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HomeMy WebLinkAbout09927 ORDINANCE NO. 9927 AN ORDINANCE APPROVING AND AUTHORIZING THE MAYOR TO EXECUTE A CONTRACT TO BUY AND SELL REAL ESTATE AND A LEASE AGREEMENT BETWEEN THE CITY OF PUEBLO, A COLORADO MUNICIPAL CORPORATION AND FERGUSON ENTERPRISES, LLC, A VIRGINIA LIMITED LIABILITY COMPANY BE IT ORDAINED BY THE CITY COUNCIL OF PUEBLO, that: SECTION 1. The following agreements, both dated May 10, 2021, between the City of Pueblo, a Colorado municipal corporation and Ferguson Enterprises, LLC, a Virginia limited liability company (“Company”) copies of which are attached hereto and are incorporated herein by this reference, having been approved as to form by the City Attorney, are hereby approved:  Contract for the City to purchase from the Company approximately 2.06 acres of improved land located at 175 S. Santa Fe Avenue, Pueblo, CO 81003 (Parcel No. 05-364-26-004) and 131 S. Mechanic Street, Pueblo, CO 81003 (Parcel No. 05- 364-25-003) (the “Property”) for the purchase price of $2.1 million; and  A Lease Agreement for the City to lease back a portion of the Property to the Company. The Mayor is authorized to execute and deliver said agreements in the name of the City and the City Clerk is authorized to affix the seal of the City thereto and attest same. The Mayor is further authorized to execute and deliver the usual and customary documents at closing to effectuate the purchase of the Property by the City from the Company in the manner described in the attached agreements. SECTION 2. The officers and staff of the City are authorized to perform any and all acts consistent with this Ordinance and the attached agreements which are necessary or appropriate to implement the transactions described therein. SECTION 3. This Ordinance shall become effective on the date of final action by the Mayor and City Council. Action by City Council: Introduced and initial adoption of Ordinance by City Council on April 26, 2021 . Final adoption of Ordinance by City Council on May 17, 2021 . President of City Council Action by the Mayor: ☒ Approved on May 19, 2021 . □ Disapproved on based on the following objections: _ Mayor Action by City Council After Disapproval by the Mayor: □ Council did not act to override the Mayor's veto. □ Ordinance re-adopted on a vote of , on □ Council action on _______ failed to override the Mayor’s veto. President of City Council ATTEST City Clerk City Clerk’s Office Item # R-10 Background Paper for Proposed Ordinance COUNCIL MEETING DATE: April 26, 2021 TO: President Lawrence W. Atencio and Members of City Council CC: Mayor Nicholas A. Gradisar VIA: Marisa Stoller, City Clerk FROM: Daniel C. Kogovsek, City Attorney SUBJECT: AN ORDINANCE APPROVING AND AUTHORIZING THE MAYOR TO EXECUTE A CONTRACT TO BUY AND SELL REAL ESTATE AND A LEASE AGREEMENT BETWEEN THE CITY OF PUEBLO, A COLORADO MUNICIPAL CORPORATION AND FERGUSON ENTERPRISES, LLC, A VIRGINIA LIMITED LIABILITY COMPANY SUMMARY: Attached is an Ordinance approving and authorizing the Mayor to sign the following two (2) agreements with Ferguson Enterprises, LLC, a Virginia limited liability company (“Company”):  Contract for the City to purchase from the Company approximately 2.06 acres of improved land located at 175 S. Santa Fe Avenue, Pueblo, CO 81003 (Parcel No. 05-364-26-004) and 131 S. Mechanic Street, Pueblo, CO 81003 (Parcel No. 05- 364-25-003) (the “Property”); and  A Lease Agreement for the City to lease back a portion of the Property to the Company. PREVIOUS COUNCIL ACTION: On January 11, 2021, by Ordinance No. 9866, City Council approved the acquisition of the Property by purchase or condemnation. BACKGROUND: Acquisition of the Property is necessary for the expansion of the Historic Arkansas Riverwalk Project (“HARP”). Schematic designs for HARP expansion to the east, extending the channel to Santa Fe Avenue have been completed. Additional parking spaces are also needed near the HARP Riverwalk to accommodate the thousands of local residents and tourists who use and enjoy the river walk each year. The HARP channel extension to Santa Fe Avenue and the construction of an adjacent parking lot (“HARP Expansion Project”) require private land acquisition. The land necessary for the HARP Expansion Project has a fair market value of $1,120,000.00, according to a recent appraisal. The Company currently occupies the Property and is reluctant to sell it to the City. In addition to paying the $1,120,000.00, the Company has requested that the City pay the Company’s relocation expenses of $1,100,000.00. In order to avoid condemnation and the payment of relocation expenses, the City and the Company negotiated a compromise which is reflected in the attached Contract to Buy and Sell Real Estate and the Lease Agreement. FINANCIAL IMPLICATIONS: Under the proposed Buy and Sell Agreement, the City will purchase the Property for One Million Two Hundred Thousand Dollars ($1,200,000.00) payable as follows: (a) Nine Hundred Thousand Dollars ($900,000.00) in cash or certified funds payable on the Closing Date; (b) Three Hundred Thousand Dollars ($300,000.00) to be deposited into an escrow account jointly controlled by the City and the Company. Said funds will be disbursed to the Company when the Company vacates the Property. The Term of the Lease Agreement shall begin on the Closing Date of the sale of the Property by Company to City and shall expire on the two (2) year anniversary of the Closing Date. Company may extend the Term for an Extended Term by exercising two (2), one (1) year renewal options by providing thirty (30) days prior written notice to the City. Company shall also have the continuing option to cancel the Lease, for any reason whatsoever, by providing thirty (30) days prior written notice to the City. Company shall not be obligated to pay rent to the City during the original term of the Lease but shall be obligated to pay rent to the City during the extended term of the Lease as follows: Dates Monthly Rent st 1 option year $7,000.00 nd 2 option year $8,000.00 The Lease is a “net” lease with City incurring no obligation, monetary or otherwise, for any expense of any nature associated with the use and operation of the Property and any component part thereof by the Company during the Lease Term. BOARD/COMMISSION RECOMMENDATION: Not applicable to this Ordinance. STAKEHOLDER PROCESS: Not applicable to this Ordinance. ALTERNATIVES: If this Ordinance is not approved, the procedures for the acquisition by the City of land necessary for the expansion of the HARP will remain unresolved RECOMMENDATION: The governing board of the HARP recommends approval of this Ordinance. Attachments: Proposed Ordinance Proposed Lease Agreement Proposed Contract to Buy and Sell Real Estate CONTRACT TO BUY AND SELL REAL ESTATE THIS CONTRACT TO BUY AND SELL REAL ESTATE ("Contract") is made and entered into as of the 10th day of May, 2021 (the "Effective Date") by and between Ferguson Enterprises, LLC, a Virginia limited liability company(the "Seller")and the City of Pueblo, Colorado, a Colorado municipal corporation (the "Buyer"). Buyer and Seller are sometimes referred to herein as a "Party" and, collectively, as the "Parties." Recitals A. Seller is the owner of certain improved real property located within Pueblo County, Colorado, and more particularly described in Schedule A, attached hereto and incorporated herein by reference (the "Property"). The Property is also known by street and number as: 175 S. Santa Fe Ave., Pueblo, CO 81003 (Pueblo County Assessor Parcel No.: 536426004) and 131 S. Mechanic St., Pueblo, CO 81003 (Pueblo County Assessor Parcel No.: 536425003) and consists of two (2) contiguous parcels containing approximately 89,928.68 square feet(2.06 Acres). B. Buyer is desirous of purchasing the Property from Seller upon the terms set forth hereinafter. C. Seller is willing to sell the Property to Buyer upon the terms and conditions hereinafter set forth. 