Loading...
HomeMy WebLinkAbout6794RESOLUTION NO. 6794 A RESOLUTION APPROVING AN AGREEMENT BETWEEN THE CITY OF PUEBLO, A MUNICIPAL CORPORATION AND WILLIAM K. SHERO AND CENTURY 400, INC. RELATING TO THE TRANSFER OF LAND AND BUILDING AT PUEBLO MEMORIAL AIRPORT AND AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO EXECUTE THE AGREEMENT AND THE WARRANTY DEED ATTACHED THERETO BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, that: .qF.('TTnM 1 _ The Agreement between the City of Pueblo, a Municipal Corporation and William K. Shero and Century 400, Inc. dated July 22, 1.991 and Warranty Deed, copies of which are attached hereto and incorporated herein, having been approved as to form by the City Attorney, are hereby approved. SECTION 2. The President of the City Council is authorized and directed to execute in the name of and on behalf of the City the Agreement and Warranty Deed and the City Clerk is directed to affix the seal of the City thereto and attest same. ATTEST: City Clerk INTRODUCED: July 26, 1991 By KENNETH HUNTER Councilperson APPR.O Pre dent of the Ci y ouncil TJ 53.39 AGREEMENT THIS AGREEMENT entered into as of the 22nd day of July, 1991 between the City of Pueblo, a Municipal Corporation (herein "City "), and William K. Shero (herein "Shero ") and Century 400, Inc., a California Corporation authorized to do business as a foreign corporation in the State of Colorado (herein "Company "), WITNESSETH: WHEREAS, City is the owner by conveyance from the United States Government of certain land known as the Pueblo Memorial Airport, Pueblo County, Colorado, and WHEREAS, it would be in the best interest of the City and in the public interest if portions of the Airport land not required for aviation or airport use be transferred and be reused and developed for industrial purposes, and WHEREAS, such reuse and development of portions of the Air- port industrial land would increase the tax base and availability of jobs and promote the economic expansion of the City, and WHEREAS, the property described herein is surplus property no longer of need or use to the City, and WHEREAS, Shero and Company have proposed a plan for the reuse and development of a portion of the Airport land for the manufacturing of industrial shampoos and blowers and plastic parts for similar equipment (the "manufacturing "). NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, City, Shero and Company agree as follows: 1. Sale and Purchase (a) City does hereby sell, and Shero does hereby purchase upon the terms and conditions herein, for a purchase price of Five Hundred Thousand and No /100 Dollars ($500,000.00) (herein "Purchase Price ") payable as herein provided, approximately 3.92 acres, more or less, of real property and all improvements located thereon including an approximately 25,000 square foot building, AS IS in its present condition (the "facility ") located at Pueblo Memorial Airport, Pueblo County, Colorado described in Exhibit "A" attached hereto and incorporated herein (herein "Property "). Shero acknowledges that City owns the Property subject to restrictions in the deed to the City recorded in Book 1074, Page 87, Instrument No. 819072 of the records of the Clerk and Recorder of Pueblo County, Colorado. (b) The Purchase Price will be paid as follows: (1) $50,000 in cash or certified funds at closing; and (2) the balance thereof by Shero executing and delivering to City his promissory note payable to the City in the principal sum of $450,000 with interest at 8.5% per annum payable in 120 consecutive monthly installments of principal and interest amortized over 20 years and the balance in full within 10 years after date of closing. Payment of the promissory note will be secured by a first deed of trust on Property. The form of the Promissory Note and Deed of Trust are attached hereto and hereby approved by City and Shero. 2. Conveyance. The City shall convey to Shero marketable title to the Property by general warranty deed substantially in the form of Exhibit "A" attached hereto and incorporated herein, free of liens, encumbrances, taxes and assessments. At closing, the deed will be duly executed and acknowledged for recording. 3. Closing The closing of the transaction contemplated by this Agreement shall be in Pueblo, Colorado at a time and date designated by the City, on or before August 31, 1991 (herein "closing date "). The closing date hereunder may be changed without amendment to this Agreement by mutual written consent of City and Shero. If the closing does not take place on or before the closing date or such later date as City and Shero shall mutually agree to in writing, this Agreement shall become null and void. 4. Conditions Precedent to Closing. The Purchase and sale herein contemplated is contingent upon and subject to the follow- ing: (a) Receipt by Shero of a standard ALTA owners title insurance policy, or commitment therefor, in the amount of the estimated value of the Property as improved satisfactory to Shero, insuring title to the Property free of liens, encumbrances, taxes and assessments. All costs and premium for such title insurance shall be paid by Shero. (b) Prior approval of the Federal Aviation Administra- tion (herein "F.A.A. ") and its issuance of all necessary Deeds of Release for the Property. (c) Pueblo County granting an exception from its sub- division regulations for the Property or the inclusion of the Property in an approved subdivision. (d) Shero's determination in his sole discretion that the Property is suitable for the planned facility. If any of the above conditions precedent to closing are not complied with prior to closing, Shero or City may terminate this Agreement and each party shall be released from all obliga- tions hereunder or Shero may waive the conditions. Closing of this transaction shall constitute a waiver of the conditions by -2- Shero and Company. 5. Shero's and Company's Representations. Shero and Company represent, warrant and agree, subject to closing, as follows: (a) Shero or Company shall on or before October 1, 1991 commence equipping the facility and diligently pursue the completion of such equipping and shall on or before January 31, 1992 commence manufacturing on the Property. (b) If Shero or Company does not commence manufacturing on the Property on or before January 31, 1992, title to the Property will revert to the City free of all liens, claims, encumbrances, taxes, restrictions, easements and rights of way placed thereon by the acts or defaults of Shero. If the Property so reverts to City and if City gives written notice to Shero of the exercise of its right of reversion and tenders to Shero the sum of $50,000.00 plus installments of principal on Shero's promissory note actually paid to City by Shero for the purchase of the Property, Shero shall execute and deliver to City a special warranty deed conveying to City marketable title to the Property free of all liens, claims, encumbrances, taxes, restrictions, easements and rights of way placed thereon by the acts or defaults of Shero except the Deed of Trust, and upon receipt of such deed, City will cancel Shero's promissory note. For purposes of this Agreement the term "commence manufacturing" means full time manufacturing of products for sale, storage or distribution within the facility after the facility has been fully equipped therefor. (c) Shero or Company shall, at his or its own expense, cause all utilities and roads used or to be used on the Property to be extended from the streets adjacent to the Property and installed upon the Property and shall maintain and keep in good repair all such roads and utility extensions. (d) Shero and Company shall keep and maintain the Property and all improvements thereon including landscaping in a good, clean, safe and orderly condition, free of waste, rubbish, debris and trash and will enclose and screen from public view by a solid fence all unsightly areas of the Property and those areas used for outside storage. (e) Waste water discharged from the Property into City's sanitary sewer system and Shero's or Company's use thereof are limited by and subject to the available treatment capacity of City's waste water treatment facilities and City's sewer user, industrial cost recovery, high strength surcharge, and pretreat- ment ordinances, rules and regulations applicable to City's sanitary sewer system, now in effect or hereafter adopted and amended. Shero and Company shall only discharge domestic waste water into City's sanitary sewer system. (f) Shero and Company shall comply with notification -3- and review requirements of the F.A.A. prior to construction, modification or alteration of any building or structure on the Property. (g) Shero or Company shall pay to City a combined service fee for services and facilities now furnished by City at the Pueblo Memorial Airport, namely: sewage treatment, public street maintenance, fire protection, and street lighting based upon $295.00 per acre per annum payable monthly for each acre of land conveyed to Shero hereunder. City may, from time to time, reduce, alter or eliminate any or all of the services or facilities presently being furnished and may modify, increase, or decrease the service fee therefor and the manner in which it is calculated, including making separate charges for such services, provided (i) such fees shall be non - discriminatory among other owners of land at Pueblo Memorial Airport receiving such services and facilities, and (ii) such fees shall be reasonable in relation to City's actual cost and expense of furnishing the services and facilities then being furnished. City's cost may include the cost of capital improvements amortized over the useful life of the improvements. (h) Shero and Company agrees and acknowledges that City reserves the right, without any obligation on its part to do so, to maintain and keep in repair the landing area of the airport and other public areas or facilities at the Pueblo Memorial Airport and to develop, modify, change, relocate, abandon, or improve the Pueblo Memorial Airport, or any part thereof, as it may determine in its sole and absolute discretion, at any time. Shero and Company further acknowledge and agree that City has not made, nor by any provision of this Agreement shall City be construed to have made any representation or warranty to the contrary relating thereto. (i) The Property to be conveyed to Shero hereunder is a portion of land City is developing into an industrial park. City in developing the industrial park intends to prepare and record appropriate restrictive covenants restricting the development and use of the land adjacent to the Property to industrial and commercial development and uses which are generally compatible with Shero's contemplated use for the Property. Shero shall sign any subdivision plat which includes the Property and Company shall subordinate the Property to such restrictive covenants provided they do not limit or impair the use of the Property as a manufacturing facility, or related office, or as permitted on adjacent property and, if requested by the City to do so, will execute and record an instrument subjecting the Property thereto. (j) Shero shall have the right prior to closing to inspect the Property and conduct such soils tests and environ- mental studies thereon to determine the condition of improvements and environmental condition of the Property and its suitability for Shero's project. (k) Shero and Company understand and agree that the -4- creation of jobs is the primary purpose for the City to enter into this Agreement and is the sole consideration and benefit accruing to the City hereunder. Accordingly, Shero and Company shall use their best efforts in good faith to employ at the facility on the Property within two (2) years after the date hereof forty (40) full time employees or full time employee equivalents. (1) At the request of City, Shero shall meet and in good faith confer with the City concerning the annexation of the Property to the City when the Pueblo Memorial Airport, or any part thereof including, without limitation, the Property, becomes eligible for annexation. 6. Colorado Law. This Agreement shall be governed by the laws of the State of Colorado and shall be construed in accordance therewith. 7. No Waiver 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. 8. Binding Effect. This Agreement shall be binding on the parties, their successors and assigns. The parties agree to do any and all things necessary to effectuate the purposes of this Agreement. 9. Construction. 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. 10. Text to Control. 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. 11. Severability. If any provision of this Agreement is declared by any court of competent jurisdiction to be invalid for any reason, such invalidity shall not effect the remaining pro- visions. On the contrary, such remaining provisions shall be fully severable, and this Agreement shall be construed and enforced as if such invalid provisions had never been inserted in the Agreement. 12. Amendment. This Agreement sets forth the entire under- standing 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 instrument setting forth such changes, signed by the parties hereto, except as otherwise provided in Section 3. 13. No Assignment. Neither Shero nor Company shall assign this Agreement or any interest herein without the prior written consent of the City. -5- 14. Notices All notices required to be given by this Agreement shall be made in writing and served either by: A. Personal delivery to the party requiring notice; or B. 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 paragraph A above or four (4) days after the date the notice was deposited in the U.S. Mail as specified in paragraph B above. For purposes of this section, the initial addresses of the parties hereto shall be as follows: William K. Shero and /or Century 400, Inc. 17287 Mt. Herrmann Fountain Valley, CA 92708 City Manager City of Pueblo 1 City Hall Place Pueblo, Colorado 81003 15. Survival of Covenants and Representations The covenants, representations and warranties made by each party herein shall survive the closing for the benefit of the other party. 