HomeMy WebLinkAbout790417.tiff e) Castle
Company
7075 rustic trail boulder,co. 80301
303 443-4071
February 6, 1979
Mr. Don Warden
Weld County Financial Officer
Centennial Center
Greeley, CO 80631
Dear Don,
Here is a signed copy of the
Memorandum of Agreement which goes with the inducement resolution.
This is the only document which was redone that needed the signature
of our corporate secretary, my wife and me.
Again . . . thanks for your help!
Yours very truly,
H. Thomas Stroop
790417
•
STATE OF COLORADO )
ss.
COUNTY OF WELD
The Board of County Commissioners of Weld County, Colorado met in
regular session at Centennial Center in Greeley, Colorado at
the hour of 9:00 o'clock A.M. , on the 5th day of February
1979 .
Present:
Name Title
feedli / 0)A 2/ Commissioner
/ Commissioner
Absent:
NONE
Thereupon, Don Warden introduced and there was
read in full the following Resolution :
RESOLUTION NO .
A RESOLUTION AMENDING RESOLUTION NO.
, ADOPTED DECEMBER 20, 1978 ,
TO INCLUDE CASTLE REAL ESTATE COMPANY
AS A REQUESTING PARTY FOR THE ISSUANCE
OF CERTAIN INDUSTRIAL DEVELOPMENT
REVENUE BONDS; AUTHORIZING THE EXECUTION
OF AN AMENDING MEMORANDUM OF AGREEMENT.
WHEREAS, Weld County, Colorado (the "County" ) by its Board of
Directors (the "Board" ) on December 20, 1978, did duly adopt Resolution
No. , entitled "A Resolution Providing for the Issuance of
Industrial Development Revenue Bonds--Castle Corporation Project, Weld
County, Colorado for the Purpose of Providing Industrial Facilities
for Castle Corporation, and Authorizing the Preparation of Documents
and Instruments Related Thereto" and pursuant to Resolution No.
did enter into a Memorandum of Agreement with Castle Corporation, a
Colorado Corporation (the "Company" ) and H. Thomas Stroop and Marianne
Stroop, husband and wife and sole shareholders at this time of the
Company (the "Stroops" ) , dated as of December 20, 1978 -, 1978 ; and
WHEREAS, a portion of the Project, as defined in Resolution No.
, will be financed with the proceeds of loans from the United
States of America, Small Business Administration (the "S. B.A. " ) ; and
WHEREAS, S. B.A. regulations and procedures require that the
business being aided by the S. B.A. loans , in this instance the Company,
and the record owner of the real estate to be subject to a mortgage to
the S. B.A. securing its loans, in this case, originally contemplated
to be the Stroops , have identical, proportional ownerships in cases
where such business and such record owner are not the same entity; and
WHEREAS, the Stroops have formed Castle Real Estate Company, a
limited partnership (the "Partnership" ) in anticipation of the Part-
-2-
nership' s ownership of the real estate to be subject to said mortgage
and in order to satisfy S .B.A. requirements; and
WHEREAS, the Stroops have represented to the County that such
arrangements have been approved by the S.B.A. and, together with the
Company and the Partnership, have requested the adoption of this
amending resolution in order to add the Partnership as a party to the
transactions contemplated by Resolution No.
NOW, THEREFORE, BE IT RESOLVED by the Board of County Commissioners
of Weld County, Colorado:
Section 1 . Amendments. The Board hereby declares that Resolution
No. is amended to read "the Company, the Stroops and the
Partnership" in its "Whereas" clauses two and three and in Section 6
in substitution for the phrase "the Company and the Stroops" and to
read "the Company, the Stroops or the Partnership" in Section 5 in
substitution for the phrase "the Company or the Stroops. "
Section 2. Amended Memorandum of Agreement . The amended form of
Memorandum of Agreement between the County, the Stroops, the Company
and the Partnership in the form attached hereto is approved and the
Chairman of the Board and the County Clerk are hereby authorized and
directed to execute such Memorandum of Agreement on behalf of the
County and in substitution for the Memorandum of Agreement, dated as
of December 20, 1978 , 1978 and described herein.
ADOPTED THIS 5th day of February , 1979 .
(SEAL) COUNTY OF WELD
STATE OF COLORADO
By �L� 9
ATTEST: Chairman
Board of County Commissioners
Weld County, Colorado
County Cle k (J//
1 U
-3-
The question being upon the passage and adoption of this Reso-
lution, the roll was called with the following result :
Those voting AYE:
Norman Carlson Chairman
Bill Kirby Commissioner
Lydia Dunbar Commissioner
June Steinmark Commissioner
Leonard Roe Commissioner
Those voting NAY: NO
Those Absent: NONE
The presiding officer thereupon declared that a majority of all
the members of the Board of County Commissioners having voted in favor
thereof, the said motion was carried and this Resolution duly passed
and adopted.
-4-
EXHIBIT A
MEMORANDUM OF AGREEMENT
This Memorandum of Agreement is between Weld County, Colorado,
(the "County" ) , Castle Corporation, a Colorado corporation (the
"Company" ) , Castle Real Estate Company, a limited partnership (the
Partnership) and H. Thomas Stroop and Marianne Stroop, husband and
wife and, at this time, sole shareholders of the Company and the
general partners of the Partnership (the "Stroops" ) .
1. Preliminary Statement. Among the matters of mutual inducement
which have resulted in the execution of this Agreement are the following:
(a) Weld County, Colorado is authorized and empowered by
Part 1, Article 3, Title 29 , 1973 Colorado Revised Statutes, as
amended (the "Act" ) to issue revenue bonds for the purpose of
defraying the costs of acquiring, owning, leasing, improving and
disposing of properties to the end that the County may be able to
promote industry and develop trade and other economic activity by
inducing manufacturing, industrial , commercial or business enter-
prises to locate in the County, to improve unemployment conditions
in the County and to secure and maintain a balanced and stable
economy in the County and to enter into agreements with respect
to the financing of such facilities, upon such terms and condi-
tions as the Board of County Commissioners of Weld County,
Colorado (the "Board") deems advisable.
