URA Res. 20-02 Approving Loan AGreement for a Loan for the Purpose of Refinancing the Authority's Tax Increment Revenue Bond, Series 2013AVON URBAN RENEWAL AUTHORITY
TOWN OF AVON, COLORADO
RESOLUTION NO 20-02
APPROVING AND DIRECTING THE EXECUTION AND
DELIVERY OF A LOAN AGREEMENT FOR A LOAN FOR THE
PURPOSE OF REFINANCING THE AUTHORITY'S TAX
INCREMENT REVENUE BOND, SERIES 2013 AND
APPROVING ACTIONS AND DOCUMENTS IN CONNECTION
THEREWITH.
WHEREAS, the Avon Urban Renewal Authority (the "Authority") is a public body
corporate and politic, and has been duly created, organized, established and authorized by the
Town of Avon, Colorado (the "Town") to transact business and exercise its powers as an urban
renewal authority, all under and pursuant to the Colorado Urban Renewal Law, constituting Part
1 of Article 25 of Title 31, Colorado Revised Statutes, as amended (the "Act"); and
WHEREAS, pursuant to Section 31-25-105 of the Act, the Authority has the power
to borrow money and to apply for and accept advances, loans, grants and contributions from any
source for any of the purposes of the Act and to give such security as may be required; and
WHEREAS, pursuant to Section 31-25-109 of the Act, the Authority has the power
to issue refunding or other bonds (defined by the Act to mean any bonds, notes, interim certificates
or receipts, temporary bonds, certificates of indebtedness, debentures or other obligations) from
time to time in its discretion for the payment, retirement, renewal or extension of any bonds
previously issued by it under the Act; and
WHEREAS, the Authority is authorized to issue bonds without an election; and
WHEREAS, the Authority has previously issued its Avon Urban Renewal
Authority, Tax Increment Revenue Bonds, Series 2013 in the aggregate principal amount of
$6,825,000, which Series 2013 Bonds are currently outstanding in the aggregate principal amount
of $4,560,000 (the "2013 Bonds"); and
WHEREAS, the Authority has previously issued its Avon Urban Renewal
Authority, Tax Increment Revenue Bonds, Series 2017 in the aggregate principal amount of
$3,000,000, which Series 2017 Bonds are currently outstanding in the aggregate principal amount
of $2,493,285.53 (the "2017 Bonds"); and
WHEREAS, an urban renewal plan, known as the "Town Center West Area Urban
Renewal Plan" (the "Urban Renewal Plan"), was duly and regularly approved by the Town Council
of the Town for an urban renewal project under the Act; and
WHEREAS, all applicable requirements of the Act and other provisions of law for
and precedent to the adoption and approval by the Town of the Urban Renewal Plan have been
duly complied with; and
WHEREAS, the Authority has determined that it is in the best interests of the
Authority and the citizens and taxpayers of the Town that the 2013 Bonds be refunded (the
"Refunding Project"); and
WHEREAS, the Authority intends to enter into a Loan Agreement with a private
purchaser hereafter determined by the Authority and so named in the Sale Certificate (the
"Lender") to obtain a loan in the principal amount of not to exceed $4,700,000 (the "Loan") in
order to finance the costs of the Refunding Project; and
WHEREAS, the proceeds derived from the Loan, after payment of the costs of
issuance properly allocable thereto, along with such other legally available moneys of the
Authority as may be necessary, shall be used to pay and cancel the 2013 Bonds on the date of
funding of the Loan, as more particularly hereinafter set forth; and
WHEREAS, the Authority specifically elects to apply all of the provisions of Title
11, Article 57, Part 2, C.R.S. (the "Supplemental Act") to the Loan; and
WHEREAS, the Loan shall be a limited obligation of the Authority payable solely
from the Pledged Revenue (as defined in the Loan Agreement); and
WHEREAS, the Board desires to delegate to the Executive Director of the
Authority the power to determine the terms of the Loan consistent with the provisions of this
Resolution; and
WHEREAS, there are on file with the Secretary of the Board: (a) the proposed
form of the Loan Agreement; (b) the proposed form of the promissory note, in the form attached
to the Loan Agreement (the "Note"), to be executed by the Authority and delivered to the Lender
evidencing the Authority's obligations to pay the Loan; and (c) the proposed form of the 2020
Cooperation Agreement between the Authority and the Town (the "Cooperation Agreement").
NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF
COMMISSIONERS OF THE AVON URBAN RENEWAL AUTHORITY, COLORADO,
THAT:
Section 1. All actions (not inconsistent with the provisions of this Resolution)
heretofore taken by the Board and the officers of the Authority directed toward the Refunding
Project and the entering into of the Loan Agreement, the Note and the Cooperation Agreement
hereby are ratified, approved and confirmed.
Section 2. The forms, terms and provisions of the Loan Agreement, the Note
and the Cooperation Agreement (collectively, the "Financing Documents") hereby are authorized
and approved, and the Authority shall enter into the Financing Documents in the respective forms
as are on file with the Secretary of the Board, but with such changes therein as shall be consistent
with this Resolution and as the Chairman of the Board or the Executive Director of the Authority
shall approve, the execution thereof being deemed conclusive approval of any such changes. The
Chairman of the Board is hereby authorized and directed to execute and deliver the Financing
Documents, for and on behalf of the Authority. The Executive Director/Secretary of the Board is
2
hereby authorized and directed to affix the seal of the Authority to, and to attest those Financing
Documents requiring the attestation of the Secretary.
Section 3. The officers of the Authority shall take all action which they deem
necessary or reasonably required in conformity with the Act to enter into the Financing Documents
and refund the 2013 Bonds, including the paying of incidental expenses, which are hereby
authorized to be paid, and for carrying out, giving effect to and consummating the transactions
contemplated by this Resolution and the Financing Documents, including, without limitation, the
execution and delivery of any necessary or appropriate closing documents to be delivered in
connection with the execution and delivery of the Financing Documents and the refunding of the
2013 Bonds.
Section 4. Pursuant to Section 11-57-205, C.R.S., the Board hereby delegates
to the Executive Director of the Authority the authority to make the following determinations with
respect to the Loan, including the execution of any certificates necessary or desirable to evidence
such determinations, which determinations shall be subject to the restrictions and parameters set
forth below:
(a) the rate or rates of interest on the Loan;
(b) the conditions on which and the prices at which the Loan may be redeemed
before maturity;
(c) the existence and amount of any reserve funds;
(d) the principal amount of the Loan;
(e) the amount of principal maturing in any particular year; and
(f) the dates on which principal and interest shall be paid.
The foregoing authority shall be subject to the following restrictions and
parameters:
(1) the Loan shall mature not later than December 1, 2028;
(2) the principal amount of the Loan shall not exceed $4,700,000
(3) the initial interest rate on the Loan shall not exceed 3.00%;
(4) the maximum annual repayment amount shall not exceed $600,000 and the
total repayment cost shall not exceed $5,400,000; and
(5) the Loan is (i) not subject to prepayment prior to maturity at the option of
the Town or (ii) subject to prepayment prior to maturity at a price equal to the principal amount so
prepaid plus accrued interest to the redemption date, with a prepayment premium not to exceed
1 % at such time as provided in the Sale Certificate.
3
Section 5. The Loan and the Note are special obligations of the Authority
payable solely as provided in the Loan Agreement and are issued on a parity with the 2017 Bonds.
The principal of, premium, if any, and interest on the Loan and the Note shall not constitute an
indebtedness of the Town or the State of Colorado or any political subdivision thereof, and neither
the Town, the State of Colorado nor any political subdivision thereof shall be liable thereon, nor
in any event shall the principal of, premium, if any, and interest on the Loan and the Note, be
payable out of funds or properties other than the Pledged Revenue, as such term is defined in the
Loan Agreement. Neither the Commissioners of the Authority nor any persons executing the Loan
Agreement or the Note shall be liable personally on the Loan Agreement or the Note.
Section 6. After the Loan Agreement and the Note are entered into, this
Resolution shall be and remain irrepealable, and may not be amended except in accordance with
the Loan Agreement, until the Loan and the Note shall have been fully paid, canceled and
discharged in accordance therewith.
Section 7. The 2013 Bonds shall be paid and cancelled on the date of funding
of the Loan, at a price equal to the par amount thereof plus accrued interest, plus a redemption
premium of 1%.
Section 8. If, for any reason, the funds on hand from the Loan shall be
insufficient to make the payment of the principal of and accrued interest on the 2013 Bonds, as the
same shall be due and payable as provided in Section 7 above, the Authority shall forthwith deposit
additional legally available funds as may be required fully to meet the amount due and payable on
the 2013 Bonds.
Section 9. The officers of the Authority are hereby authorized and directed to
take all actions necessary or appropriate to effectuate the provisions of this Resolution, including
but not limited to the execution of such certificates and affidavits as may be reasonably required
by the Lender.
Section 10. The Chairman and the Executive Director are each hereby appointed
as an Authorized Person, as defined in the Loan Agreement. Different or additional Authorized
Persons may be appointed by resolution adopted by the Board and a certificate filed with the
Lender.
Section 11. All costs and expenses incurred in connection with the Loan and the
transactions contemplated by this Resolution shall be paid either from the proceeds of the Loan or
from legally available moneys of the Authority, or from a combination thereof, and such moneys
are hereby appropriated for that purpose.
Section 12. If any section, paragraph, clause or provision of this Resolution shall
for any reason be held to be invalid or unenforceable, the invalidity or unenforceability of such
section, paragraph, clause or provision shall not affect any of the remaining provisions of this
Resolution.
Section 13. All bylaws, orders and resolutions, or parts thereof, inconsistent
herewith are hereby repealed to the extent only of such inconsistency. This repealer shall not be
construed as reviving any bylaw, order or resolution or part thereof.
L!
Section 13. All bylaws, orders and resolutions, or parts thereof, inconsistent
herewith are hereby repealed to the extent only of such inconsistency. This repealer shall not be
construed as reviving any bylaw, order or resolution or part thereof.
Section 14. This Resolution shall be in full force and effect immediately upon
its passage and approval.
PASSED, ADOPTED AND APPROVED this March 26, 2020.
Es,' Ir
(SEAL)
Attest:
Eric Heil, Executive Director
APPROVED AS TO LEGAL FORM:
Paul Wisor, Attorney for the Authority
Sarah �mith Hymes
Chairman of the Board of Commissi ners
5
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Z:
SEAL
L7AX,
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Section 13. All bylaws, orders and resolutions, or parts thereof, inconsistent
herewith are hereby repealed to the extent only of such inconsistency. This repealer shall not be
construed as reviving any bylaw, order or resolution or part thereof.
Section 14. This Resolution shall be in full force and effect immediately upon
its passage and approval.
PASSED, ADOPTED AND APPROVED this March 26, 2020.
P� RENEh,�
Sarah Smith Hymes
01 S == Chairman of the Board of Commissioners
.X LO
Attest:
C�
Ericeil, Exe ive Director
APPROVED AS TO LEGAL FORM:
Paul Wisor, Attorney for the Authority
Section 13. All bylaws, orders and resolutions, or parts thereof, inconsistent
herewith are hereby repealed to the extent only of such inconsistency. This repealer shall not be
construed as reviving any bylaw, order or resolution or part thereof.
Section 14. This Resolution shall be in full force and effect immediately upon
its passage and approval.
PASSED, ADOPTED AND APPROVED this March 26, 2020.
Sarah Smith Hymes
Chairman of the Board of Commissioners
(SEAL)
Attest:
Eric Heil, Executive Director
APPROVED AS TO LEGAL FORM:
P# Wisor, Attorney for the Authority
STATE OF COLORADO )
SS.
AVON URBAN RENEWAL )
AUTHORITY )
I, Eric Heil, the Executive Director/Secretary of the Avon Urban Renewal
Authority (the "Authority"), do hereby certify that:
1. The foregoing pages are a true and correct copy of a resolution (the
"Resolution") passed and adopted by the Board of Commissioners of the Authority (the "Board")
at a continued regular meeting held on March 26, 2020.