16. Non - Exclusive Use of Roads. City grants to Shero and Company a non - exclusive easement over and across the following City owned roads at Pueblo Memorial Airport, to -wit: William White Boulevard and United Avenue for purposes of ingress and egress to and from U.S. Highway 50 -B and the Property. City reserves the right to repair, modify, alter, change, relocate, temporarily close and provide detours therefor, and redesignate such roads. Immediately upon the dedication by the City of the roads, or any portion thereof, to the public, the easement granted by this paragraph shall cease and terminate as to the roads or portions thereof so dedicated. IN WITNESS WHEREOF, Shero and Company have caused this Agreement to be executed by Shero and Company's duly authorized officers, and the City has caused this Agreement to be executed by its duly authorized representatives both o the day and year first written above. William K. Shero [S E A L] ATTEST Secret ry CENTURY 400, INC. A CALIFORNIA CORPORATION By President CITY OF PUEBLO, A MUNICIPAL CORPORATION [S E A L] ATTEST: By Ci Clerk Pr s' ent of the City Coun it TJ 53.31 -7- PROMISSORY NOTE $450,000.00 Vg Due: /Yj T a �p4� Y" Pueblo, Colorado Y✓j�k Date: _L11 j 1. Debt and Repayment FOR VALUE RECEIVED, William K. Shero, having an office at 17287 Mt. Herrmann, Fountain Valley, California, 92708, (herein- after 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 Four Hundred Fifty Thousand and No /100 Dollars ($450,000.00) in lawful money of the United States of America, with interest thereon from the date hereof at the rate of eight and one -half (8.5) percent per annum to and including the date the Debt is paid in full, as follows: // " "� ( i ) Commencing on Ju Ne �� 1992 and on the & day of each month thereafter, the sum of Three Thousand Nine Hundred Five and 25/100 Dollars ($3,905.25) shall be due and payable; and (ii) On /1a4, . if not sooner paid, the entire unpaid principal amount of this Promissory Note, together with all unpaid and accrued interest thereon, 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 on the aggregate outstanding principal balance of this Promissory Note, or (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 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 and Century 400, Inc. dated July 22, 1991, the Warranty Deed from Lender to Borrower and Century 400, Inc.'s Continuing Guaranty 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., Four Hundred Fifty Thousand and No /100 Dollars ($450,000.00) 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 If 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 three percent (3 %) 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 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 l(ii), 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 -2- paragraph l(ii), as the case may be, until the date the Debt is paid in full, shall be equal to the greater of (i) twelve percent (12 %) per annum or (ii) two percent (2%)'over the so- called "prime rate" of United Bank of Denver. 8. Waiver. 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 -3- 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. 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. -4- IN WITNESS WHEREOF, Borrower has duly executed this Promis- sory Note the day and year first above written. William K. Shero TJ 53.34 -5- No.: 75016RECORDED \.:J ; [��� . MAY 2 2 1992 � ��� X594 �:�. =9`74 Pi ll' ;COUNTY, COLORADO COLORADO DEED OF TRUST �f THIS INDE PURE ( th "Deed of Trust") made this � day of 199A, by and between William K. Shero, whose address is 17287 Mt. Herrmann, Fountain Valley, California, 92708 (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 Four Hundred Fifty Thousand and No /100 Dollars ($450,000.00) 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 . 2594 P�; :975 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- 5oor2594 976 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 -3- 2594 977 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- eoo� 2594 978 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, Agreement between Lender and Borrower dated July 22, 1991, Century 400, Inc.'s Continuing Guaranty, and Warranty Deed to Borrower (the "Loan Documents ") to be kept or performed by Borrower and /or Century 400, Inc.; or, (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. Hc 2594 979 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 �� 2594 �� 980 entity, the entire indebtedness secured hereby shall become immediately due and payable unless written consent for such sale, conveyance, transfer, lease, mortgage or pledge has been obtained from Lender. Borrower will not, without the prior written consent of Lender, initiate, join in or consent to any easement; private restrictive covenant, zoning ordinance, or other public or private restriction which alters or limits the present use of any of the Mortgaged Property. If any of the foregoing occurs without the consent of Lender, Lender shall be entitled, at its option, to treat such event as a default hereunder. 15. No Waiver by Lender That no failure by Lender to insist upon the strict performance of any covenant, agreement, term or condition of this Deed of Trust, the Promissory Note secured hereby or any of the Loan Documents or to exercise any option, right or remedy arising on account of any breach thereof shall constitute a waiver of any such breach or of such covenant, agreement, term or condition. No covenant, agreement, term or condition in this Deed of Trust, the Promissory Note secured hereby or any of the Loan Documents to be performed or complied with by Borrower, and no breach thereof, shall be waived, altered or modified except by a written instrument executed by Lender. No waiver of any breach shall affect or alter this Deed of Trust, the Promissory Note or the Loan Documents but each and every covenant, agreement, term and condition of this Deed of Trust, the Promis- sory Note secured hereby and the Loan Documents shall continue in full force and effect with respect to any other then existing or subsequent breach thereof. 16. Cumulative Rights That each right and remedy of Lender provided for in this Deed of Trust shall be cumulative and shall be in addition to every other right or remedy provided for in the Promissory Note, this Deed of Trust or the Loan Documents or now or hereafter existing at law, or in equity, or by statute or otherwise. The exercise or beginning of the exercise by Lender of any one or more of the rights or remedies provided for in this Deed of Trust, the Promissory Note or the Loan Documents, or now or hereafter existing at law, or in equity, or by statute or otherwise, shall not preclude the simultaneous or later exercise by Lender of any or all other rights or remedies provided for in this Deed of Trust, the Promissory Note or the Loan Documents, or now or hereafter existing at law, in equity, or by statute or otherwise. 17. Estoppel Statement That Borrower, within six days after Lender's request, will furnish an accurate written statement, duly acknowledged, to Lender or to any proposed assignee of this Deed of Trust stating the amount of principal and 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 -7- Kok, 2594 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 Essence 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 assign its obligations hereunder without the prior written consent of Lender. 23. Construction Mortgage. 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 Fmo'.2594 e x982 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 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 2594 further assurances, certificates and other documents 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, on the day and year first J � OF ' /oAn jc) M"T OF Borrower has executed this Deed of Trust appearing above. William K. Shero ss. The fo egoing instrument was acknowledged before m in the County of 6 State of 61newa�� this day of —TAnP 19cia by William K. Shero. • tA'ess my hand and official seal. ,pZty expires: Notary Pub (j c -10- 500 2594 984 Adams - Mang ini, Ina. 631 Lake Avenue Pueblo, Colorado 81004 (303) 544 -0865 EXHIBIT "A" LEGAL DESCRIPTION AIRPORT INDUSTRIAL PARR SHELL BUILDING NO. 4 A parcel of land located within the County of Pueblo, State of Colorado to -wit: A parcel of land located within a portion of the E1 12 of the SW1 14 of Section 30, Township 20 South, Range 63 West of the Sixth Principal Meridian, being more particularly described, as follows: Beginning at a point on the apparent westerly right -of -way line of Fairchild Street from which the W114 corner of said Section 30 bears N 65 -38 -39 W (bearings based on the west line of the said SWI of Section 30 to bear. N 00 - 05 - 41 W), a distance of 1875.27 feet; thence S 01 -32 -43 E, along said apparent westerly right of way line a distance of 599.37 feet to a point on the apparent northerly right of way line of United Avenue; thence S 88 -25 -20 W, along said apparent northerly right of way line a distance of 285.05 feet; thence N 01 -32 -18 W, a distance of 599.52 feet; thence N 88 -27 -06 E, a distance of 284.98 feet to the Point of Beginning. Said parcel contains 3.92 acres, more or less. The above description was prepared under my direct rj�-spgn- &�ility, supervision and checking. Professional Land Surveyors CONTINUING GUARANTY For valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the undersigned Century 400, Inc., having an office at 17287 Mt. Herrmann, Fountain Valley, California, 92708, (hereinafter called Guarantor), unconditionally guarantees and promises to pay to Pueblo, a Municipal Corporation, 1 City Hall Place, Pueblo, Colorado, 81003, (hereinafter called City), or order, on demand, in lawful money of the United States, any and all indebtedness of William K. Shero (hereinafter called Borrower) to City. The word "indebtedness" is used herein in its most comprehen- sive sense and includes any and all advances, debts, obligations and liabilities of Borrower, heretofore, now, or hereafter made, incurred or created, whether voluntary or involuntary and however arising, whether due or not due, absolute or contingent, liquidated or unliquidated, determined or undetermined, and whether Borrower may be liable individually or jointly with others, or whether such indebtedness may be or hereafter become otherwise unenforceable. The liability of Guarantor shall not exceed at any one time the sum of $450,000.00 for principal plus, in addition thereto, all interest upon the indebtedness and expenses including attorney's fees or other costs incurred by City in connection with the indebtedness. This is a continuing guaranty relating to any indebtedness, including that arising under successive transactions which shall either continue the indebtedness or from time to time renew it. This guaranty shall not apply to any indebtedness created after actual receipt by City of written notice of Guarantor's revocation as to future transactions. Any payment by Guarantor shall not reduce its maximum obligation hereunder, unless written notice to that effect be actually received by City at or prior to the time of such payment. The obligations hereunder are independent of the obligations of Borrower, and a separate action or actions may be brought and prosecuted against Guarantor whether action is brought against Borrower or whether Borrower be joined in any such action or actions. Guarantor authorizes City, without notice or demand and without affecting its liability hereunder, from time to time to (a) renew, compromise, extend, accelerate or otherwise change the time for payment of, or otherwise change the terms of the indebtedness or any part thereof, including increase or decrease of the rate of interest thereon; (b) take and hold security for the payment of this guaranty or the indebtedness guaranteed, and exchange, enforce, waive and release any such security; (c) apply such security and direct the order or manner of sale thereof as City in its discretion may determine; and (d) release or substitute any one or more of the endorsers or Guarantors. City may without notice assign this guaranty in whole or in part. Guarantor waives any right to require City to (a) proceed against Borrower; (b) proceed against or exhaust any security held from Borrower; or (c) pursue any other remedy in City's power whatsoever. Guarantor waives any defense arising by reason of any disability or other defense of Borrower or by reason of the cessation from any cause whatsoever of the liability of Borrower. Until all indebtedness of Borrower to City shall have been paid in full, even though such indebtedness is in excess of Guarantor's liability hereunder, Guarantor shall have no right of subrogation, and waives any right to enforce any remedy which City now has or may hereafter have against Borrower, and waives any benefit of, and any right to participate in any security now or hereafter held by City. Guarantor waives all presentments, demands for performance, notices of non - performance, protests, notices of protest, notice of dishonor, and notices of acceptance of this guaranty and of the existence, creation, or incurring of new or additional indebtedness. Any indebtedness of Borrower now or hereafter held by Guarantor is hereby subordinated to the indebtedness of Borrower to City; and such indebtedness of Borrower to Guarantor if City so requests shall be collected, enforced and received by Guarantor as trustee for City and be paid over to City on account of the indebtedness of Borrower to City but without reducing or affecting in any manner the liabili- ty of Guarantor under the other provisions of this guaranty.. Guarantor agrees that it is not necessary for City to inquire into the powers of Borrower or the agents acting or purporting to act on his behalf, and any indebtedness made or created in reliance upon the professed exercise of such powers shall be guaranteed hereunder. Guarantor