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HomeMy WebLinkAbout6792RESOLUTION NO. 6792 A RESOLUTION APPROVING AN AGREEMENT BETWEEN THE CITY OF PUEBLO, A MUNICIPAL CORPORATION AND QUAL -MED, INC. RELATING TO THE REMODELING OF REAL PROPERTY BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, that: SECTION 1 The Agreement dated July 22, 1991 beteween the City of Pueblo, a Municipal Corporation and Qual -Med, Inc. relating to the remodeling of the building known as the Montgomery Ward Building, Third and Main Streets, Pueblo, Colorado, a copy of which is attached hereto and incorporated herein, having been approved as to form by the City Attorney, is hereby approved. The President of the City Council is hereby directed and authorized to execute the Agreement in the name of and on behalf of the City and the City Clerk is directed to affix the seal of the City thereto and attest same. SECTION 2 This Resolution shall become effective upon final passage. INTRODUCED: July 22, 1991 By SAMUEL CORSENTINO Councilperson ATTEST: APPROVED: Ci y Clerk President of the City Council TJ 53.38 MEMORANDUM TO: Members of the FROM: City Attorney DATE: July 15, 1991 RE: Qual -Med, Inc. City of Pueblo OFFICE OF THE CITY ATTORNEY 127 Thatcher Building PUEBLO, COLORADO 81003 City Council The transaction between the City and Qual -Med, Inc. as evidenced by the attached documents generally provides: 1. An $800,000 advance from the City to Qual -Med, Inc. for hard costs to remodel the Montgomery Ward Building to be paid as the construction work progresses. Hard costs include labor, materials, fixtures incorporated into the building but not equipment, and architect fees. The construction work will be performed in accordance with contract documents approved by the City. 2. Qual -Med, Inc. will repay the $800,000 in 120 install- ments of principal without interest (except default interest of 5% over prime rate) commencing when the certificate of occupancy is issued for the building or July 1, 1992 whichever occurs first. 3. City Council by resolution may call the loan for full repayment and default interest upon occurrence of: (a) failure to complete the remodeling or to move corporate headquarters to the building within 8 months after start of remodeling and keep corporate headquarters in the building. (b) failure to start remodeling by November 1, 1991. (c) failure to employ 43 employees within 8 months after start of remodeling and 72 employees within 20 months thereafter having a gross base payroll of not less than $2.7 million. (d) failure to spend within three years $400,000 in remodeling and equipping the building and adjacent property. Thomas E. ger 54.3/jp Enclosures AGREEMENT THIS AGREEMENT entered into as of this 22nd day of July, 1991 between Pueblo, a municipal corporation, ( "City "), and Qual -Med, Inc., a Delaware Corporation (the "Company "). WHEREAS, there exists and has existed within the City unem- ployment and underemployment and a lack of available employment opportunities which places a public burden upon the City and its citizens, and WHEREAS, it is in the best interest of the City to encourage economic development which creates employment opportunities and jobs for its citizens, and to appropriate funds for purposes of stimulating investment and inducing industry to locate within the City, and WHEREAS, the prevention and reduction of unemployment and underemployment and social and economic hardships associated therewith are proper public purposes and matters of public concern and public purpose which justify the expenditure of public funds, and WHEREAS, Company has represented it will remodel, renovate and equip the Montgomery Ward Building, Pueblo, Colorado and move its corporate headquarters into the building and within eight months thereafter employ within the building 43 full time employees and within twenty months thereafter employ 72 full time employees with a gross base payroll of $2.7 million. NOW, THEREFORE, in consideration of the foregoing and the mutual obligations of the parties hereto and other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, each party covenants and agrees with the other as follows: SECTION 1. DEFINITIONS. The following words and phrases shall have the following meaning in this Agreement: (a) "Authorized Officer" means an officer of Company authorized by resolution of the Board of Directors of Company to sign certificates under this Agreement on behalf of Company. (b) "Building" means the land and the Montgomery Ward Building located at Third and Main Streets, Pueblo, Coloado. (c) "Construction Documents" means the construction contracts and documents for the remodeling and renovation of the Building, including without limitation, payment and performance bonds and scope of work. (d) "Director" means the Director of Finance of City. (e) "Employees" means full -time employees including full - time equivalents. (f) "Fund" means an amount not to exceed Eight Hundred Thousand Dollars ($800,000.00) to be appropriated and made available by City to Company solely for Fund Purposes. (g) "Fund Purposes" means actual expenditures made by Company for the hard costs of constructing the Project. (h) "Project" means the renovation and remodeling of the Building. SECTION 2. CITY'S OBLIGATIONS. City represents, warrants and agrees that: -2- (a) City will appropriate and make the Fund available to Company to be used solely and exclusively by Company for Fund Purposes. If Company is not in default hereunder, City will make periodic payments out of the Fund to Company for Fund Purposes within ten (10) days after receipt by the Director of Company's written application for payment ( "Application For Payment "). Application For Payment will be in such form as approved by City, be certified as true and correct by an Authorized Officer of Company, and contain (i) the total amount spent or obligated by Company for labor actually performed and /or materials incorporated into or delivered to the Building for the construction of the Project (the "Work ") since the date of any prior Application For Payment and a statement that such Work has not been included in any other Application For Payment, and (ii) a statement that all Work represented by such Application For Payment has been performed in conformity with the approved Construction Documents and in compliance with applicable law and regulations. Each Application For Payment will be accompanied by AIA Document G702, Application And