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RESOLUTION NO. 14059
A RESOLUTION APPROVING AN EMPLOYMENT
AGREEMENT BETWEEN THE CITY OF PUEBLO, A
MUNICIPAL CORPORATION AND KEY STRUCTURES,
LLC, A COLORADO LIMITED LIABILITY COMPANY,
RELATING TO A JOB CREATING CAPITAL
IMPROVEMENT PROJECT, AUTHORIZING THE
PRESIDENT OF THE CITY COUNCIL TO EXECUTE SAID
AGREEMENT AND TRANSFERRING TWO MILLION ONE
HUNDRED THOUSAND DOLLARS ($2,100,000.00) 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 $2,100,000.00 for a
job creating capital improvement project for the benefit to Key Structures, LLC, a Colorado
limited liability company (the “Company”) described in the attached Employment
Agreement is for a public purpose and in furtherance of a municipal function and will
create employment opportunities justifying the expenditure of public funds. The City
Council further finds the incentives granted to the Company hereby meet the standards
established by Section 14-4-85 of the Pueblo Municipal Code.
SECTION 2.
The Employment Agreement dated October 9, 2018, between the City and the
Company, a copy of which is attached hereto and incorporated herein by this reference,
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 said agreement in the name of the
City and the Acting City Clerk is directed to fix the seal of the City thereto and attest same.
SECTION 3.
Funds in the aggregate amount of $2,100,000.00 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 the job creating 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 City’s Director of Finance as specified in the attached
agreement.
SECTION 4.
The officers and staff of the City are authorized and directed to perform any and
all acts consistent with this Resolution and the attached agreement which are necessary
or appropriate to implement the transactions described therein.
SECTION 5.
This Resolution shall become effective immediately upon final passage.
INTRODUCED October 9, 2018
BY: Ray Aguilera
MEMBER OF CITY COUNCIL
APPROVED:
PRESIDENT OF CITY COUNCIL
ATTESTED BY:
ACTING CITY CLERK
City Clerk’s Office Item # Q-1
Background Paper for Proposed
Resolution
COUNCIL MEETING DATE: October 9, 2018
TO: President Christopher A. Nicoll and Members of City Council
CC: Sam Azad, City Manager
VIA: Brenda Armijo, Acting City Clerk
FROM: Daniel C. Kogovsek, City Attorney
SUBJECT: A RESOLUTION APPROVING AN EMPLOYMENT AGREEMENT BETWEEN
THE CITY OF PUEBLO, A MUNICIPAL CORPORATION AND KEY
STRUCTURES, LLC, A COLORADO LIMITED LIABILITY COMPANY, RELATING
TO A JOB CREATING CAPITAL IMPROVEMENT PROJECT, AUTHORIZING
THE PRESIDENT OF THE CITY COUNCIL TO EXECUTE SAID AGREEMENT
AND TRANSFERRING TWO MILLION ONE HUNDRED THOUSAND DOLLARS
($2,100,000.00) FROM THE 1992-2021 SALES AND USE TAX CAPITAL
IMPROVEMENT PROJECTS FUND
SUMMARY:
Attached is a Resolution approving and authorizing the President of City Council to sign an
Employment Agreement between the City of Pueblo and Key Structures, LLC, a Colorado limited
liability company (the “Company”). The Resolution also authorizes the transfer of $2.1 million from
the City’s so-called “Half Cent Economic Development Fund” to fund the Company’s capital
expenditures (e.g. land acquisition, building improvement costs, equipment costs, rail
improvements, etc.) and related training expenses for up to 125 new employees.
PREVIOUS COUNCIL ACTION:
Not applicable to this Resolution.
BACKGROUND:
The Company wishes to establish a manufacturing facility with business administration offices at
the City’s Airport Industrial Park. The Company’s business plan, as it pertains to Pueblo County,
is centered on the manufacture of factory-produced pre-engineered building units for distribution
outside of Pueblo County. The Company has committed to investing approximately $7,000,000.00
in fixed assets at its new manufacturing facility located at the Airport Industrial Park.
FINANCIAL IMPLICATIONS:
Under the proposed Resolution, the City will transfer up to $100,000 for pre-employment
training at Pueblo Community College.
The proposed employment Agreement provides that after a three-year ramp up period,
the Company will hire and employ not less than one hundred twenty-five (125) new full-
time employees at its manufacturing facility, for a minimum of seven (7) years, at an
average annual salary of not less than $39,532.00 per year plus benefits.
Repayment of the City’s economic incentives, if necessary, will be secured by a first deed
of trust on the Company’s manufacturing facility.
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 establish its new manufacturing facility at
the Airport Industrial Park and the City will lose the opportunity to create 125 new jobs.
RECOMMENDATION:
The Pueblo Economic Development Corporation recommends approval of this Resolution.
Attachments:
Proposed Resolution; Proposed Employment Agreement and Proposed Deed of Trust
AGREEMENT
THIS AGREEMENT is entered into this 9th day of October, 2018 by and
between the City of Pueblo, a Colorado municipal corporation (the "City") and Key Structures,
LLC, a Colorado limited liability company (the "Company"). The Company and the City are
referred to collectively in this Agreement as the "Parties" and individually, without
differentiation, each as a"Party."