(b) In order to provide manufacturing facilities, the
Company, the Partnership and the Stroops propose to acquire,
-5-
construct, improve and equip a manufacturing facility and facili-
ties related thereto for the manufacture of kitchen cabinents ,
located within the County (hereinafter referred to as the "Project" ) .
(c) The County has indicated its willingness to proceed
with the issuance of its revenue bonds as provided by the Act
(the "Bonds" ) to finance the Project and has advised the Company,
the Partnership and the Stroops that subject to due compliance
with all requirements of law and the obtaining of all necessary
consents and approvals and to the happening of all acts, condi-
tions, and things required precedent to such financing, the
County, pursuant to the Act, will issue the Bonds in a principal
amount sufficient to pay the costs of financing the Project,
together with the costs and expenses of issuance and sale of the
Bonds, which Bonds will not exceed the aggregate principal amount
of $500, 000.
(d) The County considers that the acquisition, construction,
improvement and equipping of the Project and the entering into of
agreements relating to the Project, such as a trust indenture ,
loan agreement, lease, mortgage, security agreements and other
necessary documents (hereinafter collectively referred to as the
"Financing Agreements" ) , with the Company, the Partnership or the
Stroops,, as the case may be, with respect to the Project will
promote the health, welfare, safety, convenience and prosperity
of the County and its citizens.
2 . Undertakings by the County. Subject to the foregoing Para-
graph 1, the County agrees as follows:
(a) It will from time to time issue or cause to be autho-
rized the issuance of the Bonds pursuant to the terms of the Act
-6-
in a principal amount sufficient to pay the cost of acquiring,
constructing, improving and equipping the Project, together with
costs incident to the authorization, sale and issuance of the
Bonds, which Bonds will not exceed the aggregate principal amount
of $500, 000 .
(b) It will adopt or cause to be adopted such proceedings
and authorize the execution and delivery of such documents as
reasonably may be necessary or advisable for the authorization,
issuance and sale of the Bonds, the acquisition, construction,
improvement and equipping of the Project, and the execution of
any Financing Agreements with the Company, the Partnership or the
Stroops and other documents relating to the Project and the Bonds
as shall be authorized by the Act or other law and mutually
sati^factory to the County, the Company, the Partnership and the
Stroops.
(c) The aggregate sums to be paid by the Company, the Part-
nership or the Stroops under the Financing Agreements shall be
required to be sufficient to pay the principal of and interest
and redemption premiums, if any, on the Bonds as and when the
same shall become due.
(d) It will take or cause to be taken such other acts and
adopt such further proceedings as reasonably may be required to
implement the aforesaid undertakings and as it may deem appropriate
in pursuance thereof.
(e) The Bonds shall provide that they shall be payable
solely out of the revenues derived from the operation of the
Project pursuant to the provisions of the Financing Agreements,
-7-
that they shall never constitute the debt or indebtedness of the
County within the meaning of any provision or limitation of the
Constitution or statutes of the State of Colorado and that they
shall not give rise to a pecuniary liability of the County nor a
charge against its general credit or taxing powers .
(f) In authorizing the issuance of the Bonds pursuant to
this Agreement, the County will make no warranty, either expressed
or implied, that the proceeds of the Bonds will be sufficient to
pay all costs of the Project.
3. Undertakings on the Part of the Company, the Partnership
and the Stroops. Subject to the foregoing Paragraph 1, the Company,
the Partnership and the Stroops agree as follows:
(a) Either the Company, the Partnership or the Stroops will
enter into a contract or contracts for the acquisition , con-
struction, improvement and equipping of the Project.
(b) Prior to the delivery of the Bonds the Company, the
Partnership or the Stroops will enter into the Financing Agree-
ments with the County under the terms of which the Company, the
Partnership or the Stroops will obligate itself or themselves to
complete the acquisition , construction , improvement and equipping
of the Project and, to the extent not payable out of proceeds of
the Bonds, to pay to the County sums sufficient in the aggregate
to pay or reimburse the County for expenses incurred by it in
connection with: the authorization, issuance and sale of the
Bonds and to pay the principal of and interest and premiums, if
any, on the Bonds as and when the same shall become due and
payable; all fees and expenses of any trustee for the benefit of
-8-
the holders of the Bonds incurred under any trust indenture ; all
utility charges, taxes, assessments, casualty and liability
insurance premiums; and any other expenses or charges relating to
the ownership, use, operation, maintenance, occupancy and upkeep
of the Project. The Financing Agreements shall contain such
other provisions as may be required by law and such other pro-
visions as shall be mutually acceptable to the County, the
Company, the Partnership and the Stroops.
(c) It will take such further action and adopt such further
proceedings as may be required to implement its aforesaid under-
takings or as it may deem appropriate in pursuance thereof.
4 . General Provisions .
(a) All commitments of the County under Paragraph 2 hereof
and of the Company, the Partnership and the Stroops under Para-
grap' 3 hereof are subject to the condition that on or before one
year from the date of this Agreement (or such other date as shall
be mutually satisfactory to the County, the Company, the Partner-
ship and the Stroops) the County, the Company, the Partnership
and the Stroops shall have agreed to mutually acceptable terms
for the Bonds and of the issuance, sale and delivery thereof, and
mutually acceptable terms and conditions of any Financing Agree-
ments arfd other documents referred to in Paragraph 3 and the
proceedings referred to in Paragraphs 2 and 3 hereof.