agrees to pay a reasonable attorneys' fee and all other costs and expenses which may be incurred by City in the enforcement of this Guaranty. Guarantor agrees that this guaranty is a contract entered into at Pueblo, Colorado. The Colorado District Court for Pueblo County, Colorado shall have jurisdiction over any suit which involves this guaranty and venue in Pueblo County, Colorado shall be proper. Guarantor consents to the personal jurisdiction of that Court and agrees that service of process may be made upon Guarantor either within or without the State of Colorado. IN WITNESS WHEREOF the undersigned Guarantor has executed this guaranty at Pueblo, Colorado this day of p4 195. [S E A L1 CENTURY 400, INC. ATTEST: By ecretary President TJ 54.6 -2- CLOSING STATEMENT Seller: Pueblo, a Municipal Corporation Re: 3.92 acres of land located at Pueblo Purchaser: William K. Shero Memorial Airport Credits to Seller Purchase Price Deed of Trust $500,000 Credit for Repairs Credits to Purchaser $450,000 10,000 TOTAL $500,000 $460,000 Balance due Seller at closing $40,000 Disputes have arisen between Seller and Purchaser with respect to the condition of the 25,000 square foot building located on the above referenced land (the "Building ") . In consideration of the above stated Credit for Repairs in the amount of $10,000, Purchaser for himself, his heirs, personal representatives and assigns release and forever discharge Seller and U"-i-r'4 R r e- �� e officers, directors, employees and agents (except the architect for the building, Robert L. Shrum) from and against any and V all claims, demands, actions or suits resulting from or in any manner arising, directly or indirectly, out of this sale and purchase transaction, the Agreement between Seller and Purchaser dated July 22, 1991, and /or the condition of the land and Building hereby conveyed. Seller after adequate and full inspection, accepts the land and Building in their present condition, AS IS, WITHOUT WARRANTY EXPRESSED OR IMPLIED. Purchaser will duly record the Warranty Deed and Colorado Deed of Trust and cause to be issued and delivered to Seller within thirty (30) days, the ALTA Loan Policy insuring Seller's $450,000 deed of trust as a first and valid lien on the land the Building. Seller assigns to Purchaser any and all claims Seller may have against Robert L. Shrum, the architect for the Building. Seller makes no representation as to the validity or existence of any such claims. Purchaser agrees that he will not for any reason or purpose (except in an action against the architect) , now or in the future, make reference to any dissatisfaction he may have against the City I with respect to this transaction or the Building nor will he express or disclose his dissatisfaction, if any, with the Building or its condition, or with Seller ° --� o with respect to this transaction or the manner i-- in which he was treated by the Seller, t AW I w on in this transaction. If asked for any comment, Purchaser r state that he had disputes with the City which were resolved. Purchaser will treat as confidential the $10,000 Credit for Repairs given by Seller and will not disclose the existence of such credit to any person. Purchaser acknowledges that he took possession of the land and Building in August 1991 and agrees that any property taxes imposed or assessed after July 1991 against the land, Building, and /or Purchaser resulting from or arising out of Purchaser's or his agents, successors or assigns use and occupancy of the land and Building are not the obligation of Seller and will be paid and discharged by Purchaser before same become delinquent. Seller represents that it has not and will not impose or assess any property taxes against the land and Building during the period from August 1, 1991 to date hereof. Approved and accepted this 22nd day of May, 1992. Seller Purchas r / Pueblo, a Municipal Corporation :� William K. Shero By City Attor -2- � PETERSEN & FONDA PROFESSIONAL CORP. ATTORNEYS AT LAW 650 THATCHER BUILDING PUEBLO, COLORADO 81002 -0035 ATTN: THOMAS T. FARLEY BUYER SUBSTITUTION - DIRECT DEED ESCROW NO. 7546 MAY 19, 1992 1. You are hereby authorized and instructed to substitute as Buyer herein, TIMCOR FINANCIAL CORPORATION, a California Corporation, (hereinafter referred to as "EXCHANGE ACCOMMODATOR") in place of WILLIAM R. SKERO, (hereinafter referred to as "ULTIMATE BUYER ") for property commonly known as: 3.92 acres, Pueblo Memorial Airport, Pueblo County, Colorado Seller herein acknowledges that Buyer is acquiring the property herein described to satisfy exchange property in a prior transaction and Seller herein agrees to cooperate with "Ultimate Buyer" in order to effect same with no additional cost or liability to Seller. 2. It is understood between Seller and "Exchange Accommodator" that "Exchange Accommodator" is simply an accommodating party having become a party hereto to facilitate its predecessor in interest, "Ultimate Buyer ", in effecting a tax deferred exchange. Seller acknowledges that it is not relying on any representation of "Exchange Accommodator", in entering into the escrow referred to above or this amendment. Each of the parties hereto to hold the escrow holder free and harmless from any and all costs, damages or liability, including but not limited to reasonable attorney's fees in connection herewith. F ku�p t , / /�.,� ( 3. It is understood that Seller will convey the subject real property to "Ultimate Buyer" upon the close of this escrow and the Title Insurance Policy issued at the close of this escrow will insure the "Ultimate Buyer ". Exchange Accommodator shall not appear in the chain of Title. "Ultimate Buyer" shall be reflected as Buyer on all Closing Statements and Tax filings. 4. All warranties and representations, if any, express or implied, which have heretofore been made to or given by Seller and or "Ultimate Buyer" shall survive this amendment and the within Buyer Substitution - Direct Deed, provided, however, that nothing herein contained shall be construed as imposing any liability for such warranties or representation upon "Exchange Accommodator". Seller's sole recourse shall be to proceed against "Ultimate Buyer "with respect to any claim or allegation of Seller concerning subject property. "Ultimate Buyer" hereby agrees ll - t that "Ultimate Buyer" shall be and remain solely responsible 5tA1 A and liable to Seller for the performance of each and every ay warranty and obligation of "Ultimate Buyer" under said agreement r and with respect to Buyer's acquisition of the subject property, and that the Seller shall look solely to "Ultimate Buyer" relating to the foregoing. Alo w"jisf ,,l AKI�Y4 toA MM4) hexr(�, 7Z, eoivf",S - -tee 3 htgA45 0,4 A "el(L as c# K— 46lYr01 Qee� oj (a[11 secua(n,? pn�AeNy or- 4Wfnvn1P &yeoes `�iSd odd',oek , )r ? A f� AK-4a- NO Y A f f e(! -(-PQ � � � (1 (,v� �2ctnt PAf qN� Se(lex /k A- ere kjJ f /� A�tisf e�t�f•ea ems. 6e .yu� ear e/QP�ic1 TIMCOR 11500 W. OLYMPIC BLVD. SUITE 425 1 LOS ANGELES, CALIFORNIA 90064 (310) 479 -1550 FAX (310) 479 -2005 1- 800 -966 -1031 PETERSEN & FONDA ATTORNEYS AT LAW ESCROW NO. 7546 PAGE 2 OF 2 PROFESSIONAL CORP. 5. The parties hereby acknowledge that they have been advised to seek the advice of their own Tax Counsel and understand that no representation is made by escrow holder or Exchange Accommodator as to the legal sufficiency or effect or tax consequences of these escrow instructions, and all parties indemnify and hold escrow holder harmless as to any responsibility or liability in connection therewith. -A 4 *, 1 5-� ® T ALL OTHER TERMS AND CONDITIONS REMAIN THE SAME. SELLER: CITY OF PUEBLO, a Municipal Corporation By 5 1 "ULTIMATE BUYER" .i1� William K. Shero Mailing Address: "EXCHANGE ACCOMMODATOR" ddsub.she TIMCOR 11500 W. OLYMPIC BLVD. SUITE 425 LOS ANGELES, CALIFORNIA 90064 (310) 479 -1550 FAX (310) 479 -2005 1- 800 -966 -1031 Ii TIMCOR FINANCIAL CORPORATION a California Corporation CERTIFICATE OF SECRETARY 1 CERTIFY THAT: I am the duly qualified and acting Secretary of Timcor Financial Corporation, a California Corporation. The following is a true copy of a resolution adopted by the unanimous consent of the Board of Directors of the Corporation at a special meeting held November 10,1989: RESOLVED, that Timcor Financial Corporation be and hereby is authorized to act as Accommodator in IRC Section 1031 Tax Deferred Exchanges and that the officers of the Corporation are authorized to execute all documents necessary in such transactions, including escrow instructions, amendments and corporate deeds and to acquire, purchase, sell and convey real and personal property. RESOLVED, FURTHER, that Timothy S. Harris is President, Harvey J. Harris (aka N.J. Harris) is Vice President and Ina Underberger is Secretary of Timcor Financial Corporation and anyone acting alone is authorized to sign any of the foregoing documents for the Corporation. The resolution is in conformity with Articles of Incorporation and By -Laws of the Corporation and has never been modified or repealed. a et- 't� e k- " '�' -, 1, 7 , Ina Underberger, Sec ary TIMCOR 11500 W. OLYMPIC BLVD. SUITE 425 LOS ANGELES, CALIFORNIA 90064 (31 O) 479 -1550 FAX (310) 479 -2005 Qnn.QAA_1 (Lit ISSUED BY TRANSAMERICA LOAN POLICY OF TITLE INSURANCE TITLE INSURANCE COMPANY SUBJECT TO THE EXCLUSIONS FROM COVERAGE, THE EXCEPTIONS FROM COVERAGE CONTAINED IN SCHEDULE B AND THE CONDITIONS AND STIPULATIONS, TRANSAMERICA TITLE INSURANCE COMPANY, a California corporation, herein called the Compa- ny, insures, as of Date of Policy shown in Schedule A, against loss or damage, not exceeding the Amount of Insurance stated in Schedule A, sustained or incurred by the insured by reason of: 1. Title to the estate or interest described in Schedule A being vested other than as stated therein; 2. Any defect in or lien or encumbrance on the title; 3. Unmarketability of the title; 4. Lack of a right of access to and from the land; 5. The invalidity or unenforceability of the lien of the insured mortgage upon the title; 6. The priority of any lien or encumbrance over the lien of the insured mortgage; 7. Lack of priority of the lien of the insured mortgage over any statutory lien for services, labor or material: (a) arising from an improvement or work related to the land which is contracted for or commenced prior to Date of Policy; or (b) arising from an improvement or work related to the land which is contracted for or commenced subsequent to Date of Policy and which is financed in whole or in part by proceeds of the indebtedness secured by the insured mortgage which at Date of Policy the insured has advanced or is obligated to advance; 8. The invalidity or unenforceability of any assignment of the insured mortgage, provided the assignment is shown in Schedule A, or the failure of the assignment shown in Schedule A to vest title to the insured mortgage in the named insured assignee free , n ? clear of all liens. The Company will also pay the costs, attorneys' fees and expenses incurred in defense of the title or the lien of the insured mortgage, as insured, but only to the extent provided in the Conditions and Stipulations. IN WITNESS WHEREOF, TRANSAMERICA TITLE INSURANCE COMPANY has caused its corporate name and seal to be hereunto affixed by its duly authorized officers, the Policy to become valid when countersigned by an authorized officer or agent of the Company. TRANSAMERICA TITLE. INSURANCE COMPANY B ./ Awhurired Cou ersignature President �A�IFORNy�'1 Attest: EXCLUSIONS FROM COVERAGE h / seeretar� The following matters are expressly excluded from the coverage of this policy and the Company will not pay loss or damage, costs, attorneys' fees or expenses which arise by reason of: 1. (a) Any law, ordinance or governmental regulation (including but not limited to building and zoning laws, ordinances, or regulations) restricting, regulating, prohibiting or relating to (i) the occupancy, use, or enjoyment of the land; (ii) the character, dimensions or location of any improvement now or hereafter erected on the land; (iii) a separation in ownership or a change in the dimensions or area of the land or any parcel of which the land is or was a part; or (iv) environmental protection, or the effect of any violation of these laws, ordinances or governmental regulations, except to the extent that a notice of the enforcement thereof or a notice of a defect, lien or encumbrance resulting from a violation or alleged violation affecting the land has been recorded in the public records at Date of Policy. (b) Any governmental police power not excluded by (a) above, except to the extent that a notice of the exercise thereof or a notice of a defect, lien or encumbrance resulting from a violation or alleged violation affecting the land has been recorded in the public records at Date of Policy. 2. Rights of eminent domain unless notice of the exercise thereof has been recorded in the public records at Date of Policy, but not excluding from coverage any taking which has occurred prior to Date of Policy which would be binding on the rights of a purchaser for value without knowledge. 3• Defects, liens, encumbrances, adverse claims or other matters: (a) created, suffered, assumed or agreed to by the insured claimant; (b) not known to the Company, not recorded in the public records at Date of Policy, but known to the insured claimant and not disclo- sed in writing to the Company by the insured claimant prior to the date the insured claimant became an insured under this policy; (c) resulting in no loss or damage to the insured claimant; (d) attaching or created subsequent to Date of Policy (except to the extent that this policy insures the priority of the lien of the insured mortgage over any statutory lien for services, labor or material); or (e) resul- ting in loss or damage which would not have been sustained if the insured claimant had paid value for the insured mortgage. 4. Unenforceability of the lien of the insured mortgage because of the inability or failure of the insured at Date of Policy, or the inability or failure of any subsequent owner of the indebtedness, to comply with applicable doing business laws of the state in which the land is situated. 