HomeMy WebLinkAboutagenda.council.worksession.20160726
CITY COUNCIL WORK SESSION
July 26, 2016
4:00 PM, City Council Chambers
MEETING AGENDA
I. 4:00 - Site Visits to Marijuana Shops - Meet at Silverpeak Apothecary - Bring ID's
II. Sustainability Dashboards Update
III. Aspen Country Inn Restructuring and Refinancing
P1
1
MEMORANDUM
TO: Mayor and City Council
FROM: Linda Giudice, Management Analyst
THOUGH: Barry Crook, Assistant City Manager
Karen Harrington, Director of Quality
CJ Oliver, Environmental Health and Sustainability Director
Ashley Perl, Climate Action Manager
DATE OF MEMO: July 22, 2016
MEETING DATE: July 26, 2016
RE: Sustainability Report
REQUEST OF COUNCIL:
Staff will be summarizing the findings of the city’s first Sustainability Report. Staff requests the
following from Council:
1. Feedback on the approach and depth of the report as written
2. Approval to share the report with others
3. Guidance regarding whether to continue producing the report on a periodic basis,
perhaps annually or biennially
4. Direction from Council on expanding the scope to include a social sustainability
component,
5. Guidance from Council on preferred uses of the report. Assuming a social sustainability
section is added next year, this would include the use of such a section to guide social
services grant-making.
PREVIOUS COUNCIL ACTION:
Council previously called for development of environmental and economic sustainability
dashboards. Staff developed sustainability outcomes and metrics with input from subject matter
experts and stakeholders. Subsequently, Council reviewed and approved the community-based
outcome statements and metrics. Staff previously presented the Environmental Sustainability
Dashboard measures to City Council on December 3, 2013, and presented the Economic
Sustainability Dashboard measures to City Council in 2015.
BACKGROUND:
The intention of crafting sustainability dashboards was to provide the City Council and others in
the community with a way to more clearly define sustainability, and then assess progress toward
that end. After securing Council approval of proposed sustainability outcome statements and
P2
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2
metrics, staff began collecting the data and information needed to develop these measures and to
start building a picture of the state of sustainability in Aspen.
During report preparation, staff:
• assessed the definitions and boundaries around the proposed metrics
• evaluated, collected, and analyzed the data, including its availability and quality
• reviewed findings with those who had supplied information to the project team
• crafted the measure dashboards and report
Today, staff are presenting the report and a summary of findings. The following attachments are
provided for the Council’s convenience:
• Attachment A: Summary of Findings
• Attachment B: Complete Sustainability Report
DISCUSSION:
While sustainability as a general concept includes the notion of using resources in a way that
does not compromise future needs, to have meaning locally it is important to define the term
more specifically. The Sustainability Report offers that definition by highlighting the
sustainability outcomes the community has identified, providing a detailed exploration of key
metrics associated with the outcomes, and summarizing the findings from the data.
This first iteration of the report does not include new action recommendations. However, those
could be included in future iterations of the report if the Council wishes. Rather, this year’s
version focuses on presenting the data and summarizing what it means, while highlighting
current City plans and actions. A summary of the outcome statements, metrics and key findings
are provided below.
Outcome Statements
The outcome statements describe what we will see in Aspen if we are sustainable. These
statements are based on input from experts and interested parties. Complete versions of the
outcome statements are included in Appendix B, the full report. The short versions of the
outcomes are provided here:
ENVIRONMENTAL OUTCOMES
AIR The Aspen community enjoys clean healthy air. Residents and visitors alike expect and
value clear skies and unpolluted indoor and outdoor air.
ENERGY The Aspen community effectively manages its energy needs while minimizing adverse
environmental impacts.
PARKS, TRAILS, OPEN SPACE Aspen’s unique blend of natural resources provides wide-
ranging habitats, recreation opportunities and connected, accessible places.
P3
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3
WASTE The amount of waste is minimal, and waste management choices protect the
environment. Wastes are minimized through diversion and reuse whenever possible.
WATER The Aspen community has a sufficient supply of safe, clean water to satisfy a full range
of municipal and other purposes while maintaining healthy streams and rivers.