Certification For Payment properly completed and certified by the contractor and architect for the Work covered by each Application For Payment. SECTION 3. COMPANY'S OBLIGATIONS. Company represents, warrants and agrees that: (a) Company will cause all payments of the Fund made by City to Company to be paid to its contractors, subcontractors, materialmen and suppliers for the Work performed as shown on the -3- Application For Payment for which payment was made. Company shall not make, create or suffer to be created any mechanics' liens on the Building. (b) Company will timely renovate, remodel and equip the Project. The Project will be constructed in accordance with the Construction Documents approved by City and in compliance with applicable laws and regulations. Company will commence construction of the Project by November 1, 1991 and will thereafter diligently pursue the Project's completion, and will in a timely and expeditious manner take all action necessary and required to construct and equip the Project and obtain a Certificate of Occupancy for the Building within eight (8) months after commencement of Project construction. Company will submit all Construction Documents to City for approval prior to commencement of Project construction. City's approval will not be unreasonably withheld. (c) Company understands and agrees that the creation of jobs as herein contemplated is the primary purpose for City to enter into this Agreement and is the sole consideration accruing to City hereunder. Accordingly, Company will employ at the Building (i) within eight (8) months after commencement of Project construction and thereafter at least 43 Employees, and (ii) within 20 months after commencement of Project construction and thereafter at least 72 Employees (including the 43 Employees under (i) above) with a gross base payroll of not less than $2.7 million. (d) Construction contracts for the Project will be obtained through and be based upon competitive bidding process and proce- IMIN dures and may be based upon a "design- build" concept of construc- tion. Company will invite general contractors having their principal place of business within City or County of Pueblo who are in the opinion of Company qualified and experienced to perform the work to submit bids and will to the extent practical and feasible, in the exercise of Company's business judgment, enter into construction contracts with such local contractors, provided, that Company reserves the right to enter into contracts with other contractors if in Company's sole opinion it is necessary to obtain the best bid and technical expertise. (e) Company shall repay to City all Funds advanced to Company by City under this Agreement in 120 equal monthly install- ments of principal without interest commencing the date the Certificate Of Occupancy for the Building is issued or July 1, 1992, whichever occurs first. Company will execute and deliver to City Company's attached Promissory Note evidencing such indebtedness and Deed of Trust on the Building securing payment thereof, which Deed of Trust shall be a first and prior mortgage and encumbrance on the Building. (f) Company shall move its corporate headquarters to the Building and commence corporate headquarters operations in the Building no later than eight (8) months after commencement of Project construction and thereafter maintain no less than the number of Employees and minimum dollar payroll set forth in paragraph 3(c) in the Building until at least the date Company's $800,000 promissory note is paid in full. (g) Company shall, within three years after commencement of Project construction, spend in addition to the Fund no less than -5- $400,000 of its monies acquiring adjacent property and in renovat- ing, remodeling, furnishing and equipping the Building and adjacent property. (h) Company shall use its best efforts to hold board of directors, shareholders and other meetings within the City in in accordance with Company's memo of April 24, 1991. (i) Company at its expense shall deliver to City a commit- ment for an ALTA loan title insurance policy in form and content acceptable to City insuring the $800,000 to be advanced by City under this Agreement as a first mortgage and encumbrance on the Building. Company shall deliver the title insurance policy to City within ten days after Company's Promissory Note and Deed of Trust are delivered to City. No part of the Fund will be advanced to Company until after the title insurance policy and Company's Deed of Trust and Promissory Note are executed and delivered to the City. If Company shall default in or violate any of the provisions or covenants set forth in this Section 3, City shall be entitled, at its option, to treat such default or violation as a default under Company's Promissory Note and Deed of Trust. SECTION 4. MISCELLANEOUS. (a) This Agreement shall be governed by the laws of the State of Colorado and shall be construed in accordance therewith. (b) Time is of the essence hereof. No provision of this Agreement may be waived except by an agreement in writing signed by the waiving party. A waiver of any term or provision shall not be construed as a waiver of any other term or provision. (c) This Agreement shall inure to the benefit of and be binding on the parties and their successors and approved assigns. The parties agree to do any and all things necessary to effectuate the purposes of this Agreement. x (d) Throughout this Agreement, the singular shall include the plural, the plural shall include the singular, and the masculine and neuter shall include the feminine, wherever the context so requires. (e) The headings of sections are included solely for convenience of reference. If any conflict between any heading and the text of this Agreement exists, the text shall control. (f) This Agreement sets forth the entire understanding of the parties and may be amended, altered or revoked at any time, in whole or in part, only by filing with this Agreement a written in- strument setting forth such changes, signed by the parties hereto. Y (g) Should any action at law or in equity be brought by any party to this Agreement to enforce any right or remedy hereunder, such action will be brought in the District Court in and for the County of Pueblo, State of Colorado and the parties hereto consent to the venue and personal jurisdiction of such Court. In the event of any litigation arising out of this Agreement, the court shall award to the prevailing party all reasonable