WHEREAS, the Company has expressed a willingness to establish a manufacturing
facility and business administration offices for the Company's factory-produced, pre-engineered
building units business at the City's Airport Industrial Park, and in furtherance thereof has,
through the Pueblo Economic Development Corporation("PEDCO"), made application for funds
from the City; and
WHEREAS, PEDCO has recommended to the City Council that City approve such
application, and
WHEREAS, the City Council, based on PEDCO's recommendation, has approved such
application and will make funds available to Company subject to and upon the terms and
conditions of this Agreement; and
WHEREAS, Company's business plan, as it pertains to Pueblo County, is centered on the
manufacture of factory-produced, pre-engineered building units for distribution outside of
Pueblo County ("Company's Business"), and
WHEREAS, the City has determined that Company's Business will create primary jobs
and will not materially and substantially compete with any existing activity or business within
the City; and
WHEREAS, in connection with its application, the Company has committed to: (i) invest
approximately Seven Million Dollars ($7,000,000) in fixed assets in a manufacturing facility
located within the City's Airport Industrial Park: and (ii) provide the employment described in
Section 4 of this Agreement.
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual covenants
contained herein, and other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, City and Company agree as follows:
1. The following terms as used in this Agreement shall have the following meaning
unless the context clearly indicates otherwise:
"Employment Commitment Date" means October 1, 2021.
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"Facility" means the approximately 63,500 square foot manufacturing building and
business administration offices located at the Pueblo Memorial Airport Industrial Park, having a
street address of 319 Lockheed Street, Pueblo, Colorado, 81001, 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 at an average annual salary of not less than $39,532.00
per year plus benefits, employed by the Company or new employees hired as a result of
recruiting.
"Per Employee Payment" means an amount equal to (a) the Total Funds Advanced
divided by 125 (i.e. the Full Time Employees subject to the Employment Commitment), divided
by(b) 28 (i.e. the number of Quarters in the Repayment Period).
"Property" consisting of approximately 3.8 acres, means Lots 54 and 55, Pueblo
Memorial Airport Industrial Park Subdivision, Pueblo County, State of Colorado, according to
the recorded plat thereof filed in the records of the Pueblo County Clerk and Recorder, also
known by street and number as: 319 Lockheed Street, Pueblo, CO 81001.
"Quarter"means three consecutive calendar months commencing January 1, April 1, July
1 and October 1 of each calendar year.
"Quarterly Employees" means the sum of the aggregate number of Full -Time Employees
on each business day of a Quarter, divided by the number of business days in such Quarter.
"Repayment Reduction" means for each Quarter an amount equal to the Total Funds
Advanced divided by 28 (i.e. the number of Quarters in the Repayment Period). For example, if
the Total Funds Advanced equals $2,100,000.00, the Repayment Reduction would be
$2,100,000.00 ± 28 = $75,000.00.
2. If Company is not in default under this Agreement, City will advance to or for the
benefit of Company (each such advance, a "Funds Advance" and all such cumulative advances
the "Total Funds Advanced") funds in the amount of Two Million, One Hundred Thousand
Dollars ($2,100,000.00) (the "City Funds") as follows:
• City agrees to advance Company funds in an amount not to exceed Two Million
Dollars ($2,000,000.00) for capital improvements (e.g. acquisition of the
Property; Facility improvement costs; equipment costs; rail access and
improvement costs; etc.) by not later than Closing as defined in this Section 2
below.
• Promptly upon receipt of Company's payment of $100,000.00 to Pueblo
Community College ("PCC") for the purpose of providing pre-employment
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training of Company's prospective employees, City agrees to reimburse
Company for that amount. Company agrees to give persons successfully
completing the training program at PCC priority for hiring. The maximum
amount for training for each employee shall not exceed $800.00.
The aforesaid transfer of City Funds is subject to and contingent upon the following conditions
and covenants which Company agrees to perform and comply with:
• 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, and (ii) certified copies of the resolutions of the governing board of
Company approving this Agreement and authorizing its officers to execute
and deliver said document in the name of Company, and (iii) this
Agreement, executed by authorized officers of Company.
• The date of the last to occur of the filings required under (i), (ii) and (iii)
of this Section shall be referred to herein as "Closing." If Closing does not
occur on or before January 1, 2019, 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.
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 it
will after the date of this Agreement continuously conduct its business operations and employ
Full -Time Employees at the Facility as follows: (i) during the period from the date of this
Agreement to the Employment Commitment Date October 1, 2021, Company shall use its
commercially reasonable efforts in good faith to employ as many Full -Time Employees as
reasonably justified by its business operations, and (ii) on and after the Employment
Commitment Date, Company shall employ not less than one hundred twenty-five (125) Full -
Time Employees at the Facility (the "Employment Commitment") for a term seven (7) years
starting on the Employment Commitment Date and ending eighty-four(84) months thereafter.