ECONOMIC OUTCOMES
APPEAL OF THE ASPEN BRAND Aspen is the destination of choice. Visitors and residents
expect and receive the very best of recreational, educational, cultural, and business amenities.
TOURISM ACCESS, LODGING AND MOBILITY Visitors to Aspen can readily access the
resort via air or ground transport. They have access to modern, safe, and comfortable facilities
and amenities.
BUSINESS DIVERSITY & SUSTAINABILITY Aspen has a business environment that leads
to strong year-round economic health and that caters to a variety of visitors and residents.
WORKFORCE SUPPLY AND MATCH Aspen has a sufficient supply of well-qualified
workers. Wages are competitive. Excellent transportation options are available to support
mobility.
LOCAL COMMUNITY VIABILITY Individuals and families can thrive in Aspen with access
to affordable housing, childcare, health services, educational, and community engagement
opportunities.
For each outcome, analysis of up key metrics (typically five or six metrics per outcome) provides
tangible evidence of how close we are to the outcome. Due to challenges with data availability
or quality, some of these metrics vary from those initial requested by Council for inclusion in the
report.
Summary of Findings
Please refer to Attachment A for a summary of the key findings, as well as dashboard views of
the metrics. Those preferring a more in-depth look at the discussion and metrics can find more
detail in Appendix B, the full report.
SUMMARY:
Staff has prepared a Sustainability Report highlighting the status of the Aspen community across
the environmental and economic dimensions. Staff suggests using this information to inform
discussions and provide a pathway to action in support of sustainability outcomes. For example,
Council could use the findings to encourage or request additional information, focus policy
attention, or call for program actions to address areas at risk. Some of these discussions could
result in the creation of new Top 10 Council goals. In addition, Council could further encourage
P4
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staff to align work plans with the sustainability outcomes and metrics where appropriate, and to
reference sustainability impacts in Council memos.
Staff further recommends that Council expand the report to include a social sustainability
component, which is traditionally included as a part of the “three-legged stool” of sustainability:
environmental, social and economic. Without such a component, important aspects of
community sustainability are missing or inadvertently subsumed into other sections of the report.
Examples include priorities related to family & youth well-being; physical health; mental health
& substance abuse prevention; the well-being of seniors; and cultural, recreational, &
educational resources/opportunities. Should such a section be added, staff further suggests that
appropriate portions be used by Council as a “first filter” or guide in prioritizing requests for
social services funding.
FINANCIAL/BUDGET IMPACTS: Development of this report has been a collaborative
effort between the City Manager’s Office and the Environmental Health and Sustainability
Department, using both temporary and permanent staff. In the future, should Council determine
this report should be generated on an annual or biennial basis, additional permanent staff time
may be requested to help assure continuity and improve efficiency in producing the report.
Should permanent staff not be available, resources will continue to be needed in the form of
temporary staff. In addition, certain data desired for the report was not available unless
purchased. Supplemental requests to purchase data may be made in the future.
Finally, the content of the Sustainability Report can be used by City Council in budget decision-
making. The report shows where more resources might be used to improve a measure or where
existing resources are helping a measure move in the desired direction.
ENVIRONMENTAL IMPACTS: This report was prepared to provide information to Council,
staff and community members regarding the status of progress toward sustainability. It is
intended to be a resource for stakeholders to use, and thereby to support their efforts to reduce
key environmental impacts.
City staff members are encouraged to reference environmental sustainability measures in memos
to City Council, as a way of showing the benefits and tradeoffs of projects. Staff is hopeful that
with the increased reference to sustainability measures, this section of the memo will be a useful
and meaningful way of further evaluating projects.
RECOMMENDED ACTION: Staff requests the following from Council:
1. Feedback on the approach and depth of the report as written
2. Approval to share the report with others
3. Guidance regarding whether to continue producing the report on a periodic basis,
perhaps annually or biennially
4. Direction from Council on expanding the scope to include a social sustainability
component,
P5
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5
5. Guidance from Council on preferred uses of the report. Assuming a social sustainability
section is added next year, it would include the use of such a section to guide social
services grant-making.