5• Invalidity or unenforceability of the lien of the insured mortgage, or claim thereof, which arises out of the transaction evidenced by the insured mortgage and is based upon usury or any consumer credit protection or truth in lending law. 6• Any statutory lien for services, labor or materials (or the claim of priority of any statutory lien for services, labor or materials over the lien of the insured mortgage) arising from an improvement or work related to the land which is contracted for and commenced subsequent to Date of Policy and is not financed in whole or in part by proceeds of the indebtedness secured by the insured mortgage which at Date of Policy the insured has advanced or is obligated to advance. American Land Title Association Loan Policy (10- 21 -87) Face Page Valid Only If Schedule A, B and Cover Are Attached Form 1142 -49 CONDITIONS AND STIPULATIONS 1. DEFINITION OF TERMS. The following terms when used in this policy mean: (a) "insured ": the insured named in Schedule A. The term "insured" also includes (i) the owner of the indebtedness secured by the insured mortgage and each successor in ownership of the indebtedness except a successor who is an obligor under the provisions of Section 12(c) of these Conditions and Stipulations (reserving, however, all rights and defenses as to any successor that the Company would have had against any predecessor insured, unless the successor acquired the indebtedness as a purchaser for value without knowledge of the asserted defect, lien, encumbrance, adverse claim or other matter insured against by this policy as affecting title to the estate or interest in the land); (ii) any governmental agency or governmental instrumentality which is an insurer or guarantor under an insurance contract or guaranty insuring or guaranteeing the indebtedness secured by the insured mortgage, or any part thereof, whether named as an insured herein or not; (iii) the parties designated in Section 2(a) of these Conditions and Stipulations. (b) "insured claimant ": an insured claiming loss or damage. (c) "knowledge" or "known ": actual knowledge, not constructive knowledge or notice which may be imputed to an insured by reason of the public records as defined in this policy or any other records which impart constructive notice of matters affecting the land. (d) "land ": the land described or referred to in Schedule A, and improvements affixed thereto which by law constitute real property. The term "land" does not include any property beyond the lines of the area described or referred to in Schedule A, nor any right, title, interest, estate or easement in abutting streets, roads, avenues, alleys, lanes, ways or waterways, but nothing herein shall modify or limit the extent to which a right of access to and from the land is insured by this policy. (e) "mortgage ": mortgage, deed of trust, trust deed, or other security instrument. (f) "public records ": records established under state statutes at Date of Policy for the purpose of imparting constructive notice of matters relating to real property to purchasers for value and without knowledge. With respect to Section 1 (a) (iv) of the Exclusions From Coverage, "public records" shall also include environmental protection liens filed in the records of the clerk of the United States district court for the district in which the land is located. (g) "unmarketability of the title ": an alleged or apparent matter affecting the title to the land, not excluded or excepted from coverage, which would entitle a purchaser of the estate or interest described in Schedule A or the insured mortgage to be released from the obligation to purchase by virtue of a contractual condition requiring the delivery of marketable title. 2. CONTINUATION OF INSURANCE. (a) After Acquisition of Title. The coverage of this policy shall continue in force as of Date of Policy in favor of (i) an insured who acquires all or any part of the estate or interest in the land by foreclosure, trustee's sale, conveyance in lieu of foreclosure, or other legal manner which discharges the lien of the insured mortgage; (ii) a transferee of the estate or interest so acquired from an insured corporation, provided the transferee is the parent or wholly -owned subsidiary of the insured corporation, and their corporate successors by operation of law and not by purchase, subject to any rights or defenses the Company may have against any predecessor insureds; and (iii) any governmental agency or governmental instrumentality which acquires all or any part of the estate or interest pursuant to a contract of insurance or guaranty insuring or guaranteeing the indebtedness secured by the insured mortgage. (b) After Conveyance of Title. The coverage of this policy shall continue in force as of Date of Policy in favor of an insured only so long as the insured retains an estate or interest in the land, or holds an indebtedness secured by a purchase money mortgage given by a purchaser from the insured, or only so long as the insured shall have liability by reason of covenants of warranty made by the insured in any transfer or conveyance of the estate or interest. This policy shall not continue in force in favor of any purchaser from the insured of either (i) an estate or interest in the land, or (ii) an indebtedness secured by a purchase money mortgage given to the insured. (c) Amount of Insurance: The amount of insurance after the acquisition or after the conveyance shall in neither event exceed the least of: (i) the Amount of Insurance stated in Schedule A; (ii) the amount of the principal of the indebtedness secured by the insured mortgage as of Date of Policy, interest thereon, expenses of foreclosure, amounts advanced pursuant to the insured mortgage to assure compliance with laws or to protect the lien of the insured mortgage prior to the time of acquisition of the estate or interest in the land and secured thereby and reasonable amounts expended to prevent deterioration of improvements, but reduced by the amount of all payments made; or (iii) the amount paid by any governmental agency or governmental instrumentality, if the agency or instrumentality is the insured claimant, in the acquisition of the estate or interest in satisfaction of its insurance contract or guaranty. 3. NOTICE OF CLAIM TO BE GIVEN BY INSURED CLAIMANT. The insured shall notify the Company promptly in writing (i) in case of any litigation as set forth in Section 4(a) below, (ii) in case knowledge shall come to an insured hereunder of any claim of title or interest which is adverse to the title to the estate or interest or the lien of the insured mortgage, as insured, and which might cause loss or damage for which the Company may be liable by virtue of this policy, or (iii) if title to the estate or interest or the lien of the insured mortgage, as insured, is rejected as unmarketable. If prompt notice shall not be given to the Company, then as to the insured all liability of the Company shall terminate with regard to the matter or matters for which prompt notice is required; provided, however, that failure to notify the Company shall in no case prejudice the rights of any insured under this policy unless the Company shall be prejudiced by the failure and then only to the extent of the prejudice. 4. DEFENSE AND PROSECUTION OF ACTIONS; DUTY OF INSURED CLAIMANT TO COOPERATE. (a) Upon written request by the insured and subject to the options contained in Section 6 of these Conditions and Stipulations, the Company, at its own cost and without unreasonable delay, shall provide for the defense of an insured in litigation in which any third party asserts a claim adverse to the title or interest as insured, but only as to those stated causes of action alleging a defect, lien or encumbrance or other matter insured against by this policy. The Company shall have the right to select counsel of its choice (subject to the right of the insured to object for reasonable cause) to represent the insured as to those stated causes of action and shall not be liable for and will not pay the fees of any other counsel. The Company will not pay any fees, costs or expenses incurred by the insured in the defense of those causes of action which allege matters not insured against by this policy. (b) The Company shall have the right, at its own cost, to institute and prosecute any action or proceeding or to do any other act which in its opinion may be necessary or desirable to establish the title to the estate or interest or the lien of the insured mortgage, as insured, or to prevent or reduce loss or damage to the insured. The Company may take any appropriate action under the terms of this policy, whether or not it shall be liable hereunder, and shall not thereby concede liability or waive any provision of this policy. If the Company shall exercise its rights under this paragraph, it shall do so diligently. (c) Whenever the Company shall have brought an action or interposed a defense as required or permitted by the provisions of this policy, the Company may pursue any litigation to final determination by a court of competent jurisdiction and expressly reserves the right, in its sole discretion to appeal from any adverse judgement or order. (d) In all cases where this policy permits or requires the Company to prosecute or provide for the defense of any action or proceeding, the insured shall secure to the Company the right to so prosecute or provide defense in the action or proceeding, and all appeals therein, and permit the Company to use, at its option, the name of the insured for this purpose. Whenever requested by the Company, the insured, at the Company's expense, shall give the Company all reasonable aid (i) in any action or proceeding, securing evidence, obtaining witnesses, prosecuting or defending the action or proceeding, or effecting settlement, and (ii) in any other lawful act which in the opinion of the Company may be necessary or desirable to establish the title to the estate or interest or the lien of the insured mortgage, as insured. If the Company is prejudiced by the failure of the insured to furnish the required cooperation, the Company's obligations to the insured under the policy shall terminate, including any liability or obligation to defend, prosecute, or continue any litigation, with regard to the matter or matters requiring such cooperation. Conditions and Stipulations Continued Inside Cover B 1142 -49 CONTROL NO. 411-129217+ 0 TRANSAMERICA TITLE INSURANCE COMPANY POLICY OF TITLE INSURANCE SCHEDULE A Amount of Insurance: $ 450,000.00 Policy No.: 7546758 Date of Policy: June 29, 1992 at 2:51 P.M. 1. Name of Insured: City of Pueblo, a Municipal Corporation 2. The estate or interest in the land described in this Schedule and which is encumbered by the insured mortgage is: FEE SIMPLE 3. The estate or interest referred to herein is at Date of Policy vested in: William K. Shero 4. The mortgage, herein referred to as the insured mortgage, and the assignments thereof, if any, are described as follows: Deed of Trust from William K. Shero to the Public Trustee of the County of Pueblo for the use of City of Pueblo, a Municipal Corporation to secure $450,000.00 dated May 22, 1992, recorded May 22, 1992 in Book 2594 at Page 974. 5. The land referred to in this policy is described as follows: (SEE ATTACHED PAGE FOR LEGAL DESCRIPTION) TRANSAMERICA TITLE INSURANCE COMPANY Policy No.: 7546758 LEGAL DESCRIPTION A parcel of land located within a portion of the E1 /2 of the SW1 /4 of Section 30, Township 20 South, Range 63 West of the Sixth Prinicipal Meridian, being more particularly described as follows: BEGINNING at a point on the apparent Westerly right -of -way line of Fairchild Street from which the W1 /4 corner of said Section 30 bears North 65 deg. 38 min. 39 sec. West (bearings based on the West line of the said SW1 /4 of Section 30 to bear North 00 deg. 05 min. 41 sec. West), a distance of 1875.27 feet; thence South 01 deg. 32 min. 43 sec. East, along said apparent Westerly right of way line, a distance of 599.37 feet to a point on the apparent Northerly right of way line of United Avenue; thence South 88 deg. 25 min. 20 sec. West, along said apparent Northerly right of way line, a distance of 285.05 feet; thence North 01 deg. 32 min. 18 sec. West, a distance of 599.52 feet; thence North 88 deg. 27 min. 06 sec. East, a distance of 284.98 feet to the POINT OF BEGINNING AKA Parcel A of Subdivision Exemption No. 90 -4 recorded July 6, 1990 in Book 2506 at Page 12, County of Pueblo, State of Colorado Page 2 0 TRANSAMERICA TITLE INSURANCE COMPANY Policy No.: 7546758 SCHEDULE B -PART I This Policy does not insure against loss or damage by reason of the following: 1. Rights or claims of parties in possession not shown by the public records. 2. Easements, or claims of easements, not shown by the public records. 3. Discrepancies, conflicts in boundary lines, shortage in area, encroachments, and any facts which a correct survey and inspection of the premises would disclose and which are not shown by the public records. 4. Any lien, or right to a lien, for services, labor or material theretofore or hereafter furnished, imposed by law and not shown by the public records. 5. Taxes due and payable; and any tax, special assessments, charge or lien imposed for water or sewer service, or for any other special taxing district. EXEMPT 6. Findings of facts, conclusions of Law and Decree for a change of water rights in the matter of the application for a change of water rights of the Booth - Orchard Grove Ditch Company and the Board of Water Works of Pueblo, Colorado, recorded May 5, 1972 in Book 1718 at Page 346. 7. Easement and right of way for pipeline for the transportation of gas, petroleum or any of its products, also water or other substances purposes, granted to Colorado Interstate Gas Company, a Delaware Corporation by Jack R. Craddock, Vice President of Council by instrument recorded February 18, 1950 in Book 1116 at Page 427, in which the specific location of the easement is not defined. 