and subordination specific loans and advances are being and will be made and, as part and parcel thereof, specific monetary and other obligations are being and will be entered into which would not be made or entered into but for said reliance upon this waiver, relinquishment and subordination. 4. Counterpart Execution. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same document. Signature pages may be detached from the counterparts and attached to a single copy of this Agreement to form one physical document. 5. Bindin__ Ems. This Agreement shall be binding upon and inure to the benefit of Agent and Pueblo and their successors and assigns. 6. Savings Clause. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction only, be ineffective only to the extent of such prohibition or unenforceability without invalidating the remaining provisions of this Agreement, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 7. Governing. This Agreement shall be governed by and construed in accordance with the laws of the State of Colorado (other than conflict laws). 8. Entire Agreement. This Agreement comprises the complete and integrated agreement of the parties on the subject matter of this Agreement and supersedes all prior agreements, whether oral or evidenced in a writing. This Agreement may only be modified or amended in a writing signed by Pueblo and Agent. [SIGNATURE PAGES TO FOLLOW] IZ0030942/3 1 2 2004944 Page 3 of 5 05/20/2015 08:16:28 AM IN WITNESS WHEREOF, the parties hereto have caused this Subordination Agreement to be duly executed as of the day and year first above written. PUEBLO: Pueblo, A Colorado municipal co ration B�- ��- Name: Win^ G. Nawrocki Title: President of City Council STATE OF COLORADO ) P ss. COUNTY OF 'I u „ 1(� ) The Subordination Agreement was acknowledged before me this .15 day of a -ALA 2015, by,}�,n{-� ►�(Q�rec �[r as s � of PUEBLO, a Colorado lunicipal corporation Witness my hand and official seal. My commission expires:GI/ICh E E R. GONZALES RY PUBLIC ary Public F COLORADO D 20134016224 XPIRES MARCH 29, 2017 1Z0030942/31 Signature Page to Subordination Agreement - Pueblo 2004944 Page 4 of 5 05/20/2015 08:16:28 AM AGENT: COBIZ BANK, A COLORADO CORPORATION dba COBIZ STRUCTURED FINANCE By:�. Name: T.J. Kern Title: Senior Vice President, Manager STATE OF COLORADO ) ss. COUNTY OF (� ) The Subordination Agreement was acknowledged before me this IA -1" day of 2015, by T.J. Kern as Senior Vice President, Manager of and on behalf of CoBiz B nk, a Colorado Corporation dba CoBiz Structured Finance. Witness m hand and official seal. JANET LEE HAYES y NOTARY PUBLIC ,Q STATE OF COLORADO My commission expires: (J� U �� NOTARY ID 20134042364 MY COMMISSION 9XPIRES 0710812017 Not ublic Signature Page to Subordination Agreement - Agent 2004944 Page 5 of 5 05/20/2015 08:16:28 AM EXHIBIT A to MODIFICATION OF DEED OF TRUST LEGAL DESCRIPTION OF PREMISES Lot 1, Block 1, St. Charles Industrial Park, Filing No. 1, County of Pueblo, State of Colorado. tZ0030942/3 1