ALTERNATIVES: Council could elect to forego future production of the report, or request a
less in-depth or more in-depth report. In particular, Council could request inclusion of
recommended action items in the report, for instance.
PROPOSED MOTION: No motion is proposed; rather, guidance from Council is requested.
CITY MANAGER COMMENTS:
________________________
________________________
P6
II.
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ATTACHMENT A: SUMMARY OF FINDINGS
P7
II.
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ENVIRONMENTAL SUSTAINABILITY DASHBOARD: SUMMARY OF FINDINGS
In Aspen, a sustainable environment is one in which natural resources and their use are managed with
consideration for the future and in concert with human needs. Aspen’s natural surroundings are definitive
to its character and are among the community’s greatest assets.
Figure 1. Castle Creek.1
This report speaks to the environmental sustainability of the Aspen community and tracks progress in
maintaining a healthy and vibrant way of life. The report is organized into five different categories: Air;
Energy; Parks, Trails & Open Space; Waste; and Water. Each of these categories contains 3-4 key
performance measures in which specific data is tracked over time to gauge the City’s progress toward
greater sustainability.
The table below serves as a brief executive summary of the current state of each category as a whole. A
concise description of the status of each individual performance measure can be viewed in the Key Findings
section of the report.
AIR2
Aspen’s outdoor air quality is generally healthy to moderate. But, when negatively
impacted by local and regional events, levels have approached those deemed as
unhealthy by the EPA.
• Between 1993 and 2015, levels of PM 10 (coarse particulates) fell within
good to moderate levels. PM 2.5 levels (fine particulates) were more
consistently moderate and approaching unhealthy for sensitive
populations.
• In 2015, average annual daily trips across Castle Creek Bridge were at
98% of 1993 levels. Monthly trips showed traffic counts close to 1993
levels with exceedances in April, November, and December.
• Though there is limited data on radon across Aspen, test kits
administered by the City of Aspen indicate that a low percentage (27%) of
buildings that returned high radon results have since been mitigated
successfully.
• Between 2010 and 2015, ozone levels were below but closely
approaching EPA designated action levels.
1 Babbie, Sheila. 2016.
2 Ibid.
P8
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Seen together, these measures speak to the complex work of striving toward greater environmental
3 Photo: Menges, Chris.
4 Photo: Williamson. Courtesy of City of Aspen Parks Department.
5 Photo: Armstrong, Laura. 2016.
6 Ibid.
ENERGY3
Though Aspen has taken strides to enhance sustainable energy use and sourcing in
some areas, significant work remains to reach the City’s climate action goals.
• In 2015, Aspen Electric, which serves much of the downtown core, sourced 100%
of its portfolio from renewable sources. Holy Cross Energy, serving other parts of
Aspen and all of the surrounding areas, sourced 30.3%.
• Between 2004 and 2014, Aspen reduced its GHG emissions by 7.4%. The
community aims to decrease emissions a further 22.6% by 2020.
• Between 2004-2014, there has been a 1.8% reduction in total energy use from the
built environment in Aspen. In 2014, energy use from the built environment
comprised 70.1% of total energy use.
• In 2015, ridership on City of Aspen buses was 1,078,865, which is consistent with
rates since 2010 and a decrease from 2008-2009.
PARKS, TRAILS & OPEN
SPACE4
There is a wealth of parks, trails, and open space available for Aspen residents and
visitors.
• The City owns and maintains 25.9 miles of trails, 204 acres of parks, and 327 acres
of open space in the urban growth boundary. Aspen partners with neighboring
jurisdictions to own and jointly maintain 566 additional acres of open space in the
greater Aspen area.
• Aspen’s urban tree canopy covers 31% of the city.
• The ACES Forest Health Index indicates that the forests of the Roaring Fork Valley
are healthy and in the range of natural variability, receiving an overall score of 86
out of 100, the highest index score recorded in its 3 years of compilation.
WASTE5
Aspen has great opportunity to expand the sustainability of its waste practices.