8. Reservations as contained in Deed of Release from the United States of America acting by and thourgh the Administrator of Civil Aeronautics, to the City of Pueblo, a body politic under the laws of the State of Colorado, recorded September 20, 1958 in Book 1309 at Page 146. 9. Right of way agreement between Pueblo, a Municipal Corporation, and Colorado Interstate Corporation, a Delaware Corporation, recorded January 12, 1972 in Book 1708 at Page 67. Page 3 TRANSAMERICA TITLE INSURANCE COMPANY Policy No.: 7546758 SCHEDULE B -PART I - continued 10. Easement and right of way between Pueblo, a Municipal Corporation and Colorado Interstate Gas Company, dated June 24, 1957 and recorded July 30, 1957 in Book 1333 at Page 119. NOTE: Resolution No. 3000, Amendment to the above easement and right of way recorded December 6, 1972 in Book 1735 at Page 390 and recorded March 7, 1973 in Book 1742 at Page 657. 11. Reservation as contained in instrument of Release from United States acting by the Federal Aviation Administration to the City of Pueblo, a body corporate and politic, under the laws of the State of Colorado, recorded September 25, 1970 in Book 1678 at Page 155 and in Deed recorded September 25, 1970 in Book 1678 at Page 159. 12. Easement and right of way for laying, constructing, maintaining, operating, repairing, replacing, and removing pipelines etc., granted to Colorado Interstate Gas Company, a Delaware Corporation, by the City of Pueblo, a Municipal Corporation, by instrument recorded October 15, 1987 in Book 2368 at Page 252. 13. Right of Way Agreement between D. C. Beaman and The Colorado & Eastern Telephone and Telegraph Company, recorded May 7, 1908 in Book 321 at Page 477, over the S1/2 SW1 /4, Section 30, Township 20 South, Range 63 West, and other property. 14. License Agreement between D. C. Beaman and The Colorado Postal -Cable Company, recorded December 30, 1913 in Book 340 at Page 188, across the S1 /2 SW1 /4, Section 30, Township 20 South, Range 63 West, and other property. 15. Easement and right of way for pipe line purposes, as granted to Colorado Interstate Gas Company, a Delaware Corporation by City of Pueblo Water System, recorded December 11, 1942 in Book 940 at Page 63, affecting the following described property: On, over, across and through Section 25, Township 20 South, Range 64 West of the Sixth Prinicipal Meridian, Pueblo County, Colorado, and Sections 29 and 30, Township 20 South, Range 63 West of the Sixth Prinicipal Meridian, Pueblo County, Colorado. 16. Easement and right of way to construct, reconstruct, operate, repair, relocate and maintain lines of telegraph and telephone purposes, granted to Postal Telegraph -Cable Company by American Crystal Surgar Company by instrument recorded January 21, 1938 in Book 849 at Page 247, in which the specific location of the easement is not defined. Page 4 TRANSAMERICA TITLE INSURANCE COMPANY Policy No.: 7546758 SCHEDULE B -PART I - continued 17. Right of Way Agreement To Colorado Interstate Gas Company recorded in Book 2097 at Page 440, Instrument No. 680899. 18. Resolution No. 4883 and Right of Way Agreement recorded in Book 2097 at Page 308, Instrument No. 680825. 19. Any question as to the size of location of the subject property and as to the encroachment of the subject property onto adjoining property. 20. Lack of a right of access from the land to any open public road, street or highway. NOTE: This exception is necessary because it does not appear from the instruments in the office of the Clerk and Recorder of the County in which subject property is situated that any right of access exists to an open public roadway. 21. Reservations as contained in Deed of Release from the United States of America acting by and though the Administrator of Civil Aeronautics, to the City of Pueblo, a body politic under the laws of the State of Colorado, recorded May 22, 1992 in Book 2594 at Page 965. 22. Covenants, Conditions and Restrictions, which do contain a forfeiture or reverter clause, but omitting restrictions, if any, based on race, color, religion, or national origin as contained in instrument recorded May 22, 1992 in Book 2594 at Page 968, and any and all amendments and supplements thereto. 23. Terms, agreements, provisions, conditions, obligations, reservations, and reservations of rights contained in warranty deed recorded May 22, 1992 in book 2594 at Page 968 and re- recorded June 29, 1992 in Book 2601 at Page 68. 24. Conditions and reversion provisions as contained in warranty deed recorded May 22, 1992 in Book 2594 at Page 968, and re- recorded June 29, 1992 in Book 2601 at Page 68. Page 5 TRANSAMERICA TITLE INSURANCE COMPANY Policy No.: 7546758 SCHEDULE B -PART II In addition to the matters set forth in Part I of this Schedule, the title to the estate or interest in the land described or referred to in Schedule A is subject to the following matters, if any be shown, but the Company insures that such matters are subordinate to the lien or charge of the insured mortgage upon said estate or interest: NONE Page 6 NoS 7'5014 REcolwv „3 3� P/,�t. MAY 2 2 1991 : c • 2594 • : 965 n►ESw cowry. o0wWo DEED OF RELEASE This instrument, a Deed of Release, made by the United States of America, acting by and through the Federal Aviation Administration, under and pursuant to the powers and authority contained in the provisions of Public- Law 81 -311 (63 Stat. 700), as amended, to the City of Pueblo, a body politic under the laws of the Stag of Colorado, Mitnesseth WHEREAS, The united States of America, acting by and through the War Assets Administrator, under and pursuant to Reorganisation Plan One of 1947 (12 Fed. Reg. 4534) and the powers and authority contained in the provisions of the Surplus Property Act of 1944, as amended, by instrument entitled " Quitclaim Deed," dated July 20, 1948, and recorded in Pueblo County, Colorado, in book 1074, page 87, did surrender, transfer, remise, release, quitclaim and convey to the City of Pueblo, Colorado, airport facilities commonly known and dai gaatsd as Public Manorial Airport, subject to certain ooesditic=,, reservations, exceptions, and restrictions; and, The City has requested the FAA to execute a Agreement of Release, whereby it would release the said described property from all the reservations, restrictions, and conditions as set forth in the said Agreement; and IMMUL s, The City intends to dispose of said land free and clear of the reeervatiaus, restrictions, and conditions and receive other valae!hle•oonsideration therefor. MW Tmmzrmz, For and in consideration of the above - expressed recitals and of the benefits to accrue to the United States and to civil aviation, the United States of America upon inclusion by the City of Pueblo, Colorado, in the Instrument of Transfer conveying title to the bereinattsr described real property of provisions as follows (1) That the City of Pueblo, Colorado, reserves unto itself, its and assigns, for the use and benefit of the public a right of flight for the passage of aircraft in the airspace above the surface of the real property hereinafter described, together with the right tj cause in said airspace such noise as say be inherent in the operation of aircraft, now known or hereafter used, for navigation of flight in the said airspace, and for use of said airspace for landing on, taking off from or operating on Pueblo Memorial Airport, 2594 966 (2) That the Grantee expressly agrees for itself, its successors and assigns to restrict the height of structures, objects of natural growth and other obstructions on the hereinafter described real property to a height of not more than 4,710 feet above sea level, (3) That the Grantee expressly agrees for itself, its successors and assigns to prevent any use of the hereinafter described real property which would interfere with landing or taking off of aircraft at the Pueblo Memorial Airport, or otherwise constitute an airport hazard, hereby releases the said real property froze the conditions, reservations and restrictions as contained in the above- mentioned Instrument of Transfer from the United states of America to the City of Pueblo, Colorado, dated July 20, 1948, which real property is described as follows: A parcel* of land located within the County of Pueblo, State of Colorado to wit: A parcel of land located within a portion of the E1 /2 of the 311 1/4 of Section 30, Township 20 South, Range 63 West of the Sixth Principal Meridian, being more particularly described as followss Beginning at a point on the apparent westerly right- of-way line of Fairchild Street from which the W1 /4 corner of said Section 30 bears N 65 -38 -39 N (bearings based on the west line of the said SW 1/4 of Section 30 to bear N 00 -05 -41 W), a distance of 1875.27 feet; thence S 01 -32 -43 E, along said apparent westerly right of way line a distance of 599.37 feet to a point on the apparent northerly right of way line of United Avenue; thenca S 88 -25-20 W, along said appareent northerly right of way line a distance of 285.05 feet; thence N 01 -32 -18 N, a dista,xx of 599.!2 feet; th= e K 88 -27 -06 E, a distance of 284.98 feet to the Point of Beginning. Said parcel contains 3.92 acres, more or less. soo! 2594 967 i, j UNITED STATES OF AMERICA By V9!S Ad Manager, Airports Div Sion Northwest Mountain Region Federal Aviation Administration Accepted: City of eblo, Colorado By W WI u cchiato President of the City Council By its acceptance of this Deed of Release the City of Pueblo, Colorado, covenants and agrees for itself, its successors and � assigns, to comply with and observe all of the conditions and limitations hereof, which are expressly limited to the above- described real property. IN WITNESS WHEREOF the United States of American has caused this Deed of Release to be executed as of the 14th day of November 3.9 j UNITED STATES OF AMERICA By V9!S Ad Manager, Airports Div Sion Northwest Mountain Region Federal Aviation Administration Accepted: City of eblo, Colorado By W WI u cchiato President of the City Council k ow. 9750151tEcoituo 3 0 2t?en. MAY 2 2 1991 eoc'? 2594 !,: 968 waw COUNTY. COMMMO WARRANTY DEED THIS DEED, made this A J day of .rews-be, 1991 by and between Pueblo, a Municipal Corporation (herein "City ") and William R. Shero of Fountain Valley, California, (herein " Shero"), WITNESSETHt That City for and in consideration of the sum of $500,000.00 and other good and valuable consideration to City in hand paid by Shero, the receipt whereof is hereby confessed and acknowledged, has granted, bargained, sold and conveyed, and by these presents does grant, bargain, sell, convey and confirm unto the Shero, his heirs, personal representatives and assigns forever, all the real property situate, lying and being at Pueblo Memorial Airport, County of Pueblo, State of Colorado, more particularly described . in Exhibit, "A• attached gereto and incorporated herein (herein •Property), with all its appurtenances, and warrant the title to the same, subject to restrictions, reservations, rights of way, and easements of record and easements for the existing sanitary and storm sewer, water and natural gas lines located on or :r :zsing the Property, and to the fn1lowing covenants, conditions, and restrictions which are and shall be construed to be covenants running with the land described herein and binding upon Shero, his heirs, personal representatives and assigns and inuring to the benefit of City, its successors and assigns. 1. City reserves unto itself and its successors and assigns, for use and benefit of the public, a right of flight for the passage of aircraft in the airspace above the surface of the soo? 2594 �::= 969 Property, together with the right to cause in the airspace above the surface of the Property such noise as may be inherent in the operation of any aircraft now known or hereafter used for naviga- Lion of or flight in said airspace, and for use of the airspace above the surface of the Property for landing on, taking off from, or operation on or over the Pueblo Memorial Airport. i 2. Shero expressly agrees for himself, his heirs, personal I representatives and assigns to restrict the height of structures, objects of natural growth and other obstructions on the Property, to a height of not more than 4,700 feet above the mean sea level. 3. Shero expressly agrees for himself, his heirs, personal j representatives and assigns, that he will prevent any use of the Property which would interfere with landing or taking off of aircraft at the Pueblo Memorial Airport, or otherwise constitute an airport hazard. 