2. The Resolution was duly moved and seconded and the Resolution was
adopted at the meeting of March 26, 2020, by an affirmative vote of a majority of the members
of the Board as follows:
Name
"Yes"
"No"
Absent
Sarah Smith H mes
Amy Phillips
J
Jennie Fancher
Scott Prince
Chico Thuon
Tamra Nottingham -Underwood
V
Jake Wolf
V
3. The members of the Board were present at such meetings and voted on the
passage of such Resolution as set forth above.
4. The Resolution was approved and authenticated by the signature of the
Chair or Vice Chairman of the Board, sealed with the Authority seal, attested by the Secretary of
the Board and recorded in the minutes of the Board.
5. There are no bylaws, rules or regulations of the Board which might
prohibit the adoption of said Resolution.
6. Notice of the meeting of March 26, 2020, in the form attached hereto as
Exhibit A, was posted at the Avon Town Hall, 100 Mikaela Way; Avon Recreation Center, 90
Lake Street; Avon Public Library, 200 Benchmark Road; Avon Elementary School, 850 W
Beaver Creek Boulevard and the Town's website, not less than twenty-four (24) hours prior to
the meeting in accordance with law.
Cel
WITNESS my hand and the seal of said Authority affixed March 26, 2020.
PN RENF�
e Director/Secretary
ADO
EXHIBIT A
(Form of Notice of Meeting)
A-1
AVON URBAN RENEWAL AUTHORITY
CERTIFICATE AS TO RESOLUTION
I, the undersigned, hereby certify that I am the duly qualified and acting Executive
Director/Secretary of the Avon Urban Renewal Authority (the "Authority") and that attached
hereto is a true and correct copy of Resolution 20-02 of the Authority authorizing the issuance of
the its Tax Increment Revenue Refunding Loan, Series 2020, and certain other documents and
matters relating thereto, which resolution was duly adopted by the Board of Commissioners of
the Authority at a regular meeting thereof held on March 26, 2020, at which meeting a quorum
was present and acting throughout, and which resolution has not been revoked, rescinded,
repealed, amended or modified and is in full force and effect on the date hereof.
WITNESS my hand this 1st day of May, 2020.
AVON URBAN RENEWAL AUTHORITY
4
Eric Heil, Axa6tiv7e Director/Secretary
EXHIBIT A
AUTHORITY AUTHORIZING RESOLUTION
AVON URBAN RENEWAL AUTHORITY MEETING AGENDA avon
THURSDAY, MARCH 26, 2020
!OWN HALL CI.OSUR' COLORADO
AVON URBAN RENEWAL AUTHORITY MEETING BEGINS AT APPX 7:10 PM OR AS SOON THEREAFTER AS POSSIBLE
CALL TO ORDER AND ROLL CALL
2. APPROVAL OF AGENDA
3. PUBLIC COMMENT
4. BUSINESS ITEMS
4.1. RESOLUTION 20-03 ADOPTING AN ELECTRONIC PARTICIPATION POLICY FOR TOWN MEETINGS DURING A
LOCAL DISASTER EMERGENCY TOWN ATTORNEY PAUL WISOR)
4.2. RESOLUTION 20-01 DESIGNATING LOCATIONS FOR POSTING THE NOTICES OF PUBLIC MEETINGS
4.3. ENGAGEMENT LETTER WITH BUTLER SNOW AS BOND COUNSEL FOR THE PURPOSE OF REFINANCING THE
AUTHORITY'S OUTSTANDING 2013 BONDS (TREASURER SCOTT WRIGHT)
4.4. ENGAGEMENT LETTER WITH PIPER SANDLER AS PRIVATE PLACEMENT AGENT FOR THE PURPOSE OF
REFINANCING THE AUTHORITY'S OUTSTANDING 2013 BONDS (TREASURER SCOTT WRIGHT)
4.5. PUBLIC HEARING: RESOLUTION 20-02 APPROVING AND DIRECTING THE EXECUTION OF A LOAN AGREEMENT
FOR THE PURPOSE OF REFINANCING THE AUTHORITY'S TAX INCREMENT REVENUE BONDS, SERIES 2013
(TREASURER SCOTT WRIGHT)
4.6. APPROVAL OF DECEMBER 10, 2019 URA MEETING MINUTES (AUTHORITY CLERK BRENDA TORRES)
5. ADJOURN
*Public Comments: Council agendas shall include a general item labeled "Public Comment" near the beginning of all Council meetings.
Members of the public who wish to provide comments to Council greater than three minutes are encouraged to schedule time in advance on the
agenda and to provide written comments and other appropriate materials to the Council in advance of the Council meeting. The Mayor shall
permit public comments for any action item or work session item, and may permit public comment for any other agenda item, and may limit such
public comment to three minutes per individual, which limitation may be waived or increased by a majority of the quorum present. Article VI.
Public Comments, Avon Town Council Simplified Rules of Order, Adopted by Resolution No. 17.05.
MEETING AGENDAS AND PACKETS ARE FOUND AT: WWW.AVON.ORG
AGENDAS ARE POSTED AT AVON TOWN HALL, AVON RECREATION CENTER, AVON ELEMENTARY AND AVON PUBLIC LIBRARY
IF YOU HAVE ANY SPECIAL ACCOMMODATION NEEDS, PLEASE, IN ADVANCE OF THE MEETING,
CALL TOWN CLERK BRENDA TORRES AT 970-748-4001 OR EMAIL BTORRES@a AVON.ORG WITH ANY SPECIAL REQUESTS.
LOAN AGREEMENT
by and between
AVON URBAN RENEWAL AUTHORITY
as Borrower
and
STERLING NATIONAL BANK
as Lender
regarding
$4,111,000
Avon Urban Renewal Authority
Tax Increment Revenue Refunding Loan
Series 2020
Dated as of May 1, 2020
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS........................................................................................................ 2
ARTICLE II LOAN TERMS, FEES, APPLICATION OF PROCEEDS ............................... 7
Section 2.01. Agreement to Make Loan.................................................................................. 7
Section 2.02. Application of Loan Proceeds and Other Available Funds ............................ 7
Section 2.03. Interest Rate; Default Rate; Interest Payments; Principal Payments........... 7
Section2.04. Loan Prepayment............................................................................................... 8
Section 2.05. Expenses and Attorneys' Fees........................................................................... 8
Section 2.06. Lien on Pledged Revenues; Special Obligations .............................................. 8
ARTICLE III CONDITIONS TO CLOSING............................................................................ 9
Section 3.01. Conditions to Loan Closing............................................................................... 9
ARTICLE IV FUNDS AND ACCOUNTS...............................................................................11
Section 4.01. Creation of Funds and Accounts..................................................................... 11
Section4.02. Revenue Fund................................................................................................... 12
Section 4.03. Loan Payment Fund......................................................................................... 12
Section 4.04. Transaction Costs Fund................................................................................... 13
Section 4.05. Lender To Direct Funds and Accounts: Accounting ... Error! Bookmark not
defined.
ARTICLE V REPRESENTATIONS, WARRANTIES AND COVENANTS OF
BORROWER..............................................................................................................................14
Section 5.01. Accuracy of Information..................................................................................
14
Section 5.02. Organization; Litigation..................................................................................
14
Section 5.03. Performance of Covenants, Authority............................................................
14
Section 5.04. Use of Proceeds.................................................................................................
14
Section 5.05. Tax Covenants..................................................................................................
14
Section 5.06. Other Liabilities................................................................................................
15
Section 5.07. Financial Statements........................................................................................
15
Section 5.08. Reporting Requirements..................................................................................
15
Section 5.09. Inspection of Books and Records....................................................................
16
Section 5.10. Instruments of Further Assurance.................................................................
16
Section 5.11. Additional Obligation Restrictions.................................................................
16
Section 5.12. Continued Existence.........................................................................................
17
Section 5.13. Restructuring....................................................................................................
17
Section 5.14. Operation and Management............................................................................
17
Section 5.15. Annual Audit and Budget................................................................................
17
Section 5.16. No Exclusion of Property................................................................................. 17
Section 5.17. Amendments to Financing Documents Require Prior Lender Consent ..... 17
Section 5.18. Enforcement of Cooperation Agreement....................................................... 18
Section 5.19. Proper Allocation of New Construction......................................................... 18
ARTICLE VI REPRESENTATIONS OF THE LENDER.....................................................18
Section 6.01. Accredited Investor.......................................................................................... 18
Section 6.02. Financial Institution or Institutional Investor ............................................... 18
ARTICLE VII DEPOSITS; INVESTMENTS......................................................................... 18
Section 7.01. Investment of Funds......................................................................................... 18
Section 7.02. Compliance with Tax Covenants.................................................................... 18
ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES ................................................ 18
Section 8.01. Events of Default.............................................................................................. 18
Section 8.02. Remedies on Occurrence of Event of Default ................................................ 19
Section 8.03. Notice to Lender of Default............................................................................. 20
Section 8.04. Delay or Omission No Waiver......................................................................... 20
Section 8.05. No Waiver of One Default to Affect Another; All Remedies Cumulative.. 20
Section 8.06. Other Remedies................................................................................................ 20
ARTICLE IX MISCELLANEOUS........................................................................................... 20
Section 9.01. Loan Agreement and Relationship to Other Documents ..............................
20
Section 9.02. Successors; Assignment...................................................................................
20
Section 9.03. Notice of Claims against Lender; Limitation of Certain Damages ..............
20
Section9.04. Notices................................................................................................................
21
Section9.05. Payments...........................................................................................................
21
Section 9.06. Applicable Law and Jurisdiction; Interpretation; Severability ...................
21
Section 9.07. Copies; Entire Agreement; Modification.......................................................
22
Section9.08. Attachments......................................................................................................
22
Section 9.09. No Recourse Against Officers and Agents .....................................................
22
Section 9.10. Conclusive Recital............................................................................................
22
Section 9.11. Limitation of Actions........................................................................................
22
Section 9.12. Pledge of Revenues...........................................................................................
22
Section 9.13. Payment on Non -Business Days......................................................................
23
Section 9.14. No Registration; No Securities Depository; No CUSIP................................
23
Section 9.15. Sovereign Immunity.........................................................................................
23
Section9.16. Termination......................................................................................................
23
Exhibit A - Form of Note
Exhibit B - Principal Repayment Schedule
ii
LOAN AGREEMENT
THIS LOAN AGREEMENT (this "Agreement") is made and entered into as of May 1,
2020 by and between the AVON URBAN RENEWAL AUTHORITY (the "Borrower"), a public
body corporate and politic duly existing under the laws of the State of Colorado, and STERLING
NATIONAL BANK, in its capacity as lender (the "Lender").
RECITALS
WHEREAS, the Borrower is a public body corporate and politic and has been duly created,
organized, established and authorized by the Town of Avon, Colorado (the "Town") to transact
business and exercise its powers as an urban renewal authority, all under and pursuant to the
Colorado Urban Renewal Law, constituting part 1 of article 25 of title 31, Colorado Revised
Statutes (the "Act") (all capitalized terms used and not otherwise defined herein shall have the
respective meanings assigned in Article I hereof); and
WHEREAS, pursuant to the Act, the Borrower has the power and authority to borrow
money and to apply for and accept loans to accomplish the purposes set forth in the Act, and to
give such security as may be required; and
WHEREAS, an urban renewal plan, known as the "Town Center West Area Urban
Renewal Plan" was duly adopted by the Town Council of the Town pursuant to Resolution No.