4. Notwithstanding anything contained in this Agreement to the contrary, if
Company shall for any reason default in its Employment Commitment set forth in Section 3,
Company shall repay to City a pro-rata share of the City Funds advanced by City under Section 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
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pay to City an amount each Quarter equal to the Quarterly Employees less than one hundred
twenty-five (125) Full -Time Employees employed at the Facility by Company multiplied by the
Per Employee Payment (the "Company's Quarterly Payments"). For example, if for the second
Quarter of the third year after the Employment Commitment Date the Total Funds Advanced
equals $2,100,000.00 and such Quarterly Employees is 111, the amount payable by Company to
City on or before the fifteenth (15th) day of the next calendar month would be (125 - 111) x
$600.00 = $8,400.00.
(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 (8)percent per annum ("Default Rate") 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 and their aggregate salaries for the preceding Quarter and 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 such employment, City
shall have access to Company's records relating to Company's employees employed at the
Facility. Except in the event of any action filed by City to enforce this Agreement, City shall
treat such information as confidential and shall not disclose (except pursuant to a subpoena or
court order) such information to any party other than those City employees who have a need to
know such information.
(d) Subject to the provisions of Section 6, if Company defaults in the
performance of its 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, City
may declare the entire balance of Company's Repayment Obligation due and owing together
with interest thereon from the date of default at the Default Rate, and for such purpose, the entire
balance of Company's Repayment Obligation shall be the amount calculated pursuant to Section
4(e). 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.
(e) Except as otherwise provided in Sections 7 and 13 hereof, City's damages
for breach of Company's Employment Commitment or Repayment Obligation shall not exceed
Total Funds Advanced plus interest, provided, however, that the Total Funds Advanced shall be
reduced by the Repayment Reduction for each Quarter Company meets its Repayment
Obligation during the Repayment Period by either (i) employing one hundred twenty-five (125)
Quarterly Employees at the Facility, or (ii) paying Company's Quarterly Payments as provided
in Section 4(a) above for such Quarter.
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5. (a) All City Funds advanced to Company by City 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 Repayment Obligation contained in Section 4. The
Company's performance under this Agreement including its Repayment Obligation contained in
Section 4 shall be secured by a Deed of Trust encumbering the Facility and Property. Company
covenants with and warrants to the City that the Deed of Trust shall constitute a first priority lien
or encumbrance and that there are and will be no senior liens or encumbrances against the
Facility and Property. As agreed to in this Employment Agreement, during the seven (7) year
period starting on the Employment Commitment Date (as defined in this Employment
Agreement) and ending eighty-four (84) months thereafter (the "Repayment Period") the
principal balance of the Deed of Trust will be decreased on a quarterly basis consistent with the
Company's compliance with its Employment Commitment as set forth in Section 3 of this
Employment Agreement. A copy of the approved Deed of Trust is attached as an exhibit to this
Agreement.
(b) Company shall obtain, at Company's sole cost and expense, from a title
company selected by Company authorized to issue title insurance in the state of Colorado (the
"Title Company"), on the current standard form of extended ALTA Lenders Policy (collectively,
the "Title Commitment"). The Title Company shall promptly provide copies of any amendments
or modifications of the Title Commitment to City. At the Closing of Company's purchase of the
Property ("Closing") or as soon as reasonably practicable after Closing, the Title Company shall
issue and deliver to City the lender's title insurance policy referred to above (the "Title Policy"),
in the amount of Two Million One Hundred Thousand Dollars ($2,100,000.00) issued by the
Title Company insuring Company's title to the Property and City's first-priority encumbrance on
the Property, consistent with the Title Commitment, providing "gap" coverage, deleting the
standard exceptions, and subject only to taxes and assessments for the year of Closing and
subsequent years. At Closing, Company shall pay the premium for the Title Policy. Company
shall provide such affidavits or certificates as may be required by the Title Company to remove
all liens, including, without limitation, mechanics' or materialmen's liens, as exceptions to the
Title Policy.
6. (a) Prior to instituting any proceeding to enforce Company's Repayment
Obligation under Section 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 thirty (30) 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 must appear. City will notify Company of the time and
place of the meeting at least ten (10) days before 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.
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(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 Section 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, and the prevailing party shall recover its costs together with all internal and out-of-pocket
expenses of any kind relating to the litigation including, but not limited to, reasonable attorney
fees. 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 hereby submits
to the personal and subject matter jurisdiction of such District Court. To the full 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
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 or Mayor, as applicable, City of Pueblo, 1 City
Hall Place, 2nd Floor, Pueblo, Colorado, 81003, with copy to City Attorney, 1 City Hall Place, 3rd
Floor, Pueblo, Colorado, 81003, or
(b) if to the Company, Attn: Chief Executive Officer, c/o The Challenger
Group, Inc., 8605 Explorer Drive, Suite 250, Colorado Springs, CO 80927.
6
or to such other person or address as either party shall specify in written notice given to the other
party pursuant to the provisions of this Section 10. Notice shall be effective (i) upon receipt if
delivered personally, or(ii) three (3) business days after deposit in the mails, if mailed.
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 will not be unreasonably withheld or delayed. Any assignment or attempted assignment
of this Agreement by Company without such consent shall be null and void. No assignment of
this Agreement or any interest herein by Company shall release or discharge Company from any
of its obligations under this Agreement unless otherwise agreed by City at the time consent to
assignment is given.