• No air quality violations were found at the Pitkin County Solid Waste Center
(PCSWC) in 2015. There were several instances of organic and inorganic
groundwater pollutants, for which the PCSWC is meeting remediation
requirements.
• Aspen’s 2015 municipal solid waste diversion rate was 21.3%, which is significantly
lower than the national average of 34.3% and Aspen’s goal of 50%.
• As of 2016, the PCSWC has an estimated lifespan of 15 years.
WATER6
The sustainability of Aspen’s water production and consumption is largely pending
further data collection. River and stream health varies on a case-by-case basis.
• Between 1995 and 2013, there was an overall decrease in total treated water
production in Aspen.
• In every year between 2006 and 2015, the Roaring Fork failed to meet the
instream flow during its annual 7-day low. Between 2013 and 2015, Castle Creek
remained above the dedicated instream flow rate.
P9
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sustainability in Aspen. While many important steps have already been taken in this effort, the community
must continue to make strides in every sector in order to see its desired outcomes become reality.
P10
II.
10
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P15
II.
15
ECONOMIC SUSTAINABILITY DASHBOARD: SUMMARY OF FINDINGS
Economic sustainability in Aspen means having the resources and assets to support a robust tourist-based
and residential economy year-round. This means that the economy has an optimal level of productive
capacity, and that economic activities are in balance with the natural and social environment.
In this first rendering of the economic sustainability dashboard, most of the performance measures do not
yet have targets. Where possible, measures are compared to industry benchmarks. Until these measures
have targets, it is not possible to fully assess their performance. Overall, the data sourced to date provides
initial insight about the respective outcome areas as presented in this Summary of Findings.
APPEAL OF ASPEN BRAND
To understand the appeal of the ‘Aspen Brand’ it is important to have
a sense of who the visitors are and why they visit.
• Despite some available demographic data, no mechanism
exists for tracking the total number of visitors to Aspen.
• The median age of summer visitors is approximately 49 years
of age. In winter, the average age of guests is between 41-44
years of age. Based on ACRA summer surveys, the 45-54 and
55-64 age groups are the largest at 22%. The 18-24 age group
represents the smallest group at 6%. Demographics are
presenting a challenge and opportunity to attract and engage
visitors of all ages.
• Within the survey sample, visitors express high satisfaction
with their Aspen Experience.
More robust surveying and analysis of the visitor population and is
needed in the future in order to target and focus actions to attract
and satisfy them.
In 2015, the Colorado Tourism Office commissioned
a report entitled Colorado Travel Impacts 1996 –
2014p. 7 The report provides data on the economic
impact of visitors at the state, regional, and county
levels. Figure 1 shows the comparative data for
Pitkin County and the State of Colorado.
Figure 1. Visitor Economic Impacts
Economic Indicators
Pitkin County
Colorado
Travel Spending 668 ($M) 18.6 ($B)
Earnings 246.2 ($M) 5.1 ($B)
Employment (Jobs) 4.7 (K) 155 (K)
Local Taxes 28.9 ($M)
1.1 ($B) State Taxes 5.8 ($M)
For example, Figure 2 (below) illustrates the increase in industry earnings and employment from 2010–
2014 generated from Pitkin County visitors. This appears to show a current positive trend.
7 Colorado Travel Impacts 1996-2014p, Dean Runyan Associates (Commissioned by Colorado Tourism Office) Via link:
http://www.colorado.com/sites/default/master/files/Runyan_TravelImpacts_2014.pdf. Retrieved April – July 2016.
P16
II.
Discovery of the visitor economic impact data for the Pitkin County region is useful. Overall, it gives
insight into the magnitude of the visitor based economy. However, a more in depth analysis of the data
and methodology for collection and future use is
The portfolio of economic sustainability key performance measures demonstrate what makes Aspen
attractive to visit. They also give an idea of the magnitude and capacity of Aspen’s tourist
local economy. Highlights are summari
TOURISM ACCESS,
LODGING, & MOBILITY
Airport/airline capacity and lodging occupancy indicate part of the visitor
demand for a place, especially at peak and off peak times.