07-27, Series of 2007, on August 14, 2007, and as amended pursuant to Resolution No. 15-21,
Series of 2015, on November 10, 2015 (the "Urban Renewal Plan") for the purpose of approving
the Town Center West Area Urban Renewal Project (the "Urban Renewal Project"), such project
being an urban renewal project under the Act; and
WHEREAS, all applicable requirements of the Act and other provisions of law for and
precedent to the adoption and approval by the Town of the Urban Renewal Plan have been duly
complied with; and
WHEREAS, the Borrower has previously issued, for the purpose of paying a portion of the
costs of the Urban Renewal Project and refunding an existing loan, its Tax Increment Revenue
Bonds, Series 2013, issued in the aggregate principal amount of $6,825,000 and presently
outstanding in the aggregate principal amount of $4,560,000 (the "Refunded Bonds"), pursuant to
a resolution of the Borrower dated as of November 12, 2013 (the "Refunded Bond Resolution");
and
WHEREAS, the Borrower has previously issued its Tax Increment Revenue Bonds, Series
2017 in the aggregate principal amount of $3,000,000, which are currently outstanding in the
aggregate principal amount of $2,493,285.53 (the "2017 Bonds"); and
WHEREAS, the 2013 Bonds and the 2017 Bonds are payable from and have a lien on the
Pledged Property Tax Revenues; and
WHEREAS, the Borrower has determined that it is in the best interest of the Borrower and
the citizens and taxpayers of the Town to refund the Refunded Bonds and, for such purpose, to
incur indebtedness in the form of a loan; and
WHEREAS, the Borrower has made a request to the Lender to provide financing for the
refunding of the Refunded Bonds by making available to the Borrower a loan in the original
principal amount of $4,111,000 (the "Loan"); and
WHEREAS, the Lender is willing to enter into this Agreement and to make the Loan to
the Borrower pursuant to the terms and conditions contained herein; and
WHEREAS, the Borrower's authority to execute and deliver the Note (as defined in Article
I hereof) and this Agreement and perform its obligations thereunder and hereunder is authorized
pursuant to the Authorizing Resolution (as more particularly defined in Article I hereof); the Act;
the provisions of Title 11, Article 57, Part 2, C.R.S. (the "Supplemental Public Securities Act");
and all other laws thereunto enabling; and
WHEREAS, the Loan shall constitute a special revenue obligation of the Borrower payable
from and secured by the Pledged Revenue, subject to the limitations set forth herein; and
WHEREAS, pursuant to the resolution authorizing the 2017 Bonds (the "2017 Bond
Resolution"), subject to certain conditions set forth in the 2017 Bond Resolution, the Borrower
may issue Additional Bonds payable from and constituting a lien upon the Pledged Revenues (as
defined in the 2017 Bond Resolution) on a parity with the lien of the 2017 Bonds; and
WHEREAS, the Borrower has determined that the conditions precedent to the issuance of
Additional Bonds as set forth in the 2017 Bond Resolution have been met; and
WHEREAS, the Borrower has determined that the Note will be issued with a lien on the
Pledged Property Tax Revenues that is on a parity with the lien thereon of the outstanding 2017
Bonds.
NOW THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the parties hereto agree as follows.
ARTICLE I
DEFINITIONS
"Accredited Investor " means any Person who or which is an "accredited investor", as that
term is defined under sections 3(b) and (4)(2) of the federal "Securities Act of 1933" by regulation
adopted thereunder by the Securities and Exchange Commission.
"Act" means Title 31, Article 25, Part 1, C.R.S., as amended.
"Additional Obligations" means the one or more series of bonds or other securities or
obligations authorized to be issued by the Borrower and having a lien on the Pledged Revenues on
a parity with the lien of the Note.
"Agreement" means this Loan Agreement, as amended or supplemented from time to time
in the accordance with the provisions hereof.
2
"Authorized Person" means the Chairman of the Board or the Executive Director of the
Borrower or any designee thereof, and also means any other individual authorized by the Board to
act as an Authorized Person hereunder, provided that the Borrower has provided specimen
signatures for such Authorized Person(s) to the Lender.
"Authorizing Resolution" means the resolution adopted by the Board on March 26, 2020,
authorizing the Borrower to incur the indebtedness of the Loan and execute and deliver the Note,
this Agreement, and the other Financing Documents to which the Borrower is a party.
"Avon Station/Confluence IGA" means the Intergovernmental Agreement Between Avon
Urban Renewal Authority, Confluence Metropolitan District, and Avon Station Metropolitan
District Concerning Incremental Taxes dated as of October 9, 2007.
"Board" means the Board of Commissioners of the Borrower.
"Borrower" means Avon Urban Renewal Authority, a public body corporate and politic
duly organized and existing as an urban renewal authority under the laws of the State of Colorado.
"Business Day" means any day other than a Saturday, a Sunday, or any holiday on which
the Lender is closed for business.
"Chairman" means the Chairman of the Board.
"Cooperation Agreement" means the 2020 Cooperation Agreement between the Town of
Avon and the Avon Urban Renewal Authority dated as of May 1, 2020.
"Closing" means the concurrent execution and delivery of the Note, this Agreement, and
the other Financing Documents by the respective parties thereto and the issuance and disbursement
of the Loan and application of the proceeds thereof in accordance with Section 2.02 hereof.
"Closing Date" means the date on which the Closing occurs, estimated to be on or about
May 1, 2020.
"Code" means the Internal Revenue Code of 1986, as amended, and the rules and
regulations promulgated thereunder.
"County" means Eagle County, Colorado.
"County Assessor" means the assessor of Eagle County, Colorado.
"C.R.S." means the Colorado Revised Statutes, as amended and supplemented as of the
date hereof.
"Debt Requirements" means, with respect to any Payment Date, an amount equal to the
sum of the following with respect to any such date: (a) the principal due on the Loan and (b) the
interest due on the Loan.
3
"Default" means an event, act or occurrence which, with the giving of notice or the lapse
of time (or both), would become an Event of Default.
"Event of Default" has the meaning set forth in Section 8.01 hereof.
"Executive Director " means the Executive Director of the Borrower.
"Final Assessed Valuation" means the final certified assessed valuation of all taxable
property within the Urban Renewal Project Area, as calculated and recorded by the County
Assessor on or about December 10 of each year, or on such other date as may be established by
law for the annual final certification of assessed valuation.
"Financing Documents" means this Agreement, the Note, the Authorizing Resolution, the
Urban Renewal Plan, the Moral Obligation Resolution and the Cooperation Agreement, all in form
and substance satisfactory to the Lender.
"Fiscal Year" means the 12 months commencing on the first day of January of any calendar
year and ending on the last day of December of the same calendar year, or any other twelve-month
period which the Borrower or other appropriate authority hereafter may establish as the Borrower's
fiscal year.
"Interest Payment Date" means June 1 and December 1 of each year, commencing June 1,
2020 and continuing through and including the Maturity Date.
"Lender" means Sterling National Bank, a national banking association, in its capacity as
lender of the Loan.
"Loan" means the loan made by the Lender to the Borrower in the original principal amount
of $4,111,000 as evidenced by the Note and made in accordance with the terms and provisions of
this Agreement.
"Loan Amount" means Four Million One Hundred Eleven Thousand and 00/100 U.S.
Dollars ($4,111,000).
"Loan Payment Fund" means the fund by that name established by the provisions of
Section 4.01 hereof to be administered by the Lender in the manner and for the purposes set forth
in Section 4.03 hereof.
"Maturity Date" means December 1, 2028.
"Moral Obligation Resolution" means the resolution adopted by the Town Council
expressing its present intent, in each year the Note is outstanding, to lend additional moneys to the
Borrower by making payments into the Loan Payment Account to the extent there are insufficient
Pledged Revenues to make such deposits when due.
"Net Pledged Revenue" means the moneys described in clauses (a), (b), and (d) of the
definition of Pledged Revenue set forth in this Article I.
0
"Note" means the Promissory Note evidencing the Loan issued in the original principal
amount of $4,111,000 from the Borrower, as maker, to the Lender, as payee, and dated as of May
1, 2020.
"Parity Obligations" means the 2017 Bonds and Additional Obligations hereafter issued.
"Payment Date" means a Principal Payment Date and/or an Interest Payment Date, as the
context requires.
"Permitted Investments" means any investment or deposit permissible for the City under
then applicable law.
"Permitted Subordinate Debt" means (a) the Borrower's obligations under the Cooperation
Agreement and the 2017 Cooperation Agreement and (b) Debt issued pursuant to the provisions
of Section 5.11(d) hereof.
"Pledged Property Tax Revenues" means, for each Fiscal Year, that portion of the ad
valorem property taxes produced by the levies at the rates fixed each year by or for the governing
bodies of the various taxing jurisdictions within or overlapping the Urban Renewal Project Area
upon that portion of the valuation for assessment of all taxable property within the Urban Renewal
Project Area which is in excess of the Property Tax Base Amount, provided, however, that such
amount shall be reduced by any lawful collection fee charged by the County and further provided,
that the following shall be specifically excluded from the foregoing:
(a) tax increment revenues required to be remitted by the Borrower to the
Confluence Metropolitan District pursuant to the Avon Station/Confluence IGA; and
(b) if authorized and approved by the Borrower, ad valorem property taxes
produced by a mill levy of any special district formed after May 28, 2009, pursuant to Title 32,
Article 1, Colorado Revised Statutes, which mill levy is in addition to, and not a replacement for,
property taxes levied by taxing entities in existence as of May 28, 2009.
"Pledged Revenue" means:
(a) Pledged Property Tax Revenues;
(b) all amounts appropriated to the Borrower by the Town in accordance with
the Moral Obligation Resolution;
(c) all amounts held in the funds and accounts established and maintained
hereunder together with investment earnings thereon, including, without limitation, the
Loan Payment Fund; and
(d) all other legally available moneys which the Borrower determines, in its
sole discretion, to deposit in the Loan Payment Fund.
"Principal Payment Date" or "Principal Payment Dates" means December 1 of each year,
commencing December 1, 2020 and continuing through December 1, 2028 (the Maturity Date).
"Property Tax Base Amount" means the amount certified by the County Assessor as the
valuation for assessment of all taxable property within the Urban Renewal Project Area last
certified by the County Assessor prior to the adoption of the Urban Renewal Plan; provided,
however, that in the event of a general reassessment of taxable property in the Urban Renewal
Project Area, the valuation for assessment of taxable property within the Urban Renewal Project
Area shall be proportionately adjusted in accordance with such general reassessment in the manner
required by the Act.
"Refunded Bonds" means the Borrower's Tax Increment Revenue Bonds, Series 2013,
issued in the aggregate principal amount of $6,825,000 and presently outstanding in the aggregate
principal amount of $4,560,000.
"Refunded Bond Resolution" means the resolution of the Borrower adopted on November
12, 2013, authorizing the issuance of the Refunded Bonds and governing the provisions pursuant
to which such bonds are payable.
"Special Counsel" means (a) as of the Closing Date, Butler Snow LLP, and (b) as of any
other date, Butler Snow LLP, or such other attorneys selected by the Borrower with nationally
recognized expertise in the issuance of tax-exempt debt.
"Supplemental Public Securities Act" means Title 11, Article 57, C.R.S.
"Tax Certificate" means the tax compliance certificate to be signed by the Borrower, in a
form acceptable to Special Counsel, relating to the requirements of Sections 103 and 141-150 of
the Code.
"Town" means the Town of Avon, Colorado.
"Transaction Costs Fund" means the fund by that name established by the provisions of
Section 4.01.
"2017 Bond Resolution " means Resolution No. 16-04, Series of 2016 of the Borrower, of
the Borrower, which authorized the issuance and delivery of the 2017 Bonds.
"2017 Bonds" means the Borrower's Tax Increment Revenue Bonds, Series 2017, issued
in the aggregate original principal amount of $3,000,000, as authorized by the 2017 Bond
Resolution.
"2017 Cooperation Agreement" means the 2017 Cooperation Agreement between the
Town and the Borrower.
"Urban Renewal Plan" means the Urban Renewal Plan known as the "Town Center West
Area Urban Renewal Plan" duly adopted by the Town Council of the Town pursuant to Resolution
No. 07-27, Series of 2007, on August 14, 2007, and as amended pursuant to Resolution No. 15-
21, Series of 2015, on November 10, 2015, for the purpose of approving the Town Center West
Area Urban Renewal Project.
"Urban Renewal Project Area" means the area legally described in Section 1.2.1 of the
Urban Renewal Plan.