12. The persons signing this Agreement in the name of and on behalf of City and
Company represent and warrant that they, and the entities they represent, have the requisite
power and authority to enter into, execute, and deliver this Agreement, and that this Agreement
is a valid and legally binding obligation of Company and City, enforceable against them 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 by City 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, 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 Section 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 Section 2
hereof
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 partners or
joint venturers under this Agreement.
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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 at Pueblo, Colorado, this 9th day of October, 2018.
City of Pueblo, Colorado
a Colorado Municipal Corporation
[ SEAL ]
Attest:,�Jal tri C By ir,or,
Acting City Clerk .ent of the City Council
Key Structures, LLC
a Colorado Limited 'a ility Compan
By
Brian Bahr
Manager
8
STATE OF COLORADO )
n ) ss.
COUNTY OF I PrK) )
The foregoing instrument was acknowledged before me this 01 day of October, 2018 by
Brian Bahr as Manager of Key Structures, LLC, a Colorado limited liability company.
Witness my hand and official seal.
My commission expires: (1-91-2.00.D.
[ SEAL ] tr\04-1
Notar ublic
JANNA KELLEY
Notary Public
State of Colorado
Notary ID#20164037111
My Commission Expires 09-27-2020
9
Reception 2122947
11/15/2018 10:08:12 AM
Recording Requested by: STATEMENT OF AUTHORITY
FITC-NQS Colorado (SECTIONS 38-30-108.5 and 38-30-172,C.R.S.)
NO& 1 g S 7 7 1. This Statement of Authority relates to an entity named:
McCallin Real Estate LLC
2. The type of entity is a limited liability company
3. The entity is formed under the laws of the State of Colorado
4. The current mailing address for the entity is:
6301 Clermont Street,Commerce City,CO 80022
5. The name and position of each person authorized to execute instruments
conveying,encumbering and otherwise affecting title to real property on
behalf of the entity is:
Brian E.McCallin,Manager
6. The authority of the foregoing persons to bind the entity is not limited
7. Other matters concerning the manner in which the entity deals with
interests in real property: N/A
8. This Statement of Authority is executed on behalf of the entity pursuant to
the provisions of Sections 38-30-108.5 and 38-30-172,C.R.S.
9. This Statement of Authority amends and supersedes in all respects any
prior Statement of Authority executed on behalf of the Entity.
Executed on November /./. ,2018
McCallin Real Estate LLC,a Colorado limited liability company
By: /
Brian E.McCallin,Manager
STATE OF Coiores16
COUNTY OF—L 2Yn v-s-!
The foregoing instrument was acknowledged before me this ID- day of November,
2018 by Brian E.McCallin, Manager of McCallin Real Estate LLC, a Colorado limited
liability company.
• MAUREEN S. DUNN
Witne hand and official seal. NOTARY
PUBLIC
STATEOFCOLORADO
NOTARY IDN 20154020040
MY COMMISSION EXPIRES MAY 21,2019
Notary Public 7
My Commission Expires:
Reception 2122948
11/15/2018 10:08:12 AM
STATEMENT OF AUTHORITY
(SECTIONS 38-30-108.5 and 38-30-172,C.R.S.)
1. This Statement of Authority relates to an entity named:
Key Structures LLC
2. The type of entity is a limited liability company
3. The entity is formed under the laws of the State of Colorado
4. The current mailing address for the entity is:
8605 Explorer Drive,Suite 250,Colorado Springs,CO 80920
5. The name and position of each person authorized to execute instruments
conveying, encumbering and otherwise affecting title to real property on
behalf of the entity is:
Brian Bahr,Manager
6. The authority of the foregoing persons to bind the entity is not limited
7. Other matters concerning the manner in which the entity deals with
interests in real property: N/A
8. This Statement of Authority is executed on behalf of the entity pursuant to
the provisions of Sections 38-30-108.5 and 38-30-172,C.R.S.
9. This Statement of Authority amends and supersedes in all respects any
prior Statement of Authority executed on behalf of the Entity.
Executed on November 1 Z ,2018
Key Structures a Colorad ' d liability company
By:
rias Bahr,Manager
STATE OF Coo rad o
COUNTY OF Ek Paso )
The foregoing instrument was acknowledged before me this 12 day of November,
2018 by Brian Bahr, Manager of Key Structures LLC, a Colorado limited liability
company.
Witness my hand and official seal. J N N Ay PPublic
Y
State of Colorado
No Public Notary lDM2016 303711i
My Commission Expires 09.27-2020
My Commission Expires:(-1..—'06 - Oa.0 - - '
Reception 2122949
11/15/2018 10:08:12 AM
After Recording Return to
Key Structures LLC
Brian Bahr
8605 Explorer Drive,Suite 260
Colorado Springs,CO 80920
SPECIAL WARRANTY DEED
This Deed,made November 13,2018
Between McCallin Real Estate LLC,a Colorado limited liability company, of the County of Denver,
State of Colorado, grantor(s)and Key Structures LLC,a Colorado limited liability company,whose
legal address is 8605 Explorer Drive,Suite 250,Colorado Springs,CO 80920,grantee(s)
WITNESSETH, That the grantor(s), for and in the consideration of the sum of TWO MILLION
FOUR HUNDRED THOUSAND DOLLARS AND NO/100'S($2,400,000.00)the receipt and sufficiency of
which is hereby acknowledged,has granted,bargained,sold and conveyed,and by these presents does
grant, bargain, sell,convey and confirm, unto the grantee(s), his heirs and assigns forever, all the real
property together with improvements, if any,situate, lying and being in the County of Pueblo, State of
COLORADO described as follows:
Lots 54 and 55,Pueblo Memorial Airport Industrial Park Subdivision,now known as Parcel A,Lot Line
Vacation No.2005-030 recorded February 22,2006 at Reception No.1662769,County of Pueblo,State
of Colorado.