• Commercial airlines have increased to 3 providers and capacity is high
(over 90%) with approximately 750 flights per month.
• In 2015, the total lodging capacity (pillow count) was 9,193. The total
pillow count decreased by 2% from 2009 to 2015. There appea
shift in the mix in favor of the
community goals to support a diverse lodging base. Demand for lodging
during peak seasons remains solid with occupancy rates between 70 to
75%.
• Qualitative ratings of walkabili
relatively good performance and continuous improvement in these
areas.
The performance indicators appear to be relatively stable based on the
historical trend. Inevitably, there are further opportunities to optimize
infrastructure, operating efficiencies, and quality attributes especially in light of
competition for visitors.
BUSINESS DIVERSITY &
The business community of Aspen is diverse and steady.
appears to be trending in a positive direction with moderate growth in taxable
193.4 193.9
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Figure 2. Annual Industry Earnings and Employment
Generated from Pitkin County Visitors (2010
Discovery of the visitor economic impact data for the Pitkin County region is useful. Overall, it gives
insight into the magnitude of the visitor based economy. However, a more in depth analysis of the data
and methodology for collection and future use is considered prudent.
The portfolio of economic sustainability key performance measures demonstrate what makes Aspen
attractive to visit. They also give an idea of the magnitude and capacity of Aspen’s tourist
local economy. Highlights are summarized below.
Airport/airline capacity and lodging occupancy indicate part of the visitor
demand for a place, especially at peak and off peak times.
Commercial airlines have increased to 3 providers and capacity is high
(over 90%) with approximately 750 flights per month.
In 2015, the total lodging capacity (pillow count) was 9,193. The total
pillow count decreased by 2% from 2009 to 2015. There appea
shift in the mix in favor of the moderate category, consistent with
community goals to support a diverse lodging base. Demand for lodging
during peak seasons remains solid with occupancy rates between 70 to
75%.
Qualitative ratings of walkability, bike-ability and transit indicates
relatively good performance and continuous improvement in these
areas.
The performance indicators appear to be relatively stable based on the
historical trend. Inevitably, there are further opportunities to optimize
infrastructure, operating efficiencies, and quality attributes especially in light of
competition for visitors.
The business community of Aspen is diverse and steady. Economic activity
appears to be trending in a positive direction with moderate growth in taxable
193.9 206.9 225.9 246.2
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$0
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$150
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Figure 2. Annual Industry Earnings and Employment
Generated from Pitkin County Visitors (2010 - 2014)
Earnings Employment
16
Discovery of the visitor economic impact data for the Pitkin County region is useful. Overall, it gives
insight into the magnitude of the visitor based economy. However, a more in depth analysis of the data
The portfolio of economic sustainability key performance measures demonstrate what makes Aspen
attractive to visit. They also give an idea of the magnitude and capacity of Aspen’s tourist-based and
Airport/airline capacity and lodging occupancy indicate part of the visitor
Commercial airlines have increased to 3 providers and capacity is high
(over 90%) with approximately 750 flights per month.
In 2015, the total lodging capacity (pillow count) was 9,193. The total
pillow count decreased by 2% from 2009 to 2015. There appears to be a
category, consistent with
community goals to support a diverse lodging base. Demand for lodging
during peak seasons remains solid with occupancy rates between 70 to
ability and transit indicates
relatively good performance and continuous improvement in these
The performance indicators appear to be relatively stable based on the
historical trend. Inevitably, there are further opportunities to optimize
infrastructure, operating efficiencies, and quality attributes especially in light of
Economic activity
appears to be trending in a positive direction with moderate growth in taxable
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P17
II.
17
SUSTAINABILITY
sales and quantity of business licenses.
• Since 2004, economic activity in Aspen (reported as total taxable sales)
has steadily increased (2.2%) year-on-year. As expected, Aspen
businesses’ sales differ considerably between on and off seasons.
Historically, May and December are the lowest and highest average
sales months.
• Over the past six years, the top business types in Aspen have remained
relatively consistent. While business types have changed little from
2010-2015, the categories of businesses remain diverse and suited for
peak as well as off seasons.