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, Seller and Buyer agree as follows: 1. Sale and Purchase. Seller agrees to sell and Buyer agrees to purchase the Property, together with all tenements, hereditaments, appurtenances, interests, rights, benefits, easements and improvements thereunto belonging or appertaining, all of which are and shall constitute part of the Property as defined herein, on the terms and conditions set forth in this Contract. Seller's furniture, trade fixtures, displays, inventory, bins, racking and other items of personal property located at the Property will remain the property of Seller and shall not be deemed part of the Property to be acquired by the Buyer hereunder. 2. Purchase Price and Terms. The Purchase Price for the Property shall be One Million Two Hundred Thousand Dollars ($1,200,000.00) payable as follows: (a) Nine Hundred Thousand Dollars ($900,000.00) in cash or certified funds payable on the Closing Date (as defined in Paragraph 5 below); (b) Three Hundred Thousand Dollars ($300,000.00) to be deposited into an escrow account jointly controlled by Buyer and Seller. The Parties agree that that said funds will be disbursed to the Seller when Seller vacates the Leased Premises, as provided in the Escrow Agreement. 1 3. Evidence of Title. (a) Title Commitment and Policy. Prior to the Closing Date (as defined in Paragraph 5 below) Seller shall order and obtain, at Seller's expense, a current commitment for extended coverage title insurance in the amount of the Purchase Price, together with legible copies of all documents listed as exceptions therein, and a current certificate of taxes due with respect to the Property, from a title company selected by Buyer and reasonably acceptable to Seller authorized to issue title insurance in the State of Colorado (the "Title Company"), on the current standard form of extended ALTA Owners Policy (collectively, the "Title Commitment"). The Title Company shall promptly provide copies of any amendments or modifications of the Title Commitment to Buyer and Seller. At Closing or as soon as reasonably practicable after Closing, the Title Company shall issue and deliver to Buyer the owner's title insurance policy referred to above(the "Title Policy"), issued by the Title Company insuring Buyer's title to the Property consistent with the Title Commitment, providing"gap"coverage, deleting the standard exceptions, endorsing over arbitration exceptions (to the extent the Title Company will so agree), if necessary, and subject only to taxes and assessments for the year of Closing and subsequent years, and the other matters approved by Buyer in accordance with subparagraph (c) below and any encumbrances upon the Property caused by Buyer(the "Permitted Exceptions"). At Closing, Seller shall pay the premium for the Title Policy. Buyer may obtain such other endorsements to the Title Policy as Buyer desires, at the expense of Buyer, except for endorsements obtained at Seller's cost, as provided in subparagraph (c) below. Seller 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. (b) Survey. Buyer may order an update to Buyer's existing survey from its existing surveyor (or, if such surveyor is not available, then from another surveyor selected by Buyer and reasonably acceptable to Seller) (the "Survey"). At Buyer's sole cost and expense, Buyer shall cause a copy of the Survey to be delivered to Seller promptly following Buyer's receipt of same. The Survey shall show all improvements and shall plot all exceptions shown on the applicable Title Commitment (to the extent plottable), certified in favor of Seller, Buyer, any requested affiliates of Seller and Buyer, and the Title Company in a manner reasonably acceptable to Seller and Buyer, and prepared in accordance with the appropriate "ALTA/ACSM" minimum standards. (c) Title Defects and Objections. Buyer will have twenty (20) days from the date of receipt of the Title Commitment and Survey, whichever shall last occur, but in no event later than the expiration of the Inspection Period (as defined in Paragraph 4 below), to notify Seller in writing of any objections to any items identified in the Title Commitment, or of any other objections as to title matters. Seller will have until fifteen (15)days after receipt of Buyer's written objections ("Seller's Cure Period") to elect, at its reasonable discretion, to cure all items to which Buyer has objected, cause such items to be modified in a manner which is reasonably satisfactory to Buyer or to advise Buyer that Seller does not intend to cure such items. Alternatively, within the Seller's Cure Period, Buyer at Buyer's cost may elect to obtain one or more endorsements to the Title Commitment, in a form reasonably acceptable to Buyer, providing title insurance protection with regard to any objections raised by Buyer. If Seller fails to cure to the reasonable satisfaction of Buyer any written objection by Buyer of which Seller has been given notice in accordance with this subparagraph (c), or elects not to cure, then Buyer may elect, as its sole remedy to either (i) waive the objection by written notice to Seller within ten (10) days after 2 expiration of Seller's Cure Period and proceed to Closing as herein provided, or(ii) terminate this Contract by written notice to Seller, in which case the Parties will be released from all obligations hereunder, except for any obligations that expressly survive the termination of this Contract. Buyer will have ten (10) business days after receipt of any amendment or update to the Title Commitment or Survey to object to any changes in the same fashion as objections to the initial Title Commitment or Survey under this subparagraph (c). Anything above to the contrary notwithstanding, Seller shall be obligated to, and shall cause all financing, mortgage, judgment and tax liens to be removed as title exceptions prior to or concurrently with Closing. 4. Inspection. Commencing on the Effective Date and continuing for One Hundred Twenty (120) days thereafter (the "Inspection Period"), Buyer, its agents, consultants and employees, shall have the right to enter and access the Property at reasonable times and upon reasonable advance notice for the purpose of making such inspections, studies, tests and investigations ("Testing") as Buyer may elect and which it deems necessary to determine the suitability of the Property for Buyer's intended use. All such Testing shall be performed by Buyer or its agents or employees at Buyer's sole cost and expense. Buyer shall indemnify, defend and hold Seller and the Property harmless from and against any and all direct costs, liabilities, claims, demands, actions and expenses arising from or in connection with such Testing and, in the event Buyer does not close on the purchase of the Property, Buyer shall repair any damage to the Property or improvements thereon caused by such Testing. This indemnification shall not be deemed to apply to costs, liabilities, claims, demands, actions or expenses arising from Seller's negligent acts or omissions or any pre-existing condition (including, without limitation, environmental conditions)within the Property. If Buyer is not satisfied with the physical condition of the Property, Buyer may terminate this Contract by written notice given to Seller prior to the expiration of the Inspection Period. 5. Date of Closing. The closing of Buyer's purchase of the Property ("Closing") shall take place within One Hundred Fifty (150) days after the Effective Date of this Contract or at an earlier date as mutually agreed to by the Parties ("Closing Date") and the hour and place of Closing shall be mutually agreed upon by the Parties. 6. Transfer of Title. Subject to payment of the Purchase Price, compliance by Buyer with the other terms and provisions hereof, and the occurrence or waiver by Buyer of the Conditions Precedent to Closing defined and described in Paragraph 7, at Closing: (a) Seller shall execute and deliver to Buyer at Closing a Special Warranty Deed conveying marketable fee simple title to the Property to Buyer free of financing, mortgage, judgment and tax liens, subject only to the Permitted Exceptions which shall include all matters shown on the Title Commitment accepted by Buyer; and (b) Seller shall relinquish all rights under that certain Lease Agreement dated September 9, 2014 between the Seller, as Tenant, and the Pueblo Urban Renewal Authority, as Landlord, by executing a Quit Claim Deed to the Pueblo Urban Renewal Authority to that certain parcel of unimproved land, described as follows: The South 3 feet of Lot 14, and all of Lots 15, 16 and 17, Block 1, Moore's Subdivision, County of Pueblo, State of Colorado 3 also known by street and number as: 209 S. Santa Fe Ave., Pueblo, CO 81003 (Pueblo County Assessor Parcel No.: 536426005). 