also known by street and number as 319 Lockheed Street,Pueblo,CO
TOGETHER with all and singular hereditaments and appurtenances, thereunto belonging, or in
anywise appertaining, and the reversion and reversions, remainder and remainders, rents issues and
profits thereof,and all the estate,right,title,interest,claim and demand whatsoever of the grantor,either
in law or equity,of,in and to the above bargained premises,with the hereditaments and appurtenances
and except taxes and assessments for the year 2018 and subsequent years, and subject to those items
shown on Exhibit" ,"attached hereto and by this reference incorporated herein.
TO HAVE AND TO HOLD said premises above bargained and described, with the
appurtenances, unto the grantee, their heirs and assigns forever. The grantor(s), for themselves, their
heirs and personal representatives or successors, does covenant and agree that they shall and will
WARRANT AND FOREVER DEFEND the above-bargained premises in the quiet and peaceable
possession of the grantee(s),their heirs and assigns,against all and every person or persons claiming
the whole or any part thereof,by,through or under the grantor(s).
The singular number shall include the plural,the plural the singular, and the use of any gender
shall be applicable to all genders.
•0V
Recording Requested by:
FNTG-NCS Colorado
ND o 1 SG'i'7
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IN WITNESS WHEREOF,the grantor has executed this on the date set forth above.
SELLER:
McCatlin Real Estate LLC,a
Colorado limited li company
BY:
Brian E.McCallin,Manager
STATE OF COLORADO )ss:
COUNTY OF`DP_ri V Q(
The foregoing instrument was acknowledged before me November la. , 2018 by Brian E.
McCallin,Manager of McCallin Real Estate LLC,a Colorado limited liability company.
Witness my hand and official seal.
rk)01-Curti t b avt S 4OO Flu
Notary Public Mc, er% S. UNh,
My Commission xpires:
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EXHIBIT"B"
1. Terms,conditions,provisions,agreements and obligations contained in the Resolution No.90-z-5
as set forth below:
Recording Date: April 19,1990
Recording No.: Book 2494 Page 903
2. Easements, notes, terms, conditions, provisions, agreements and obligations as shown on the
plat of Subdivision Exemption No.89-5:
Recording Date: April 19,1990
Recording No.: Reception No.917628
3. Easements, notes, terms,conditions, provisions, agreements and obligations as shown on the
plat of Pueblo Memorial Airport Industrial Park Subdivision:
Recording Date: October 11,1995
Recording No.: Reception No. 1096136
Pueblo Memorial Airport Industrial Park Subdivision Ratification of Plat:
Recording Date: October 11,1995
Recording No.: Book 2836 Page 686
4. Terms, conditions, provisions, agreements and obligations contained in the Agreement for
Revocable Permit for Use of Public Right of Way as set forth below:
Recording Date: October 11,1995
Recording No.: Book 2836 Page 700
5. Terms, conditions, provisions, agreements and obligations contained in the Subdivision
Improvements Agreement for Pueblo Memorial Airport Industrial Park Subdivision as set forth
below:
Recording Date: October 11,1995
Recording No.: Book 2836 Pane 705
6. Terms,conditions,provisions,agreements and obligations contained in the Resolution No.P&D
00-55 as set forth below:
Recording Date: August 28,2000
Recording No.: Reception No.1347566
Easement Vacation&Dedication No.2000-004:
Recording Date: August 28,2000
Recording No.: Reception No.1347567
7. Easement(s) for the purpose(s) shown below and rights incidental thereto, as granted in a
document:
Granted to: Pueblo,a municipal corporation
Purpose: Water Main(s)and Appurtenances
Recording Date: October 2,2000
Recording No.: Reception No.1352240
8. Easement(s) for the purpose(s) shown below and rights incidental thereto, as granted in a
document:
Granted to: MoCallin Real Estate LLC,a Colorado limited liability company
Purpose: Vehicular Access and Parking
Recording Date: October 25,2000
Recording No.: Reception No.1355777
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9. Easement(s) for the purpose(s) shown below and rights incidental thereto, as granted in a
document:
Granted to: McCallin Real Estate LLC,a Colorado limited liability company
Purpose: Railroad Spur
Recording Date: October 25,2000
Recording No.: Reception No. 1355778
10. Terms, conditions, provisions, agreements, reservations and obligations contained in the
Warranty Deed as set forth below:
Recording Date: October 25,2000
Recording No.: Reception No. 1355779
11. Easements, notes, terms,conditions, provisions, agreements and obligations as shown on the
plat of Lot Line Vacation No.2005-030:
Recording Date: February 22,2006
Recording No.: Reception No. 1862769
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DEED OF TRUST
THIS INDENTURE ("Deed of Trust"), is made this (p day of o Vett/ h c7
2018 between Key Structures, LLC, a Colorado limited liability company, whose address is 319
Lockheed Street,Pueblo, CO 81001 ("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 One City Hall Place, Pueblo, CO 81003 ("City
of Pueblo");
WITNESSETH, THAT, WHEREAS, Grantor and the City of Pueblo are parties to that
certain Agreement dated October 9, 2018, a true, complete and correct copy of which is attached
as Exhibit A hereto (the "Agreement"), whereby Grantor agreed to comply with certain
employment requirements enumerated in the Agreement in consideration of certain funds
advanced from the City of Pueblo to Grantor in an aggregate amount not to exceed Two Million
One Hundred Thousand Dollars($2,100,000.00) (the "Replacement City Funds");
AND WHEREAS, as of the date hereof, the amount of the Replacement City Funds
subject to a repayment obligation upon default by Grantor under the Agreement shall be
equivalent to the Repayment Obligation as defined in Section 4 of the Agreement.