Generally, business diversity and sustainability is subject to market forces
(supply and demand). Further work can be done to understand the capacity for
businesses that are operating in the on and off-season and whether this suits
community and visitor needs.
WORKFORCE
SUPPLY & MATCH
The size and composition of the valley workforce appears to be relatively stable
and consistent with what you would expect to see post downturn (2008/2009).
• While the size of the valley workforce contracted from 37,000 (2008) to
33,000 (2014), the composition of occupations remained relatively
stable. Arts, Entertainment, Recreation, Accommodation, and Food
consistently at the top.
• In 2015, Pitkin County (Aspen/Snowmass) had the highest annual wages
(compared to peer counties) reported at $59,488. Pitkin County annual
average wage increased by approximately 29% from 2011 to 2015
which is likely attributed to a rebound in hiring and wages post the
economic downturn in 2008/2009.
• The total number of Aspen workforce members living within the Urban
Growth Boundary (UGB) is unknown. It should be noted that 38% of
City of Aspen FTE workforce live within the UGB.
• While housing supply does not perfectly meet demand, 90% (owners)
and 70% (renters) of APCHA employed households are not cost
burdened.
• The average workforce member (travelling from mid valley) spends
approximately $2,100 or (3.5%) of annual wages commuting by bus.
The annual round trip cost of commuting by bus is calculated at
approximately one fifth (20%) of what it costs for drive alone commute
for the same distance (Aspen/Carbondale).
• Subsidized / free bus passes totaling 1,185 (627 - winter and 558 –
summer) are purchased by approximately 50 employers for the benefit
of their employees.
Demand for affordable housing and low cost transportation options remain key
issues especially given the relative cost of living. Workforce development as a
contributor to the economy is an opportunity.
P18
II.
18
LOCAL COMMUNITY
VIABILITY
Aspen’s local community viability relates to its economic and social capacity to
sustain its residents (e.g. income, employment, housing, childcare, education,
and engagement) and relative quality of life.
• From 2009-2014, the city’s median household income has on average
grown minimally but steadily (average increase of 1.3% year-on-year).
• Over the same period, the averaged city unemployment rate is rising
but remains lower than the national period average.
• Basic necessities of housing and childcare are in high demand relative
to affordable supply.
• Meanwhile, health insurance costs in the county indicate a competitive
cost split for employees.
• High school graduation rates have been consistently high (over 90%)
which suggest a high standard of education.
• City voter participation averages around 2,252 ballots cast in regular
elections which implies citizens care about their community and the
issues that face it.
These key performance indicators suggest reasonably good local community
viability. With the relatively high cost of living, accessibility to affordable
housing, childcare, and healthcare remain key issues.
Collectively, these key performance measures demonstrate robust tourist access and residential
demand for a place. They give a relatively good insight as to how appealing the Aspen community
remains as a brand and how important this is in sustaining the local economy. The economic
sustainability dashboard provides an ‘at a glance view’ of how the community is doing on each measure.
And what this means for future consideration and opportunities for continuous improvement.
Photos (in order above): Giudice L.; Babbie, S.; Holder. M; Kolacek, Z.; Aspen Times
P19
II.
19
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e
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s
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2
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Page 1 of 3
MEMORANDUM
TO: Mayor and City Council
FROM: Don Taylor, Director of Finance
THRU: Steve Barwick, City Manager
DATE OF MEMO: July 22, 2016
MEETING DATE: July 26, 2016
RE: Discussion on the structure of Aspen Country Inn (ACI)
Refinancing
REQUEST OF COUNCIL: This is being provided to City Council in advance of its scheduled
consideration at the regular council meeting on August 8th 2016.
PREVIOUS COUNCIL ACTION: City Council agreed to make a loan in the amount of
$1,691,130 in 2000 in order to provide a layer of the financing required for this project. Interest
has not been paid on the note so the balance is now $3.28 million.