7. Additional Conditions Precedent to Closing. The sale and purchase contemplated by this Contract is contingent upon occurrence of all the following prior to Closing Date (collectively, the "Conditions Precedent to Closing"): (a) City Council of Buyer, as its governing body, approving this Contract on or before Closing. (b) Funds for the payment of the Purchase Price being duly appropriated by Buyer's governing body in accordance with law and a sufficient unencumbered balance thereof being duly appropriated for payment of the Purchase Price stated above. (c) The results of inspection and testing do not indicate any conditions which are deemed unacceptable to Buyer, in Buyer's sole and absolute discretion. (d) The Parties entering into a Lease Agreement, acceptable to both Parties, which shall take effect on the Closing Date and shall specify the terms and conditions under which Seller shall be allowed to remain in possession of portions of the Property, for a specified interval, following Closing. In the event any of the Conditions Precedent to Closing are not satisfied on or before five (5) days before the Closing Date, Buyer may by notice given to Seller not less than least five (5) days prior to Closing Date that Buyer will (i) waive any or all of the above conditions in writing delivered to Seller and close the sale and purchase of the Property, or (ii) elect to terminate this Contract, in which event each party will be released from all obligations under this Contract. 8. Closing Costs, Documents and Services. Buyer and Seller shall sign and complete all customary or required documents at or before Closing. Fees for real estate closing services, if any, shall be paid at Closing, one-half by Seller and one-half by Buyer. 9. Prorations. Estimated general taxes and assessments for the year of Closing, if any(which shall be based on the taxes for the calendar year immediately preceding Closing) shall be prorated and paid by Seller on the Closing Date. 10. Possession. Possession of all portions of the Property not being leased by Buyer to Seller under the Lease Agreement shall be delivered to Buyer by Seller on the Closing Date. For all portions of the Property not being leased by Buyer to Seller, Seller shall, within ten (10) days after the Closing Date, remove all equipment, fixtures and improvements of a detachable or temporary nature installed or placed upon the Property by Seller, including trade fixtures, and Seller shall repair all damage to the Property caused by such removal. The failure of Seller to remove its equipment, fixtures and detachable improvements shall, at the option of Buyer, be deemed an abandonment of such property and Buyer may dispose of such property, at Seller's expense, in a manner as the Buyer, in its sole discretion, may determine. 4 11. Time of Essence/Default and Remedies. Time is of the essence hereof. If any obligation required to be performed prior to Closing (and including the obligation to close) is not performed there shall be the following exclusive remedies: (a) If Buyer is in Default: In the event Buyer defaults in the performance of its obligations hereunder, Seller shall have the right to (i) terminate this Contract by written notice to Buyer or(ii)treat this Contract as being in full force and effect and to obtain specific performance, but not any damages. Such violations may be restrained or such obligations enforced by injunction, without the posting of a bond, at the instance and request of Seller without the showing of any special damages or an inadequate remedy at law. (b) If Seller is in Default: In the event Seller defaults in the performance of its obligations hereunder, Buyer shall have the right to (i) terminate this Contract by written notice to Seller or(ii)treat this Contract as being in full force and effect and to obtain specific performance, but not any damages. Such violations may be restrained or such obligations enforced by injunction,without the posting of a bond, at the instance and request of Buyer without the showing of any special damages or an inadequate remedy at law. (c) Costs and Attorneys' Fees. Anything to the contrary herein notwithstanding, in the event of any action or litigation arising out of this Contract, the court shall award to the prevailing party all reasonable costs and expenses, including reasonable attorneys' fees. Exclusive venue and jurisdiction for any such litigation shall be in the District Court in and for Pueblo County, Colorado and to the maximum extent permitted by law, Buyer and Seller hereby waive their right to a trial by jury. The provisions of this subparagraph (c) shall survive Closing or termination of this Contract. 12. Representations and Warranties of Seller. The Seller represents and warrants to Buyer as follows: (a) Seller has full power, capacity and authority to execute and deliver this Contract and all other documents required to be executed and delivered by Seller under this Contract and to perform its obligations hereunder. (b) This Contract has been, duly authorized, executed and delivered by Seller and constitutes the legal, valid and binding obligation of Seller, enforceable against Seller in accordance with its terms. (c) Seller is nota party to any judicial, administrative, arbitration or other similar proceedings relating in any manner to the Property or to Seller's interest therein or that may detrimentally affect Seller's ability to perform its obligations under this Contract or the ability of persons who acquire portions of the Property to develop, own or operate the Property. Seller has not received notice of(and to Seller's knowledge there is no basis for) any pending or threatened claims, actions, suits or other proceedings of the nature described in the immediately preceding sentence, nor are any such claims, actions, suits or other proceedings anticipated by Seller. (d) To Seller's knowledge, there are no violations of laws, rules, regulations, ordinances, codes, covenants, conditions, restrictions or agreements applicable to the Property. Seller has not received notice from any governmental or other agency or any other person with 5 respect to any such violations concerning the Property. (e) There are no contracts or other obligations outstanding for the sale, lease or transfer of all or any part of the Property. (f) There is no default, nor has any event occurred which, with the passage of time, the giving of notice or both, would constitute a default under any agreement, contract, mortgage, deed of trust or other instrument which relates to Seller's interest in the Property, to the Property itself, or which affects the Property in any manner that would have a material adverse effect on the Buyer. (g) To the best of Seller's information, knowledge and belief: (i)the Property is in compliance with all applicable state and federal environmental laws, regulations, ordinances, rules and orders (collectively, "Environmental Laws"); (ii) there are no pending or threatened judicial or administrative proceedings of any kind with respect to the Property alleging the violation or potential violation of any Environmental Law nor any pending or threatened investigations of any matters relating to any Environmental Laws with respect to the Property; (iii) there exists no release or threatened release of any hazardous, toxic or otherwise regulated substance, waste, contaminant or material (collectively "Hazardous Materials"), as such terms are defined in any applicable Environmental Law, on, in or at the Property, or any part thereof; (iv) the Property has not been used as a dump site, a storage site for solid wastes or the location of above ground or underground fuel or storage tanks; and (v) that Hazardous Materials are not currently present on or have at any time been stored or used on the Property in violation of any Environmental Laws. Seller shall indemnify and hold Buyer harmless and defend Buyer from any loss, liability or expense, including reasonable attorneys' fees, incurred by Buyer, or any claim made against Buyer, by reason of Seller's breach of any of the foregoing representations or warranties. The provisions of this Paragraph 12 shall survive closing and the recordation of the Special Warranty Deed. 13. Representations and Warranties of Buyer. Buyer represents, warrants and covenants as follows: (a) Buyer has full power, capacity and authority to execute and deliver this Contract and all other documents required to be executed and delivered by Buyer under this Contract and to perform its obligations hereunder. (b) Subject to approval by Buyer's City Council, this Contract will have been duly authorized, executed and delivered by Buyer and constitutes the legal, valid and binding obligation of Buyer, enforceable against Buyer in accordance with its terms. 