costs and expenses, including reasonable attorney fees. '.i (h) Company shall not assign this Agreement nor any interest herein. Any attempted assignment or assignment by Company shall be void and unenforceable. MWM (i) All notices required to be given by this Agreement shall be made in writing and served either by: (i) Personal delivery to the party requiring notice; or (ii) Mailing notice via the U.S. Mail to the last known address of the party requiring notice, by first class mail, postage prepaid. Effective date of the notice shall be the date of the personal delivery as specified in subparagraph (i) above or four (4) days after the date the notice was deposited in the U.S. Mail as specified in subparagraph (ii) above. For purposes of this section, the initial addresses of the parties hereto shall be as follows: Qual -Med, Inc. City 95 West First Avenue City Manager Monte Vista, CO 81144 City of Pueblo 1 City Hall Place Pueblo, CO 81003 (j) This Agreement supersedes all other contracts or agree- ments between the parties hereto with respect to the subject matter of this Agreement. (k) If any provision of this Agreement shall be held to be invalid or unenforceable by any court of competent jursidiction, such holding shall not invalidate or make unenforceable any other provision of this Agreement. (1) The representations and warranties of each party shall survive the delivery of Company's Promissory Note and Deed of Trust for the benefit of the other party. (m) Any action taken by City to accelerate the payment of Company's Promissory Note shall be authorized by Resolution ME adopted by the City Council of City. (n) Each person_ signing this Agreement represents and warrants that the Agreement has been approved by the entity or organization in whose name he is signing and that he has been duly authorized to sign this Agreement in the name of and on behalf of such entity or organization. IN WITNESS WHEREOF, Company has caused this Agreement to be executed by its duly authorized officers, and City has caused this Agreement to be executed by its duly authorized representatives both on the day and year first written above. UAL -MED, INC. [S E A L] D ATTEST: k.� f�Gtil 'L2. By � kL Secretary Its CITY OF PUEBLO, A MUNICIPAL CORPORATION [S E A L] ATTEST: By - C1 y Clerk President of the City Council APPROVED AS TO FORM: City Attorn y TJ 53.35 -9- D ED D ° INNEW OFFICE OF THE CITY ATTORNEY 127 Thatcher Building PUEBLO, COLORADO 81003 TO: Billy Martin, Director of Finance FROM: City Attorney RE: Qual -Med, Inc.'s $800,000 loan DATE: January 24, 1992 We (a) Qual -Med, Inc.'s $800,000 promissory note dated January 12, 1992 payable to the City. (b) Qual -Med, Inc.'s deed of trust recorded in Book 2574 at Page 233 which secures payment of its promissory note. Disbursement of the $800,000 principal of the promissory note is to be made by the City pursuant to Section 3(a) of the July 22, 1991 agreement between Qual -Med, Inc. and the City. We enclosed a copy of such agreement. If you have any questions, please call me. Very truly yours, Thomas E. Jagger sm encs. cc: Marian Mead MM964451 RECORDED ""� �t1 JAN 15 139 «�� 25 , c COLORADO DEED OF TRUST THIS INDENTURE (the "Deed of Trust ") made this 2nd day of January, 1992, by and between Qual -Med, Inc., a Delaware Corporation, whose address is 95 West First Avenue, Monte Vista, Colorado, 81144 (hereinafter referred to as "Borrower ") and the Public Trustee of Pueblo County, State of Colorado (hereinafter referred to as "Trustee "). W I T N E S S E T H: WHEREAS, Borrower has executed one certain Promissory Note (the "Promissory Note "), of even date herewith made payable to the order of Pueblo, a Municipal Corporation (hereinafter referred to as "Lender ") at its office at 1 City Hall Place, Pueblo, Colorado, 81003 or at such other place as the holder thereof may designate in writing, for the principal sum of Eight Hundred Thousand and No /100 Dollars ($800,000.00) with interest thereon as provided in said Promissory Note and having a maturity date ten years after the date hereof, (the "indebtedness "); and WHEREAS, Borrower desires to secure the prompt payment of the aforesaid indebtedness and the repayment of any advances made pursuant to this Deed of Trust. NOW, THEREFORE, in consideration of Ten and No /100 Dollar(s) and other good and valuable consideration and for the purpose aforesaid, Borrower hereby grants, bargains, sells and conveys unto Trustee in trust forever the real property located in Pueblo County, Colorado, described in Exhibit A attached hereto and incorporated by reference herein, and all of Borrower's right, title and interest therein. This Deed of Trust includes, and Borrower hereby grants, bargains, sells and conveys unto Trustee in trust forever, the real property and all buildings, structures and improvements now or hereafter placed thereon, all fixtures now or hereafter attached thereto, and all the rights, permits, hereditaments and appurtenances thereto belonging or in any way appertaining, together with any after acquired property interest in the above described property which Borrower may at any time hereafter have or acquire, and also all of the rents, issues, uses, profits and income of the above described property from now until the debt secured hereby is paid in full. All the above described property (whether real or personal) is herein referred to as the "Mortgaged Property ". To have and to hold the Mortgaged Property, together with all !;• 2574 ;234 the privileges and appurtenances thereunto belonging: In trust nevertheless, that in case of default by Borrower hereunder, then upon notice and demand in writing filed with the Trustee as provided by law, it shall and may be lawful for Trustee to foreclose this Deed of Trust, and to sell and dispose of the Mortgaged Property (or any part thereof as may be designated in the notice of such sale) and all the right, title and interest of Borrower therein, in the manner as may then be provided by law, and to issue, execute and deliver his certificate of purchase, trustee's deed or certificate of redemption all as then may be provided by law. Trustee shall, out of the proceeds or avails of such sale, after first paying and retaining all fees, charges, the costs of making said sale and advertising the Mortgaged Property, and attorney's fees as herein provided, pay to Lender the amount of such indebtedness, and all moneys advanced by Lender for any purpose authorized herein or by law, with