(b) Prior to the issuance of the Bonds , there shall be a
reasonable showing to the County that the Company, the Partnership
or the Stroops are capable of carrying out its or their financial
obligations under the Financing Agreements .
-9-
(c) If the events set forth in (a) of this paragraph do not
take place within the time set forth or any extension thereof and
the Bonds are not issued and sold within such time, the Company,
the Partnership and the Stroops agree that it and they will
reimburse the County for all reasonable and necessary direct out-
of-pocket expenses which the County may incur arising from the
execution of this Agreement and the performance of the County' s
obligations hereunder and this Agreement shall thereupon terminate.
IN WITNESS WHEREOF, the parties have entered into this Agreement
by their duly authorized officers on this 5th day of February
1979.
WELD COUNTY
STATE OF COLORADO
(SEAL) (/�� �-, •
C/�� J �`^/ /J
ATTEST: G u�- `" '�2UOn.¢ ".`.y `�f= By —� Cn l.Ge-� Ga a-r---
t/ Board of County Commissioners
Weld County, Colorado
County Clerk ab
CASTLE CORPORATION
(SEAL)
BY AV/
President
ATTEST:
Secretary
H. THOMAS STROOP '
MARI NNE STROOP
-10-
(SEAL) CASTLE REAL ESTATE COMPANY
ATTEST: By
H. Thomas Stroop, Genera/ Partner
v� �eLGG7t.E.� '�/.
Marianne Stroop, Genera Partner
-11-
CERTIFICATE AS TO PROCEEDINGS
STATE OF COLORADO
ss.
COUNTY OF WELD
I, Mary Ann Feuerstein , County Clerk of Weld County, State
of Colorado, do hereby certify that the foregoing 11 pages constitute
a full and correct copy of the record of proceedings of the Board of
County Commissioners of said County, taken at a regular meeting
thereof, held on the 5th day of February , 1979 , so far as
said minutes relate to Resolution No. , a copy of which is
therein set forth; that the copy of Resolution No. contained
in said minutes is a full, true and correct copy of the original of
the Resolution as adopted by said Board at said meeting; that the
original Resolution has been duly signed and approved by the Chairman
of said Board and myself, as County Clerk, and sealed with the corporate
seal of the County, and recorded in the Book of Resolutions of the
County kept for that purpose in my office.
I further certify that the Chairman and other members of said
Board, constituting a quorum, were present at the meeting and that
said members voted for the passage of Resolution No . as in the
minutes set forth.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal of
•
said County this 5th day of February , 1979 .
/1 aztev1/4:1-121WA41
County Clerk
(SEAL)
-12-
Empire
.italia Savings
January 19 , 1979
1
J H. Thomas Stroop
Marianne Stroop
7075 Rustic Trail
Boulder, Colorado 80301
pear Mr. and Mrs . Stroop :
n
This letter is the Aasociation'g consent to extend our
commitment letter dated January 9 , 1979 from January 19 , 1971
to January 26 , 1979 . This extension should not be construed as
J
a continuing waiver of our rights , terms and conditions as stip-
ulated in said letter.
Yours very truly,
—.) Clarence >!. Hughes
Assistant Vice President
Commercial Loan ! apartment
CP 1 :dm
Ycc : Board of County Commissioners
Weld County
Greeley, Colorado 80631
Castle Corporation
c/o H. Thomas Stroop ^
7075 Rustic Trail `' .\`'
Boulder, Colorado 80301 �',:
i
yi�Y�. Main office
Empire 1654 California Street
Savrnys Denver, Colorado 80202
s/�,,,'41aaP' a y 303/623-1771
January 9 , 1979
Board of County Commissioners
Weld County, Colorado
Greeley , Colorado 80631
Castle Corporation
c/o H. Thomas Stroop
7075 Rustic Trail
Boulder , Colorado 80301
H. Thomas Stroop
Marianne Stroop
7075 Rustic Trail
Boulder , Colorado 80301
Re : Industrial Development Revenue Bond (Castle Corporation Project)
Series 1979 , County of Weld , Colorado , in an aggregate principal
amount not to exceed $450, 000.
Gentlemen:
This letter is to evidence the commitment of The Empire Savings ,
Building and Loan Association (the Association) , in Denver , Colorado
to purchase from Weld County , Colorado (the County) , its Industrial
Development Revenue Bond (Castle Corporation Project) Series 1979
(the Bond) , in an aggregate principal amount not to exceed $450 ,000 .
The Bond shall be issued for the purpose of financing a portion of the
cost of a project (the Project) consisting of the acquisition of certain
land described in Exhibit A attached hereto (the Project Site) and
the construction of a building (the Building) to be used for the manu-
facture of kitchen cabinets by Castle Corporation (the Company) . The
Project Site is located approximately 1 . 5 miles south of the town of
Erie within the County. The date of the purchase of the Bond from the
County by the Association, the delivery of the executed Bond by the
County to the Association, and the execution, delivery , recording and
filing of all of the documents contemplated in connection with the
issuance of the Bond is herein called the Closing Date. The purchase
of the Bond by the Association shall be subject to the following require-
ments , terms and conditions :
1 . The Bond shall be issued pursuant to an authorizing resolution
adopted by the Board of County Commissioners and a Loan�Agree-
A Financial Service of t�' ldvall
INNIS
Castle Corporation
January 9 , 1979
Page Two
ment (the Loan Agreement) between and among the County ,
Mr . H. Thomas Stroop and Mrs . Marianne Stroop (the Stroops)
husband and wife, as owners of the Project Site and sole or
controlling shareholders of the Company, or the Company .
The County ' s right , title and interest in the Loan Agree-
ment shall be assigned to the Association pursuant to an
Assignment of Loan Agreement in consideration of the
purchase of the Bond .