ARTICLE II
LOAN TERMS, FEES, APPLICATION OF PROCEEDS
Section 2.01. Agreement to Make Loan. The Lender hereby agrees to make a loan to
the Borrower in the original aggregate principal amount of $4,111,000 (as previously defined, the
"Loan Amount") subject to the terms and conditions of this Agreement. The Loan shall be
evidenced by the Note, the form of which is set forth in Exhibit A attached hereto.
Section 2.02. Application of Loan Proceeds and Other Available Funds. On the Closing
Date, the Lender will disburse the proceeds of the Loan, together with $628,240 from the Borrower
(representing moneys from prior funds and accounts relating to the Refunded Bonds), as follows:
(a) $4,044,240 was paid by the Lender to UMB Bank, n.a., as Refunded Bonds
Paying Agent, for payment of a portion of the purchase price of the Refunded Bonds
on the Closing Date; and
(b) $628,240 shall be paid by the Borrower to UMB Bank, n.a., as paying agent
for the Refunded Bonds, which amount, when combined with the amount set forth
in (a) above, is sufficient to fully redeem and discharge the Refunded Bonds on
May 1, 2020; and
(c) $66,760 will be paid by the Lender to the Borrower for deposit in the
Transaction Costs Fund held by the Borrower.
Notwithstanding the foregoing and any other provision contained herein, the Lender shall
not be obligated to disburse any amounts other than the amounts described in subparagraph (b)
above until such time as the Lender has received confirmation that the Refunded Bonds have been
paid in full and cancelled.
Section 2.03. Interest Rate; Default Rate; Interest Payments; Principal Payments.
(a) Interest Rate. Commencing on the Closing Date through and including the
Maturity Date, the Loan Balance shall bear interest at a fixed rate equal to 2.11 % per annum
(the "Fixed Interest Rate"). Interest on the Loan shall be calculated on the basis of a 360 -
day year of twelve 30 -day months.
(b) Interest Payments. Interest payments on the Loan shall be due and payable
semi-annually on each Interest Payment Date, commencing June 1, 2020.
(c) Principal Payments. Principal payments on the Loan shall be due and
payable on each Principal Payment Date, commencing December 1, 2020, in the amounts
set forth below:
7
Payment Principal
Date Amount Due
12/1/2020
$460,000
12/1/2021
424,000
12/1/2022
433,000
12/1/2023
442,000
12/1/2024
451,000
12/1/2025
461,000
12/1/2026
470,000
12/1/2027
480,000
12/1/2028*
490,000
*Maturity Date.
(d) All principal, interest and other payments to be made hereunder by or on
behalf of the Borrower to the Lender shall be made, and shall not be considered made until
received, in lawful money of the United States of America in immediately available funds.
Section 2.04. Loan Prepayment. The Loan is subject to prepayment prior to maturity, at
the option of the Borrower, as a whole or in integral multiples of $1,000, in any order of maturity
and in whole or partial maturities, on December 2, 2022, and on any date thereafter, upon payment
of the redemption prices set forth in the table below, at a price equal to the principal so redeemed
plus accrued interest to the redemption date.
December 2, 2022 through December 1, 2024: 101%
December 2, 2024 and thereafter: 100%
Section 2.05. Expenses and Attorneys' Fees. In the event that a claim by the Lender is
brought against the Borrower and the Lender prevails in such claim, the Borrower will reimburse
the Lender for all reasonable attorneys' and all other consultants' fees and all other costs, fees and
out-of-pocket disbursements incurred by the Lender in connection with the preparation, execution,
delivery, administration, defense and enforcement of this Agreement or any of the other Financing
Documents, including reasonable attorneys' and all other consultants' fees and all other costs and
fees (a) incurred before or after commencement of litigation or at trial, on appeal or in any other
proceeding; (b) incurred in any bankruptcy proceeding and (c) related to any waivers or
amendments with respect thereto (examples of costs and fees include but are not limited to fees
and costs for enforcing the collection of ad valorem property taxes in the amounts required
pursuant to Section 5.11 hereof or confirming the priority of the Lender's claim on the Pledged
Revenue or the funds and accounts established hereunder). The Borrower will also reimburse the
Lender for all costs of collection of the Pledged Revenue, including all reasonable attorneys' and
all other consultants' fees, before and after judgment.
Section 2.06. Lien on Pledged Revenues; Special Obligations. The Pledged Revenues
are hereby irrevocably pledged to the punctual payment of the debt service requirements of the
Note. The Note shall be payable from and shall constitute an irrevocable first lien (but not
necessarily an exclusive first lien), on the Pledged Revenues. Except as hereinafter provided, the
Note, the Parity Obligations and any Additional Obligations are equitably and ratably secured by
a pledge of and lien on the Pledged Revenues and shall not be entitled to any priority one over the
other in the application of the Pledged Revenues regardless of the time or times of the issuance of
the Note, the Parity Obligations and any such Additional Obligations, it being the intention of the
Board that there shall be no priority among the Note, the Parity Obligations, and any Additional
Obligations.
ARTICLE III
CONDITIONS TO CLOSING
Section 3.01. Conditions to Loan Closing. The funding by the Lender of the Loan
pursuant to Section 2.02 hereof is conditioned upon the satisfaction of each of the following:
(a) The Financing Documents. The Financing Documents shall have been
duly executed and delivered by each of the respective parties thereto and shall not have
been modified, amended or rescinded, shall be in full force and effect on and as of the
Closing Date and executed original or certified copies of each thereof have been delivered
to the Lender; provided, however, that with respect to the Note, the Lender shall be in
receipt of the executed original.
(b) Borrower Proceedings. The Lender shall have received a certified copy of
all resolutions and proceedings taken by the Borrower authorizing the execution, delivery
and performance of this Agreement, the Note, and the other Financing Documents to which
the Borrower is a party, and the transactions contemplated hereunder and thereunder,
together with such other certifications as to the specimen signatures of the officers of the
Borrower authorized to sign this Agreement, the Note, and the other Financing Documents
to be delivered by the Borrower hereunder and as to other matters of fact as shall reasonably
be requested by the Lender.
(c) Governmental Approvals. The Lender shall have received certified copies
of all governmental approvals, if any, necessary for the Borrower to execute, deliver and
perform its obligations under this Agreement and the other Financing Documents to which
the Borrower is a party.
(d) Representations and Warranties True; No Default. The Lender shall be
satisfied that on the Closing Date each representation and warranty on the part of the
Borrower contained in this Agreement and any other Financing Document to which the
Borrower is a party are true and correct in all material respects and no Default or Event of
Default has occurred and is continuing, and the Lender shall be entitled to receive
certificates, signed by authorized officers of the Borrower, to such effect.
(e) Borrower's Certificate. The Lender shall have received a certificate signed
by an authorized officer of the Borrower, dated the Closing Date, to the same effect as
provided in the foregoing Subsections 3.01(a), (b), (c) and (d). Such certificate shall cover
such other matters incidental to the transactions contemplated by this Agreement or any
other Financing Document as the Lender may reasonably request.
9
(f) Special Counsel's Legal Opinions. The Lender shall have received a letter
from Special Counsel to the effect that the Lender may rely upon an opinion of Special
Counsel addressed to the Borrower as if such opinion were addressed to the Lender; such
opinion being dated the Closing Date and stating that the obligations of the Borrower under
this Agreement constitute a special revenue obligation of the Borrower, that such obligation
is binding and enforceable against the Borrower in accordance with the terms of this
Agreement; and which opinion shall address the tax exemption of the interest on the Loan
for state and federal purposes including, without limitation, an opinion to the effect that the
Loan constitutes a qualified tax-exempt obligation under Section 265(b)(3)(B) of the Code.
The opinion addressed to the Borrower and the reliance letter addressed to the Lender shall
be in form and substance satisfactory to the Lender and its counsel.
(g) Opinion of Counsel to the Borrower. The Lender shall have received an
opinion of counsel to the Borrower dated the Closing Date and addressed to the Lender,
with respect to such matters as the Lender may require, in form and substance satisfactory
to the Lender and its counsel, including opinions as to the validity of the Borrower's
organization and existence; to the effect that all other governmental approvals, if any,
necessary for the Borrower to execute, deliver and perform its obligations under this
Agreement and the other Financing Documents to which the Borrower is a parry have been
duly obtained; that the Authorizing Resolution has been duly and properly adopted; and
that this Agreement and the other Financing Documents to which the Borrower is a party
have been duly authorized and delivered by the Borrower.
(h) Opinion of Counsel to Town. The Lender shall have received an opinion
from counsel to the Town, dated the Closing Date and addressed to the Lender, with respect
to such matters as the Lender may require, including, without limitation, opinions to the
effect that the Moral Obligation Resolution and the Urban Renewal Plan have been duly
and properly adopted by the Town Council of the Town, have not been rescinded, revoked,
or amended since such adoption and each remain in full force and effect; that the
Cooperation Agreement has been duly authorized and delivered by the Town and
constitutes a valid and binding obligation of the Town enforceable in accordance with its
terms; and otherwise in form and substance satisfactory to the Lender and its counsel.
(i) Other Certificates and Opinions. The Lender shall have received
certificates of authorized representatives of all parties to the Financing Documents with
respect to such matters as the Lender may require, or opinions of counsel as the Lender
may require, all in form and substance satisfactory to the Lender and its counsel.
0) No Change in Law. No law, regulation, ruling or other action of the United
States, the State of Colorado or any political subdivision or authority therein or thereof
shall be in effect or shall have occurred, the effect of which would be to prevent the
Borrower from fulfilling its obligations under this Agreement.
(k) Fees and Expenses. All Lender's counsel fees and any other fees and
expenses due and payable in connection with the issuance of the Loan, the execution and
delivery of this Agreement and the other Financing Documents, and any other amounts due
and payable hereunder shall have been paid by the Borrower.
X17
(1) Borrower Financial Information. The Borrower shall have provided the
Lender with all pertinent financial information regarding the Borrower.
(m) Borrower Due Diligence. The Lender and its counsel shall have been
provided with the opportunity to review all agreements, documents, and other material
information relating to the Borrower, the Pledged Revenue, the Refunded Bonds, and the
Borrower's ability to perform its obligations under this Agreement and the other Financing
Documents to which the Borrower is a party.
(n) Approval of Financing Documents. The Lender and its counsel shall have
had sufficient time to review the Financing Documents and the substantially final versions
of such documents shall be in form and content satisfactory to the Lender and its counsel.
(o) Other Requirements. The Lender shall be in receipt of such other
certificates, approvals, filings, opinions and documents as shall be reasonably requested by
the Lender.
(p) Other Legal Matters. All other legal matters pertaining to the execution
and delivery of this Agreement, the Note, and the other Financing Documents, and the
issuance of the Loan shall be reasonably satisfactory to the Lender and its counsel.
ARTICLE IV
FUNDS AND ACCOUNTS
Section 4.01. Creation of Funds and Accounts. The following funds are hereby created
and established, each of which shall be administered by the Lender in accordance with the
provisions hereof:
(a) Revenue Fund;
(b) the Loan Payment Fund; and
(c) the Transaction Costs Fund.
11
Section 4.02. Revenue Fund. Pursuant to the 2017 Bond Resolution, there was continued
a special fund of the Borrower known as the "Avon Urban Renewal Authority Revenue Fund."
So long as the Note or any 2017 Bonds shall be outstanding, either as to principal or interest, all
Pledged Property Tax Revenues shall be immediately credited to the Revenue Fund and all moneys
on deposit in the Revenue Fund shall be applied as described below.
