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HomeMy WebLinkAbout13493RESOLUTION NO. 13493 A RESOLUTION APPROVING AN AGREEMENT BETWEEN PUEBLO, A MUNICIPAL CORPORATION AND CREATIVE STONE MFG., INC. D/B/A CORONADO STONE PRODUCTS, A CALIFORNIA CORPORATION AND CMB PROPERTY HOLDINGS, LLC, A NEW YORK LIMITED LIABILITY COMPANY, RELATING TO A JOB CREATING CAPITAL IMPROVEMENT PROJECT, AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO EXECUTE SAID AGREEMENT AND TRANSFERRING $750,000 FROM THE 1992-2021 SALES AND USE TAX CAPITAL IMPROVEMENT PROJECTS FUND BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, that: SECTION 1. The City Council finds and determines that the expenditure of $750,000 for the job creating capital improvement project with Creative Stone Mfg., Inc. d/b/a Coronado Stone Products and CMB Property Holdings, LLC (collectively “the Company”) as 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. SECTION 2. The Agreement dated July 25, 2016 between the City and the Company 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. Funds in the aggregate amount of $750,000 are hereby authorized to be transferred, expended and made available out of the 1992-2021 Sales and Use Tax Capital Improvement Projects Fund for the sole purpose of creating the capital improvement project authorized herein and in the manner described in the attached Agreement. The funds hereby authorized to be transferred and expended shall be released, disbursed and paid by the Director of Finance as specified 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 the attached Agreement which are necessary and desirable to effectuate the transactions described therein. SECTION 5. This Resolution shall become effective immediately upon final passage. INTRODUCED August 8, 2016 BY: Robert Schilling City Clerk’s Office Item # Q-1 Background Paper for Proposed Resolution COUNCIL MEETING DATE: August 8, 2016 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 AN AGREEMENT BETWEEN PUEBLO, A MUNICIPAL CORPORATION AND CREATIVE STONE MFG.,, INC. D/B/A CORONADO STONE PRODUCTS, A CALIFORNIA CORPORATION AND CMB PROPERTY HOLDINGS, LLC, A NEW YORK LIMITED LIABILTY COMPANY, RELATING TO A JOB CREATING CAPITAL IMPROVEMENT PROJECT, AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO EXECUTE SAID AGREEMENT AND TRANSFERRING $750,000 FROM THE 1992-2021 SALES AND USE TAX CAPITAL IMPROVEMENT PROJECTS FUND SUMMARY: Attached is a proposed Resolution approving and authorizing the President of City Council to sign an agreement with Creative Stone Mfg., Inc. d/b/a Coronado Stone Products and CMB Property Holdings, LLC (collectively “the Company”). PREVIOUS COUNCIL ACTION: None. BACKGROUND: The Company’s business plan is centered on the manufacture of stone veneer products. The Company currently operates manufacturing plants in South Carolina, Texas, New York and at three sites in California. The Company currently produces over fifty different varieties of manufactured stone veneer. FINANCIAL IMPLICATIONS: The Company intends to open a manufacturing facility at 33865 United Avenue, Pueblo, Colorado 81001 in the Pueblo Memorial Airport Industrial Park. In the attached Agreement, the City has agreed to transfer $750,000 from the 1992-2021 Sales and Use Tax Capital Improvement Projects Fund to the Company for the purchase of the manufacturing facility. After a three-year “ramp up,” the Company has agreed to employ not less than fifty-one full time employees whose annual compensation shall average at least $30,400, not including benefits. The Company’s employment commitment is for a minimum of seven years. The City’s economic incentive payment is secured by a first deed of trust on the Company’s new manufacturing facility located at 33865 United Avenue, Pueblo, Colorado 81001. BOARD/COMMISSION RECOMMENDATION: Not applicable to this Resolution. STAKEHOLDER PROCESS: Not applicable to this Resolution. ALTERNATIVES: If this Resolution is not approved, the Company will not be able to open a new manufacturing facility at the Pueblo Memorial Airport Industrial Park. RECOMMENDATION: The Pueblo Economic Development Corporation recommends approval of this Resolution. Attachments: Proposed Resolution and Employment Agreement and Deed of Trust AGREEMENT THIS AGREEMENT ("Agreement") is entered into as of July 25, 2016 between Pueblo, a Municipal Corporation, 1 City Hall Place,Pueblo,CO 81003 (the"City")and Creative Stone Mfg., Inc. d/b/a Coronado Stone Products, a California corporation, 11191 Calabash Ave., Fontana, CA 92337 ("Coronado") and CMB Property Holdings, LLC, a New York limited liability company, P.O. Box 6430, McKinney, TX 75071 ("CMB") (Coronado and CMB are hereinafter collectively referred to as the "Company"). WHEREAS, Company has expressed a willingness to locate a manufacturing facility within the Pueblo Memorial Airport Industrial Park("Industrial Park"), and in furtherance thereof has,through the Pueblo Economic Development Corporation,made application for funds and other economic incentives to the City, and WHEREAS, in connection with its application, Company has committed to invest not less than$ 2,500,000 in fixed assets in a manufacturing facility it will locate within the Industrial Park and to provide the employment described in Section 5 of this Agreement; and WHEREAS,the City has approved such application and will make certain