interest thereon as set forth in the Promissory Note, rendering the overplus, if any, as provided by applicable law. The sale or sales and said deed or deeds so made shall be a perpetual bar, both in law and equity, against Borrower and all other persons claiming the Mortgaged Property or any part thereof by, from, through or under Borrower. The legal holder of the indebtedness may, purchase the Mortgaged Property or any part thereof and it shall not be obligatory upon the purchaser or purchasers at any such sale to see to the application of the purchase money. If a release deed is required, Borrower hereby agrees to pay all the expenses thereof. Borrower hereby warrants title to the Mortgaged Property, subject only to taxes not yet due and payable and to easements, rights of way, restrictions and reservations of record as of the date of this Deed of Trust. Borrower hereby further covenants, acknowledges and agrees: 1. Promissory Note To pay the principal of and the interest on the indebtedness evidenced by the Promissory Note secured hereby at the time and in the manner provided therein and to perform every other agreement contained in such Promissory Note. Privilege is reserved to make prepayments only as permitted in such Promissory Note. 2. Payment of Charges . To pay and discharge when due and before penalty attaches all taxes, assessments, water rents and other governmental or municipal charges, fines and impositions levied upon Borrower or the Mortgaged Property and, upon the request of Lender, to promptly deliver the official receipts therefor to Lender; provided that Borrower need not pay any such amount so long as the validity thereof is being contested in good faith and provision for the payment thereof, and any damage, cost, loss or expenses which may be incurred by Lender in connection therewith, is made by Borrower in a manner satisfactory to Lender. 3. Insurance; Eminent Domain. To continuously maintain hazard and extended coverage, liability and other insurance, of -2- such type or types and amounts as Lender may from time to time require, on the Mortgaged Property, (but in no event less than the unpaid balance of the Promissory Note), and to pay promptly when due any premiums therefor. All insurance shall be carried with companies approved by Lender and the policies and renewals thereof (or certificates of insurance in form and substance satisfactory to Lender) shall be delivered to and held by Lender and have attached thereto loss payable clauses in favor of and in form and substance acceptable to Lender. Such insurance shall provide that it may not be cancelled except upon ten (10) days prior written notice to Lender. In event of loss, Borrower shall give immediate notice to Lender, which may make proof of loss if not made promptly by Borrower. Each insurance company concerned is hereby authorized and directed to make payment for such loss directly to Lender instead of to Borrower and Lender jointly. All insurance proceeds, or any part thereof, may be applied by Lender, at its option, to the reduction of the indebtedness hereby secured, or to the restoration or repair of the property damaged, if any, or release the same to Borrower to make the necessary repairs or restoration. All judgments, decrees and warrants for injury or damage to the Mortgaged Property and all awards pursuant to proceedings for condemnation or under power of eminent domain are hereby assigned to Lender by Borrower in their entirety and shall be paid to Lender which, at its option, may apply the same to the reduction of the indebtedness secured hereby, or to the restoration or repair of the property damaged, or release said payment to Borrower to make the necessary restoration or repairs. Lender is hereby empowered, in the name of Borrower, to receive and give acquittance for or to appeal from any such award, judgment or decree whether it be joint or several. 4. No Waste That Borrower shall not commit or permit waste to or at the Mortgaged Property and shall maintain the Mortgaged Property in good repair and condition, reasonable wear and tear excepted. On any failure so to maintain, Lender, at its option, may cause reasonable maintenance and repair work to be performed to or on the Mortgaged Property at the cost of Borrower. Borrower agrees that no part of the Mortgaged Property shall be removed, demolished or altered structurally without the prior written consent of Lender, which consent shall not be withheld unreasonably. 5. Repair If all or any part of the Mortgaged Property shall be damaged by fire or other casualty, the Borrower will promptly restore the Mortgaged Property to the equivalent of its condition as of the date hereof, or better, regardless of whether or not there shall be any insurance proceeds therefor and whether or not the same are made available by the Lender for such purpose. If any part of the Mortgaged Property shall be physically damaged through condemnation, the Borrower will promptly restore, repair, or alter the remaining property in a manner satisfactory to the Lender, regardless of whether or not there shall be condemnation MIC awards therefor and whether or not the same are made available by Lender for such purpose. If any work to be performed pursuant to this paragraph shall involve an estimated expenditure of more than Fifty Thousand and No /100 Dollars ($50,000.00), (i) unless otherwise agreed by Lender, no such work shall be undertaken until plans and specifications therefor, prepared by an architect satisfactory to the Lender, have been submited to and approved by the Lender, and (ii) the Borrower shall comply with all requirements which may be imposed by the Lender, which requirements may include (without limitation) the furnishing of additional title insurance against liens, architectural inspec- tions, and the furnishing of security that the Borrower will complete all such work. 6. Right to Inspect That Lender is hereby given the right of entry on the Mortgaged Property at any reasonable time for the purpose of inspecting said property or for performing necessary repairs or maintenance not completed by Borrower. Borrower will also, from time to time, without charge, furnish to the Lender such financial statements and information as the Lender may reasonably request. 