Under the Loan Agreement , the proceeds of the Bond will
be loaned by the County to the Stroops or the Company and
the Stroops or the Company will agree to make loan repayments
in an amount sufficient to pay the principal of and interest
on the Bond when due . The Bond shall be further secured by
a First Deed of Trust or Mortgage (the Mortgage) from the
Stroops or the Company, whoever is the record owner of the
Project Site on the Closing Date, to the Association and ,
in the event that the Loan Agreement is entered into by the
Stroops , by a Lease Agreement (the Lease) between the Stroops ,
as lessors , and the Company , as lessee. The Stroops ' right ,
title and interest in the Lease shall be assigned by the
Stroops to the Association. Payment of the principal of and
interest on the Bond shall he guaranteed by the Stroops and
the Company pursuant to a separate Guaranty Agreement of the
principal user (the Guaranty) between the Stroops , the Company
and the Association. The Bond , the Loan Agreement , the Assign-
ment of Loan Agreement , the Mortgage , the Lease and the assign-
ment thereof and the Guaranty shall be in form satisfactory to
the Association. The Bond shall be payable to the Association.
The principal balance of the Bond outstanding from time to time
(the Principal Balance) shall bear interest at the rate of
8 . 50% per annum (except that , if interest thereon should become
subject to Federal or State income taxation, the interest rate
shall be increased to 11 1 / 2% per annum) . The Bond shall be
payable in equal monthly installments , including both principal
and interest , on the first business day of each month , commenc-
ing on the first business day of the month following the Closing
Date, in the amount required to amortize the Principal Balance
from the Closing Date to a date 25 years from the Closing Date.
The Bond shall be due and payable in full , in the amount of its
Principal Balance at that time, on a date 15 years from the
Closing Date. The Bond shall provide that the principal may be
prepaid in whole or in part on 30 days written notice and upon
payment to the Association of 90 days interest at the rate
provided in the Note , computed on the amount prepaid .
The Association shall purchase the Bond from the County on the
Closing Date at a purchase price equal to the principal amount
of the Bond .
2 . The Loan Agreement and Deed of Trust shall provide for monthly
payments by the Stroops or the Company to the Association of
1/ 12th of the annual estimated real estate taxes on the Project
Castle Corporation
January 9 , 1979
Page Three
and Project Site for the purposes of a property tax escrow
fund to be held and administered by the Association.
3 . All right , title and interest of the Stroops or the Company
in the Project and in the Project Site, including all improve-
ments , appurtenances and fixtures attached thereto on the
Closing Date or thereafter , shall be mortgaged and pledged
to the Association pursuant to the Mortgage . Appropriate
financing statements shall be filed to record and perfect the
security interest of the Association in the Loan Agreement and
the Lease.
4 . On the Closing Date , title to the Project Site will either be
in the name of the Stroops , Castle Real Estate Company , a
limited partnership , or in the name of the Company . The
record owner of the Project Site on the Closing Date will
execute and deliver the Mortgage to the Association.
5 . The Project Site shall have been improved with the construction
of the Building , which building shall be suitable for the manu-
facturing operations of the Company and shall contain approximately
37 , 000 gross square feet . The Building shall be constructed
substantially in accordance with the preliminary plans and spec-
ifications on file as of the date of this letter in the offices
of the Association and dated as of May 2 , 1978 .
6 . Pursuant to the provisions of the Loan Agreement , the Stroops
or the Company will agree to procure and maintain throughout
the term of the Loan Agreement , insurance such that the Project
will be continuously insured against such risks as are customarily
insured against by businesses of like size and type , paying as
the same become due and payable all premiums with respect thereto ,
including but not necessarily limited to :
a . Insurance upon the actual cash value of the Project
' (but in no event less than the cost of paying or
redeeming the Principal Balance of the Bond) as
determined by a recognized appraiser or insurer
selected by the Stroops or the Company and approved
by the Association, against loss or damage by fire ,
lightning , wind storm, hail , explosion, riots , civil
commotion, vandalism, malicious mischief , aircraft ,
vehicles and smoke with uniform standard extended
coverage endorsement limited only as may be provided
in the standard form of extended coverage endorsement
at the time in use in the State of Colorado .
b . General accident and public liability insurance to
the extent of $500 ,000 per person and $ 1 million per
accident , against liability for bodily injury ,
including death resulting therefrom, and $500 , 000
per accident against liability for damage to property ,
including loss of use thereof , occurring on or in
any way relating to the Project or any part thereof .
Castle Corporation
January 9 , . 1979
Page Four
The Association requests that its insurance agency
be permitted to bid on the above insurance on
a competitive rate basis .
7 . On the Closing Date, the Association shall be furnished with
an ALTA policy of mortgagee ' s title insurance from a title
insurance company approved by the Association in a face amount
not less than the principal amount of the Bond , covering the
title to the Project Site and showing the Mortgage to be a valid
first lien on the Project Site , subject only to exceptions ,
restrictions , rights of way , and easements agreed to by the
Association.
8 . Not less than ten days prior to the Closing Date , the Stroops
or the Company shall deliver to the Association for its approval
the following:
a . An improvement location survey, dated not more than
90 days prior to its date of submission to the Assoc-
iation, certified by a registered professional engineer ,
showing the location of the Building and other improve-
ments on the Project Site, and containing an exact legal
description of the Project Site, including easements and
rights appurtenant thereto .
b . A commitment for the title insurance described in para-
graph 7 of this letter , as well as a current tax cert-
ificate pertaining to the Project Site .
c . A certificate of occupancy issued by the proper municipal
authority .
d . A soil test made by a professional soil testing labor-
atory , with engineering recommendations for footings and
foundations based upon the tests , as well as a certific-
ation by the soils engineer with respect to the Stroops '
or the Company ' s compliance with said recommendations .
e . A report of professional structural and mechanical
engineers with respect to the adequacy of design and
specifications of the structural and mechanical systems
of the Building, as well as a certification by said
engineers that the completed mechanical and structural
systems were constructed in accordance with the plans and
specifications referred to above.
f . Copies of the personal income tax returns for the Stroops
for the years 1976 , 1977 , and 1978 .
g . Financial statements of the Stroops and the Company , in
form satisfactory to the Association, dated not later than
thirty (30) days from their date of submission .