AND WHEREAS, the Grantor is desirous of securing payment of the Repayment
Obligation to the extent outstanding and subject to the quarterly reductions pursuant to Section
4(e)of the Agreement(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 ("Termination Date"), the following
described property,to wit:
Lots 54 and 55, Pueblo Memorial Airport Industrial Park Subdivision, now known as Parcel A,
Lot Line Vacation No. 2005-030 recorded February 22, 2006 at Reception No. 1662769, Pueblo
County, State of Colorado
also known by street and number as 319 Lockheed Street, Pueblo,CO 81001.
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, or b)in case default shall be made or violation or breach of any of the terms
conditions, covenants or agreements herein contained, which is not cured within sixty(60) days
after written notice specifying the default is given by the City of Pueblo to Grantor, 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 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
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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 four 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 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 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. For the purposes of
calculating the proceeds and overplus of a sale as described above, the amount of the Repayment
Obligation owed to the City of Pueblo as of the date of the sale shall be that amount which is
outstanding under the Agreement at the time of such sale, taking into consideration the quarterly
reduction of the amount of the Repayment Obligation pursuant to Section 4(e) of the Agreement.
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 liens, 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
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the Grantor shall and will forever defend the title to said property against such person or persons
subject to any liens,easements,conditions,restrictions,covenants and reservations of record.
Until the Termination Date, 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 junior 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 junior 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 the Grantor, without beneficiary's prior written consent, hereafter sells or transfers all
or any part of the property or an interest therein, excluding (a)the creation of a lien or
encumbrance subordinate to this Deed of Trust, (b)the creation of a purchase money security
interest for household appliances, (c) a transfer by devise, descent or by operation of law upon
the death of a joint tenant, or (d)the grant of any leasehold interest of three years or less not
containing an option to purchase, 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
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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
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 the Termination Date,
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.
GRANTOR:
Key Structures, LLC
a Colorado Limited Liability Company
By , ,A010.4(e:01A-
Brian Bahr
Manager
STATE OF COLORADO )
) ss.
COUNTY OF El Paso )
The foregoing instrument was acknowledged before me this q day of October, 2018
by Brian Bahr as Manager of Key Structures, LLC, a Colorado limited liability company.
Witness my hand and official seal.
My commission expires: q'a1"a.oao .
[ SEAL k 11 Io
JANNA KELLEY Notar 'ublic
Notary Public
State of Colorado
Notary 10020164037111
My Commission Expires 09-27-2020
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EXHIBIT A
Agreement
[Attached]
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AGREEMENT
THIS AGREEMENT is entered into this 9th day of October, 2018 by and
between the City of Pueblo, a Colorado municipal corporation (the "City") and Key Structures,
LLC, a Colorado limited liability company (the "Company"). The Company and the City are
referred to collectively in this Agreement as the "Parties" and individually, without
differentiation,each as a"Party."
WHEREAS, the Company has expressed a willingness to establish a manufacturing
facility and business administration offices for the Company's factory-produced, pre-engineered
building units business at the City's Airport Industrial Park, and in furtherance thereof has,
through the Pueblo Economic Development Corporation("PEDCO"), made application for funds
from the City; and
WHEREAS, PEDCO has recommended to the City Council that City approve such
application,and
WHEREAS, the City Council, based on PEDCO's recommendation, has approved such
application and will make funds available to Company subject to and upon the terms and
conditions of this Agreement;and
WHEREAS, Company's business plan, as it pertains to Pueblo County, is centered on the
manufacture of factory-produced, pre-engineered building units for distribution outside of
Pueblo County("Company's Business"), and
WHEREAS, the City has determined that Company's Business will create primary jobs
and will not materially and substantially compete with any existing activity or business within
the City; and
WHEREAS, in connection with its application, the Company has committed to: (i)invest
approximately Seven Million Dollars ($7,000,000) in fixed assets in a manufacturing facility
located within the City's Airport Industrial Park: and (ii) provide the employment described in
Section 4 of this Agreement.