14. Seller Covenants. Commencing on the Effective Date and until the first to occur of Closing or termination of this Contract, Seller shall not (a) lease, sell, convey or further encumber any portion of the Property, (b) consent to any zoning or other change affecting the use of the Property, except for those requested or approved by Buyer, or(c) cause any other changes which affect the condition of Seller's title to the Property or would otherwise be reasonably likely to adversely impact the condition of the Property or Buyer's intended use thereof. 6 15. Notices. Any notice required or permitted to be given or delivered under this Contract shall be in writing and shall be given by personal delivery, or by the United States Postal Service, by registered or certified mail, postage prepaid, or reputable national overnight courier service: (a) If to Buyer, addressed to: Mayor 1 City Hall Place, 2nd Floor Pueblo, CO 81003 Telephone No. (719) 553-2611 with a copy to:City Attorney 1 City Hall Place, 3rd Floor Pueblo, CO 81003 Telephone No. (719) 562-3899 (b) If to Seller, addressed to: Ferguson Enterprises, LLC 12500 Jefferson Ave. Newport News, VA 23602-4314 Attn: RE & Facilities Dept. Telephone No. (757) 874-7795 or to such other address or person as any Party may from time to time specify in a writing delivered to the other Party in the manner provided in this paragraph. Any notice shall be deemed delivered on the day on which personal delivery is effected or three (3) days after deposit in the mail in the case of registered or certified mail, and one (1) business day after deposit in the case of overnight courier. 16. Assignment. This Contract and the rights granted to Buyer hereunder may be assigned by Buyer with Seller's consent, provided, such consent shall not be unreasonably withheld, conditioned or delayed. Except as so restricted, this Contract shall inure to the benefit of and be binding upon the Parties and their respective successors and assigns. 17. Modification. No subsequent modification of any of the terms of this Contract shall be valid or binding upon the Parties or enforceable unless made in writing and signed by the Parties. 18. Entire Contract. This Contract constitutes the entire agreement between the Parties relating to the subject matter hereof, and any prior statements, representations or agreements pertaining thereto,whether oral or written, have been merged and integrated into this Contract. 19. Captions. The captions in this Contract are inserted for convenience of reference only and in no way define, describe or limit the scope or intent of this Contract or any of the provisions hereof. 7 20. Validity. If any provision of this Contract shall be held to be invalid or unenforceable, the same shall not affect in any respect whatsoever the validity or enforceability of the remainder of this Contract. 21. Broker. Buyer and Seller represent and warrant that they shall each pay their respective brokers or real estate agents, if any, in connection with this transaction. Seller agrees to indemnify, defend and hold Buyer harmless from and against any and all claims, loss, liability, costs and expenses (including reasonable attorneys' fees), resulting from any claims that may be made against Buyer by any broker or other person claiming a commission, fee or other compensation by reason of the transaction contemplated hereby if the same shall arise by, through or on account of Seller. Buyer agrees to indemnify, defend and hold Seller harmless from and against any and all claims, loss, liability, costs and expenses(including reasonable attorneys' fees), resulting from any claims that may be made against Seller by any broker or other person claiming a commission, fee or other compensation by reason of the transaction contemplated hereby if the same shall arise by, through or on account of Buyer. 22. Applicable Law. This Contract will be construed and enforced in accordance with the laws of the State of Colorado (without giving effect to its choice of law principles). 23. Interpretation. Whenever the context so requires, the singular number shall include the plural and the plural the singular, and the use of any gender shall include all genders. 24. Survival of Representations. The representations, warranties, covenants and agreements of Buyer and Seller in this Contract are and shall be construed to be covenants running with the Property, shall survive the Closing of the transaction contemplated hereby and recordation of the Special Warranty Deed, may be enforced by either Buyer or Seller after Closing Date, and shall not be merged or be deemed to be merged into the Special Warranty Deed. 25. Third Parties. Buyer and Seller and their respective successors and permitted assigns are the only parties to this Contract and are the only parties entitled to enforce this Contract. Nothing contained in this Contract nor any provision hereof is intended to give or shall be construed to give or confer, directly or indirectly, or otherwise, upon any third party any right, remedy or benefit hereunder. 26. Counterparts and Facsimile Signatures. This Contract may be executed in multiple counterparts, which taken together shall be deemed one original. 27. Exclusivity. In consideration of the time and resources which the Buyer will devote to the transactions contemplated herein, Seller agrees that for a period of One Hundred Fifty(150) after the effective date of this Contract or the earlier termination of this Contract, Seller will not, directly or indirectly, solicit, initiate or enter into discussions or transactions with, or encourage, or provide any information to, any individual, entity or group (other than to Buyer and Buyer's designees) concerning any sale or lease of the Property or any similar transaction or alternative. The provisions of this Paragraph shall not be construed to prohibit Seller or Buyer from discussing the transaction contemplated herein with their attorneys or other consultants. 28. Limitations on Liability. EXCLUDING LIABILITY ARISING FROM THE WILLFUL 8 OR INTENTIONAL MISCONDUCT OF A PARTY, NEITHER PARTY SHALL BE LIABLE FOR ANY DIRECT, CONSEQUENTIAL, INCIDENTAL, PUNITIVE, SPECIAL, EXEMPLARY OR INDIRECT DAMAGES (INCLUDING LOSS OF PROFITS ARISING OUT OF THIS CONTRACT) EVEN IF IT IS ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. 29. Condition of Property. Except as otherwise expressly set forth herein, the Property is being conveyed to Buyer "AS-IS, WHERE-IS" without any warranties with respect to the condition of the Property. Buyer will personally inspect the Property during the Inspection Period to ascertain the condition thereof, and is making this purchase without relying on any oral or written warranty or representation by Seller, or employees or agents of Seller, as to the condition of the Property, all of which are hereby disclaimed by Seller. 