funds and other economic incentives available to Company subject to and upon the terms and conditions of this Agreement; and 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 Coronado and CMB, jointly and severally (collectively "Company") agree as follows: 1. The following terms as used in this Agreement shall have the following meaning unless the context clearly indicates otherwise: "Effective Date" means the date of approval of this Agreement by City Council of City. "Employment Commitment Date" means October 1, 2019. "Facility" means the manufacturing facility located at Lot 74, Pueblo Memorial Airport Industrial Park Subdivision, County of Pueblo, State of Colorado, also known and numbered as 33865 United Avenue, Pueblo CO 81001, wherein Company will conduct its manufacturing operations for production of goods for distribution and sale outside of Pueblo County, Colorado. "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. The term "Full-Time Employee" does not include independent contractors nor employees of independent contractors except employees performing work at the Facility who are employees of an independent contractor 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. 1 "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. "Salary" means direct compensation payable to an employee including vacation pay, bonuses,overtime compensation and the amount of any pretax benefits paid by the employee under flexible spending or other qualified plans. The term does not include employer paid payroll taxes nor benefits such as employer paid health insurance. 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 $750,000.00 (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 Banner & Bower, P.C. for the benefit of Company,to be held in trust as set forth in 2.(c)below and utilized by Company for the purchase of the Facility. (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 of the governing board of Company approving this Agreement and authorizing its officers to execute and deliver this Agreement and related documents in the name of Company, (iii) executed Deed of Trust encumbering the Facility to assure Company's performance of this Agreement, and(iv)a Lender's Title Insurance Policy in the amount of$750,000 naming the City as insured. 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 December 31, 2016, 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) All City Funds received by Banner & Bower, P.C. on behalf of Company shall be deposited in Banner& Bower, P.C.'s client trust account for the sole and only purpose of paying for the purchase of the Facility.At closing for the purchase of the Facility,Banner&Bower, P.C. shall pay all City Funds to the Title Company or closing agent for the benefit of Company. 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 fifty-one (51) Full-Time Employees at the Facility whose annual compensation shall average at least $30,400.00, not including benefits. Company will use good 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"). 2 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 "Company's Repayment Obligation"), as follows: (a) During the seven (7) year period starting on the Employment Commitment Date and ending on September 30, 2026 (the "Repayment Period") Company shall pay to City an amount each Quarter equal to the Quarterly Employees less than fifty-one (51) Full-Time Employees employed at the Facility by Company multiplied by $175.07 (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 40,the amount payable by Company to City on or before the fifteenth (15th) day of the next calendar month would be (51 - 40) x $175.07 = $1,925.77. (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, if any, 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 51 times $175.07 multiplied by the remaining Quarters of the Repayment Period 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. 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. 3 5. (a) Company's Repayment Obligation under this Agreement shall be deemed to be a debt of Company payable to City until Company performs and discharges its obligations hereunder including its Employment Commitment contained in Paragraph 3 and Company's Repayment Obligation contained in Paragraph 4. Company's obligations under this Agreement including its Employment Commitment and Company's Repayment Obligation shall be secured by a first Deed of Trust encumbering the Facility, all in form and content approved by City's attorney. (b) At the end of the Repayment Period,provided Company is not in default of the obligations contained in this Agreement, including the Employment Commitment and Company's Repayment Obligation, if any, City shall cause the Deed of Trust securing Company's performance of this Agreement to be released For purposes of C.R.S. Section 38-39-102, the original of this Agreement shall be deemed the original evidence of debt and when cancelled shall meet the requirements of C.R.S. Section 38-39-102(1)(a)(II). 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 Company's 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 shall entitle City to immediately institute proceedings to enforce Company's Repayment Obligation. (b) City Council may, 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 Company's 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 4 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. 