7. Compliance with Governmental Regulations That Borrower will comply with all the laws, acts, rules, regulations and orders of any federal, state, municipal, legislative, administrative or judicial body, commission or officer exercising any power of regu- lation or supervision over Borrower or the Mortgaged Property for the construction, use or operation thereof including without limitation all environmental laws and regulations; provided, however, that Borrower may contest any such law, act, rule, regulation or order in any reasonable manner which will not affect, in any way, the interest of Lender in or to any part of the Mortgaged Property and provided that Borrower makes provision for the payment of any damage, cost, loss or expense which may be incurred by Lender in connection therewith in a manner satisfac- tory to Lender. 8. Performance of Defaulted Covenants That Lender may, at its option, even after default by Borrower or after maturity of the indebtedness secured hereby, make any payment or perform any defaulted covenant, agreement or act of Borrower hereunder or under any other agreements securing, evidencing or relating to the indebtedness secured hereby and any moneys advanced by Lender for such purpose shall bear interest at the rate set forth in the Promissory Note, and shall thereupon become a part of the indebt- edness secured hereby (even if in excess of the face amount of the above described Promissory Note) and shall be immediately due and payable without notice. 9. Payment of Lender's Expenses. That Borrower agrees to and shall promptly pay all costs, charges and expenses incurred by Lender, including reasonable attorneys' fees arising out of or in connection with any action, proceeding or hearing, in any way affecting or relating to the Mortgaged Property, the above -4- 45;c� 2574 : 237 described Promissory Note, this Deed of Trust or the Loan Documents. 10. Defaults. That upon the occurrence of any one or more of the following events: (i) default in the timely payment of the indebtedness secured hereby, or any part thereof; (ii) breach or violation of any of the other covenants or agreements contained herein; (iii) breach or violation of any of the terms, covenants, agreements or provisions of the Promissory Note or Agreement between Lender and Borrower dated July 22, 1991 (the "Loan Documents ") to be kept or performed by Borrower; (iv) the filing by the Borrower of a voluntary petition in bankruptcy or the Borrower's adjudication as a bankrupt or insolvent, or the filing by or against the Borrower of any petition or answer seeking or acquiescing in any reorganiza- tion, arrangement, composition, readjustment, liquidation, dissolution or similar relief for itself under any present or future federal, state or other law or regulation relating to bankruptcy, insolvency or other relief for debtors (which, in the case of a filing against the Borrower, is not dismissed within sixty (60) days after the filing thereof) or the Borrower's seeking or consenting to or acquiescing in, or the appointment of any trustee, receiver or liquidator of Borrow- er or any portion of its assets or of all or any part of the Mortgaged Property or of any or all of the rents, issues, profits or revenues thereof, or the making of any general assignment for the benefit of creditors, or the admission in writing of its inability to pay its debts generally as they become due, and any such event (except (iv) above) is not curred or remedied by Borrower within ten (10) days after Lender gives written notice thereof to Borrower, the whole of the indebtedness secured hereby and the interest thereon may at once, at the option of Lender, be declared immediately due and payable, and the Mortgaged Property may be sold in the manner and with the same effect as if the indebtedness had matured and remained unpaid after maturity. If foreclosure is made by Trustee, a reasonable attorney's fee for services in the supervision of such foreclosure proceedings shall be allowed and added by Trustee as a part of the cost of fore- closure. If foreclosure be by action in court, reasonable attorneys' fees shall be taxed by the court as part of the cost of such foreclosure proceedings. All such reasonable attorneys' fees (as well as the costs, charges and expenses referred to in para- graph 8 hereof) shall be and become a part of the indebtedness secured hereby ratably and on a parity with other indebtedness secured hereby. -5- �l 2574 -.'_ 23 V 11. Continuance of Lien That the lien of this Deed of Trust shall remain in full force and effect during any modifica- tion, postponement, extension or renewal of the time for payment of the indebtedness or any part thereof secured hereby. 12. Right to Possession; Receiver. That, in case of default, whereby the right of foreclosure occurs hereunder, Lender, or the holder of the certificate of purchase, shall at once become entitled to the possession, use and enjoyment of the Mortgaged Property, 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, use, enjoyment, rents, issues, and profits shall at once be delivered to Lender or the holder of the certificate of purchase on request. On refusal, the delivery of such possession may be enforced by the party entitled thereto by any appropriate civil suit or proceedings, and such party shall be entitled to a receiver for the Mortgaged Property, and of the rents, issues and profits thereof, and after any such default, including the time covered by foreclosure proceedings and the period of redemption, if any. Such entitlement shall exist as a matter of right without regard to the solvency or insolvency of the Borrower or of the then owner of the Mortgaged Property and without regard to the adequacy of the security for the indebtedness secured hereby. Such receiver may be appointed by any court of competent jurisdiction upon ex part application, notice thereof being hereby expressly waived, and the appointment of any such receiver, on any such application with or without notice, is hereby consented to. All rents, issues and profit, income and revenue of the Mortgaged Property shall be applied by such receiver according to law and the orders and direction of the court. 13. Exemption; Marshalling of Assets. That Borrower shall not have nor assert any right under any statute or rule of law pertaining to the marshalling or separate sale of Borrower's assets, including the Mortgaged Property, or to any exemption under and by virtue of any law of the State of Colorado or the United States now existing or which may hereafter be passed in relation thereto. Lender shall have the right to make partial release or releases of the Mortgaged Property agreeable to Lender without notice to, or the consent, approval or agreement of others in interest, which partial release or releases shall not impair in any manner the validity of or priority of this Deed of Trust on the security remaining, nor release the personal liability of Borrower for repayment of the indebtedness secured hereby. 