Section 4.03. Loan Payment Fund. First, from moneys on deposit in the Revenue Fund
and concurrently on a pari passu basis with any payments required to be made to the bond account
created by the 2017 Bond Resolution and any bond accounts created in connection with any
Additional Obligations, there shall be credited to a special account held by the Borrower, which is
hereby created and designated as the "Avon Urban Renewal Authority, Tax Increment Revenue
Loan, Series 2020 Loan Payment Fund" (the "Loan Payment Fund"), the following amounts:
(i) Interest Payments. No later than the fifteenth day of each month,
commencing in the first month following the date of delivery of the Note, an amount in equal
monthly installments necessary, together with any other moneys from time to time available
therefor from whatever source, to pay the next installment of interest on the Note coming due at
the next interest payment date, and no later than the fifteenth day of each month thereafter,
commencing in the month in which an interest payment date occurs, one-sixth of the amount
necessary, together with any other moneys from time to time available therefor and on deposit
therein from whatever source, to pay the next installment of interest on the Note then outstanding.
(ii) Principal Payments. No later than the fifteenth day of each month,
commencing in the first month following the date of delivery of the Note, an amount in equal
monthly installments necessary, together with any other moneys from time to time available
therefor from whatever source, to pay the next installment of principal of the Note coming due on
the next principal payment date, and no later than the fifteenth day of each month thereafter,
commencing in the month in which a principal payment date occurs, one-sixth of the amount
necessary, together with any other moneys from time to time available therefor and on deposit
therein from whatever source, to pay the next installment of principal of the Note coming due on
the next principal payment date.
If prior to any interest payment date or principal payment date there has been accumulated
in the Loan Payment Fund the entire amount necessary to pay the next maturing installment of
interest or principal, or both, the payment required in subsection (1) or (2) (whichever is
applicable) of this subsection, may be appropriately reduced; but the required monthly amounts
shall again be so credited to such account commencing on such interest payment date or principal
payment date.
A similar bond account shall be created for any series of Additional Obligations and
payments into such account shall be made contemporaneously with and have the same priority as
payments into the Loan Payment Fund created hereunder.
The moneys in the Loan Payment Fund shall be used only to pay the principal of, prior
redemption premium if any, and interest on the Note as the same becomes due, and shall not be
applied to the payment of Parity Bonds or Additional Bonds.
12
(iii) Town Payments. If, in any month, there are insufficient moneys on
deposit in the Revenue Fund to make the payments into the Loan Payment Fund in the amounts
set forth above, or if the Executive Director anticipates that there will be a deficiency in moneys
on deposit in the Revenue Fund to make any such deposit in any given month, then the Executive
Director shall immediately notify the Town Manager of any such insufficiency. Pursuant to the
Moral Obligation Resolution, upon the receipt of any such notice, the Town Manager shall notify
the Town Council of any such insufficiency in the Revenue Fund and request an appropriation or
supplemental appropriation in an amount sufficient to make up any such insufficiency. Pursuant
to the Moral Obligation Resolution, the Town Council has agreed to consider, but is not obligated
to, deposit to the Loan Payment Fund an amount sufficient to cover any such insufficiency. Until
the Town credits an amount to the Loan Payment Fund in an amount sufficient to fully fund the
Loan Payment Fund as set forth above, the Borrower shall continue to transfer moneys on deposit
in the Revenue Fund to the Loan Payment Fund to the extent available, including any amounts
necessary to make up any insufficiencies in preceding months. While the Town Council has agreed
to consider funding the Loan Payment Fund in the event that there are insufficient moneys on
deposit in the Revenue Fund to make the required deposits thereto, the Town Council's decision
not to fund any such insufficiency shall not constitute an Event of Default hereunder.
(iv) Investment Earnings. All interest income from moneys credited to
the Loan Payment Fund shall remain therein.
Section 4.04. Transaction Costs Fund. The Transaction Costs Fund shall be maintained
by the Borrower. All moneys on deposit in the Transaction Costs Fund shall be applied by the
Borrower to the payment of the costs incurred in connection with the transactions contemplated
by the Financing Documents in accordance with invoices provided to the Borrower and as detailed
in a closing memorandum prepared by Piper Sandler & Co. Any amounts remaining in the
Transaction Costs Fund 60 days after the Closing Date (including investment earnings thereon)
shall be transferred by the Lender to the Loan Payment Fund. At such time as no amounts remain
in the Transaction Costs Fund, such fund shall terminate.
13
ARTICLE V
REPRESENTATIONS, WARRANTIES AND COVENANTS OF BORROWER
While any part of the Loan is outstanding or any other obligations hereunder or under any
of the other Financing Documents are unpaid or outstanding, the Borrower continuously warrants,
covenants and agrees as follows:
Section 5.01. Accuracy of Information. All information, certificates or statements given
to the Lender by the Borrower pursuant to this Agreement and the other Financing Documents will
be true and complete when given.
Section 5.02. Organization; Litigation. The Borrower is validly existing and in good
standing under the laws of its state of organization, has all requisite power and authority and
possesses all licenses, permits and approvals necessary to conduct its business. There is no
litigation or administrative proceeding threatened or pending against the Borrower which could, if
adversely determined, have a material adverse effect on the Borrower's financial condition.
Section 5.03. Performance of Covenants, Authority. The Borrower covenants that it
will faithfully perform and observe at all times any and all covenants, undertakings, stipulations,
and provisions contained in the Authorizing Resolution, this Agreement, the Note, and all
proceedings pertaining thereto. The Borrower covenants that it is duly authorized under the
constitution and laws of the State of Colorado, including, particularly and without limitation, the
Act, to execute and deliver the Note, this Agreement, and the other Financing Documents to which
it is a party, and that all action on its part for the execution and delivery of the Note, this Agreement,
and the other Financing Documents to which it is a party have been duly and effectively taken and
will be duly taken as provided therein and herein, and that the Loan, the Note, this Agreement, and
the other Financing Documents to which the Borrower is a party are and will be valid and
enforceable obligations of the Borrower according to the terms thereof and hereof.
Section 5.04. Use of Proceeds. Disbursements by the Lender to the Borrower hereunder
will be used exclusively by the Borrower for the purposes represented to the Lender and in
accordance with the provisions of Section 2.02 hereof.
Section 5.05. Tax Covenants. The Borrower covenants for the benefit of the Lender that
it will not take any action or omit to take any action with respect to the Loan, the proceeds thereof,
or any other funds of the Borrower or any facilities financed or refinanced with the proceeds of
the Loan if such action or omission (a) would cause the interest on the Loan to lose its exclusion
from gross income for federal income tax purposes under Section 103 of the Tax Code or (b) would
cause interest on the Loan to lose its exclusion from Colorado taxable income under present
Colorado law. The foregoing covenants shall remain in full force and effect notwithstanding the
payment in full or defeasance of the Loan until the date on which all obligations of the Borrower
in fulfilling the above covenants under the Tax Code and Colorado law have been met. For the
purpose of Section 265(b)(3)(B) of the Code, the Borrower hereby designates the Loan as a
qualified tax-exempt obligation.
14
Section 5.06. Other Liabilities. The Borrower will pay and discharge, when due, all of
its liabilities, except when the payment thereof is being contested in good faith by appropriate
procedures which will avoid financial liability and with adequate reserves provided therefor.
Section 5.07. Financial Statements. The financial statements and other information
previously provided to the Lender by the Borrower or provided to the Lender by the Borrower in
the future are or will be complete and accurate and prepared in accordance with generally accepted
accounting principles generally applicable to urban renewal authorities. There has been no
material adverse change in the Borrower' financial condition since such information was provided
by the Borrower to the Lender. The Borrower will (a) maintain accounting records in accordance
with generally recognized and accepted principles of accounting generally applicable to urban
renewal authorities consistently applied throughout the accounting periods involved; (b) provide
the Lender with such information concerning the business affairs and financial condition of the
Borrower as the Lender may reasonably request, provided that such information relates to the
Pledged Revenue or the Urban Renewal Project Area; and (c) without request, provide the Lender
with the information set forth in Section 5.08 below. The Borrower shall notify the Lender
promptly of all litigation or administrative proceedings, threatened or pending, against the
Borrower which would, if adversely determined, in Borrower's reasonable opinion, have a material
adverse effect on the Borrower's financial condition arising after the date hereof.
Section 5.08. Reporting Requirements. The Borrower will provide the following to the
Lender at the times and in the manner provided below:
(a) as soon as available, but not later than 210 days following each Fiscal Year,
a copy of the Town's comprehensive annual financial report which shall include audited
financial statements of the Town and of the Borrower as a component unit of the Town;
(b) as soon as available, but in no event later than December 31 of each year,
the annual budget of the Borrower for the immediately succeeding Fiscal Year and, as soon
as available, a copy of any proposed amendments thereto; and
(c) promptly upon receipt thereof, a certification of values issued by the County
Assessor containing the certified preliminary assessed valuation of the Urban Renewal
Project Area and the Property Tax Base Amount for that year;
(d) promptly upon receipt thereof, a certification of values issued by the County
Assessor containing the Final Assessed Valuation of the Urban Renewal Project Area and
the Property Tax Base Amount for that year;
(e) as soon as available, a copy of any report to the Town of any auditor of the
Town if and to the extent that such report relates to the Borrower as a component unit of
the Town and following approval thereof by the Borrower and the Town;
(f) promptly at the time or times at which such event occurs, written notice of
any events likely to have a material adverse effect on the Borrower or the Loan; and
(g) promptly upon request of the Lender, the Borrower shall furnish to the
Lender such other reports or information regarding the Pledged Revenue or the assets,
15
financial condition, business or operations of the Borrower (to the extent related to the
Urban Renewal Project Area) as the Lender may reasonably request, to the extent legally
permissible for the Borrower to provide.
Section 5.09. Inspection of Books and Records. The Lender shall have the right to
examine any of the books and records of the Borrower at any reasonable time and as often as the
Lender may reasonably desire provided, however, that (a) the Lender shall provide not less than 3
days prior notice to the Borrower of its intent to make such examination and (b) the Lender shall
apply the standard of reasonableness to any request made of the Borrower with respect to such
examination. Without limiting the generality of the foregoing, the Lender agrees that it shall use
commercially reasonable efforts to maintain as confidential any non-public or proprietary
information obtained by the Lender in exercising its rights under this Section 5.09.
Section 5.10. Instruments of Further Assurance. The Borrower covenants that it will
do, execute, acknowledge, and deliver or cause to be done, executed, acknowledged, and delivered,
such agreements supplemental hereto and such further acts, instruments, and transfers as the
Lender may reasonably require for the better assuring, transferring, and pledging unto the Lender
the Pledged Revenue; provided, however, that the Borrower shall not be obligated to incur in
excess of nominal expenses in complying with this covenant.
Section 5.11. Additional Obligation Restrictions.
(a) No Senior Obligations. The Borrower shall not incur any additional
obligations payable from or constituting a lien upon the Pledged Revenue senior to the lien
thereon of the Loan.
(b) No Additional Obligations Without Lender Consent. The Borrower shall
not, without the prior written consent of the Lender, incur Additional Obligations payable
from or constituting a lien upon the Pledged Revenue on parity to the lien thereon of the
Loan.
(c) Certain Tax Sharing Agreements Not Debt. The Avon Station/Confluence
IGA and any agreements entered into by the Borrower for the purpose of effecting the
provisions of clause (b) of the definition of "Pledged Property Tax Revenues" set forth in
Article I hereof shall not constitute debt for purposes of Section 5.11(d) below or otherwise
under this Agreement.
(d) Permitted Subordinate Obligations. The Borrower may incur additional
obligations secured by a lien on the Net Pledged Revenue fully subordinate to the lien
thereon of the Loan ("Permitted Subordinate Debt"), provided that:
(i) such obligations shall be limited to the Borrower's obligations under
the Cooperation Agreement and/or tax increment sharing agreements entered into
by the Borrower for the purpose of financing the development or redevelopment of
projects within the Urban Renewal Project Area;
�,
(ii) all agreements and other instruments pursuant to which Permitted
Subordinate Debt is incurred shall contain language to the effect that such
obligation is fully subordinate to the Loan;
(iii) payments on such obligations shall be made not more than once
annually and only on a date in each year after the date on which all payments due
in that year on the Loan have been made or the amount necessary to make such
payments has been accumulated and is on deposit in the Loan Payment Fund;
(iv) such obligations shall not be subject to acceleration;
(v) at the time of issuing or incurring such obligations, no Event of
Default shall have occurred and be continuing under this Agreement; and
(vi) prior to the issuance or incurrence of the Permitted Subordinate Debt
then proposed, the Borrower shall provide Lender with notice of the proposed
issuance thereof, which notice shall include a statement to the effect that such
obligations will be incurred in accordance with the provisions of this Section
5.11(d).