30. Tax-Deferred Exchange. If one or more of the parties to this Contract desires to enter into a tax-deferred exchange within the scope of Section 1031 of the Internal Revenue Code of 1986, as amended, and its accompanying Regulations, with respect to the fee simple title in or proceeds of the Property, then the parties each agree to assist one another in the consummation of such transaction(s); and the parties reserve the right to assign their respective rights (but not obligations) hereunder to a Qualified Intermediary as provided for in IRC Regulation 1.1031(a)- 1(g)(4) on or before the Closing Date, through written assignment and otherwise as may be necessary to accomplish a Section 1031 Exchange under the Internal Revenue Code, provided the assisting party shall incur no additional expense or liability. [SIGNATURE PAGE FOLLOWS] 9 Executed as of the day and year first above written. BUYER: CITY OF PUEBLO, COLORADO a Colorado municipal corporation • By: Nic utas A.Gradisar, Mayor ATTESTED BY: -,, CIT ERK SELLER: FERGUSON ENTERPRISES, LLC a Virginia limited liability company By: C----�= Name'Steven R.Adcox Title: Deputy General Counsel STATE OF VIRGINIA ss. CITY OF CHESAPEAKE The foregoing instrument was acknowledged before me this 27 day of M4-y 2021 by Steven R. Adcox as Deputy General Counsel of Ferguson Enterprises, LLC, a Virginia limited liability company. Witness my hand and official seal. My commission expires: August 31, 2022. [SEAL] •‘"PEJ. V/� ins � • ' Notary Public 0":" Reg. No. 7588711 0A AR 1, Q M P g\> z •"i °NWii A:0.4,`! 10 SCHEDULE A LEGAL DESCRIPTION CONTINUED PARCEL A: LOTS 1, 2 AND 3 AND FRACTIONAL LOTS 4, 5, 6, 7, 10, 11 AND 12, ALL IN BLOCK 2 IN THE FORMER TOWN OF CENTRAL PUEBLO, BEING THOSE PORTIONS OF SAID LOTS 1, 2, 3, 4, 5, 6, 7, 10, 11 AND 12, ALL IN BLOCK 2 IN THE FORMER TOWN OF CENTRAL PUEBLO, NOW A PART OF THE CITY OF PUEBLO, FILED FOR RECORD on August 13, 1883, WHICH LIES WESTERLY OF THE 20 FOOT WIDE ALLEY ADJOINING THE WESTERLY BOUNDARY OF BLOCK 1 IN MOORE'S SUBDIVISION FILED FOR RECORD JUNE 19, 1912. TOGTHER WITH THAT PORTION OF THE ALLEY IN SAID BLOCK 2, IF NOW VACATED, ADJOINING THE ABOVE DESCRBED LOTS. PARCEL B: LOTS 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13 AND THE NORTH TWENTY-TWO FEET OF LOT 14 IN BLOCK 1 IN MOORE'S SUBDIVISION OF A PORTION OF THE EAST ONE-HALF OF THE NORTHEAST QUARTER OF THE SOUTHEAST QUARTER OF SECTION 36, TOWNSHIP 20 SOUTH, RANGE 65 WEST AND THE WEST ONE-HALF OF THE NORTHWEST QUARTER OF THE SOUTHWEST QUARTER OF SECTION 31 IN TOWNSHIP 20 SOUTH, RANGE 64 WEST, PUEBLO COUNTY, COLORADO, ACCORDING TO THE RECORDED PLAT THEREOF. PARCEL C: LOTS (ALSO KNOWN AS FRACTIONAL LOTS) 1, 2, 3 AND 4 IN BLOCK 55 IN HOBSON'S SUBDIVISION OF A PART OF THE CITY OF PUEBLO, ACCORDING TO THE AMENDED PLAT OF A PORTION OF SAID SUBDIVISION FILED FOR RECORD ON OCTOBER 26, 1887, COUNTY OF PUEBLO, STATE OF COLORADO. 11 LEASE AGREEMENT THIS LEASE AGREEMENT("Lease") is made the 10th day of May, 2021, between the City of Pueblo, a Colorado municipal corporation (hereinafter called the "City") and Ferguson Enterprises, LLC, a Virginia limited liability company(hereinafter called the"Company"). Company and City are sometimes referred to herein as a "Party" and collectively, as the "Parties." 1. Leased Premises Defined. Subject to satisfaction of the terms and conditions contained in this Lease, the City agrees to lease to the Company and the Company agrees to lease from the City, only that portion of 175 S. Santa Fe Avenue, Pueblo, CO 81003 (Parcel No. 05-364-26-004) and 131 S. Mechanic Street, Pueblo, CO 81003 (Parcel No. 05-364-25-003) described approximately as 56,254 square feet and shown as a hatched area on Exhibit A. Area shown on Exhibit A as "Temporary Construction Easement" (approximately 1,721 square feet) will be property that will be accessible to the City during construction of the channel extension. The Leased Premises shall be leased subject to and subordinate to all easements, reservations, restrictions, covenants., limitations, rights-of-way and conditions of record and the zoning and subdivision regulations and resolutions of the City. 1.1 Mutual Temporary Access Easements. During the Term and Extended Term of this Lease: 1.1.1 To the extent that it does not materially interfere with the construction of the HARP channel extension to Santa Fe Avenue, the City hereby grants Company a temporary access easement across City-owned land adjacent to the Leased Premises for purposes of ingress and egress to the Leased Premises by Company, including the Company's delivery trucks in order to provide adequate turn radius for access to the docks on the Leased Property. Company shall repair any damage to the City-owned property or improvements thereon resulting from the Company's use of such access easement. 1.1.2 To the extent that it does not materially interfere with the Company's established business activities, Company hereby grants City a temporary access easement across the Leased Premises for purposes of ingress and egress by City to City-owned land. City shall repair any damage to the Leased Premises or improvements thereon resulting from the City's use of such access easement. 2. Term. 2.1. Commencement:The Term of this Lease shall begin on the Closing Date(as defined in that certain Contract to Buy and Sell Real Estate between the City and Company of even date herewith) of the sale of the Leased Premises by Company to City. 2.2. Expiration: The Term of this Lease shall expire on the two (2) year anniversary of the Closing Date of the sale of the Leased Premises by Company to City. 2.3 Options: Provided Company is in full compliance with the terms and conditions of this Lease, Company may extend the Term for an Extended Term as follows: Company may exercise two (2), one (1) year renewal options by providing thirty (30) days prior written notice to the City. 1 2.4 Termination Without Cause Option: Company shall have the continuing option to cancel this Lease, for any reason whatsoever, by providing thirty (30) days prior written notice to the City. 3. Rent. Company agrees to pay rent to the City as follows: 3.1 Term. Company shall not be obligated to pay rent to the City during the original term of this Lease. 3.2 Extended Term. Company shall be obligated to pay rent to the City during the extended term of this Lease as follows: Dates Monthly Rent 1St option year $7,000.00 2"d option year $8,000.00 4. Use of Leased Premises. 4.1. Company shall use the Leased Premises in a careful, safe and proper manner in compliance with all laws and regulations applicable to the Leased Premises and Company's use thereof. Company shall not cause, maintain or permit any nuisance or waste in, on, or about the Leased Premises. 4.2. The Leased Premises shall be used and occupied by Company exclusively for commercial purposes associated with or incident to Company's established business activities and for such other activities of Company as are reasonably incident thereto. 4.3 The Parties agree that Company shall be allowed to make repairs and modifications in or to the Leased Premises during the Term and Extended Term of this Lease. All expenses associated with such activities shall be paid by the Company. The Parties further agree that such repairs and modifications shall not be made without City's prior written consent which consent shall not be unreasonably withheld or unduly delayed. In connection with the repairs and modifications, Company shall not permit or allow any lien to be filed or recorded against the Leased Premises or City's or Company's interests therein. All modifications made in or to the Leased Premises by Company with City's consent shall become part of the Leased Premises and shall be surrendered with the Leased Premises at the termination of this Lease. In addition, all such repairs and modifications shall be made in compliance with the building codes, zoning and land use regulations of the City and in compliance with all laws and regulations applicable to the Leased Premises and Company's use thereof. 4.4. All equipment, fixtures and improvements of a detachable or temporary nature installed or placed upon the Leased Premises by Company, including trade fixtures, shall remain on the Leased Premises, subject to Company's right, at its option, to remove same upon termination of this Lease.The failure of Company to remove its equipment, fixtures and detachable improvements at termination of this Lease shall, at the option of City, be deemed an abandonment of such property and City may dispose of such property, at Company's expense, in a manner as the City, in its sole discretion, may determine. 