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, I City Hall Place, Second Floor, Pueblo, CO 81003 with a copy to City Attorney, 1 City Hall Place, Third Floor, Pueblo, Colorado 81003, or (b) if to the Company, Attn: President, 11191 Calabash Ave., Fontana, CA 92337 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 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 Company's obligations under this Agreement, 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 manufacturing 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 5 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. 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. Executed effective the day and year first above written. [ SEAL ] Pueb , . - ipal . )ration Attest. Cit Jerk = -esi.`' the City Council 6 [ SEAL ] Creative Stone Mfg., Inc. d/b/a Coronado Stone Products a California co .orat}von Attest: By Name: 61441 it-&Pta O- N. Scott Ebersole Title: 4F,o/ Y'e'a Sur 4' Title: President [ SEAL ] CMB Property Holdings, LLC a New York limited liability company Attest: By Name: Name: Robert Barbeau Title: Title: 7 [ SEAL] Creative Stone Mfg., Inc. d/b/a Coronado Stone Products a California corporation Attest: By Name: Name: Scott Ebersole Title: Title: President [ SEAL] CMB Property Holdings, LLC a New York limite ability company i'' 11/'edA Attest: By �' Name: 14 12). 1'e- Name: Robep1Barbeau Title: V 1444.e C k.V ( Title: / 7 Reception 2044964 08/11/2016 12:13:14 PM DEED OF TRUST THIS INDENTURE, is made this 0 day of , 2016 between CMB Property Holdings, LLC, a New York limited liability company, whose address is 33865 United Ave., Pueblo, CO 81001 (hereinafter referred to as "Grantor"), and the Public Trustee of the County of Pueblo, State of Colorado (hereinafter referred to as "Public Trustee") for the benefit of the City of Pueblo, a Municipal Corporation whose address is l City Hall Place, Pueblo, CO 81003 ("City of Pueblo"or"beneficiary"); WITNESSETH, THAT, WHEREAS, Grantor and the City of Pueblo are parties to that certain Agreement dated July 25, 2016, a true, complete and correct copy of which is attached hereto as Exhibit A (the "Agreement"), whereby Grantor agreed to comply with certain employment and other requirements enumerated in the Agreement in consideration of an advance from the City of Pueblo to Grantor in the amount of Seven Hundred Fifty Thousand Dollars($750,000.00)(the"City Funds"); AND WHEREAS, as of the date hereof, the amount of the City Funds subject to a repayment obligation under the Agreement and currently outstanding is $750,000.00 (the "Repayment Obligation"); AND WHEREAS, the Grantor is desirous of securing all of its obligations under the Agreement, including but not limited to payment of the Repayment Obligation (the "Obligations"); NOW THEREFORE, the Grantor, in consideration of the premises and for the purpose aforesaid, does hereby grant, bargain, sell and convey unto the said Public Trustee in trust until the full payment and performance of the Obligations ("Full Performance"), the following described property, situate in the County of Pueblo, State of Colorado, to wit: LOT 74, PUEBLO MEMORIAL AIRPORT INDUSTRIAL PARK SUBDIVISION, PUEBLO COUNTY, STATE OF COLORADO also known by street and number as 33865 United Ave., Pueblo,CO 81001 assessor's schedule or parcel number: 329001012 TO HAVE AND TO HOLD the same, together with all and singular the privileges and appurtenances thereunto belonging, in trust nevertheless, that: a) in case of default by Grantor of the Obligations under the Agreement, or in the payment of any interest thereon according to the tenor and effect of said Agreement, or in the payment of any prior encumbrances, principal or interest, if any subject to any applicable cure provisions in the Agreement, or b) in case default shall be made or violation or breach of any of the terms conditions, covenants or agreements herein contained, the beneficiary hereunder or the legal holder of the indebtedness secured hereby may declare a violation of any of the covenants herein contained and may elect to 2044964 Page 2 of 12 08111/2016 12:13:14 PM advertise said property for sale, and demand such sale by filing a notice of election and demand for sale with the Public Trustee. Upon receipt of such notice of election and demand for sale,the Public Trustee shall cause such notice to be recorded in the recorder's office of the county in which said property is situated. The Public Trustee shall then give public notice of the time and place of sale by advertisement to be published for four weeks (once each week for five successive weeks) in some newspaper of general circulation at that time published in the county or counties in which said property is located. A copy of such notice shall be mailed to all persons entitled to receive notice as provided by law. It shall and may then be lawful for the Public Trustee to sell said property for the highest and best price the property will bring in cash and to dispose of the said property (en masse or in separate parcels, as the said Public Trustee may think best), together with all the right,title and interest of the Grantor therein, at public auction at any place as may be specified by statute and designated in the notice of sale. The Public Trustee shall make and give to the purchaser of such property at