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual covenants
contained herein, and other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, City and Company agree as follows:
1. The following terms as used in this Agreement shall have the following meaning
unless the context clearly indicates otherwise:
"Employment Commitment Date" means October 1,2021.
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"Facility" means the approximately 63,500 square foot manufacturing building and
business administration offices located at the Pueblo Memorial Airport Industrial Park, having a
street address of 319 Lockheed Street, Pueblo, Colorado, 81001, 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 at an average annual salary of not less than $39,532.00
per year plus benefits, employed by the Company or new employees hired as a result of
recruiting.
"Per Employee Payment" means an amount equal to (a) the Total Funds Advanced
divided by 125 (i.e. the Full Time Employees subject to the Employment Commitment), divided
by(b)28 (i.e. the number of Quarters in the Repayment Period).
"Property" consisting of approximately 3.8 acres, means Lots 54 and 55, Pueblo
Memorial Airport Industrial Park Subdivision, Pueblo County, State of Colorado, according to
the recorded plat thereof filed in the records of the Pueblo County Clerk and Recorder, also
known by street and number as: 319 Lockheed Street,Pueblo, CO 81001.
"Quarter"means three consecutive calendar months commencing January 1,April 1, July
1 and October 1 of each calendar year.
"Quarterly Employees"means the sum of the aggregate number of Full -Time Employees
on each business day of a Quarter, divided by the number of business days in such Quarter.
"Repayment Reduction" means for each Quarter an amount equal to the Total Funds
Advanced divided by 28 (i.e. the number of Quarters in the Repayment Period). For example, if
the Total Funds Advanced equals $2,100,000.00, the Repayment Reduction would be
$2,100,000.00-28= $75,000.00.
2. If Company is not in default under this Agreement, City will advance to or for the
benefit of Company (each such advance, a "Funds Advance" and all such cumulative advances
the "Total Funds Advanced") funds in the amount of Two Million, One Hundred Thousand
Dollars($2,100,000.00)(the "City Funds")as follows:
• City agrees to advance Company funds in an amount not to exceed Two Million
Dollars ($2,000,000.00) for capital improvements (e.g. acquisition of the
Property; Facility improvement costs; equipment costs; rail access and
improvement costs; etc.) by not later than Closing as defined in this Section 2
below.
• Promptly upon receipt of Company's payment of $100,000.00 to Pueblo
Community College ("PCC") for the purpose of providing pre-employment
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training of Company's prospective employees, City agrees to reimburse
Company for that amount. Company agrees to give persons successfully
completing the training program at PCC priority for hiring. The maximum
amount for training for each employee shall not exceed$800.00.
The aforesaid transfer of City Funds is subject to and contingent upon the following conditions
and covenants which Company agrees to perform and comply with:
• 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, and (ii) certified copies of the resolutions of the governing board of
Company approving this Agreement and authorizing its officers to execute
and deliver said document in the name of Company, and (iii) this
Agreement, executed by authorized officers of Company.
• The date of the last to occur of the filings required under (i), (ii) and (iii)
of this Section shall be referred to herein as "Closing." If Closing does not
occur on or before January 1, 2019, 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.
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 it
will after the date of this Agreement continuously conduct its business operations and employ
Full -Time Employees at the Facility as follows: (i) during the period from the date of this
Agreement to the Employment Commitment Date October 1, 2021, Company shall use its
commercially reasonable efforts in good faith to employ as many Full -Time Employees as
reasonably justified by its business operations, and (ii) on and after the Employment
Commitment Date, Company shall employ not less than one hundred twenty-five (125) Full -
Time Employees at the Facility (the "Employment Commitment") for a term seven (7) years
starting on the Employment Commitment Date and ending eighty-four(84)months thereafter.
4. Notwithstanding anything contained in this Agreement to the contrary, if
Company shall for any reason default in its Employment Commitment set forth in Section 3,
Company shall repay to City a pro-rata share of the City Funds advanced by City under Section 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
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pay to City an amount each Quarter equal to the Quarterly Employees less than one hundred
twenty-five(125) Full-Time Employees employed at the Facility by Company multiplied by the
Per Employee Payment (the "Company's Quarterly Payments"). For example, if for the second
Quarter of the third year after the Employment Commitment Date the Total Funds Advanced
equals $2,100,000.00 and such Quarterly Employees is 111, the amount payable by Company to
City on or before the fifteenth (15th) day of the next calendar month would be (125 - 111) x
$600.00=$8,400.00.
(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(8)percent per annum("Default Rate")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 and their aggregate salaries for the preceding Quarter and 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 such employment, City
shall have access to Company's records relating to Company's employees employed at the
Facility. Except in the event of any action filed by City to enforce this Agreement, City shall
treat such information as confidential and shall not disclose (except pursuant to a subpoena or
court order) such information to any party other than those City employees who have a need to
know such information.
(d) Subject to the provisions of Section 6, if Company defaults in the
performance of its 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, City
may declare the entire balance of Company's Repayment Obligation due and owing together
with interest thereon from the date of default at the Default Rate, and for such purpose,the entire
balance of Company's Repayment Obligation shall be the amount calculated pursuant to Section
4(e). 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.