BACKGROUND: The city and APCHA worked together to create the Aspen Country Inn
(ACI) as an affordable housing project in 2000. APCHA created an LLC and partnered with
private equity investors that infused cash into the partnership in exchange for rights to
depreciation, tax credits and profits or losses. The city put the land into the project and took a
promissory note and deed of trust for the value of the land. At the end of the tax credit
compliance period (15 years) APCHA bought out the interest of the private equity investors.
The City and APCHA have been working together to try and refinance the property and re-
syndicate tax credits in order to lower interest costs and finance major repairs that need to
happen at ACI. Some of the repairs were discovered as part of the capital needs assessment that
was performed as part of the financing requirements.
The cost of these repairs are estimated to be 5.7 million dollars. The largest component of this
cost is replacing the roof which is seriously damaged. There is also radon mitigation, storm
water management, HVAC, some siding replacement and appliance replacement components to
this project. Most of this is required by either HUD or tax credit investors as a condition of their
investment. The Asset department should have a good estimate of the project cost by the
meeting date.
DISCUSSION: There has been some minor modifications to the form of the financing for ACI
that reduce the cost of borrowing. The basic structure of the financing is as follows:
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Page 2 of 3
The City and APCHA will form a new partnership entity. The City will be the managing general
partner with a less than 1% interest. Private equity partners will be given a 99%+ interest in
exchange for buying tax credits that the project will be eligible for. This will raise
approximately $5,380,000 toward completion of the project and cost of the tax credit deal.
Colorado Housing Authority will issue a tax exempt bond for the construction financing of the
project that will not exceed $7,200,000. The tax exempt financing component of the initial
construction financing makes the project eligible for Low Income Housing Tax Credits (LIHTC).
These funds will be loaned to the new ACI partnership to accomplish the construction work and
to pay off the existing mortgages. A copy of this financing agreement is attached.
The City will buy the Bond issued by CHFA as an investment as part of its investment portfolio.
This will be a private placement by CHFA. This eliminates the need for disclosure counsel and
eliminates marketing costs, saving the project approximately $50,000. This bond will have a less
than one-year term.
The permanent financing will be put in place upon the completion of the project through a HUD
guaranteed loan. While the city tax exempt bond will be paid off it will be necessary for the city
to take back a promissory note and deed of trust as a soft loan in the amount of $5,688,000 as
part of the permanent financing. There is a developer fee that the city will be paid as part of the
transaction that it could use to adjust this amount down or the city can take the developer fee out
and use it for housing development. The developer fee amount to the City is currently estimated
to be $1,200,000. Currently the plan is to take the developer fee out and use it in the housing
development fund. The City currently has a similar loan as part of the existing financing in the
amount of $3,350,000.
FINANCIAL/BUDGET IMPACTS: The financing project has been structured so that the rents
from the project can support the ongoing operational costs and the primary debt financing costs.
There may be some payment of interest to the city on its subordinate loan but no real
amortization of the loan. In year 15 of the partnership agreement the City will have the option to
buy out the tax credit partners for essentially their tax costs as there will be no real equity in the
property.
RECOMMENDED ACTION: Staff recommends approval of this financial structure.
ALTERNATIVES: The City could choose not to do this work at this time and not refinance the
property.
PROPOSED MOTION
CITY MANAGER COMMENTS:
ATTACHMENTS:
CHFA Financing Agreement
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Page 3 of 3
Letter of Intent from Boston Capital (Tax Credit Partner)
Agreement of Limited Partnership
P28
III.
DRAFT
SHERMAN & HOWARD L.L.C.
JULY 18, 2016
FINANCING AGREEMENT
By and Among
COLORADO HOUSING AND FINANCE AUTHORITY
CITY OF ASPEN, COLORADO
and
ACI AFFORDABLE 1 LLLP,
a Colorado limited liability limited partnership
Dated as of July __, 2016
Relating to
Colorado Housing and Finance Authority
Multifamily Housing Revenue Bond
(Aspen Country Inn Project) Series 2016
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TABLE OF CONTENTS
(THIS TABLE OF CONTENTS IS NOT A PART OF THIS FINANCING AGREEMENT, BUT
IS ONLY FOR CONVENIENCE OF REFERENCE.)