Castle Corporation
January 9 ; 1979
Page Five
h . A written opinion from counsel to the Stroops and the
Company that the Building and other improvements on the
Project Site do not violate federal, state of local
environmental control acts , as well as local zoning
or land use laws .
i . A complete set of plans and specifications for the
Project which indicate the approval of all proper
governmental authorities , together with plot plan
engineering details and specifications , which shall
not have been altered without the Association' s prior
written consent .
9 . On the Closing Date the Association shall receive an opinion
from DeMuth, Eiberger , Kemp & Backus , Denver , Colorado or other
bond counsel selected by the Association and the County , stating
that the Bond is validly issued and that the interest on the
Bond is exempt from federal and state income taxation.
10 . On the Closing Date, the Association shall receive a certified
copy of the Lease as executed between the Stroops and the Company.
Additionally, on the Closing Date the Association shall receive
an estoppel certificate, indicating that the lease is in full
force and effect, and that there have been no defaults there-
under .
11 . The Association shall be provided by the Stroops and the Company
with annual operating statements showing the gross income and
expenses of the Project . These statements shall be furnished
within ninety (90) days of the close of the fiscal year of the
Company, throughout the term of the Loan Agreement .
12 . The Closing Date shall not precede the completion of the
construction of the Project in substantial accordance with the
plans and specifications , and a final inspection of the Project
by the Association.
13 . The Association may charge as its service charge an amount not
to exceed $500, for the appraisal of the Project Site and the
Project and for general expenses incurred in the processing of
its loan to the County and purchase of the Bond from the County.
This service charge does not include bond counsel fees , fees of
counsel to the Stroops or the Company , fees of real estate
counsel or any other fees incurred by the Stroops , the Company
or the Association in connection with the Project and the
issuance of the Bond .
14 . The transactions contemplated hereunder are subject to all rules
and regulations governing the Association.
15 . This commitment shall not be assignable without the prior
written consent of the Association.
Castle Corporation
January 9 , 1979
Page Six
This commitment shall expire February 6 , 1979 , unless accepted by
the Stroops , the Company and the County and returned to the Association
prior to that date, accompanied by a deposit with the Association of
$4 , 500 as a non-refundable binder , in which event the commitment shall
be effective to December 31 , 1979 . An additional fee of $4 , 500 shall
be payable to the Association immediately prior to the purchase of the
Bond pursuant to this commitment and such purchase shall be contingent
upon the payment of said fee.
Sincerely ,
THE EMPIRE SAVINGS , BUILDING
AND LOAN ASSOCIATION,
Clarence M. Hughes
Assistant Vice President
Commercial Loan Department
The foregoing commitment is accepted this 5th day of
February , 1979 , by the undersigned .
CASTLE CORPORATION
By /�
President
ATTEST:
Secretary
(CORPORATE) /1/ i�>.n.. %
SEAL H. Thomas Stroop
Marianne Stroop
WELD COUNTY , COLORADO
By lld
President of the Board of
County Commissioners
ATTEST:
Castle Corporation
January 9 ; 1979
Page Seven
Received the sum of this day of
1979 .
THE EMPIRE SAVINGS , BUILDING
AND LOAN ASSOCIATION
By
.
• ✓ );C ( c. r //<. C' n .0:.,
U.S. SMALL BUSINESS ADMIIiISID ION
o ACTION NUMBER I p�l'�
p , x.-
We concur with tin requcst 'ry° Castle
1- Company
.1`L�+- + (.14,4 7-1 /-7 7075 rustic trail boulder,co. so3o1
p Date
loan er 30:3443-4071 .
APPROVED:
Vy ,2 / / January 25, 1979
{' 1/r6n//-r r Date Mr. Wayne Lance
I Small Business Administration r4 Pt.
ii CtRnt %nnwr I ttc-: ' 721 19th Street """"
�C- .2 I _—— F.,i c',+rh __' L..__..__? Denver, CO 80202
l
Dear Mr. Lance: 1
Many thanks for your prompt action l
In obtaining an authorization for the $203,750 loan to the Erie Development (k
Company. E____.
liltThere is a minor change in the wording
of the authorization which might be considered. There is also a clarification
.....
which we want the SBA to he aware of. And there two important changes in
the authorization which we hope the SBA will consider and agree to. ,
First , the minor wording changes . . . .
In paragraph-2.A._ i
ifiteIt is recommended that this paragraph read:
Assignment of LDC's right , title and interest in and to a
certain Note to be executed by Castle Corporation, and H. Thomas
Stroop and Marianne Stroop , individually and as partners of the
Castle Real Estate Company , a partnership , in the amount of
$203 ,750 , and to be for a term of twenty-five (25) years ; , , ;y.;
said Note to be secured by: ' —^
I.