4. The Property and its use are further subject to the following Restrictive Covenantss (a) The Property tuay be used only for manufacturing and warehouse facilities and incidental office use. The Property shall not be used for smelting or plating op3rations, or for the storage or processing of putrescible materials, or for any purpose or business which constitutes a nuisance, or which exceeds the state air pollution control standards for the activities conducted on the Property. Gasoline or diesel fuel used in connection with the business conducted on the Property but not for sale at retail or wholesale may be stored on the Property in an environmentally sound manner. (b) Outdoor storage shall not be permitted except for storage of equipment used in the facility. Parking areas for vehicles and roads on the Property shall be paved. (c) The Property shall no* be subdivided and no building or structure over thirty -five feet in height shall be installed or constructed on the Property. (d) No structure or building shall be constructed or -2- 1 , 25941 970 installed nearer than sixty -five (65) feet along the front of the Property near United Avenue or thirty -five (35) feet of side or rear streets. There must be installed and maintained a minimum thirty -five (35) foot strip of living landscaped ground along the front of the Property near United Avenue and twenty -five (25) feet adjacent to abutting streets. Minimum side yards set -backs shall be thirty -five (35) feet. (e) The Property owner shall at all times keep and maintain the Property and all buildings, landscaping and improvements located thereon in a good, clean, safe and orderly condition free of waste, rubbish, debris and trash, and enclose and screen from public view all outside storage and unsightly areas of the Property and those used for storage. i (f) before commencing the construction, installation or alteration of any building, structure, parking facility, outdoor sign, *or other permanent improvement, or landscaping on the Property. the Property owner shall submit to and have approved by the City in writing the site plans and plans and specifications f therefor. City's approval will not be unreasonably withheld. In ( the event the City or its designated representatives shall fail to approve or disapprove such plans and specifications within twenty- five (25) working days after they have been submitted to the City, such approval will not be required and this covenant will be + dews* to have been complied with. All buildings, improvements and activities on the Property shall be constructed and conducted in compliance with all applicable federal, state and local law, regulations, and codes. (g) Waste water discharged from the Property into City's sanitary sewer system and the Property owner's use thereof are limited by and subject to the available treatment capacity of City's waste water treatment facilities and City's sewer user, industrial cost recovery, high strength surcharge, and pretreatment ordinances, rules and regulations applicable to City's sanitary sewer system at Pueblo Memorial Airport, now in effect or hereafter adopted or amended. The Property owner shall only discharge domestic waste into City's sanitary sewer system. (h) City reserves the rioht to waive all or any part of these Restrictive Covenants. S. This Deed and conveyance are made upon the expressed condition that Sher* will commence or cause to be commenced manufacturing on the Property on or before January 31, 1992. If manufacturing on the Property does not commence on or before January 31, 1922, title to the Property free and cleir of all DIM b001 2594 f� , -: 971 i i liens and encumbrances shall revert to the City. If title to the Property so reverts to the City and if City gives written notice to Shero of the exercise of its right of reversion and tenders to Shero the sum of $50,000.00 plus installments of principal on Shero's Promissory Note actually paid to City by Shero for the purchase of the Property, Shero shall execute and deliver to City a special warranty deed conveying to City marketable fee simple title to the Property free and clear of all liens, claims, encumbrances, taxes, restrictions, reservations, easements and rights of way except those of record as of the date of this Deed and Shero's deed of trust securing its Promissory Note payable to City. 'Commence manufacturing' means the full time manufacturing of products for sale, storage or distribution on the Property after the facility on the Property has been fully equipped therefor. 6. Invalidation of any one of the foregoing covenants, conditions, restrictions or reservations by judgment or court order or otherwise shall not affect any of the other of said covenants, reservations, restrictions or condition3 which shall remain in full force and effect. 7. City shall have the right to enforce the restrictions, covenants and conditions hereof by injunction or specific per - formance or other lawful procedure and to recover damages, costs, expenses, including reasonable attorney fees, resulting from any violation thereof or arising out of their enforcement. ' William K. Shero _ -4- c 2594 972 IS, A,.4 Ir J � s . :• er -: ss. STATE OF ) PUEBLO, A MUNICIPAL CORPORATION , Y P retWent of the City Counc The foregoing instrument was acknowledged before me this day 99 ... ..,MAq , 199A by William R. Shero. .�;.Wtbn*ss'•.my hand and official seal. c ommission expires: otary Publa c COUNTY OF PUEBLO ) ) ss. STATE OF COLORADO ) The foregoing instrument was acknowledged before me this 2233rrdd day of , 1991 by Michael Oc as rre of the City oui and 14ariaq D. ' ad as City Clerk of Pueblo, a Municipal Witness my hand and official seal. ;• My'aommission expires: 5/29/94 • 1 7 A it y o'� �• t r bl c .� ••r�•'C1 ••i 1 _� TEJ 53.33 -5- 631 LAIN Amwr AmbiN C*nxb 8JW4 054445 EXHIBIT "A" LEGAL DESCRIPTION ' AIRPORT XXDUB RM PARK OR= BVILDISO We 4 A parcel of land located v1th1n the County of Pueblo, State of Colorado to -vats A parcel of land located within a portion of the S1 12 of the EW1 14 of Section 30, Township 20 South, Range 63 West of the Sixth Principal Meridian, being more particularly described as follovss Beginning at a point on the apparent westerly right- of-way Itne of Fairchild Street from which the W1 14 corner of said Section 30 bears N 65 -38 -39 W (bearings based on the west I"* of the said SW1 14 of Section 30 to bear N 00 -05 -41 W), a distance of 1875.27 feet; thence S 01 -32 -43 B, along said apparent westerly right of way line a distance of 599.37 feet to a point on the apparent northerly right of way line of United Avenue; thence S 88 -25 -20 W, along said apparent northerly right of way line a distance of 285.05 feet; thence X 01 -32 -18 W, a distance of 599.52 feet; thence N 88 -27 -06 a, a distance of 284.98 feet to the Point of Beginning. Saud parcel contains 3.92 acres, more or less. The above description was prepared under my direct MsppasAility, supervision and checking. Professional Land Surveyors r. 16128 Da Professional Land Surveyors y w � S. PROOF OF LOSS OR DAMAGE. CONDITIONS AND STIPULATIONS * " (Continued) In addition to and after the notices required under Section 3 of these Conditions and Stipulations have been provided the Company, a proof of loss or damage signed and sworn to by the insured claimant shall be furnished to the Company within 90 days after the insured claimant shall ascertain the facts giving rise to the loss or damage. The proof of loss or damage shall describe the defect in, or lien or encumbrance on the title, or other matter insured against by this policy which constitutes the basis of loss or damage and shall state, to the extent possible, the basis of calculating the amount of the loss or damage. If the Company is prejudiced by the failure of the insured claimant to provide the required proof of loss or damage, the Company's obligations to the insured under the policy shall terminate, including any liability or obligation to defend, prosecute, or continue any litigation, with regard to the matter or matters requiring such proof of loss or damage. In addition, the insured claimant may reasonably be required to submit to examination under oath by any authorized representative of the Company and shall produce for examination, inspection and copying, at such reasonable times and places as may be designated by any authorized representative of the Company, all records, books, ledgers, checks, correspondence and memoranda, whether hearing a date before or after Date of Policy, which reasonably pertain to the loss or damage. Further, if requested by any authorized representative of the Company, the insured claimant shall grant its permission, in writing, for any authorized representative of the Company to examine, inspect and copy all records, books, ledgers, checks, correspondence and memoranda in the custody or control of a third party, which reasonably pertain to the loss or damage. All information designated as confidential by the insured claimant provided to the Company pursuant to this Section shall not be disclosed to others unless, in the reasonable judgment of the Company, it is necessary in the administration of the claim. Failure of the insured claimant to submit for examination under oath, produce other reasonably requested information or grant permission to secure reasonably necessary information from third parties as required in this paragraph shall terminate any liability of the Company under this policy as to that claim. 6. OPTIONS TO PAY OR OTHERWISE SETTLE CLAIMS; TERMINATION OF LIABILITY. In case of a claim under this policy, the Company shall have the following options: (a) To Pay or Tender Payment of the Amount of Insurance or to Purchase the Indebtedness. (i) to pay or tender payment of the amount of insurance under this policy together with any costs, attorneys' fees and expenses incurred by the insured claimant, which were authorized by the Company, up to the time of payment or tender of payment and which the Company is obligated to pay; or (it) to purchase the indebtedness secured by the insured mortgage for the amount owing thereon together with any costs, attorneys fees and expenses incurred by the insured claimant which were authorized by the Company up to the time of purchase and which the Company is obligated to pay. If the Company offers to purchase the indebtedness as herein provided, the owner of the indebtedness shall transfer, assign, and convey the indebtedness and the insured mortgage, together with any collateral security, to the Company upon payment therefor. Upon the exercise by the Company of either of the options provided for in paragraphs a(i) or (it), all liability and obligations to the insured under this policy, other than to make the payment required in those paragraphs, shall terminate, including any liability or obligation to defend, prosecute, or continue any litigation, and the policy shall he surrendered to the Company for cancellation. (b) To Pay or Otherwise Settle With Parties Other than the Insured or With the Insured Claimant. (i) to pay or otherwise settle with other parties for or in the name of an insured claimant any claim insured against under this policy together with any costs, attorneys' fees and expenses incurred by the insured claimant which were authorized by the Company up to the time of payment and which the Company is obligated to pay; or (ii) to pay or otherwise settle with the insured claimant the loss or damage provided for under this policy, together with any costs, attorneys' fees and expenses incurred by the insured claimant which were authorized by the Company up to the time of payment and which the Company is obligated to pay. Upon the exercise by the Company of either of the options provided for in paragraphs b(i) or (ii), the Company's obligations to the insured under this policy for the claimed loss or damage, other than the payments required to be made, shall terminate, including any liability or obligation to defend, prosecute or continue any litigation. 7. DETERMINATION AND EXTENT OF LIABILITY. This policy is a contract of indemnity against actual monetary loss or damage sustained or incurred by the insured claimant who has suffered loss or damage by reason of matters insured against by this policy and only to the extent herein described. (a) The liability of the Company under this policy shall not exceed the least of: (i) the Amount of Insurance slated in Schedule A, or, if applicable. the amount of insurance as defined in Section 2 (c) of these Conditions and Stipulations: (ii) the amount of the unpaid principal indebtedness secured by the insured mortgage as limited or provided under Section 8 of these Conditions and Stipulations or as reduced under Section 9 of these Conditions and Stipulations, at the time of loss or damage insured against by this policy occurs. together with interest thereon; or (iii) the difference between the value of the insured estate or interest as insured and the value of the insured estate or interest subject to the defect, lien or encumbrance insured against by this policy. (b) In the event the insured has acquired the estate or interest in the manner described in Section 2(a) of these Conditions and Stipulations or has conveyed the title, then the liability of the Company shall continue as set forth in Section 7(a) of these Conditions and Stipulations. (c) The Company will pay only those costs, attorneys' fees and expenses incurred in accordance with Section 4 of these Conditions and Stipulations. 8. LIMITATION OF LIABILITY. (a) If the Company establishes the title, or removes the alleged defect, lien or encumbrance, or cures the lack of a right of access to or from the land, or cures the claim of unmarketability of title, or otherwise establishes the lien of the insured mortgage, all as insured, in a reasonably diligent manner by any method, including litigation and the completion of any appeals therefrom, it shall have fully performed its obligations with respect to that matter and shall not be liable for any loss or damage caused thereby. (b) In the event of any litigation, including litigation by the Company or with the Company's consent, the Company shall have no liability for loss or damage until there has been a final determination by a court of competent jurisdiction, and disposition of all appeals therefrom, adverse to the title or to the lien of the insured mortgage, as insured. (c) The Company shall not be liable for loss or damage to any insured for liability voluntarily assumed by the insured in settling any claim or suit without the prior written consent of the Company. (d) The Company shall not be liable for : (i) any indebtedness created subsequent to Date of Policy except for advances made to protect the lien of the insured mortgage and secured thereby and reasonable amounts expended to prevent deterioration of improvements; or (ii) construction loan advances made subsequent to Date of Policy, except construction loan advances made subsequent to Date of Policy for the purpose of financing in whole or in part the construction of an improvement to the land which at Date of Policy were secured by the insured mortgage and which the insured was and continued to be obligated to advance at and after Date of Policy. 