4.5. City shall not be obligated to repair, replace, maintain or alter the Leased Premises or any component part thereof. Company, at its expense, shall keep and maintain the Leased Premises, including, without limitation, the buildings, structural components including but 2 not limited to foundation, floors, roofs and walls, fixtures, and electrical, heating, mechanical, plumbing and air conditioning systems, and adjacent sidewalks and parking area, in a clean and safe condition at all times and return the same to City in its "As Is, Where Is" condition. The duty of the Company to repair and maintain shall not include the duty to replace. 4.6. It is the intent of the Parties hereto that this Lease be a "net" lease with City incurring no obligation, monetary or otherwise, for any expense of any nature associated with the use and operation of the Leased Premises and any component part thereof by the Company, except as otherwise expressly set forth herein. 5. Condition of Leased Premises. 5.1 EXCEPT AS SPECIFICALLY SET FORTH IN THIS LEASE, IT IS UNDERSTOOD AND AGREED THAT CITY IS NOT MAKING AND HAS NOT AT ANY TIME MADE ANY WARRANTY OR REPRESENTATION OF ANY KIND OR CHARACTER, EXPRESS OR IMPLIED, WITH RESPECT TO THE LEASED PREMISES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTY OR REPRESENTATION AS TO HABITABILITY, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, ZONING, PHYSICAL OR ENVIRONMENTAL CONDITIONS, INCLUDING THE PRESENCE OF HAZARDOUS MATERIALS, UTILITIES, GOVERNMENTAL APPROVALS, COMPLIANCE OF THE LEASED PREMISES WITH GOVERNMENTAL LAWS, THE TRUTH, ACCURACY OR COMPLETENESS OF ANY DOCUMENT OR OTHER INFORMATION PROVIDED TO COMPANY BY ANY OTHER PERSON OR ANY OTHER MATTER OR THING REGARDING THE LEASED PREMISES. 5.2 The taking of possession of the Leased Premises by Company after the Commencement Date shall be conclusive evidence that the Company accepts the Leased Premises in its then present condition "As Is, Where Is, With All Faults" and that the Leased Premises are in good and satisfactory condition at the time of the commencement of this Lease. 6. Right of Entry. Subject to Company's security requirements, City or City's officers, employees, agents and representatives, as the case may be, may enter the Leased Premises during normal business hours upon no less than 48 hours' written or oral notice to Company, except notice shall not be required in case of emergency, such as fire. 7. Insurance and Indemnification. 7.1. City's Indemnity. City shall defend, indemnify and save harmless Company and its agents and employees against all costs (including, without limitation, reasonable attorneys' fees), damages or claims whether for personal injury, bodily injury or property damage, during the Term and Extended Term of this Lease, occurring on the Leased Premises, if caused by a negligent act or omission by City or its agents, employees or contractors. 7.2. Company's Indemnity. Company shall defend, indemnify and save harmless City and its agents and employees against all costs(including,without limitation, reasonable attorneys' fees), damages or claims whether for personal injury, bodily injury or property damage, during the Term and Extended Term of this Lease, occurring on the Leased Premises, if caused by a negligent act or omission by Company or its agents, employees or contractors, arising out of Company's operations or Company 's use or occupancy of Leased Premises. 3 7.3. City's Insurance. Liability Insurance. During the Term and Extended Term of this Lease, City must maintain insurance covering City's liability for ownership and use of the Leased Premises. Such insurance must provide limits of not less than $1 million with respect to injury to any one person, $1 million with respect to any one occurrence and $500,000 with respect to property damage arising out of any one occurrence. 7.4. Company's Insurance. 7.4.1. Liability Insurance. During the Term and Extended Term of this Lease, Company must maintain insurance covering Company's liability for occupation and use of the Leased Premises. Such insurance must provide limits of not less than $1 million with respect to injury to any one person, $1 million with respect to any one occurrence and $500,000 with respect to property damage arising out of any one occurrence. 7.4.2. Worker's Compensation Insurance. Company shall maintain and keep in force an "all-employees" compensation insurance policy as required under the laws of the State of Colorado. 7.4.3. Fire and Extended Coverage Insurance. 7.4.3.1. Company shall, at its expense, during the Term and Extended Term of this Lease, secure and maintain in full force and effect "All—Risk" property insurance (including, without limitation, fire, extended coverage and all risk perils including mechanical breakdown) upon the Leased Premises. Such insurance shall be in an amount not less than the full replacement value of the buildings and improvements (without deduction for physical depreciation) and issued by an insurance company or association authorized to issue such policies under the laws of the State of Colorado and reasonably approved by City; shall name the City as an additional insured and shall not be subject to cancellation upon less than thirty (30) days' prior written notice to City. Such insurance, by its terms or by endorsement, shall waive any right of subrogation of the insurer against City and its respective officers, agents and employees, for any loss or damage resulting from the covered perils. At the request of the City, Company will furnish to City evidence of such insurance and its continuance during the Term and Extended Term of this Lease. 7.4.3.2. Company shall, at its expense, secure and maintain fire and extended coverage insurance on all fixtures, equipment and improvements installed by Company on the Leased Premises. Such insurance, by its terms or by endorsement, shall waive any right of subrogation of the insurer against City and its respective officers, agents and employees, for any loss or damage resulting from covered perils. 7.5. Insurance Requirements. All insurance required to be carried by the Parties hereunder shall be issued with a company or companies licensed and authorized to conduct business in the State of Colorado with an A.M. Best rating of B+ or higher, the Parties further agree to provide each other with copies of certificates of insurance for all policies required. 7.6. Waiver of Subrogation. The Parties to this Lease hereby release each other and their respective officers, agents, managers, directors, and employees from any and all claims and demands for loss, damages, expense or injury to any person or to the Leased Premises or to personal property which are caused by or result from any risk insured against, under insurance policies carried or required to be carried by the Parties and in force at the time of any such loss, 4 to the extent such loss is covered by such Parties' policies. The Parties shall each obtain from their respective insurers waivers of all rights of subrogation, which the insurer of one Party might have against the other Party and City and Company shall each indemnify the other against any loss or expense, including reasonable attorneys' fees, resulting from the failure to obtain such waivers of subrogation. 8. Taxes. 8.1. Sales and Use Taxes. Company shall pay, before delinquency, any and all sales and use taxes levied or charged in connection with the Leased Premises and any of the personal property belonging to Company and situated on the Leased Premises or used in connection with the operation and maintenance of the improvements on the Leased Premises. Company further agrees to pay, before delinquency, any and all sales and use taxes levied or charged in connection with the Company's sales transactions occurring on the Leased Premises during the Term and Extended Term of this Lease. 8.2. Property Taxes. Company shall pay, before delinquency, any and all personal property taxes and real property taxes (including possessory interest taxes) levied or charged against the real property leased hereby and any of the personal property belonging to Company and situated on the Leased Premises or used in connection with the operation and maintenance of the Leased Premises. 