Second, the clarifications . . . . -J.In parasraph__ 4_G._(3)_
wa
We wish to make two points . First , the sewage disposal system will be r''giv
a Weld County approved septic system until such time that a sewer line
is built to service the area in which our facility will be located. At t.. _.
that time, we will be hooked up to the sewer. Second , we applied to the
Public Service Company for a gas tap last October. At that time, they ' ' ,,
felt it would be approximately one year before they could provide the
i
page two
gas tap. In the meantime, Interstate Gas Company, who supplies Public
Services , is planning to release more gas . Therefore Public Service
hopes to be able to reduce the waiting time for gas taps to about six
months . If this happens , we will have our gas tap by the time the
building is completed. But if it doesn ' t happen, we plan to use propane I '
temporarily. We understand that as long as the Town of Erie and Weld
County approve these situations , it will he satisfactory with the SBA. . .
and Erie and Weld County have already agreed.,
Now the serious concerns which we
have with the authorization.
In_paragraph 4. E.
This paragraph seeks agreement by the LDC to provide additional equity .
funds to cover any cost overruns or unanticipated expenses . It is
assumed that SBA's intent here is to indicate that the SBA is not prepared
to commit more than $203,750 to the project . . . and that is perfectly w.omm
understandable and acceptable.
However , instead of asking the LDC to obtain more funds , we are prepared
for the Castle heal Estate Company to handle any such unanticipated
expenses by paying for them in cash . . . so that the total amount of the
project being financed does not exceed $815,000. The cash to do this
would not come from the working capital loan guaranteed by the SBA or 4
from the equity working capital that was proposed in the Castle Corporation
Business Plan that was used by the SBA when the working capital loan was
approved.
Being conservative by nature, I decided it would be best if the Castle
Corporation had some additional financial "cushion". I felt that ifl.
we needed more funds later , they might not be available . . . or they might '
be much more expensive to obtain than they are now. For that reason, rss; .
I decided to raise an additional $125 ,000 in the sale of additional stock C :- --
in the Castle Corporation now. It is that money which could he used to
pay for any cost overruns or unexpected expenses should they occur,
We think this is a much more realistic and workable way to prepare for
unanticipated cost overruns. The LDC might have extreme difficulty in - ,
raising additional funds for unexpected project costs , for those who have a.' 9
a financial interest in the Company are already contributing the maximum 14._. ;
allowable to the LDC . . . and other sources might not be available. Wem_ ,
therefore propose the following substitute for paragraph 4.E. . . . .
v • °° -0• • • C w 2 I .w 4 ...-..T a e� it1
. w. q
page three
The SBA will not provide more funds than herein committed
for the financing of this project. Any additional unexpected
project costs must be handled by others prior to the closing
of this loan. However, SBA guaranteed loan funds or the SBC 's
working capital planned for the business at the time the SBA
working capital loan guarantee was approved may not be used
for this purpose.
Or. . .you may have:some other language which better accomplishes our
desired purpose.
In_paragraph 4.G. (6) .
it requires performance, labor and material payment bonds . Since the G
SBA will be providing a loan for the second mortgage on a completed
building for which Weld County has issued a Certificate of Occupancy,
and your authorization limits your loan to S203,750, it is felt that
these performance bonds are unnecessary and would create a wasteful
expense.
None of the other lenders on this project are requiring bonds , for
they are assured of the completion of the project to high quality
standards in other ways .
4.
Working with the construction lender, the First National Bank of Boulder, .
the Castle Real Estate Company can assure financial responsibility for
making sure there are funds to complete the building by placing 5100,000
in escrow with the Bank to pay any unexpected cost overruns . In addition,
the General Contractor will sign a fixed price contract with the Castle
Real Estate Company to build the building . Under these conditions , the
First National Bank of Boulder is satisfied that there are sufficient ` y.
funds available to complete the. construction. Ire se
T_obe_protected_ from mechanic' s _liens , the construction department of
the First National Bank of Boulder will handle all the construction
cost disbursements . The Bank will pay the subcontractors for their labor
and profit , and pay their suppliers directly for materials . . . obtaining
lien releases as the material and labor payments are made. In addition,
funds will be left in the escrow account for at least 90 clays after the , ;:
last work is done on the project . . . to assure funds will be available f
•
to handle any unexpected lien.
To make sure the building is constructed to hl_912 qualit1standards that
will be acceptable to the permanent mortgage holders , we have worked out
a program whereby the most important structural and mechanical systems ►^�
in the building will be designed by professional and certified engineers.
'
page four
'rr
The Bank will then hire these engineers to inspect various stages of
the construction , assuring that the building Is being built according
to plans and specifications which the engineers created. Periodic reports
by these engineers will be supplied to the First National Bank and to
Empire Savings for their information and acceptance. in addition, the
building will receive the normal building plan review for code compliance
and construction progress inspection reports by the Weld County building
inspectors .
Because of the steps which are being taken to assure that there is ample
money to finish the project , to eliminate mechanics ' liens and to monitor
the quality construction of the building , all other lenders for this
project are in agreement that the performance and payment bonds are
unnecessary and would be an expensive waste. ', Since the SBA is authorizing .
a loan only for a building which will have been completed to professionally
engineered standards , and which will have received a Cerificate of
Occupancy indicating its satisfactory completion, and since the SBA has
no responsibility for lending more than the authorized amount , we hope
the SBA will agree that these performance bonds can be eliminated. We
therefore recommend that paragraph 4.G. (6) be dropped from the authorization. :::.10, tIf the SBA will agree to the above
suggestted changes in the authorization , it would the final step in
completing a long and arduous process of arranging the financing for
the Castle Corporation and their facilities. With these changes , we
will have everything ready to commence the construction of our facility
and to start the Castle Corporation.Thanks for your help and cooperation.• Yours very truly,// ., r .H. Thomas Stroop
President , Castle Corporation•
Approved and recommended by
Horst BachPresident , Eri Development Company
l . r,.J P' : 1 I .. dog 1 '+''t
t t� '' tit-ry ;,;,041:1410"
, l� iii.)iii.) .1: YN 1.