such sale, a certificate of purchase as required by law. Unless the property is redeemed, the public trustee shall execute and record a confirmation deed to the holder of the certificate of purchase no less than fifteen days after the date of sale or, if later, the expiration of all redemption periods and the receipt of all statutory fees and costs. The Public Trustee shall, out of the proceeds of such sale and after first paying and retaining all fees, charges and costs of making said sale, pay to the beneficiary hereunder or to any assignee of the beneficiary's rights under the Agreement any amounts due pursuant to the Obligations under the Agreement, and all moneys advanced by such beneficiary for insurance, taxes and assessments, with interest thereon at eight per cent per annum, rendering the overplus, if any, unto those persons entitled thereto as a matter of law. Said sale as evidenced by the confirmation deed executed and recorded by the Public Trustee shall operate as a perpetual bar, both in law and equity, against the Grantor and all other persons claiming the said property, or any part thereof, by, from,through or under the Grantor. The City of Pueblo or its assignee may purchase said property or any part thereof; and it shall not be obligatory upon the purchaser at any such sale to see to the application of the purchase money. The Grantor covenants with and warrants to the Public Trustee, that at the time of the ensealing of and delivery of these presents the Grantor is well seized of the said lands, tenements and property in fee simple, and has good right, full power and lawful authority to grant, bargain, sell and convey the same in the manner and form as aforesaid; hereby fully and absolutely waiving and releasing all rights and claims the Grantor may have in or to said lands, tenements, and property as a Homestead Exemption, or other exemption, under and by virtue of any act of the General Assembly of the State of Colorado or of the United States Congress, now existing or which may hereafter be passed in relation thereto, and that the same are free and clear of all liens and encumbrances whatever as of the date hereof except easements, conditions, restrictions, covenants and reservations of record. The Grantor further warrants to the Public Trustee the quiet and peaceable possession of said property against all persons who may lawfully claim the whole or any part thereof, and that the Grantor shall and will forever defend the title to said property against such person or persons. 2044964 Page 3 of 12 08/11/2016 12:13:14 PM Until Full Performance, the Grantor shall timely pay all taxes and assessments levied on the property; any and all amounts due on account of principal and interest or other sums on any senior encumbrances, if any; and will keep all improvements that may be on said lands insured against any casualty loss, including extended coverage, in a company or companies, meeting the net worth requirements of the beneficiary hereof in an amount which will yield to the holder of the indebtedness, after reduction by co-insurance provisions of the policy, if any, not less than the then total indebtedness. Each policy shall contain a loss payable clause naming the beneficiary as mortgagee and shall further provide that the insurance may not be canceled upon less than ten days written notice to the beneficiary. Should the Grantor fail to insure and deliver a certificate evidencing the required coverage under the policies or to pay taxes or assessments as the same fall due, or to pay any amounts payable upon senior encumbrances, if any, the beneficiary may make any such payments or procure any such insurance, and all monies so paid with interest thereon at the rate of eight per cent per annum shall be added to and become a part of the indebtedness secured by this Deed of Trust and may be paid out of the proceeds of the sale of the property if not paid by the Grantor. In addition, and at its option, the beneficiary may declare the indebtedness secured hereby and this Deed of Trust to be in default for failure to procure insurance or make any of the payments required by this paragraph. If all or any part of the property or an interest therein is sold or transferred by the Grantor without beneficiary's prior written consent, excluding the creation of a lien or encumbrance subordinate to this Deed of Trust, beneficiary may, at beneficiary's option, declare all the sums secured by this Deed of Trust to be immediately due and payable. Beneficiary shall have waived such option to accelerate if, prior to the sale or transfer, beneficiary and the person to whom the property is to be sold or transferred reach agreement in writing that the credit of such person is satisfactory to beneficiary and that the interest payable on the sums secured by this Deed of Trust shall be at such rate as beneficiary shall request. IN CASE OF ANY DEFAULT whereby the right of foreclosure occurs hereunder, the holder of said certificate of purchase shall at once become entitled to the possession, use and enjoyment of the property aforesaid, and to the rents, issues and profits thereof, from the accruing of such right and during the pendency of foreclosure proceedings and the period of redemption, if any. Such possession shall at once be delivered to the holder of said certificate of purchase on request. Upon refusal, delivery