9. REDUCTION OF INSURANCE; REDUCTION OR TERMINATION OF LIABILITY. (a) All payments under this policy, except payments made for costs, attorneys' fees and expenses, shall reduce the amount of the insurance pro tanto. However, any payments made prior to the acquisition of title to the estate or interest as provided in Section 2(a) of these Conditions and Stipulations shall not reduce pro tanto the amount of the insurance afforded under this policy except to the extent that the payments reduce the amount of the indebtedness secured by the insured mortgage. American Land Title Association Loan Policy (10- 21 -87) Cover Page Form 1142 -41 (b) Payment in part by any person of the principal of the indebtedness, or any other obligation secured by the insured mortgage, or any voluntary partial satisfaction or release of the insured mortgage, to the extent of the payment, satisfaction or release, shall reduce the amount of insurance pro tanto. The amount of insurance may thereafter be increased by accruing interest and advances made to protect the lien of the insured mortgage and secured therby, with interest thereon, provided in no event shall the amount of insurance be greater than the Amount of Insurance stated in Schedule A. (c) Payment in full by any person or the voluntary satisfaction or release of the insured mortgage shall terminate all liability of the Company except as provided in Section 2(a) of these Conditions and Stipulations. 10. LIABILITY NONCUMULATIVE. If the insured acquires title to the estate or interest in satisfaction of the indebtedness secured by the insured mortgage, or any part thereof, it is expressly understood that the amount of insurance under this policy shall be reduced by any amount the Company may pay under any policy insuring a mortgage to which exception is taken in Schedule B or to which the insured has agreed, assumed, or taken subject, or which is hereafter executed by an insured and which is a charge or lien on the estate or interest described or referred to in Schedule A, and the amount so paid shall be deemed a payment under this policy. 11. PAYMENT OF LOSS. (a) No payment shall by made without producing this policy for endorsement of the payment unless the policy has been lost or destroyed, in which case proof of loss or destruction shall be furnished to the satisfaction of the Company. (b) When liability and the extent of loss or damage has been definately fixed in accordance with these Conditions and Stipulations, the loss or damage shall be payable within 30 days thereafter. 12. SUBROGATION UPON PAYMENT OR SETTLEMENT. (a) The Company's Right of Subrogation. Whenever the Company shall have settled and paid a claim under this policy, all right of subrogation shall vest in the Company unaffected by any act of the insured claimant. The Company shall be subrogated to and be entitled to all rights and remedies which the insured claimant would have had against any person or property in respect to the claim had this policy not been issued. If requested by the Company, the insured claimant shall transfer to the Company all rights and remedies against any person or property necessary in order to perfect this right of subrogation. The insured claimant shall permit the Company to sue, compromise or settle in the name of the insured claimant and to use the name of the insured claimant in any transaction or litigation involving these rights or remedies. If a payment on account of a claim does not fully cover the loss of the insured claimant, the Company shall be subrograted to all rights and remedies of the insured claimant after the insured claimant shall have recovered its principal, interest, and costs of collection. (b) The Insured's Rights and Limitations. Notwithstanding the foregoing, the owner of the indebtedness secured h; the insured mortgage, provided the priority of the lien of the insured mortgage or its enforceability is not affected. may release or substitute the personal liability of any debtor or guarantor, or extend or otherwise modify the terms of payment, or release a portion of the estate or interest from the lien of the insured mortgage, or release any collateral security for the indebtedness. When the permitted acts of the insured claimant occur and the insured has knowledge of any claim of title or interest adverse to the title to the estate or interest or the priority or enforceability of the lien of the insured mortgage, as insured, the Company shall be required to pay only that part of any losses insured against by this policy which shall exceed the amount, if any - lost to the Company by reason of the impairment by the insured claimant of the Company's right of subrogatio.,. (c) The Company's Rights Against Non - insured Obligors. The Company's right of subrogation against non - insured obligors shall exist and shall mc!udc, without limitation, the rights of the insured to indemnities guaranties. other policies of insurance or bonds- notwithstanding any terms or conditions contained in those instruments which provide for subrogation rights by reason of this policy. The Company's right of subrogation shall not he avoided by acquisition of the insured mortgage by an obligor (except an obligor described in Section I(a) (ti) of these Conditions and Stipulations) who acquires the insured mortgage as a result of an indemnity, guarantee, other policy of insurance. or bond and the obligor will not be an insured under this policy, notwithstanding Section I(a)(i) of these Conditions and Stipulations. 13. ARBITRATION. Unless prohibited by applicable law, either the Company or the insured ma) demand arbur:iion pursuant to the Title Insurance Arbitration Rules of the American Arbitration Association Arbitrable matters may include, but are not limited to, any controversy or claim between the Company and the insured arising out of or relating to this policy, any service of the Company in connection with its iss- uapce or the breach of a policy provision or other obligation. All arbitrable matters when the Amount of Insurance is $1,000,000 or less shall be arbitrated at the option of either the Company or the insu- red. All arbitrable matters when the Amount of Insurance is in excess of $1.000,000 shall he arbitrated only when agreed to by both the Company and the insured. Arbitration pursuant to this policy and under the Rules in effect on the date the demand for arbitration is made or, at the option of the insu- red, the Rules in effect at Date of Policy shall be binding upon the parties. The award may include at- torneys' fees only if the laws of the state in which the land is located permit a court to award attor- neys fees to a prevailing party. Judgment upon the award rendered by the Arbitrator(s) may he ente- red in any court having jurisdiction thereof. The law of the situs of the land shall apply to an arbitration under the Title Insurance Arbitration Rules. A copy of the Rules may be obtained from the Company upon request. 14. LIABILITY LIMITED TO THIS POLICY; POLICY ENTIRE CONTRACT. (a) This policy together with all endorsements, if any, attached hereto by the Company is the entire policy and contract between the insured and the Company. In interpreting any provision of this policy, this policy shall be construed as a whole. (b) Any claim of loss or damage, whether or not on based on negligence, and which arises out of the status of the lien of the insured mortgage or of the title to the estate or interest covered hereby or by any action asserting such claim, shall be restricted to this policy. (c) No amendment of or endorsement to this policy can be made except by a writing endorsed hereon or attached hereto signed by either the President, a Vice President, the Secretary, an Assistant Secretary, or a validating officer or authorized signatory of the Company. 15. SEVERABILITY. In the event any provision of this policy is held invalid or unenforceable under applicable law, the policy shall be deemed not to include that provision and all other provisions shall remain in full force and effect. 16. NOTICES, WHERE SENT. All notices required to be given the Company and any statement in writing required to be furnished the Company shall be addressed to Transamerica Title Insurance Company, 4683 Chabot Drive, Suite 101, Pleasanton, CA 94588. — VaGd Only If Face Page, Schedules A and B Are Attached STATE OF COLORADO � Sa CERTIFICATE OF TAXES DUE • ,%'County of Pueblo E I, the undersigned, County Treasurer in and for said County, do hereby certify that there are no unpaid taxes, or unredeemed tax liens as appears of record in the office, on the following described property, except as noted below. Parcel No. 03 300 - 16 - 001 Changes To This Parcel Property Descriptions: (Note: G is symbol for degrees in legal descriptions) 1991 tax payable in 1992 Parcel A Sub Exemption #90 -4 Contg 3.92A � Assessed to City of Pueblo Formerly #03- 300 -00 -076 Assessed valuation $0.00 Amounts Reflected are valid only until July 31, 1992 Current Tax $ 0.00 Status Exempt Taxes Due $ 0.00 Pen -Int $ 0.00 Adv $ 0.00 Late Pen $ 0.00 Balance Current Tax $ 0.00 Cost To Pay Special Assessment In Full $ 0.00 Tax Liens or Delinquent Tax Amount To Redeem $ 0.00 Total Due This Certificate $ 0.00 This does not include special taxes that are not of record in this office or of taxes on improvements on said property which may be separately assessed. IN WITNESS WHEREOF, I have hereunto set my hand and seal, this 25TH day of June A.D. 19 92 Issued to Transamerica Title Certificate No. 42,876 Fee for Issuing This Certificate $ 10.00 O TY T Order No. 7546758 B C. Y• (�2 rq rr�,� �• ,� Erv� r�- r> > ��� l y'�z r� l� ©a�► ��Y of �� �t� WARRANTY DEED AW THIS DEED, made this A3 day of .�is�rM ba r¢, 1991 by and between Pueblo, a Municipal Corporation (herein "City ") and William K. Shero of Fountain Valley, California, (herein "Shero "), WITNESSETH: That City for and in consideration of the sum of $500,000.00 and other good and valuable consideration to City in hand paid by Shero, the receipt whereof is hereby confessed and acknowledged, has granted, bargained, sold and conveyed, and by these presents does grant, bargain, sell, convey and confirm unto the Shero, his heirs, personal representatives and assigns forever, all the real property situate, lying and being at Pueblo Memorial Airport, County of Pueblo, State of Colorado, more particularly described in Exhibit "A" attached hereto and incorporated herein (herein "Property), with all its appurtenances, and warrant the title to the same, subject to restrictions, reservations, rights of way, and easements of record and easements for the existing sanitary and storm sewer, water and natural gas lines located on or crossing the Property, and to the following covenants, conditions, and restrictions which are and shall be construed to be covenants running with the land described herein and binding upon Shero, his heirs, personal representatives and assigns and inuring to the benefit of City, its successors and assigns. 1. City reserves unto itself and its successors and assigns, for use and benefit of the public, a right of flight for the passage of aircraft in the airspace above the surface of the Property, together with the right to cause in the airspace above the surface of the Property such noise as may be inherent in the operation of any aircraft now known or hereafter used for naviga- tion of or flight in said airspace, and for use of the airspace above the surface of the Property for landing on, taking off from, or operation on or over the Pueblo Memorial Airport. 2. Shero expressly agrees for himself, his heirs, personal representatives and assigns to restrict the height of structures, objects of natural growth and other obstructions on the Property, to a height of not more than 4,700 feet above the mean sea level. 3. Shero expressly agrees for himself, his heirs, personal representatives and assigns, that he will prevent any use of the Property which would interfere with landing or taking off of aircraft at the Pueblo Memorial Airport, or otherwise constitute an airport hazard. 4. The Property and its use are further subject to the following Restrictive Covenants: (a) The Property may be used only for manufacturing and warehouse facilities and incidental office use. The Property shall not be used for smelting or plating operations, or for the storage or processing of putrescible materials, or for any purpose or business which constitutes a nuisance, or which exceeds the state air pollution control standards for the activities conducted on the Property. Gasoline or diesel fuel used in connection with the business conducted on the Property but not for sale at retail or wholesale may be stored on the Property in an environmentally sound manner. (b) Outdoor storage shall not be permitted except for storage of equipment used in the facility. Parking areas for vehicles and roads on the Property shall be paved. (c) The Property shall not be subdivided and no building or structure over thirty -five feet in height shall be installed or constructed on the Property. (d) No structure or building shall be constructed or -2- installed nearer than sixty -five (65) feet along the front of the Property near United Avenue or thirty -five (35) feet of side or rear streets. There must be installed and maintained a minimum thirty -five (35) foot strip of living landscaped ground along the front of the Property near United Avenue and twenty -five (25) feet adjacent to abutting streets. Minimum side yards set -backs shall be thirty -five (35) feet. (e) The Property owner shall at all times keep and maintain the Property and all buildings, landscaping and improvements located thereon in a good, clean, safe and orderly condition free of waste, rubbish, debris and trash, and enclose and screen from public view all outside storage and unsightly areas of the Property and those used for storage. (f) Before commencing the construction, installation or alteration of any building, structure, parking facility, outdoor sign, or other permanent improvement, or landscaping on the Property, the Property owner shall submit to and have approved by the City in writing the site plans and plans and specifications therefor. City's approval will not be unreasonably withheld. In the event the City or its designated representatives shall fail to approve or disapprove such plans and specifications within twenty - five (25) working days after they have been submitted to the City, such approval will not be required and this covenant will be deemed to have been complied with. All buildings, improvements and activities on the Property shall be constructed and conducted in compliance with all applicable federal, state and local law, regulations, and codes. (g) Waste water discharged from the Property into City's sanitary sewer system and the Property owner's use thereof are limited by and subject to the available treatment capacity of City's waste water treatment facilities and City's sewer user, industrial cost recovery, high strength surcharge, and pretreatment ordinances, rules and regulations applicable to City's sanitary sewer system at Pueblo Memorial Airport, now in effect or hereafter adopted or amended. The Property owner shall only discharge domestic waste into City's sanitary sewer system. (h) City reserves the right to waive all or any part of these Restrictive Covenants. 