Section 5.12. Continued Existence. The Borrower will maintain its existence and shall
not merge or otherwise alter its corporate structure in any manner or to any extent as might reduce
the security provided for the payment of the Loan.
Section 5.13. Restructuring. In the event the Pledged Revenue is insufficient or is
anticipated to be insufficient to pay the principal of, prepayment penalty, if any, and interest on
the Loan when due, the Borrower shall use its best efforts to refinance, refund, or otherwise
restructure the Loan so as to avoid such a default.
Section 5.14. Operation and Management. The Borrower will continue to operate in
accordance with all applicable laws, rules, regulations, and intergovernmental agreements, and
keep and maintain separate accounts of the receipts and expenses thereof in such manner that the
Pledged Revenue may at all times be readily and accurately determined.
Section 5.15. Annual Audit and Budget. At least once a year in the time and manner
provided by law, the Borrower will cause audits to be performed of the records relating to the
Borrower's revenues and expenditures. In addition, at least once a year in the time and manner
provided by law, the Borrower will cause budgets to be prepared and adopted. The audits and
budgets of the Borrower may be presented as a component unit of the Town. Copies of the budgets
and the audits will be filed and recorded in the places, time, and manner provided by law.
Section 5.16. No Exclusion of Property. The Borrower shall take no action that could
have the effect of excluding property from the Urban Renewal Project Area unless consented to in
writing by the Lender.
Section 5.17. Amendments to Financing Documents Require Prior Lender Consent.
The Borrower shall not amend or consent to any amendment to any Financing Document, or waive
any provision thereof, without the prior written consent of the Lender.
17
Section 5.18. Enforcement of Cooperation Agreement. The Borrower shall do all
things reasonably necessary and appropriate to enforce the Cooperation Agreement against the
Town.
Section 5.19. Proper Allocation of New Construction. The Borrower shall cooperate
with the Lender in making a good faith effort to determine that the County Assessor has correctly
allocated new construction to the reassessment of property within the Urban Renewal Project Area.
ARTICLE VI
REPRESENTATIONS OF THE LENDER
Section 6.01. Accredited Investor. The Lender is an organization that qualifies as an
"accredited investor," as defined in § 11-59-110(1)(g) C.R.S.
Section 6.02. Financial Institution or Institutional Investor. The Lender is an
organization that qualifies as a "financial institution or institutional investor" as defined in §32-1-
103(6.5), C.R.S.
ARTICLE VII
DEPOSITS; INVESTMENTS
Section 7.01. Investment of Funds. Notwithstanding any provision contained herein, the
Borrower shall invest moneys on deposit in the Loan Payment Fund in Permitted Investments.
Section 7.02. Compliance with Tax Covenants. Any and all interest income on moneys
held and administered by the Lender under this Agreement shall be subject to full and complete
compliance at all times with the covenants and provisions of Section 5.05 hereof.
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
Section 8.01. Events of Default. The occurrence of any one or more of the following
events or the existence of any one or more of the following conditions shall constitute an Event of
Default under this Agreement (whatever the reason for such event or condition and whether it shall
be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree,
rule, regulation, or order of any court or any administrative or governmental body), and there shall
be no default or Event of Default hereunder except as provided in this Section 8.01.
(a) The Borrower fails to pay the interest on the Loan when due pursuant to this
Agreement;
(b) The Borrower fails to pay the principal on the Loan when due pursuant to
this Agreement;
IE:3
(c) The Borrower defaults in the performance or observance of any other of the
covenants, agreements, or conditions on the part of the Borrower in this Agreement or the
Note and fails to remedy the same to the satisfaction of the Lender within 45 days after the
occurrence thereof;
(d) The Borrower fails to replenish the Loan Payment Fund as required in
Section 4.03 hereof,
(e) the Borrower shall commence any case, proceeding or other action (A)
under any existing or future law of any jurisdiction relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief entered with respect
to it or seeking to adjudicate it insolvent or a bankrupt or seeking reorganization,
arrangement, adjustment, winding up, liquidation, dissolution, composition or other relief
with respect to it or its debts, or (B) seeking appointment of a receiver, trustee, custodian
or other similar official for itself or for any substantial part of its property, or the Borrower
shall make a general assignment for the benefit of its creditors;
Section 8.02. Remedies on Occurrence of Event of Default.
(a) Lender's Rights and Remedies. Upon the occurrence and continuance of
an Event of Default, the Lender shall have the following rights and remedies which may
be pursued:
(i) Receivership. Upon the filing of a bill in equity or other
commencement of judicial proceedings to enforce the rights of the Lender
hereunder, the Lender shall be entitled as a matter of right to the appointment of a
receiver or receivers of the Pledged Revenue, and of the revenues, income, product,
and profits thereof pending such proceedings, subject however, to constitutional
limitations inherent in the sovereignty of the Borrower.
(ii) Suit for Judgment. The Lender may proceed to protect and enforce
its rights under this Loan Agreement and any provision of law by such suit, action,
or special proceedings as the Lender shall deem appropriate.
(iii) Mandamus or Other Suit. The Lender may proceed by mandamus
or any other suit, action, or proceeding at law or in equity, to enforce its rights
hereunder.
(b) Judgment. No recovery of any judgment by the Lender shall in any manner
or to any extent affect the lien of this Loan Agreement on the Pledged Revenue or any
rights, powers, or remedies of the Lender hereunder, but such lien, rights, powers, and
remedies of the Lender shall continue unimpaired as before.
(c) No Acceleration. Notwithstanding anything herein to the contrary,
acceleration of the Loan shall not be an available remedy for an Event of Default.
19
Section 8.03. Notice to Lender of Default. Notwithstanding any cure period described
above, the Borrower will immediately notify the Lender in writing when it obtains knowledge of
the occurrence of any Default or Event of Default.
Section 8.04. Delay or Omission No Waiver. No delay or omission of the Lender to
exercise any right or power accruing upon any default shall exhaust or impair any such right or
power or shall be construed to be a waiver of any such default, or acquiescence therein; and every
power and remedy given by this Agreement may be exercised from time to time and as often as
may be deemed expedient.
Section 8.05. No Waiver of One Default to Affect Another; All Remedies Cumulative.
No waiver of any Event of Default hereunder shall extend to or affect any subsequent or any other
then existing Event of Default or shall impair any rights or remedies consequent thereon. All rights
and remedies of the Lender provided herein shall be cumulative and the exercise of any such right
or remedy shall not affect or impair the exercise of any other right or remedy.
Section 8.06. Other Remedies. Nothing in this Article VIII is intended to restrict the
Lender's rights under any of the Financing Documents or at law, and the Lender may exercise all
such rights and remedies as and when they are available.
ARTICLE IX
MISCELLANEOUS
Section 9.01. Loan Agreement and Relationship to Other Documents. The warranties,
covenants and other obligations of the Borrower (and the rights and remedies of the Lender) that
are outlined in this Agreement and the other Financing Documents are intended to supplement
each other. In the event of any inconsistencies in any of the terms in the Financing Documents,
all terms will be cumulative so as to give the Lender the most favorable rights set forth in the
conflicting documents, except that if there is a direct conflict between any preprinted terms and
specifically negotiated terms (whether included in an addendum or otherwise), the specifically
negotiated terms will control.
Section 9.02. Successors; Assignment. The rights, options, powers and remedies granted
in this Agreement and the other Financing Documents will extend to the Lender and to its
successors and permitted Lender assignees, will be binding upon the Borrower and its successors
and will be applicable hereto and to all renewals and/or extensions hereof. This Loan Agreement
shall be assignable by the Lender to any entity without the consent of the Borrower.
Section 9.03. Notice of Claims against Lender; Limitation of Certain Damages. In
order to allow the Lender to mitigate any damages to the Borrower from the Lender's alleged
breach of its duties under the Financing Documents or any other duty, if any, to the Borrower, the
Borrower agrees to give the Lender written notice no later than 20 days after the Borrower knows
of any claim or defense it has against the Lender, whether in tort or contract, relating to any action
or inaction by the Lender under the Financing Documents, or the transactions related thereto, or
of any defense to payment of the Borrower's obligations for any reason. The requirement of
providing timely notice to the Lender represents the parties' agreed -to standard of performance
20
regarding the duty of the Lender to mitigate damages related to claims against the Lender.
Notwithstanding any claim that the Borrower may have against the Lender, and regardless of any
notice the Borrower may have given the Lender, the Lender will not be liable to the Borrower for
consequential and/or special damages arising therefrom, except those damages arising from the
Lender's willful misconduct, gross negligence or bad faith. Failure by the Borrower to give notice
to the Lender shall not waive any claims of the Borrower but such failure shall relieve the Lender
of any duty to mitigate damages prior to receiving notice.
Section 9.04. Notices. Notice of any record shall be deemed delivered when the record
has been (a) deposited in the United States Mail, postage pre -paid; (b) received by overnight
delivery service; (c) received by telex; (d) received by telecopy; (e) received by electronic mail
through the internet; or (f) when personally delivered at the following addresses:
If to the Borrower: Avon Urban Renewal Authority
c/o Town Manager, Town of Avon
100 Mikaela Way
P.O. Box 975
Avon, Colorado 81620
Telephone: (970) 748-4000
e-mail: eheil o,avon.org
If to the Lender: Sterling National Bank
500 Seventh Avenue, 3rd Floor
New York, New York 10018
Attention: Public Sector Finance
Section 9.05. Payments. Payments due on the Loan shall be made by wire or other means
of electronic transfer of funds in lawful money of the United States. All payments may be applied
by the Lender to principal, interest and other amounts due under the Note and this Agreement in
any order which the Lender elects, subject to the provisions of this Agreement.
Section 9.06. Applicable Law and Jurisdiction; Interpretation; Severability. This
Agreement will be governed by and interpreted in accordance with the internal laws of the State
of Colorado, except to the extent superseded by Federal law. Invalidity of any provisions of this
Agreement will not affect any other provision. THE BORROWER AND THE LENDER
HEREBY CONSENT TO THE EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL
COURT SITUATED IN DENVER, COLORADO, AND WAIVE ANY OBJECTIONS BASED
ON FOR UMNON CONVENIENS, WITH REGARD TO ANY ACTIONS, CLAIMS, DISPUTES
OR PROCEEDINGS RELATING TO THIS AGREEMENT, THE NOTE, OR THE PLEDGED
REVENUE OR ANY TRANSACTIONS ARISING THEREFROM, OR ENFORCEMENT
AND/OR INTERPRETATION OF ANY OF THE FOREGOING. Nothing in this Agreement will
affect the Lender's rights to serve process in any manner permitted by law. This Agreement, the
other Financing Documents and any amendments hereto (regardless of when executed) will be
deemed effective and accepted only at the Lender's offices, and only upon the Lender's receipt of
the executed originals thereof. Invalidity of any provision of this Agreement shall not affect the
validity of any other provision.
21
Section 9.07. Copies; Entire Agreement; Modification. The Borrower hereby
acknowledges the receipt of a copy of this Agreement and all other Financing Documents.