14. No Conveyance or Encumbrance. That if the Mortgaged Property, or any part thereof, is sold (whether by land contract or otherwise), conveyed, transferred, leased (other than pursuant to standard lease having a term of less than 2 years, which does not contain an option or right of first refusal to purchase the Mortgaged Property, or any part thereof), encumbered, mortgaged, subjected to a deed of trust or pledged to any other person or entity, the entire indebtedness secured hereby shall become -6- ;..;;,. 2574 240 , . interest then owing on the above described Promissory Note and describing any offsets or defenses which may then exist against the indebtedness secured hereby. 18. Rent Assignment That Borrower will duly and punctually perform all terms, covenants, conditions and agreements binding upon it or the Mortgaged Property under any lease which involves or affects the Mortgaged Property or any part thereof. Borrower will not accept payments of rent for more than two (2) months in advance without the express written consent of Lender. In order further to secure payment of the Promissory Note secured hereby and the observance, performance and discharge of the Borrower's obligations hereunder, under the Promissory Note and under the Loan Documents, the Borrower hereby assigns, transfers and sets over to the Lender (and, upon request of Lender, will execute a separate instrument assigning) all of the Borrower's right, title and interest in, to and under all of the leases now or hereafter affecting the Mortgaged Property or any part thereof and in and to all of the rents, issues, profits, revenues, awards and other benefits now or hereafter arising from the Mortgaged Property or any part thereof. Unless and until a default (as described in paragraph 10 above) occurs, the Borrower shall be entitled to collect the rents, issues, profits, revenues, awards and other benefits of the Mortgaged Property (except as otherwise provided in this Deed of Trust) as and when they become due and payable. The Lender shall be liable to account only for rents, issues, profits, revenues, awards and other benefits of the Mortgaged Property actually received by the Lender pursuant to any provision of this Deed of Trust. 19. Gender; Titles That pronouns of any gender shall include the other genders, and either the singular or plural shall include the other, as the identification of Borrower requires; and that the term "Lender" shall include any subsequent holder of the indebtedness secured hereby; that the titles of the paragraphs hereof are for reference purposes only and do not constitute part of this Deed of Trust. 20. Partial Unenforceability That if any term or provision of this Deed of Trust or the application thereof to any person or circumstance shall, to any extent, be invalid, unenforceable or inapplicable, the remainder of this Deed of Trust, or the application of such term or provision to persons or circumstances other than those as to which it is held invalid, unenforceable or inapplicable shall not be affected thereby, and each term and provision of this Deed of Trust shall be valid and be enforced to the fullest extent permitted by law. 21. Time of Essenc That time is of the essence hereof. 22. Benefit That the covenants contained herein shall bind, and the benefits and advantages contained herein, shall inure to the benefit of the respective successors and assigns of Borrower, Trustee and Lender; provided that Borrower may not „� 2.574 2 assign its obligations hereunder without the prior written consent of Lender. 23. Construction Mortga This this instrument is a "construction mortgage” (as defined in Section 9- 313(1)(c) of the Colorado Uniform Commercial Code) to the extent that it secures an obligation incurred for the construction of an improvement on the Mortgaged Property, including the acquisition cost of the Mortgaged Property. 24. Financing Statement. That this instrument is intended to be effective as a financing statement which is filed as a "fixture filing" pursuant to Section 9- 402(6) of the Colorado Uniform Commercial Code with respect to goods which are or will be fixtures related to the Mortgaged Property. For the purposes of this paragraph, Borrower is the Debtor, and Lender is the Secured Party. 25. Additional Payments or Taxes and Insurance That, subject to the limitations of applicable law, if requested by Lender, together with and in addition to each monthly installment payable under the terms of the above described Promissory Note, Borrower will pay to Lender, a sum equal to the premiums that will next become due and payable on all policies of insurance required by Lender, plus taxes and special assessments next due on the Mortgaged Property (all as estimated by Lender) less all sums already paid therefore divided by the number of months to elapse before two months prior to the date when such insurance premiums, taxes and assessments will become delinquent, said sums to be held by Lender to pay said insurance premiums, taxes and assessments before the same become delinquent. In holding such payments, Lender shall not be liable to Borrower for interest or other compensation, and such payments shall not be held in trust and may be mingled with Lender's general funds. If Lender determines that the monthly payments paid by Borrower to Lender for insurance premiums, taxes and assessments under this paragraph shall not be sufficient to pay same when due and payable, Borrower shall, after written notice thereof and together with the next due monthly installment, pay to Lender any amount necessary to make up the deficiency anticipated by Lender. 26. Nature of Use. That the nature of the use of the Mort- gaged Property shall not be altered without the prior written consent of Lender. 27. Use of Mortgaged Property The Borrower will not -make, suffer or permit, without the prior written consent of Lender, any use of the Mortgaged Property for any purpose other than that for which the same are used or intended to be used as of the date of this Mortgage. 