9. Utilities. Company shall pay, before delinquent, any and all charges for electricity, heat or cooling, water and sewer,telephone, internet, and fees to the City's stormwater utility enterprise and street repair utility enterprise and all other utility services furnished to or used in or supplied to the Leased Premises. City shall not be obligated to furnish, provide, or pay for any utilities, facilities or services of any kind. 10. Environmental Provisions. 10.1 For the purpose of this Lease, "Hazardous Materials" means any hazardous or toxic substance, material or waste which is or will become regulated by any local government authority, the State of Colorado or the United States government and shall include, but not be limited to (1) substances defined as "hazardous waste", "restricted hazardous waste," "hazardous substance" or "hazardous material" under any applicable federal, state or local law or regulation ("Environmental Regulations") (2) asbestos-containing materials (3) PCB's (4) petroleum or petroleum-based products, and (5) lead. Notwithstanding the foregoing, reasonable quantities of common office and/or cleaning materials shall not be considered Hazardous Materials for purposes of this Lease, provided that Company handles any such materials in accordance with all Environmental Regulations. 10.2 Company will comply with Environmental Regulations that are applicable to the Company and its use of the Leased Premises. No activity shall be undertaken by the Company, its employees, agents, licensees, invitees, contractors or subcontractors, on all or any portion of the Leased Premises which would cause: (i) the presence, use, generation, release, discharge, storage or disposal of any Hazardous Materials in, on, under, about, or from the Leased Premises or any part thereof in violation of any Environmental Regulations; (ii) any portion of the Leased Premises to become a hazardous waste treatment, storage or disposal facility without receiving proper governmental authorization and in compliance with all Environmental Regulations; or (iii) the discharge of pollutants or effluents into any water source or system or the discharge into the 5 air of any emissions without receiving proper governmental authorization and in compliance with all Environmental Regulations, including, without limitation, the Federal Water Pollution Control Act, U.S.C. Section 1221 et seq. and the Clean Air Act, 42 U.S.C. Section7401 et seq. 10.3 Company agrees to defend, indemnify and forever hold harmless the Leased Premises and City, and City's respective agents, successors, and assigns, as their interest may appear,from all claims, losses, damages, penalties, expenses and costs, including, but not limited to, reasonable attorneys' fees, remedial, and cleanup costs, incurred by reason of the use, storage, generation, release, discharge, maintenance, disposal, or removal of Hazardous Materials in, on, under, about or from the Leased Premises, or any part thereof, by Company, its employees, agents, licensees, authorized guests, contractors and subcontractors. 10.4 The provisions of this Paragraph 10 shall expressly survive the expiration of the Term and Extended Term or other termination of this Lease. 11. Quiet Possession. Company shall, and may peacefully have, hold and enjoy the Leased Premises, subject to the other terms hereof, provided that Company is not in default beyond any applicable notice and cure period under the Lease. 12. Time of the Essence and Default and Remedies. 12.1. Time is of the essence hereof. 12.2. Company shall have the option of terminating this Lease, with or without cause, upon thirty (30) days prior written to City. City may only terminate this Lease for cause. 12.3. If any obligation required to be performed under this Lease is not performed there shall be the following exclusive remedies: (a) If City is in Default: In the event City defaults in the performance of its obligations hereunder, Company shall have the right to (i)terminate this Lease by written notice to City or(ii) treat this Agreement as being in full force and effect and to obtain specific performance, but not any damages. Such violations may be restrained or such obligations enforced by injunction at the instance and request of Company without the showing of any special damages or an inadequate remedy at law. (b) If Company is in default: In the event of default at any time by Company in the payment of the monthly rent herein provided for, or in the performance of any other of its covenants herein contained, City shall have the right, after five (5) days' notice in writing to Company and Company's failure within said five (5) day period to cure said default (provided, however, if said default does not relate to the payment of money and cannot by its nature be cured within said five (5) day period, such time period shall be extended if Tenant commences to cure in such five (5) day period and thereafter diligently prosecutes such cure to completion), to either: (1) terminate this Lease and re-enter and take possession of the Leased Premises, and/or (2) pursue any remedy whatsoever provided by law or equity. 6 (c) In the event the Parties hereto become involved in a dispute arising out of this Lease, or the performance or breach thereof, the Court shall award costs, expenses, and reasonable attorneys' fees to the prevailing Party. (d) If Company violates any of the terms and provisions of this Lease or defaults in any of its obligations hereunder other than the payment of monthly rent or other sum payable hereunder, such violation may be restrained or such obligation enforced by injunction at the instance and request of City without the showing of any special damages or an inadequate remedy at law. 13.. Waiver. No waiver of any breach or breaches of any provision, covenant or condition of this Lease shall be construed to be a waiver of any preceding or succeeding breach of such provision, covenant or condition, or of any other provision, covenant or condition. 14. Assignment. This Agreement and the rights granted to Company hereunder may be assigned as follows: 14.1. Internal Assignments. Notwithstanding anything in this Lease to the contrary, Company has the right to assign this Lease, without City's consent, to a parent, subsidiary, or affiliate of Company, to a Company that has been merged or consolidated with Company, or to a Company acquiring all or substantially all of Company's physical assets, provided Company (or the resulting entity of any merger or consolidation) remains fully liable hereunder. 14.2. Outside Assignment Requirements. It shall be necessary for Company to obtain City's prior, written consent to any other proposed assignment of this Lease. However, City's consent must not be unreasonably or unduly withheld, conditioned, or delayed, provided, however, that City may withhold consent thereto if in the exercise of its sole judgment it determines that: 14.2.1. Financial Condition. The financial condition of the proposed assignee is not consistent with the extent of the obligations undertaken by the proposed assignment; or 14.2.2. Proposed Use. The proposed use of the Leased Premises is not appropriate for the area surrounding the Leased Premises. 15. Representations and Warranties of City. The City represents and warrants to Company as follows: (a) City has full power, capacity and authority to execute and deliver this Lease and all other documents required to be executed and delivered by City under this Lease and to perform its obligations hereunder. (b) This Lease has been duly authorized, executed and delivered by City and constitutes the legal, valid and binding obligation of City, enforceable against City in accordance with its terms. 7 16. Representations and Warranties of Company. Company represents, warrants and covenants as follows: (a) Company has full power, capacity and authority to execute and deliver this Lease and all other documents required to be executed and delivered by Company under this Lease and to perform its obligations hereunder. (b) This Lease has been duly authorized, executed and delivered by Company and constitutes the legal, valid and binding obligation of Company, enforceable against Company in accordance with its terms. 