5. This Deed and conveyance are made upon the expressed condition that Shero will commence or cause to be commenced manufacturing on the Property on or before January 31, 1992. If manufacturing on the Property does not commence on or before January 31, 1992, title to the Property free and clear of all -3- liens and encumbrances shall revert to the City. If title to the Property so reverts to the City and if City gives written notice to Shero of the exercise of its right of reversion and tenders to Shero the sum of $50,000.00 plus installments of principal on Shero's Promissory Note actually paid to City by Shero for the purchase of the Property, Shero shall execute and deliver to City a special warranty deed conveying to City marketable fee simple title to the Property free and clear of all liens, claims, encumbrances, taxes, restrictions, reservations, easements and rights of way except those of record as of the date of this Deed and Shero's deed of trust securing its Promissory Note payable to City. "Commence manufacturing" means the full time manufacturing of products for sale, storage or distribution on the Property after the facility on the Property has been fully equipped therefor. 6. Invalidation of any one of the foregoing covenants, conditions, restrictions or reservations by judgment or court order or otherwise shall not affect any of the other of said covenants, reservations, restrictions or conditions which shall remain in full force and effect. 7. City shall have the right to enforce the restrictions, covenants and conditions hereof by injunction or specific per- formance or other lawful procedure and to recover damages, costs, expenses, including reasonable attorney fees, resulting from any violation thereof or arising out of their enforcement. William K. Shero -4- PUEBLO, A MUNICIPAL CORPORATION [S E A L] By ATTEST: Pre ent of the City Council Ci Clerk COUNTY OF ���� 1 ss. STATE OF a� ) The foregoing instrument was acknowledged before me this ol`a day of M g , 199 by William K. Shero. Witness my hand and official seal. My commission expires: [S E A LJ COUNTY OF PUEBLO ) ) ss. STATE OF COLORADO ) '�J" . nu k-m Notary Pub a c The foregoing instrument was acknowledged before me this 2 3rd day of December , 1991 by Michael Occhiato as President of the City Council and Marian D. Mead as City Clerk of Pueblo, a Municipal Corporation. Witness my hand and official seal. My commission expires: 5/29/94 . [S E A LJ IAl2� 4�- of ry blic TEJ 53.33 -5- Adams - Mangini, Ina 631 Lake Avenue Pueblo, Colorado 81004 (303) 544 -0865 EXHIBIT "A" LEGAL DESCRI AIRPORT INDUSTRIAL PARR SHELL BUILDING NO. 4 A parcel of land located within the County of Pueblo, State of Colorado to -wit: A parcel of land located within a portion of the E112 of the SWI of Section 30, Township 20 South, Range 63 West of the Sixth Principal Meridian, being more particularly described as follows: Beginning at a point on the apparent westerly right -of -way line of Fairchild Street from which the W1 14 corner of said Section 30 bears N 65 -38 -39 W (bearings based on the west line of the said SW1 14 of Section 30 to bear N 00 -05 -41 W), a distance of 1875.27 feet; thence S 01 -32 -43 E, along said apparent westerly right of way line a distance of 599.37 feet to a point on the apparent northerly right of way line of United Avenue; thence S 88 -25 -20 W, along said apparent northerly right of way line a distance of 285.05 feet; thence N 01 -32 -18 W, a distance of 599.52 feet; thence N 88 -27 -06 E, a distance of 284.98 feet to the Point of Beginning. Said parcel contains 3.92 acres, more or less. The above description was prepared under my direct rKsp�ility, supervision and checking. 16128 Da \` `l' t, i'.• a Professional Land Surveyors WARRANTY DEED THIS DEED, made this day of , 1991 by and between Pueblo, a Municipal Corporation (herein "City ") and William K. Shero of Fountain Valley, California, (herein "Shero "), WITNESSETH: That City for and in consideration of the sum of $500,000.00 and other good and valuable consideration to City in hand paid by Shero, the receipt whereof is hereby confessed and acknowledged, has granted, bargained, sold and conveyed, and by these presents does grant, bargain, sell, convey and confirm unto the Shero, his heirs, personal representatives and assigns forever, all the real property situate, lying and being at Pueblo Memorial Airport, County of Pueblo, State of Colorado, more particularly described in Exhibit "A" attached hereto and incorporated herein (herein "Property), with all its appurtenances, and warrant the title to the same, subject to restrictions, reservations, rights of way, and easements of record and easements for the existing sanitary and storm sewer, water and natural gas lines located on or crossing the Property, and to the following covenants, conditions, and restrictions which are and shall be construed to be covenants running with the land described herein and binding upon Shero, his heirs, personal representatives and assigns and inuring to the benefit of City, its successors and assigns. 1. City reserves unto itself and its successors and assigns, for use and benefit of the public, a right of flight for the passage of aircraft in the airspace above the surface of the EXHIBIT "A" Property, together with the right to cause in the airspace above the surface of the Property such noise as may be inherent in the operation of any aircraft now known or hereafter used for naviga- tion of or flight in said airspace, and for use of the airspace above the surface of the Property for landing on, taking off from, or operation on or over the Pueblo Memorial Airport. 2. Shero expressly agrees for himself, his heirs, personal representatives and assigns to restrict the height of structures, objects of natural growth and other obstructions on the Property, to a height of not more than 4,700 feet above the mean sea level. 3. Shero expressly agrees for himself, his heirs, personal representatives and assigns, that he will prevent any use of the Property which would interfere with landing or taking off of aircraft at the Pueblo Memorial Airport, or otherwise constitute an airport hazard. 4. The Property and its use are further subject to the following Restrictive Covenants: (a) The Property may be used only for manufacturing and warehouse facilities and incidental office use. The Property shall not be used for smelting or plating operations, or for the storage or processing of putrescible materials, or for any purpose or business which constitutes a nuisance, or which exceeds the state air pollution control standards for the activities conducted on the Property. Gasoline or diesel fuel used in connection with the business conducted on the Property but not for sale at retail or wholesale may be stored on the Property in an environmentally sound manner. (b) Outdoor storage shall not be permitted except for storage of equipment used in the facility. Parking areas for vehicles and roads on the Property shall be paved. (c) The Property shall not be subdivided and no building or structure over thirty -five feet in height shall be installed or constructed on the Property. (d) No structure or building shall be constructed or -2- installed nearer than sixty -five (65) feet along the front of the Property near United Avenue or thirty -five (35) feet of side or rear streets. There must be installed and maintained a minimum thirty -five (35) foot'strip of living landscaped ground along the front of the Property near United Avenue and twenty -five (25) feet adjacent to abutting streets. Minimum side yards set -backs shall be thirty -five (35) feet. (e) The Property owner shall at all times keep and maintain the Property and all buildings, landscaping and improvements located thereon in a good, clean, safe and orderly condition free of waste, rubbish, debris and trash, and enclose and screen from public view all outside storage and unsightly areas of the Property and those used for storage. (f) Before commencing the construction, installation or alteration of any building, structure, parking facility, outdoor sign, or other permanent improvement, or landscaping on the Property, the Property owner shall submit to and have approved by the City in writing the site plans and plans and specifications therefor. City's approval will not be unreasonably withheld. In the event the City or its designated representatives shall fail to approve or disapprove such plans and specifications within twenty - five (25) working days after they have been submitted to the City, such approval will not be required and this covenant will be deemed to have been complied with. All buildings, improvements and activities on the Property shall be constructed and conducted in compliance with all applicable federal, state and local law, regulations, and codes. (g) Waste water discharged from the Property into City's sanitary sewer system and the Property owner's use thereof are limited by and subject to the available treatment capacity of City's waste water treatment facilities and City's sewer user, industrial cost recovery, high strength surcharge, and pretreatment ordinances, rules and regulations applicable to City's sanitary sewer system at Pueblo Memorial Airport, now in effect or hereafter adopted or amended. The Property owner shall only discharge domestic waste into City's sanitary sewer system. (h) City reserves the right to waive all or any part of these Restrictive Covenants. 5. This Deed and conveyance are made upon the expressed condition that Shero will commence or cause to be commenced manufacturing on the Property on or before January 31, 1992. If manufacturing on the Property does not commence on or before January 31, 1992, title to the Property free and clear of all -3- liens and encumbrances shall revert to the City. If title to the Property so reverts to_ the City and if City gives written notice to Shero of the exercise of its right of reversion and tenders to Shero the sum of $50,000.00 plus installments of principal on Shero's Promissory Note actually paid to City by Shero for the purchase of the Property, Shero shall execute and deliver to City a special warranty deed conveying to City marketable fee simple title to the Property free and clear of all. liens, claims, encumbrances, taxes, restrictions, reservations, easements and rights of way except those of record as of the date of this Deed and Shero's deed of trust securing its Promissory Note payable to City. "Commence manufacturing" means the full time manufacturing of products for sale, storage or distribution on the Property after the facility on the Property has been fully equipped therefor. 6. Invalidation of any one of the foregoing covenants, conditions, restrictions or reservations by judgment or court order or otherwise shall not affect any of the other of said covenants, reservations, restrictions or conditions which shall remain in full force and effect. 7. City shall have the right to enforce the restrictions, covenants and conditions hereof by injunction or specific per- formance or other lawful procedure and to recover damages, costs, expenses, including reasonable attorney fees, resulting from any violation thereof or arising out of their enforcement. William K. Shero -4- PUEBLO, A MUNICIPAL CORPORATION [S E A L} BY ATTEST: President of the City Council ity Clerk COUNTY OF 1 ss. STATE OF ) The foregoing instrument was acknowledged before me this day of , 1991 by William K. Shero. Witness my hand and official seal. My commission expires: [S E A L] COUNTY OF PUEBLO Notary Public ss. STATE OF COLORADO ) The foregoing instrument was acknowledged before me this day of , 1991 by as President of the City Council and as City Clerk of Pueblo, a Municipal Corporation. Witness my hand and official seal. My commission expires: . [S E A L] Notary Public TEJ 53.33 -5- Adams - Mang►ini, Ina 631 Lake Avenue Pueblo, Colorado 81004 (303) 544.0865 EXHIBIT "A" - LEGAL DESCRIPTION AIRPORT INDUSTRIAL PARR SHELL BUILDING NO. 4 A parcel of land located within the County of Pueblo, State of Colorado to -wit: A parcel of land located within a portion of the E1 12 of the SWI of Section 30, Township 20 South, Range 63 West of the Sixth Principal Meridian, being more particularly described as follows: Beginning at a point on the apparent westerly right -of -way line of Fairchild Street from which the W114 corner of said Section 30 bears N 65 -38 -39 W (bearings based on the west line of the said SWI of Section 30 to bear N 00 -05 -41 W), a distance of 1875.27 feet; thence S 01 -32 -43 E, along said apparent westerly right of way line a distance of 599.37 feet to a point on the apparent northerly right of way line of United Avenue; thence S 88 -25 -20 W, along said apparent northerly right of way line a distance of 285.05 feet; thence N 01 -32 -18 W, a distance of 599.52 feet; thence N 88 -27 -06 E, a distance of 284.98 feet to the Point of Beginning. Said parcel contains 3.92 acres, more or less. The above description was prepared under my direct r$�,spgn-s-.i.t supervision and checking. LS 16128 Da 3 Professional Land Surveyors