28. Further Assurances At any time, and from time to time, upon request by Lender, the Borrower will make, execute and deliver, or cause to be made, executed and delivered, to the BOG- 2574 242" Lender or to the order of Lender, and where appropriate, cause to be recorded and /or filed and from time to time thereafter to be re- recorded and /or refiled at such time and in such offices and places as shall be deemed desirable by the Lender, any and all such other and further deeds of trust, security agreements, financing statements, continuation statements, instruments of Curtner assurances, certificates ana otner aocuments as may, in the opinion of Lender, be necessary or desirable in order to effectuate, complete, enlarge or perfect, or to continue and preserve (a) the obligations of the Borrower under the Promissory Note, this Deed of Trust and the Loan Documents, and (b) the lien and security interest of this Deed of Trust as a first and prior lien and security interest upon all of the Mortgaged Property, whether nor owned or hereafter acquired by the Borrower. Upon any failure by the Borrower so to do, the Lender may make, execute, record, file, re- record and /or refile any and all such deeds of trust, security agreements, financing statements, continuation statements, instruments, certificates and documents for and in the name of the Borrower, and the Borrower hereby irrevocably appoints the Lender the agent and attorney -in -fact of the Borrower so to do. Borrower further agrees to pay to Lender, on demand, all costs and expenses incurred by Lender in connection with the preparation, execution, recording, filing and refiling of any such instrument or document, including the charges for examining title, the attorney's fee for the rendering of an opinion as to the priority of this Deed of Trust and the charge for a title insurance policy insuring such title and of such other security instrument as a valid first and continuing lien. 29. Notices. All notices, demands and requests given or required to be given by any party hereto to another party shall be in writing. All such notices, demands and requests by any party to the other_ shall be deemed to have been properly given if delivered in person or if sent by United States registered or certified mail, postage prepaid, addressed to the other party at the address first set forth above or to such other address as such other party may, from time to time, designate by written notice given as herein required. 30. Applicable Law This Deed of Trust shall be interpret- ed, construed and enforced according to the laws of the State of Colorado. IN WITNESS WHEREOF, Borrower has executed this Deed of Trust on the day and year first appearing above. BORROWER: [S"`E 'A,;'k']` QUAL —MED, INC. a DELAWARE Co r.pora.t n By .'. Executive Vice President for Finance and Administration -10- ?5�4 243 COUNTY OF Pueblo STATE OF Colorado S'S. The foregoing instrument was acknowledged before me in the County of Pueblo State of Colorado this 14th day of January 19 92 by Keith Hovland Executive Vice President for Finance and Administration of Qual -Med, Inc., a Delaware Corporation a corporation. Witness my hand and official seal. My commission expires: 11 -22 -93 [S E A L] az- ;��` Notary Public 1021 Ruppel Street #32 t ' Pueblo, CO 81001 -11- 4 4 EXHIBIT "A" (To Deed of Trust Dated January 2, 1992) LEGAL DESCRIPTION Lots 4, 5 and 6, Block 32, in the part of the present City of Pueblo, County of Pueblo, State of Colorado AND The North 72 feet of Lots 1, 2 and 3, Block 32, in that part of the present City of Pueblo, County of Pueblo, State of Colorado. PROMISSORY NOTE $800,000.00 _ Due: July 1, 2002 Pueblo, Colorado Date: July 22, 1991 1. Debt and Repayment FOR VALUE RECEIVED, Qual -Med, Inc., having an office at 95 West First Avenue, Monte Vista, Colorado, 81144, (hereinafter called "Borrower "), promises to pay to the order of Pueblo, a Municipal Corporation, having offices at 1 City Hall Place, Pueblo, Colorado, 81005, or its successors or assigns (hereinafter called "Lender "), at such office or at such other place as may be designated from time to time in writing by Lender, the principal sum of Eight Hundred Thousand and No /100 Dollars ($800,000.00) in lawful money of the United States of America, without interest thereon, except default interest as provided herein, as follows: (i) Commencing on the date the Certificate Of Occupancy is issued for the Building or July 1, 1992, whichever occurs first, and on the first day of each month thereafter, the sum of Six Thousand Six Hundred Sixty -Six and 67/100 Dollars ($6,666.67) shall be due and payable; and (ii) On July 1, 2002, if not sooner paid, the entire unpaid principal amount of this Promissory Note, together with all unpaid and accrued interest thereon, if any, shall be due and payable. Each payment of interest or principal made by Borrower under this Promissory Note shall be accompanied by payment of all charges and other sums then due and payable under this Promissory Note, the Deed of Trust or the Loan Documents. All payments made hereunder shall be applied, (i) to any charges and other sums due under this Promissory Note, the Deed of Trust or the Loan Documents, (ii) to interest, if any, and (iii) to the reduction of the principal balance of this Promissory Note. 2. Definitions. A. The term "Debt" shall mean the entire unpaid principal balance of this Promissory Note, together with all interest accrued and unpaid thereon, if any, and all other sums due under this Promissory Note, the Deed of Trust and the Loan Documents. B. The term "Loan Documents" as used in this Promissory Note shall mean the Agreement between Lender and Borrower dated July 22, 1991 and any of the documents, if any, other than this Promissory Note or the Deed of Trust now or hereafter executed by Borrower and /or others, which wholly or partially evidences, secures or guarantees payment of this Promissory Note. C. The term "Deed of Trust" as used in this Promissory Note shall mean that certain Colorado Deed of Trust, dated the date hereof, executed and delivered by Borrower to Lender in order to secure the payment of the principal sum of this Promissory Note (i.e., Eight Hundred - Thousand and No /100 Dollars ($800,000.00) which Colorado Deed of Trust is to be duly recorded in the office of the County Clerk and Recorder of Pueblo County, Colorado. 3. Prepayment Borrower may prepay all or any portion of the Debt without premium or penalty. Any partial prepayment shall be applied against the principal and shall not postpone the due date of any subsequent payments or change the amount of such payments. 