(e) Except as otherwise provided in Sections 7 and 13 hereof, City's damages
for breach of Company's Employment Commitment or Repayment Obligation shall not exceed
Total Funds Advanced plus interest, provided, however, that the Total Funds Advanced shall be
reduced by the Repayment Reduction for each Quarter Company meets its Repayment
Obligation during the Repayment Period by either (i) employing one hundred twenty-five (125)
Quarterly Employees at the Facility, or (ii) paying Company's Quarterly Payments as provided
in Section 4(a)above for such Quarter.
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5. (a) All City Funds advanced to Company by City 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 Repayment Obligation contained in Section 4. The
Company's performance under this Agreement including its Repayment Obligation contained in
Section 4 shall be secured by a Deed of Trust encumbering the Facility and Property. Company
covenants with and warrants to the City that the Deed of Trust shall constitute a first priority lien
or encumbrance and that there are and will be no senior liens or encumbrances against the
Facility and Property. As agreed to in this Employment Agreement, during the seven (7) year
period starting on the Employment Commitment Date (as defined in this Employment
Agreement) and ending eighty-four (84) months thereafter (the "Repayment Period") the
principal balance of the Deed of Trust will be decreased on a quarterly basis consistent with the
Company's compliance with its Employment Commitment as set forth in Section 3 of this
Employment Agreement. A copy of the approved Deed of Trust is attached as an exhibit to this
Agreement.
(b) Company shall obtain, at Company's sole cost and expense, from a title
company selected by Company authorized to issue title insurance in the state of Colorado (the
"Title Company"), on the current standard form of extended ALTA Lenders Policy (collectively,
the"Title Commitment"). The Title Company shall promptly provide copies of any amendments
or modifications of the Title Commitment to City. At the Closing of Company's purchase of the
Property("Closing") or as soon as reasonably practicable after Closing, the Title Company shall
issue and deliver to City the lender's title insurance policy referred to above (the "Title Policy"),
in the amount of Two Million One Hundred Thousand Dollars ($2,100,000.00) issued by the
Title Company insuring Company's title to the Property and City's first-priority encumbrance on
the Property, consistent with the Title Commitment, providing "gap" coverage, deleting the
standard exceptions, and subject only to taxes and assessments for the year of Closing and
subsequent years. At Closing, Company shall pay the premium for the Title Policy. Company
shall provide such affidavits or certificates as may be required by the Title Company to remove
all liens, including, without limitation, mechanics' or materialmen's liens, as exceptions to the
Title Policy.
6. (a) Prior to instituting any proceeding to enforce Company's Repayment
Obligation under Section 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 thirty(30)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 must appear. City will notify Company of the time and
place of the meeting at least ten (10) days before 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.
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(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 Section 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, and the prevailing party shall recover its costs together with all internal and out-of-pocket
expenses of any kind relating to the litigation including, but not limited to, reasonable attorney
fees. 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 hereby submits
to the personal and subject matter jurisdiction of such District Court. To the full 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
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 or Mayor, as applicable, City of Pueblo, 1 City
Hall Place, 2' Floor, Pueblo, Colorado, 81003, with copy to City Attorney, 1 City Hall Place, 3`a
Floor,Pueblo, Colorado, 81003, or
(b) if to the Company, Attn: Chief Executive Officer, do The Challenger
Group,Inc., 8605 Explorer Drive, Suite 250, Colorado Springs, CO 80927.
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or to such other person or address as either party shall specify in written notice given to the other
party pursuant to the provisions of this Section 10. Notice shall be effective (i) upon receipt if
delivered personally,or(ii)three(3)business days after deposit in the mails, if mailed.
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 will not be unreasonably withheld or delayed. Any assignment or attempted assignment
of this Agreement by Company without such consent shall be null and void. No assignment of
this Agreement or any interest herein by Company shall release or discharge Company from any
of its obligations under this Agreement unless otherwise agreed by City at the time consent to
assignment is given.
12. The persons signing this Agreement in the name of and on behalf of City and
Company represent and warrant that they, and the entities they represent, have the requisite
power and authority to enter into, execute, and deliver this Agreement, and that this Agreement
is a valid and legally binding obligation of Company and City, enforceable against them 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 by City 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, 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 Section 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 Section 2
hereof
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 partners or
joint venturers under this Agreement.
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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 at Pueblo,Colorado,this 9th day of October, 2018.
City of Pueblo,Colorado
a Colorado Municipal Corporation
[ SEAL]
AttestZ Cn CLCx By
Acting City Clerk of the City Council
Key Structures,LLC
a Colorado Limited 'a g ility Compan
By
Brian Bahr
Manager
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STATE OF COLORADO )
) ss.
COUNTY OF E I Pact° )
The foregoing instrument was acknowledged before me this C( day of October, 2018 by
Brian Bahr as Manager of Key Structures,LLC, a Colorado limited liability company.
Witness my hand and official seal.
My commission expires: CI-a121) D.
[ SEAL] Y1C
No ublic
JANNA KELLEY
Notary Public
State of Colorado
Notary ID N 20164037111
My Commission Expires 09-27-2020
.rw r
9