of such possession may be enforced by the holder of said certificate of purchase by any appropriate civil suit or proceeding. The holder of said certificate of purchase shall be entitled to a Receiver for said property, and of the rents, issues and profits thereof, after such default, including the time covered by foreclosure proceedings and the period of redemption, if any, and shall be entitled thereto as a matter of right without regard to the solvency or insolvency of the Grantor or of the then owner of said property and without regard to the value thereof. Such Receiver may be appointed by any court of competent jurisdiction upon ex parte application and without notice -- notice being hereby expressly waived -- and all rents, issues and profits, income and revenue therefrom shall be applied by such Receiver to the payment of the indebtedness hereby secured, according to the law and the orders and directions of the court. IN THE CASE OF ANY DEFAULT in any of said Obligations, according to the tenor and effect of said Agreement or any part thereof, or of a breach or violation of any of the covenants or agreements herein by the Grantor,the whole of said Obligations hereby secured and 2044964 Page 4 of 12 08/11/2016 12:13:14 PM the interest thereon to the time of the sale may at once, at the option of the legal holder thereof, become due and payable, and the said property be sold in the manner and with the same effect as if said indebtedness had matured. If foreclosure be made by the Public Trustee, attorney's fees in a reasonable amount for services in the supervision of said foreclosure proceedings shall be allowed by the Public Trustee as a part of the cost of foreclosure; and if foreclosure be made through the courts, a reasonable attorney's fee shall be taxed by the court as a part of the cost of such foreclosure proceedings. IT IS FURTHER UNDERSTOOD AND AGREED that upon Full Performance, the City of Pueblo shall execute a release of this Deed of Trust, such release document to be prepared by Grantor with Grantor paying the expense thereof; all of the covenants and agreements herein contained shall extend to and be binding upon the heirs, personal representatives, successors and assigns of the respective parties hereto; and that the singular number shall include the plural and the plural the singular. Executed on the date first above written. CMB Property Holdings, LLC, a New York limited liab' '';;co per,,, By: ! -' /i,� % 2044964 Page 5 of 12 08/11/2016 12:13:14 PM FXHTRTLA_ AGREEMENT THIS AGREEMENT ("Agreement") is entered into as of July 25, 2016 between Pueblo, a Municipal Corporation, 1 City Hall Place, Pueblo, CO 81003 (the "City") and Creative Stone Mfg., Inc. d/b/a Coronado Stone Products, a California corporation, 11191 Calabash Ave., Fontana, CA 92337 ("Coronado") and CMB Property Holdings, LLC, a New York limited liability company, P.O. Box 6430, McKinney, TX 75071 ("CMB") (Coronado and CMB are hereinafter collectively referred to as the"Company"). WHEREAS, Company has expressed a willingness to locate a manufacturing facility within the Pueblo Memorial Airport Industrial Park ("Industrial Park"), and in furtherance thereof has, through the Pueblo Economic Development Corporation, made application for funds and other economic incentives to the City, and WHEREAS, in connection with its application, Company has committed to invest not less than$ 2,500,000 in fixed assets in a manufacturing facility it will locate within the Industrial Park and to provide the employment described in Section 5 of this Agreement; and WHEREAS, the City has approved such application and will make certain funds and other economic incentives available to Company subject to and upon the terms and conditions of this Agreement;and 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 Coronado and CMB, jointly and severally (collectively "Company")agree as follows: 1. The following terms as used in this Agreement shall have the following meaning unless the context clearly indicates otherwise: "Effective Date"means the date of approval of this Agreement by City Council of City. "Employment Commitment Date"means October 1, 2019. "Facility" means the manufacturing facility located at Lot 74, Pueblo Memorial Airport Industrial Park Subdivision, County of Pueblo, State of Colorado, also known and numbered as 33865 United Avenue, Pueblo CO 81001, wherein Company will conduct its manufacturing operations for production of goods for distribution and sale outside of Pueblo County, Colorado. "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. The term "Full-Time Employee" does not include independent contractors nor employees of independent contractors except employees performing work at the Facility who are employees of an independent contractor 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. 2044964 Page 6 of 12 08111/2016 12:13:14 PM "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. "Salary" means direct compensation payable to an employee including vacation pay, bonuses, overtime compensation and the amount of any pretax benefits paid by the employee under flexible spending or other qualified plans. The term does not include employer paid payroll taxes nor benefits such as employer paid health insurance. 