4. Default Under Other Documents At the option of Lender, any default under any of the terms, covenants, agreements or provisions contained in the Deed of Trust or the Loan Documents which are to be kept and performed by the Borrower shall be deemed a default under this Promissory Note. 5. Late Payment Charge I£ any sum payable under this Promissory Note is not paid within ten (10) days after the date on which it is due, Borrower shall pay an amount equal to five percent (5 %) of such unpaid sum as a late payment charge. In addition, if any sum payable under this Promissory Note is not paid on or before the date it is due, such sum shall bear interest at the default interest rate set forth in paragraph 7 hereof. 6. Acceleration. At the option of Lender, the Debt shall become immediately due and payable upon the occurrence of any default in timely payment of all or any portion of the Debt evidenced hereby, or upon any default, breach, or violation of any of the terms, covenants or provisions of this Promissory Note, the Deed of Trust or the Loan Documents, provided such default, violation or breach is not curred or remedied within ten (10) days after Lender gives written notice thereof to Borrower. 7. Interest After Default. If the Debt is declared immediately due and payable by Lender pursuant to the provisions of paragraph 6 hereof, or if the Debt is not paid in full on or before the date specified in paragraph 1 (i i) , the interest rate on the Debt or the portion thereof remaining outstanding, for any calendar month or portion thereof, from the date of such acceleration or from the date specified in paragraph l(ii), as the case may be, until the date the Debt is paid in full, shall be equal to the so- called "prime rate" of United Bank of Denver plus five percent (5 %). 8. Waiver. -2- Borrower hereby waives presentment and demand for payment, notice of dishonor, _protest and notice of protest of this Promissory Note and agrees to perform and comply with each of the terms, covenants, agreements and provisions contained in this Promissory Note, the Deed of Trust and the Loan Documents on the part of Borrower to be observed or performed. No release of any security for the Debt or extension of time for payment of same, or any installment hereof, and no alteration, amendment or waiver of any provision of this Promissory Note, the Deed of Trust or the Loan Documents made by agreement between Lender and Borrower or any other person or party shall release, discharge, modify, change or affect the obligations of Borrower under this Promissory Note, the Deed of Trust or the Loan Documents. No delay or omission on the part of the Lender in exercising any right hereunder or under the Deed of Trust or under the Loan Documents shall operate as a waiver of such right. 9. Extensions, Assiqnment and Release. Borrower agrees to remain and continue bound for the payment of the principal, interest and other sums provided for by the terms of this Promissory Note notwithstanding any assignment of this Promissory Note by Lender, any extension or extensions of the time of or for the payment of said principal, interest or other sums due and payable hereunder, or any change or changes in the amount or amounts to be paid under and by virtue of the obligation to pay provided for in this Promissory Note, or any change or changes by way of release or surrender of any collateral, rights and /or real estate held as security for the payment of this Promissory Note, or any change or changes by way of release of, agreement not to sue or suspension of rights against any other person. Borrower hereby waives all and every kind of notice of such assignment, extension or extensions, change or changes, release, surrender, agreement and suspension and agrees that the same may be made without the joinder or approval of Borrower. 10. Costs and Expenses Borrower agrees to pay all attempting to collect or secure attorneys' fees, whether the same or otherwise. costs of collecting, securing or the Debt, including reasonable are collected or secured by suit 11. Invalid Provisions. If any provision or portion of this Promissory Note, or the application thereof to any persons or circumstances, shall to any extent be invalid or unenforceable, the remainder of this Promis- sory Note, or the application of such provision or portion there- of, to any other person or circumstances shall not be effected thereby, and each provision of this Promissory Note shall be valid and enforceable to the fullest extent permitted by law. -3- 12. Documents Securing the Note This Promissory Note is secured by the Deed of Trust and the Loan Documents. 13. Governing Law The terms of this Promissory Note shall be governed by and construed under the laws of the State of Colorado. 14. Amendment This Promissory Note may not be amended or terminated orally, but only by an agreement in writing signed by the party against whom enforcement of such amendment or termination is sought. 15. Authority The representative of Borrower subscribing below represents that he /she has full power, authority and legal right to execute and deliver this Promissory Note and that the Debt evidenced hereby constitutes a valid and binding obligation of Borrower. 16. Notice. All notices permitted or required in this Promissory Note shall be in writing and shall be deemed to have been served when sent by certified or registered mail, postage prepaid, and addressed to the party to whom such notice is intended as set forth in the Deed of Trust. 17. Miscellaneous A. Whenever used, the singular number shall include the plural, the plural the singular, and the words "Lender" and "Borrower" shall include their respective successors and assigns; provided that Borrower may not assign its obligations hereunder except with the prior written approval of Lender. B. No right, power or remedy conferred upon or reserved to the Lender by this Promissory Note is intended to be exclusive of any other right, power or remedy, but each and every such right, power and remedy shall be cumulative and concurrent and shall be in addition to any other right, power and remedy given under this Promissory Note, the Deed of Trust and the Loan Documents, or now or hereafter existing at law or in equity or by statute. IN WITNESS WHEREOF, Borrower has duly executed this Promis- sory Note the day and year first above written. BORROWER: [S E A L] QUAL -MED, INC. -4- ATTEST: By Secretary President TJ 53.36 -5-