IMPORTANT: READ BEFORE SIGNING. THE TERMS OF THIS AGREEMENT
SHOULD BE READ CAREFULLY BECAUSE ONLY THOSE TERMS IN WRITING,
EXPRESSING CONSIDERATION AND SIGNED BY THE PARTIES ARE
ENFORCEABLE. NO OTHER TERMS OR PROMISES NOT CONTAINED IN THIS
WRITTEN CONTRACT MAY BE LEGALLY ENFORCED. THE TERMS OF THIS
AGREEMENT MAY ONLY BE CHANGED BY ANOTHER WRITTEN
AGREEMENT. THIS NOTICE SHALL ALSO BE EFFECTIVE WITH RESPECT TO
ALL OTHER CREDIT AGREEMENTS NOW IN EFFECT BETWEEN THE
BORROWER AND THE LENDER. A MODIFICATION OF ANY OTHER CREDIT
AGREEMENT NOW IN EFFECT BETWEEN THE BORROWER AND THE LENDER,
WHICH OCCURS AFTER RECEIPT BY THE BORROWER OF THIS NOTICE, MAY
BE MADE ONLY BY ANOTHER WRITTEN INSTRUMENT. ORAL OR IMPLIED
MODIFICATIONS TO ANY SUCH CREDIT AGREEMENT ARE NOT
ENFORCEABLE AND SHOULD NOT BE RELIED UPON.
Section 9.08. Attachments. All documents attached hereto, including any appendices,
schedules, riders, and exhibits to this Agreement, are hereby expressly incorporated by reference.
Section 9.09. No Recourse Against Officers and Agents. Pursuant to Section 11-57-
209 of the Supplemental Public Securities Act, if a member of the Board of the Borrower, or any
officer or agent of the Borrower, acts in good faith in the performance of his duties as a member,
officer, or agent of the Board or the Borrower and in no other capacity, no civil recourse shall be
available against such member, officer or agent for payment of the principal of and interest on the
Loan. Such recourse shall not be available either directly or indirectly through the Board of the
Borrower, or otherwise, whether by virtue of any constitution, statute, rule of law, enforcement of
penalty, or otherwise. By the acceptance of the delivery of the Note evidencing the Loan and as a
part of the consideration for such transfer, the Lender and any person purchasing or accepting the
transfer of the obligations representing the Loan specifically waives any such recourse.
Section 9.10. Conclusive Recital. Pursuant to Section 11-57-210 of the Supplemental
Public Securities Act, the Note and this Agreement are entered into pursuant to certain provisions
of the Supplemental Public Securities Act. Such recital shall be conclusive evidence of the validity
and the regularity of the issuance of the Note and this Agreement after delivery for value.
Section 9.11. Limitation of Actions. Pursuant to Section 11-57-212 of the Supplemental
Public Securities Act, no legal or equitable action brought with respect to any legislative acts or
proceedings in connection with the authorization or issuance of the Note or this Agreement shall
be commenced more than 30 days after the authorization of the Note and this Agreement.
Section 9.12. Pledge of Revenues. The creation, perfection, enforcement, and priority of
the pledge of revenues to secure or pay the Loan provided herein and therein shall be governed by
Section 11-57-208 of the Supplemental Public Securities Act, this Agreement, the Note, and the
Authorizing Resolution. The amounts pledged to the payment of the Loan shall immediately be
subject to the lien of such pledge without any physical delivery, filing, or further act. The lien of
22
such pledge shall have a first priority. The lien of such pledge shall be valid, binding, and
enforceable as against all persons having claims of any kind in tort, contract, or otherwise against
the Borrower irrespective of whether such persons have notice of such liens.
Section 9.13. Payment on Non -Business Days. Except as provided herein, whenever
any payment hereunder shall be stated to be due on a day which is not a Business Day, such
payment may be made on the next succeeding Business Day, and such extension of time shall in
such case be included in the computation of the amount due.
Section 9.14. No Registration; No Securities Depository; No CUSIP. The City and the
Lender hereby agree as follows: (i) the Notes are not being registered under the Securities Act of
1933; (ii) the Notes are not being registered or otherwise qualified for sale under the "Blue Sky"
laws and regulations of any state; (iii) the Lender will hold the Notes as two (2) separate debt
instruments; (iv) no CUSIP number will be obtained for the Notes; (v) no official statement or
other offering document has been or will be prepared in connection with the private placement of
the Loan with the Lender; (iv) the Loan will not close through the Depository Trust Company or
any other securities depository and the Notes will not be in book entry form; (v) the Loan are not
listed on any stock or other securities exchange; and (vi) the Loan shall not be assigned a rating by
any rating agency.
Section 9.15. Sovereign Immunity. Notwithstanding any other provisions of this
Agreement to the contrary, no term or condition of this Agreement or any other Financing
Document shall be construed or interpreted as a waiver, express or implied, of any of the
immunities, rights, benefits, protections or other provisions of the Colorado Governmental
Immunity Act, Title 24, Article 10, C.R.S., as now or hereafter amended.
Section 9.16. Termination. This Agreement shall terminate at such time as no amounts
are due and owing to the Lender hereunder or under any of the other Financing Documents.
[The remainder of this page intentionally left blank]
23
IN WITNESS WHEREOF, the undersigned have executed this Loan Agreement as of the
date set forth above.
(SEAL)
Attest:
Executive Director/Secretary
Board of Commissioners
LENDER
STERLING NATIONAL BANK
By BWLAA' C—
Authori ed
Officer
BORROWER
AVON URBAN RENEWAL AUTHORITY
By
Chairman, Board of Commissioners
[Signature Page to Loan Agreement]
EXHIBIT A
FORM OF NOTE
This Note may only be transferred to: (i) an affiliate of the Lender, (ii) a "Bank"
as defined in Section 3(a)(2) of the Securities Act of 1933 as amended (the "Securities Act');
(iii) an "Accredited Investor" as defined in Regulation D under the Securities Act; or (iv) a
"Qualified Institutional Buyer" as defined in Rule 144A under the Securities Act.
UNITED STATES OF AMERICA
STATE OF COLORADO
AVON URBAN RENEWAL AUTHORITY
PROMISSORY NOTE
IN THE AGGREGATE PRINCIPAL AMOUNT OF
$4,111,000
US $4,111,000 — 2.11 % Interest
May 1, 2020
FOR VALUE RECEIVED, AVON URBAN RENEWAL AUTHORITY, a public body
corporate and politic duly organized and existing as an urban renewal authority under the laws of
the State of Colorado (hereinafter referred to as "Maker"), promises to pay to the order of Sterling
National Bank, its successors and assigns (hereinafter referred to as "Payee"), at the office of Payee
or its agent, designee, or assignee, or such place as Payee or its agent, designee, or assignee may
from time to time designate in writing, the principal sum of FOUR MILLION ONE HUNDRED
ELEVEN THOUSAND AND 00/100 DOLLARS (US $4,111,000.00) pursuant to the terms of the
Loan Agreement dated of even date herewith (the "Loan Agreement") by and between Maker and
Payee, in lawful money of the United States of America. Unless and until otherwise designated in
writing by Payee to. Maker, all payments hereunder shall be made to Payee in accordance with the
Loan Agreement.
Amounts received by Payee under this Promissory Note (this "Note") shall be applied in
the manner provided by the Loan Agreement. This Note shall bear interest, be payable, mature
and be enforceable pursuant to the terms and provisions of the Loan Agreement. All capitalized
terms used and not otherwise defined herein shall have the respective meanings ascribed in the
Loan Agreement.
This Note is governed by and interpreted in accordance with the internal laws of the State
of Colorado, except to the extent superseded by Federal law. Invalidity of any provisions of this
Note will not affect any other provision.
For the purpose of Section 265(b)(3)(B) of the Code, the Borrower hereby designates the
Loan as a qualified tax-exempt obligation.
A-1
Pursuant to Section 11-57-210 of the Colorado Revised Statutes, as amended, this Note is
entered into pursuant to certain provisions of the Supplemental Public Securities Act, being Title
11, Article 57, of the Colorado Revised Statutes, as amended. , Such recital shall be conclusive
evidence of the validity and the regularity of the issuance of this Note after delivery for value.
THE PROVISIONS OF THIS NOTE MAY BE AMENDED OR REVISED ONLY
BY AN INSTRUMENT IN WRITING SIGNED BY MAKER AND PAYEE. THERE ARE
NO ORAL AGREEMENTS BETWEEN MAKER AND PAYEE WITH RESPECT TO THE
SUBJECT MATTER HEREOF.
IN WITNESS WHEREOF, an authorized representative of Avon Urban Renewal
Authority, as Maker, has executed this Promissory Note as of the day and year first above written.
(SEAL)
Attest:
Executive Director/Secretary
Board of Commissioners
AVON URBAN RENEWAL AUTHORITY
By
Chairman, Board of Commissioners
[Signature Page to Promissory Note]
A-2
EXHIBIT B
PRINCIPAL REPAYMENT SCHEDULE
I�
Principal
Year
Payment Due
12/01/2020
$460,000
12/01/2021
424,000
12/01/2022
433,000
12/01/2023
442,000
12/01/2024
451,000
12/01/2025
461,000
12/01/2026
470,000
12/01/2027
480,000
12/01/2028
490,000
I�
2020 COOPERATION AGREEMENT
BETWEEN THE TOWN OF AVON AND
THE AVON URBAN RENEWAL AUTHORITY
THIS 2020 COOPERATION AGREEMENT (this "Agreement"), dated as of
May 1, 2020, is made and entered into between the TOWN OF AVON, COLORADO (the
"Town") and the AVON URBAN RENEWAL AUTHORITY (the "Authority").
WHEREAS, the Town is a Colorado home rule municipality with all the powers
and authority granted pursuant to Article XX of the Colorado Constitution and its Town Charter;
and
WHEREAS, the Authority is a Colorado Urban Renewal Authority, with all the
powers and authority granted to it pursuant to Title 31, Article 25, Part 1, Colorado Revised
Statutes ("C.R.S.") (the "Urban Renewal Law"); and
WHEREAS, pursuant to Article XIV of the Colorado Constitution, and Title 29,
Article 1, Part 2, C.R.S., the Town and the Authority are authorized to cooperate and contract with
one another to provide any function, service or facility lawfully authorized to each governmental
entity; and
WHEREAS, the Town has heretofore approved the Avon Urban Renewal
Authority Town Center West Area Urban Renewal Plan, as amended (the "Plan") and the urban
renewal project described therein (the "Urban Renewal Project"); and
WHEREAS, the Urban Renewal Project has been undertaken for the public purpose
of enhancing employment opportunities, eliminating existing conditions of blight, and improving
the tax base of the Town; and
WHEREAS, pursuant to Section 31-25-112, C.R.S., the Town is specifically
authorized to do all things necessary to aid and cooperate with the Authority in connection with
the planning or undertaking of any urban renewal plans, projects, programs, works, operations or
activities of the Authority, to enter into agreements with the Authority respecting such actions to
be taken by the Town, and appropriating funds and making such expenditures of its funds to aid
and cooperate with the Authority in undertaking the Urban Renewal Project and carrying out the
Plan; and
WHEREAS, the Authority has previously issued its Tax Increment Revenue Bonds,
Series 2013 in the original aggregate principal amount of $6,825,000, and presently outstanding
in the aggregate principal amount of $4,560,000 (the "2013 Bonds"), for the purpose of financing
the acquisition, construction and equipping of the Urban Renewal Project and refinancing a loan
by and between the Authority and Vectra Bank dated May 28, 2009 (the "2009 Loan"); and
WHEREAS, in connection with the issuance of the 2013 Bonds, the Town and the
Authority executed and delivered a Cooperation Agreement (the "2013 Cooperation Agreement")
pursuant to which the Town agreed, subject to certain conditions, to loan funds to the Authority
for urban renewal purposes; and
WHEREAS, pursuant to Resolution No. 16-04, Series of 2016 of the Authority, the
("2017 Bond Resolution"), the Authority has previously issued its Tax Increment Revenue Bonds,
Series 2017, in the original aggregate principal amount of $3,000,000 (the "2017 Bonds") for the
purpose of financing the acquisition, construction and equipping of the project described in the
2017 Bond Resolution and the Plan; and
WHEREAS, in connection with the issuance of the 2017 Bonds, the Town and the
Authority executed and delivered a Cooperation Agreement (the "2017 Cooperation Agreement")
pursuant to which the Town agreed, subject to certain conditions, to loan funds to the Authority
for urban renewal purposes; and
WHEREAS, the Authority is entering into a Loan Agreement (the "Loan
Agreement") with Sterling National Bank (the "Lender") to obtain a loan in the principal amount
of $4,111,000 (the "Loan") in order to finance the costs of refunding the 2013 Bonds (the
"Refunding Project"); and
WHEREAS, the Town Council of the Town (the "Council") has adopted its
Resolution 20-07, Series 2020 (the "2020 Moral Obligation Resolution") declaring its nonbinding
intent and expectation that, in each year the Note is outstanding, it will lend additional moneys to
the Authority, within the limits of available funds and revenues, by making payments into the Loan
Payment Fund to the extent there are insufficient Pledged Revenues to make such deposits when
due; and
WHEREAS, the Town Council has determined that it is in the best interest of the
Town and the Authority has determined it is in the best interest of the Authority, that the 2017
Cooperation Agreement remain in full force and effect, and that this Agreement shall be an
additional cooperation agreement among the Town and the Authority, which agreement shall
supersede and replace in its entirety the 2013 Agreement.