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 $750,000.00 (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 Banner & Bower, P.C. for the benefit of Company, to be held in trust as set forth in 2.(c) below and utilized by Company for the purchase of the Facility. (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 of the governing board of Company approving this Agreement and authorizing its officers to execute and deliver this Agreement and related documents in the name of Company, (iii) executed Deed of Trust encumbering the Facility to assure Company's performance of this Agreement, and (iv) a Lender's Title Insurance Policy in the amount of$750,000 naming the City as insured. 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 December 31, 2016, 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) All City Funds received by Banner & Bower, P.C. on behalf of Company shall be deposited in Banner & Bower, P.C.'s client trust account for the sole and only purpose of paying for the purchase of the Facility. At closing for the purchase of the Facility, Banner& Bower, P.C. shall pay all City Funds to the Title Company or closing agent for the benefit of Company. 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 fifty-one (51) Full-Time Employees at the Facility whose annual compensation shall average at least $30,400.00, not including benefits. Company will use good 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"). 2 2044964 Page 7 of 12 08/11/2016 12:13:14 PM 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 "Company's Repayment Obligation"), as follows: (a) During the seven(7)year period starting on the Employment Commitment Date and ending on September 30, 2026 (the "Repayment Period") Company shall pay to City an amount each Quarter equal to the Quarterly Employees less than fifty-one (51) Full-Time Employees employed at the Facility by Company multiplied by $175.07 (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 40, the amount payable by Company to City on or before the fifteenth (15th) day of the next calendar month would be (51 - 40)x$175.07=$1,925.77. (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, if any, 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 51 times $175.07 multiplied by the remaining Quarters of the Repayment Period 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. 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. 3 2044964 Page 8 of 12 08/11/2016 12:13:14 PM S. (a) Company's Repayment Obligation under this Agreement shall be deemed to be a debt of Company payable to City until Company performs and discharges its obligations hereunder including its Employment Commitment contained in Paragraph 3 and Company's Repayment Obligation contained in Paragraph 4. Company's obligations under this Agreement including its Employment Commitment and Company's Repayment Obligation shall be secured by a first Deed of Trust encumbering the Facility, all in form and content approved by City's attorney. (b) At the end of the Repayment Period, provided Company is not in default of the obligations contained in this Agreement, including the Employment Commitment and Company's Repayment Obligation, if any, City shall cause the Deed of Trust securing Company's performance of this Agreement to be released. For purposes of C.R.S.Section 38-39- 102, the original of this Agreement shall be deemed the original evidence of debt and when cancelled shall meet the requirements of C.R.S. Section 38-39-102(1)(a)(II). 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 Company's 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 shall entitle City to immediately institute proceedings to enforce Company's Repayment Obligation. (b) City Council may, 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 Company's 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 4 2044964 Page 9 of 12 08111/2016 12:13:14 PM 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. 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, I City Hall Place, Second Floor, Pueblo, CO 81003 with a copy to City Attorney, 1 City Hall Place, Third Floor, Pueblo, Colorado 81003,or (b) if to the Company, Attn: President, 11191 Calabash Ave., Fontana, CA 92337 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 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 Company's obligations under this Agreement, 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 manufacturing 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 5 2044964 Page 10 of 12 08/11/2016 12:13:14 PM 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, 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 togral ` E to but one and the same original. .y a`" ',"oto 7, ifr.cii, ',a.: 2044964 Page 11 of 12 08/11/2016 12:13:14 PM [ SEAL] Creative Stone Mfg., Inc. d/b/a Coronado Stone Products a California ccoorrporat}i�on Attest: By Name: I P1 • y eou'lhe N : Scott Ebersole Title: retif'ea$�r4P. Title: President [ SEAL] CMB Property Holdings, LLC a New York limited liability company Attest: By Name: Name: Robert Barbeau Title: Title: 7 2044964 Page 12 of 12 08/11/2016 12:13:14 PM [ SEAL] Creative Stone Mfg., Inc. d/b/a Coronado Stone Products • a California corporation Attest: By Name: Name: Scott Ebersole Title: Title: President [ SEAL] CMB Property Holdings, LLC a New Yo k-limitealiability company Attest: By , 447L/4CGt Name: _ " t4 1>. SIF- Name: Robe Barbeau /9i Title: �••I1. '^t144' � /✓V1•Ae Title: AW/6r 7