17. Notices. Any notice required or permitted to be given or delivered under this Lease shall be in writing and shall be given by personal delivery, or by the United States Postal Service, by registered or certified mail, postage prepaid, or reputable national overnight courier service: (a) If to City, addressed to: Mayor City of Pueblo 1 City Hall Place, 2nd Floor Pueblo, Colorado 81003 with a copy to: City Attorney 1 City Hall Place, 3rd Floor Pueblo, Colorado 81003 (b) If to Company, addressed to: Ferguson Enterprises, LLC 12500 Jefferson Ave. Newport News, VA 23602-4314 Attn: RE & Facilities Dept. or to such other address or person as any party may from time to time specify in a writing delivered to the other party in the manner provided in this paragraph. Any notice shall be deemed delivered on the day on which personal delivery is effected or three (3) days after deposit in the mail in the case of registered or certified mail, and one (1) business day after deposit in the case of overnight courier. 18. Modification. No subsequent modification of any of the terms of this Agreement shall be valid or binding upon the Parties or enforceable unless made in writing and signed by the Parties. 19. Entire Agreement. All understandings and agreements heretofore had between the Parties hereto considering the subject matter hereof are merged into this Lease and the Contract to Buy and Sell Real Estate between the City and Company of even date herewith which alone fully and 8 completely express the agreement and understanding of the Parties with respect to the Leased Premises. Said agreements are entered into after full investigation, neither Party relying upon any statement or representation, not embodied in this Lease or said Contract to Buy and Sell Real Estate made by the other Party. 20. Captions. The captions in this Lease are inserted for convenience of reference only and in no way define, describe or limit the scope or intent of this Lease or any of the provisions hereof. 21. Validity. If any provision of this Lease shall be held to be invalid or unenforceable, the same shall not affect in any respect whatsoever the validity or enforceability of the remainder of this Lease. 22. Broker. Company and City represent and warrant to each other that no broker or finder has been engaged by such Party in connection with this transaction. City agrees to indemnify, defend and hold Company harmless from and against any and all claims, loss, liability, costs and expenses (including reasonable attorneys' fees), resulting from any claims that may be made against Company by any broker or other person claiming a commission, fee or other compensation by reason of the transaction contemplated hereby if the same shall arise by, through or on account of City. Company agrees to indemnify, defend and hold City harmless from and against any and all claims, loss, liability, costs and expenses (including reasonable attorneys' fees), resulting from any claims that may be made against City by any broker or other person claiming a commission, fee or other compensation by reason of the transaction contemplated hereby if the same shall arise by, through or on account of Company. 23. Applicable Law. This Agreement will be construed and enforced in accordance with the laws of the State of Colorado (without giving effect to its choice of law principles). 24. Interpretation. Whenever the context so requires, the singular number shall include the plural and the plural the singular, and the use of any gender shall include all genders. In addition, the Parties acknowledge that the Parties and their counsel have reviewed and revised this Lease and that the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Lease or any exhibits or amendments hereto. 25. Survival of Representations. The representations, warranties, covenants and agreements of Company and City in this Agreement are and shall be construed to be covenants running with the Leased Premises and shall survive the expiration or termination of this Lease. 9 26. Third Parties. Company and City and their respective successors and permitted assigns are the only parties to this Lease and are the only parties entitled to enforce this Lease. Nothing contained in this Lease nor any provision hereof is intended to give or shall be construed to give or confer, directly or indirectly, or otherwise, upon any third party any right, remedy or benefit hereunder. 27. Venue and Waiver of Trial by Jury. CITY AND COMPANY HEREBY IRREVOCABLY SUBMIT TO THE JURISDICTION OF THE DISTRICT COURT, PUEBLO COUNTY, STATE OF COLORADO IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS LEASE AND HEREBY IRREVOCABLY AGREE THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING SHALL BE HEARD AND DETERMINED IN THE DISTRICT COURT OF PUEBLO COUNTY, STATE OF COLORADO. COMPANY AND CITY AGREE THAT THE PROVISIONS OF THIS PARAGRAPH 27 SHALL SURVIVE THE EXPIRATION OR TERMINATION OF THIS LEASE. TO THE FULL EXTENT PERMITTED BY LAW, COMPANY AND CITY HEREBY WAIVE THEIR RIGHTS TO A TRIAL BY JURY. 28. Damage to or Destruction of Leased Premises. If, during the Term and Extended Term of this Lease, the Leased Premises shall be damaged to such an extent that the repair of such damage and the restoration of the Leased Premises can be accomplished, with reasonable diligence, within ninety (90) days after such damage, Company shall promptly repair such damage and cause the Leased Premises to be restored to their condition prior to the event causing the damage. If, during the Term and Extended Term of this Lease, the Leased Premises shall be destroyed or damaged, or partially destroyed or damaged, without Company's fault to such an extent that the repair of such destruction or damage and the restoration of the Leased Premises cannot be accomplished, with reasonable diligence, within ninety (90) days after such destruction or damage, then Company shall promptly notify City in writing of such fact within ten (10) days after the date of such destruction or damage and Company shall thereafter have the right, during a period of thirty (30) days following such notification, to terminate this Lease by written notice to the City, declaring this Lease to be terminated provided, however, that, as a condition precedent to such termination, the proceeds of insurance required to be maintained by Company under Section 7.4.3 (or an amount equal to the insurance proceeds which would have been available but for the failure to maintain such insurance) shall be paid by Company to City. Unless such notice of immediate termination shall be given within such 30-day period, this Lease shall continue in full force and effect. 29. Holding Over. If Company shall hold over after the expiration of the Term or Extended Term of this Lease, without a signed renewal or new Lease, then Company shall be deemed a tenant from month to month, subject to all of the terms and conditions set forth in this Lease, except that the monthly rental due under Section 3.1 hereof shall increase to $25,000.00 per month due and payable in accordance with the provisions of this Lease. Nothing in this Section shall be construed as permission of the City to hold over beyond the expiration of the Term and Extended Term of this Lease. 30. Recording. Neither Party shall record this Lease or any short form memorandum of this Lease. 10 31. Counterparts. This Lease 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. [SIGNATURE PAGE FOLLOWS 11 (Signature Page to Lease Agreement] Executed as of the day and year first above written. CITY: City of Pueblo, Colorado a Colorado municipal corporation By: - ' a ," Nicholas A. G Isar, Mayor ATTESTED BY: ktV COMPANY : Ferguson Enterprises, LLC a Virginia limited liability company By Lei Name: Steven R. Adcox Title: Deputy General Counsel STATE OF VIRGINIA ss. CITY OF CHESAPEAKE The foregoing instrument was acknowledged before me this Vl1.4day of Mao/ , 2021 by Steven R. Adcox as Deputy General Counsel of Ferguson Enterprises, LLC, a Virginia limited liability company. Witness my hand and official seal. My commission mpirt.h4kugust 31, 2022. J. . [SEAL] � Q.Q'� fr�q � : Notary Public Q r moi A frQ: Reg. 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