NOW, THEREFORE, in consideration of the mutual promises set forth below, the
Town and the Authority agree as follows:
1. DEFINITIONS. Capitalized terms not otherwise defined herein shall have
the meanings ascribed to them in the Loan Agreement.
2. 2013 COOPERATION AGREEMENT/2017 COOPERATION
AGREEMENT. This Agreement hereby supersedes and replaces in its entirety the 2013
Cooperation Agreement. The 2017 Cooperation Agreement is hereby ratified, approved and
confirmed and shall remain in full force and effect. The terms of this Agreement shall be in
addition to all the terms and provisions of the 2017 Cooperation Agreement.
3. PLEDGED PROPERTY TAX REVENUES. (a) The Authority shall use
Pledged Property Tax Revenues for purposes described in the Loan Agreement and for any other
lawful purpose, as permitted by the Act.
(b) To the extent lawfully possible, the Town will take no action that
would have the effect of materially reducing Pledged Property Tax Revenues.
F)
4. LOAN. (a) If the Council appropriates funds pursuant to the 2020 Moral
Obligation Resolution, such funds shall be a loan from the Town to the Authority to be repaid as
provided herein.
(b) The Town may advance to the Authority amounts to be used by the
Authority for costs incurred for its staffing, consultants, design, engineering, construction, and
other expenses in connection with the Plan and the Refunding Project, including any amounts
advanced prior to the date hereof (the "Prior Advance"). Such amounts shall be subject to annual
appropriation by the Town Council, and the Town shall not be obligated to advance any money to
the Authority pursuant to the terms hereof. If amounts are appropriated by the Town Council, such
amounts may be paid directly to the Authority by the Town or, at the request of the Authority, paid
to third -parties by the Town on behalf of the Authority. Each amount advanced shall constitute a
loan to the Authority in an amount equal to such advance, to be repaid as provided herein.
(c) The Town hereby authorizes the Authority to utilize the services of
certain Town employees as determined by the Town to assist the Authority in work related to the
Plan and the Refunding Project. The Authority shall, upon request of the Town, reimburse the
Town for the applicable percentage of each such employees' wages or salary and benefits, as set
forth in writing by the Town. The use of such employees by the Authority and the proportionate
cost of their services shall be deemed an advance by the Town and the obligation to pay for such
services is hereby designated a loan from the Town to the Authority to be repaid as provided
herein. The Town may, in its discretion, choose not to seek reimbursement of such costs in order
to assist the Authority with the implementation of the Plan.
(d) The Town shall retain the right to establish the employees' wages or
salary and benefits, and the right to discharge, reassign, or hire employees to perform the services
required by the Authority. Except for the percentage of time devoted to the Authority activities
which shall be under the direction or control of the Executive Director of the Authority, the Town
retains the right to direct and control the employees. The Town, as the employer, has the
responsibility for payment of salary or wages to the employee, and for reporting, withholding, and
paying any applicable taxes with respect to the employees' wages or salary and payment of Town
sponsored employee benefit plans and payment of unemployment compensation insurance as may
be required. The Town also retains the right to provide for the welfare and benefit of employees
through such programs as professional training. The Authority shall not have any responsibility
for the payment or reporting of remuneration paid to the Town's employees, all of such
responsibilities being the obligation of the Town. The Town intends to retain the right to maintain
the employment relationship between the Town and its employees on a long term, and not a
temporary basis.
(e) In the event of any employment related issues with employees
assigned to work with the Authority, the Executive Director of the Authority shall report such
concerns or issues promptly to the Town Manager, who shall be responsible for addressing such
concerns.
(f) Any advances or loans made pursuant to this Agreement, including
the Prior Advances, shall be reimbursed to the Town to the extent there are Pledged Revenues
available for such purposes pursuant to the Loan Agreement. To the extent that such advances
3
and/or loans are not paid, the Town may, by resolution, forgive all or any portion of such advances
and/or loans at any time.
(g) Any other amounts advanced or loaned to the Authority by the Town
or payments made or debts incurred by the Town on behalf of the Authority relating to the Plan,
the Urban Renewal Project, the Loan or the Refunding Project may be designated a loan from the
Town to the Authority to be repaid as provided herein.
5. PAYMENT. (a) All amounts payable by the Authority to the Town
hereunder, including the Prior Advances, shall constitute "Permitted Subordinate Debt" for
purposes of the Loan Agreement. The Authority shall cause such amounts to be paid from and to
the extent of Pledged Revenue available for the payment of Permitted Subordinate Debt in
accordance with Section 5.11(d) of the Loan Agreement. All amounts payable by the Authority
to the Town hereunder shall be on a parity basis with all amounts payable by the Authority to the
Town under the 2017 Cooperation Agreement.
(b) Due to the benefits gained by the Town from the Urban Renewal
Project, no interest will be due on the amounts advanced or loaned to the Authority by the Town
unless the Town and the Authority agree in writing that interest shall be paid on any such loans or
advances.
6. FURTHER COOPERATION. (a) The Town shall continue to make
available such employees of the Town as may be necessary and appropriate to assist the Authority
in carrying out any authorized duty or activity of the Authority pursuant to the Urban Renewal
Law, the Plan, the Urban Renewal Project, the Loan or the Refunding Project, or any other lawfully
authorized duty or activity of the Authority.
(b) The Town agrees to assist the Authority by pursuing all lawful
procedures and remedies available to it to collect and transfer to the Authority on a timely basis
all Pledged Revenue for deposit with the Lender in accordance with the Loan Agreement. To the
extent lawfully possible, the Town will take no action that would have the effect of reducing tax
collections that constitute Pledged Revenue.
(c) The Town agrees to pay to the Authority any Pledged Property Tax
Revenues when, as and if received by the Town, but which are due and owing to the Authority
pursuant to the Urban Renewal Plan.
7. SUBORDINATION. The Authority's obligations pursuant to this
Agreement, including the Prior Advances, are subordinate to the Authority's obligations for the
repayment of any current or future bonded indebtedness. For purposes of this Agreement, the term
"bonded indebtedness," "bonds" and similar terms describing the possible forms of indebtedness
include all forms of indebtedness that may be incurred by the Authority, including, but not limited
to, general obligation bonds, revenue bonds, revenue anticipation notes, tax increment notes, tax
increment bonds, and all other forms of contractual indebtedness of whatsoever nature that is in
any way secured or collateralized by revenues of the Authority, and including the Loan.
11
8. GENERAL PROVISIONS. (a) Dispute Resolution. If a dispute arises
between the parties relating to this Agreement, the parties agree to submit the dispute to mediation
prior to filing litigation.
(b) Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Colorado and shall be subject to the
limitations, if any, that are applicable under the Charter or the ordinances of the Town.
(c) Separate Entities. Nothing in this Agreement shall be interpreted in
any manner as constituting the Town or its officials, representatives, consultants or employees as
the agents of the Authority, nor as constituting the Authority or its officials, representatives,
consultants or employees as agents of the Town. Each entity shall remain a separate legal entity
pursuant to applicable law. Neither party shall be deemed hereby to have assumed the debts,
obligations or liabilities of the other.
(d) Third Parties. Neither the Town nor the Authority shall be obligated
or liable under the terms of this Agreement to any person or entity not a party hereto, other than
the Lender.
(e) Modifications. No modification or change of any provision in this
Agreement shall be made, or construed to have been made, unless such modification is mutually
agreed to in writing by both parties with the prior written consent of the Lender and incorporated
as a written amendment to this Agreement. Memoranda of understanding and correspondence
i' shall not be construed as amendments to the Agreement.
(f) Entire Agreement. This Agreement shall represent the entire
agreement between the parties with respect to the subject matter hereof and shall supersede all
prior negotiations, representations or agreements, either written or oral, between the parties
relating to the subject matter of this Agreement and shall be independent of and have no effect
upon any other contracts.
(g) Severability. If any provision of this Agreement is held to be
invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired.
(h) Notices. All notices and other communications hereunder shall be
sufficiently given and shall be deemed given when delivered or mailed by first class mail, postage
prepaid, addressed as follows:
If to the Town:
Town of Avon, Colorado
100 Mikaela Way
P.O. Box 975
Avon, Colorado, 81620
Attention: Town Manager
5
If to the Authority:
Avon Urban Renewal Authority
100 Mikaela Way
P.O. Box 975
Avon, Colorado, 81620
Attention: Executive Director
The Town or the Authority may, by notice given hereunder, designate any further
or different addresses to which subsequent notices or other communications shall be sent.
(i) Termination. This Agreement may not be terminated by either party
so long as the Loan or other Additional Obligations of the Authority are outstanding. So long as
the Authority does not have any outstanding Loans or Additional Obligations, and does not owe
any amounts to the Town under this Agreement, either party may terminate this Agreement in
writing upon thirty (30) days written notice to the other party.
0) Assignment. This Agreement shall not be assigned, in whole or in
part, by either party without the written consent of the other and of the Lender.
(k) Waiver. No waiver of a breach of any provision of this Agreement
by either party shall constitute a waiver of any other breach or of such provision. Failure of either
party to enforce at any time, or from time to time, any provision of this Agreement shall not be
construed as a waiver thereof. The remedies reserved in this Agreement shall be cumulative and
additional to any other remedies in law or in equity.
G
IN WITNESS HEREOF, the parties have caused this Agreement to be executed by their
duly authorized officers on the date above.
AVON URBAN RENEWAL
AUTHORITY
By:
Sarah Smith Hymes, aha rman
ATTEST:
Eric Heil, Executive Director/Secretary
APPROVED AS TO LEGAL FORM
TOWN OF AVON, COLORADO
C
Eric Heil, Town Manager
ATTEST:
Brenda Torres, T
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Jeik-.
APPROVED AS TO LEGAL FORM
By: By:
Paul Wisor, Authority Attorney
7
Paul Wisor, Town Attorney
IN WITNESS HEREOF, the parties have caused this Agreement to be executed by their
duly authorized officers on the date above.
AVON URBAN RENEWAL
AUTHORITY
Sarah Smith Hymes, Chairman
ATTEST:
fl
Eric Hei Ex tive Director/Secretary
APPROVED AS TO LEGAL FORM
Paul Wisor, Authority Attorney
TOWN OF AVON, COLORADO
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JER
ATTEST:
Brenda Torres, Town Clerk
APPROVED AS TO LEGAL FORM
Lo
Paul Wisor, Town Attorney
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TOWN OF AVON, COLORADO
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JER
ATTEST:
Brenda Torres, Town Clerk
APPROVED AS TO LEGAL FORM
Lo
Paul Wisor, Town Attorney
IN WITNESS HEREOF, the parties have caused this Agreement to be executed by their
duly authorized officers on the date above.
AVON URBAN RENEWAL
AUTHORITY
Sarah Smith Hymes, Chairman
ATTEST:
Eric Heil, Executive Director/Secretary
APPROVED AS TO LEGAL FORM
By:
Paul Wisor, Authority Attorney
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TOWN OF AVON, COLORADO
By:
Eric Heil, Town Manager
ATTEST:
Brenda Torres, Town Clerk
APPROVED AS TO LEGAL FORM
By:
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raul Wisor, Town A omey