January 26, 1979
Mr. H: Thomas and/or Marianne Stroop
General Partners , Castle Real Estate Company
7075 Rustic Trail
Boulder , CO 80301
Dear Mr. and Mrs. Stroop :
We understand you are seeking twenty five year financing for a 30,000
sq . ft . factory and 7000 sq . ft. office building to be constructed on
17.42 acres , more or less , in Erie, Colorado to be leased for twenty five
years to the Castle Corporation . . . with an option for the Castle
Corporation to buy the building anytime after one year. We also understand
the building is to be financed thru a Small Business Administration local
community development program, as follows :
1 . Weld County will issue industrial development bonds to be
purchased by Empire Savings of Denver in the amount of $448,250
(55% of the total project 's cost) . This will provide the funds
for the first mortgage for the property.,.
2. The SBA loans $203,750 (252 of the project 's cost) to the Erie
Development Company (EDC) , a non-profit local community development
corporation. . .who relends it to the Castle Real Estate Company ,
a limited partnership. . . taking a second mortgage on the aboved
described real estate. The EDC then assigns that second mortgage
to the SBA for their loan protection.
3. Joel R. and Elizabeth Hosted (husband and wife) lends $4O,750
(52 of the project 's cost) to the EDC to be relent to the Castle
Real Estate Company. The EDC obtains a third mortgage on the
above described real estate for this loan, and assigns it to
Joel R. and Elizabeth Hosted for their collateral .
4. The Castle Real Estate Company, a limited partnership with
H. Thomas and Marianne Stroop as the sole general partners , lend
the EDC $122 ,250 (15%; of the project 's cost) , which is relent
back to the Castle Real Estate Company for the balance of the
project ' s cost. The Castle Real Estate Company will have a
fourth mortgage position on the real estate with their loan.
We further understand that each month the Castle Real Estate Company
wil issue a check to the Erie Development Company 's bank (First National
Bank of Boulder) to cover the total payments on all four mortgages . Upon
the deposit of the Castle Real Estate Company's check , the Bank will
automatically issue checks on 'behalf of the Erle Development Company for
all of the monthly iI payments to the four sources of money to make up the r,
page two
financing for the real estate . . . Empire Savings with the first mortgage,
the S[3A with the second mortgage, the Husteds with the third mortgage,
and the Castle Real Estate Company with the fourth mortgage.
We further understand the construction of the building will _ begin as early
in 1979 as the weather will permit. We understand that the construction
should he completed as early as June or as late as August . When the
building is completed, the money for the third mortgage will be made
available to complete the permanent financing.
We do commit to make the loan for the third mortgage as follows :
Principle amount . . . $40,750
Interest rate. . . 18%
Term. . . 25 years
Monthly payments . . . $618.37
Collateral . . . Third mortgage on real estate
described In the first paragraph, above.
Commitment time limit . . . Commitment will end August 31 , 1979
unless an extension is acceptable to
both parties .
Personal guarantee . . . The repayment of this loan will be
personally guaranteed by H. Thomas
and Marianne Stroop.
Yours very truly,
Joel-R. Rusted
ACCEPTED
H. Thomas Stroop
Elizabeth L. Rusted L u
27 )
Marianne Stroop f
Acceptance is made for Castle Real I'
Estate Company and individually.
P
d
w
Mr. Horst Bach
President
Erie Development Company
P. 0. Box 83
Erie, Colorado 80516
Dear Mr. Bach:
The Small Business Administration hereby authorizes a loan, docket number
LD 122,019-20-lo-c0 to Erie Development Company, hereinafter referred
to as "LDC" , in the amount of $203,750, to assist Castle Corporation and
The Castle Real Estate Company, a partnership, hereinafter referred to as
"SBC" , subject to the following terms and conditions:
1 . Repayment Terms:
NOTE PAYABLE: Twenty-five (25) years from date of Note, with interest
at the rate of seven and three eights percent (1-3/8%) per annum, and
installments, including principal and interest, each in the amount of
$1 ,491 .00, payable monthly, beginning two (2) months from date of Note,
and the balance of principal and interest payable twenty-five (25)
years from date of Note; with the further provision that each said
monthly installment shall be applied first to interest accrued to the
date of receipt of said installment, and the balance, if any, to prin-
cipal .
2. Coll. '.eral :
A. Assignment of LDC' s right, title and interest in and to a certain
Note to be executed by Castle Corporation, H. Thomas Stroop, and
Marianne M. Stroop, in the amount of $203,750, and to be for a
term of twenty-five (25) years; said Note to be secured by:
(1 ) Deed of Trust on property located on County Line Road in the
Town of Erie, Colorado (legal description to be furnished prior
to disbursement of loan proceeds) , subject to a prior lien held
by Empire Savings & Loan Association, Denver, Colorado, in the
approximate current amount of $448,250. Evidence shall be pre-
sented that prior lien is not open-end, or if it is , agreement
from prior lien holder that no further advances will be made
during the term of this loan.
said Note and collateral documents acceptable in all respects to
' District Director.
3. Use of Loan Proceeds:
A. Loan proceeds to be used to pay final twenty-five percent (25%) of
project cost of:
(1 ) Approximately $73,690 for land.
(2) Approximately $114,400 for site improvements.
(3) Approximately $62.6,910 for building construction.
(4) The balance, if any, to be applied to the loan in inverse order
of maturity.
B. The LDC must inject $163,000 prior to any disbursement of this
loan; said funds must be for a term equal , at least, to the term
of this loan, and be subordinate to the liens securing this loan;
no more than seventy-five percent (75%) of said funds may he pro-
vided by individuals or firms ( individually or collectively) having
a pecuniary interest in the project. If any portion of said funds
are borrowed, LDC will supply to the District Director copies of .
debt instruments.
Page 2
4. Additional Conditions :
A. SBC to agree in writing to purchase Federal Flood Insurance in
aunts and coverages satisfactory to SBA if, at any time during
t,e life of the loan, SBC's community is designated as a flood
prone area, and the FIA map shows that SBC' s property is located
within a special flood hazard area, and Federal Flood Insurance
can be purchased.
B. SBC has furnished copy of recorded Disburser' s Notice required
by Section 38-22-126, CRS 1973.
C. Financial statements annually by the [DC and semi -annually by
small business concerns being assisted. SBC' s year end state •
-
ments to be prepared by an independent public accountant, with
his unqualified opinion, and provided further that this Adminis-
tration shall have the right to conduct an audit of the books of
the Borrower and the small business concern' at its discretion.
D. Prior to any disbursement, SBC to execute an Environmental Pro-
tection Agreement in compliance with Executive Order 1173, 38
F.R. , 25161 .
E. Agreement by LDC to provide additional equity funds to cover
additional project costs incurred as a result of overruns or un-
anticipated expenses in financing the project.
F. An agreement executed between the small business concern being
assisted and the LDC providing that any and all outstanding
obligations may be accelerated and payments called for by LDC
and SBA, if the small business concern during the term of this
loan effects a change of ownership or control of the business
without prior written consent of SBA. It is further agreed that
the proportional ownership of the Castle Corporation and The
Castle Real Estate Company will remain constant even though writ-
ten permission to sell stock and partnership interest to addi-
tional individuals is approved by SBA.
G. Prior to any disbursement on account of the loan, District Direct-
or must have the documentary evidence as required by loan in form
and substance satisfactory to him that:
(1 ) SBC has acquired title to the real property at a cost not in
excess of that referred to under use of proceeds, and proof
of such title acceptable to SBA counsel has been obtained.
(2) One (1 ) copy of firm contract for construction of the build-
ing in accordance with accepted final plans and specifications
at a cost not to exceed that referred to under use of proceeds.
(3) The plant site will be adequately serviced by access roads,
water system, sewage disposal system, and all necessary utili-
ties.
(4) One (1 ) set of acceptable final detailed plans and specifica-
tions, together with evidence showing the SBC has complied
with all state and local codes, zoning and housing ordinances,
health and safety regulations, and certification that the pro-
ject will meet all envircnmental protection standards.
(5) All first mortgage (or other monies supported by lien positions
superior to SBA) and LDC funds have been injected into the
project, or placed in an escrow account (for disbursement
therefrom in accordance with the escrow agreement) .
(6) 100% performance and labor and material payment bonds to be
furnished, naming LDC/SBC only as obligee.
Page 3
(7) The following Compliance Certifications have been properly
executed:
(a) SBA Form 601 "Applicant' s Assurance of Compliance."
(b) SBA Form 601A "Agreement of Amendment of Contract to
Conform with Requirements of SBA Form 601 ."
(c) SBA Form 6018 "Notice Regarding Nonsegregated Facilities ."
(d) SBA Form 601D "City Plan Compliance" (where "City Plans"
are in effect) .
(8) SBC has furnished a survey and plot plan.
H. Prior to any disbursement, SBA shall be in receipt of satisfactory
evidence that there has been no adverse change since the date of
the application which would warrant withholding disbursements on
account of the loan.
I . Full disbursement of loan proceeds cannot he made until construc-
tion has been completed and property is ready for occupancy to
the satisfaction of the LDC and SBA.
J. Such other conditions as SBA may impose pursuant to outstanding
general requirements and instructions of this Administration.
K. Disbursement of the loan shall be made at the discretion of SBA
in accordance with the provisions of this letter of authorization
and the applicable general requirements and instructions of this
Administration, provided that the Small Business Administration
may terminate disbursement of the loan after a date twelve (12)
months from date thereof.
L. LDC has submitted evidence satisfactory to District Counsel that
its Articles of Incorporation have been amended to conform to
SBA regulations.
It is further understood and agreed between the parties that, in considera-
tion of LDC' s agreement to use the proceeds of said loan to assist an identi-
fiable small business concern in accordance with the manner prescribed in
Part 108 of SBA Rules and Regulations, in event of liquidation or foreclosure
proceedings by SBA against LDC (except where said liquidation or foreclosure
proceedings result from fraud or misrepresentation of LDC) SBA agrees that
no legal action shall be instituted to collect the indebtedness referred to
herein, other than foreclosure upon the collateral hypothecated as security
for said indebtedness. The term "collateral" as referred to herein shall
have the same meaning as set forth in the Note which secures said loan.
The LDC and SBC will acknowledge acceptance of the conditions under which
the loan will be made by signing the acknowledgement on one of the enclosed
copies of this letter and returning it to this office within ten (10) days
from date of receipt. Questions concerning the conditions may be referred
to Douglas V. Vasquez (Attorney) , Small Business Administration, Denver
District Office, 837-4485.
A. VERNON WEAVER, Administrator
BY e .6,74`tAssistant Distriet_Director, F&I
` SMALL BUSINESS ADMINISTRATION
Acceptance by LDC and SBC
The terms and conditions of the letter of authorization have been read
and are satisfactory to and will be complied with by the undersigned.
Further, when the contract is let, Small Business Administration will
be informed on the amount of the contract and the name, address and
telephone number of the prime contractor.
Erie Development Company (LDC)
P. 0. Box 83, Erie, CO 80516
BY ?_...~ if 4/7 : (L.S.)
•
President
•
Attest etJcS'-'_(
Secretary
(Corporate Seal)
Castle Corporation and H. Thomas
Stroop (SEC)
7075 Rustic
Trail
By
President
Attest 44 .ac4-.J (L.S.)
Secretary
Hello