Page
ARTICLE I DEFINITIONS AND INTERPRETATION ............................................................... 2
Section 1.1 Definitions........................................................................................................... 2
Section 1.2 Interpretation. ...................................................................................................... 5
Section 1.3 Recitals, Titles and Headings. ............................................................................. 5
Section 1.4 Exhibits. .............................................................................................................. 5
ARTICLE II REPRESENTATIONS AND WARRANTIES ......................................................... 6
Section 2.1 Representations and Warranties of the Authority. .............................................. 6
Section 2.2 Representations, Warranties and Covenants of the Borrower. ........................... 7
Section 2.3 Representations and Warranties of the Lender. .................................................. 9
ARTICLE III ISSUANCE OF THE BOND ................................................................................. 10
Section 3.1 Issuance and Sale of the Bond. ......................................................................... 10
Section 3.2 Delivery of the Bond and Closing of the Loan. ................................................ 10
Section 3.3 Terms of the Bond. ........................................................................................... 11
Section 3.4 Redemption of the Bond. .................................................................................. 11
Section 3.5 Registration and Transfer. ................................................................................. 12
Section 3.6 Limitation on Liability of Authority. ................................................................ 13
Section 3.7 No Warranty...................................................................................................... 14
Section 3.8 Supplemental Public Securities Act Provisions. ............................................... 14
ARTICLE IV THE LOAN ........................................................................................................... 15
Section 4.1 Amount, Source and Funding of Loan. ............................................................. 15
Section 4.2 Loan Repayment. .............................................................................................. 15
Section 4.3 Additional Payments. ........................................................................................ 16
Section 4.4 Nature of the Borrower’s Obligations............................................................... 16
Section 4.5 Prepayment of Note. ......................................................................................... 17
Section 4.6 Servicing Requirements. ................................................................................... 17
Section 4.7 Rights Under Loan Agreement. ........................................................................ 18
Section 4.8 Rights Under Security. ...................................................................................... 18
Section 4.9 Insurance and Condemnation Proceeds. ........................................................... 18
ARTICLE V FURTHER AGREEMENTS ................................................................................... 19
Section 5.1 Covenants of the Authority. .............................................................................. 19
Section 5.2 Borrower to Maintain its Existence; Conditions Under Which Exceptions
Permitted. .......................................................................................................... 19
Section 5.3 Sale or Conveyance of the Facilities. ................................................................ 20
Section 5.4 Tax-Exempt Status of Bond; Arbitrage. ........................................................... 21
Section 5.5 Additional Instruments...................................................................................... 22
Section 5.6 Books and Records. .......................................................................................... 23
Section 5.7 Notice of Certain Events. .................................................................................. 23
Section 5.8 Indemnification of the Authority and the Lender. ............................................ 23
Section 5.9 Compliance with Usury Laws. .......................................................................... 24
Section 5.10 Compliance with Other Laws. .......................................................................... 24
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Section 5.11 Maintenance and Repair of Facilities. .............................................................. 24
Section 5.12 Additional Covenants Required by the Lender. ................................................ 24
ARTICLE VI EVENTS OF DEFAULT AND REMEDIES ........................................................ 26
Section 6.1 Defaults. ............................................................................................................ 26
Section 6.2 Loan Acceleration Default. ............................................................................... 27
Section 6.3 Remedies. .......................................................................................................... 27
Section 6.4 Attorneys’ Fees and Costs. ............................................................................... 28
Section 6.5 No Remedy Exclusive....................................................................................... 28
Section 6.6 No Additional Waiver Implied by One Waiver. ............................................... 28
ARTICLE VII MISCELLANEOUS ............................................................................................. 29
Section 7.1 Entire Agreement. ............................................................................................. 29
Section 7.2 Notices. ............................................................................................................. 29
Section 7.3 Assignments. ..................................................................................................... 30
Section 7.4 Waiver of Jury Trial. ......................................................................................... 30
Section 7.5 Severability. ...................................................................................................... 31
Section 7.6 Execution of Counterparts. ............................................................................... 31
Section 7.7 Amendments, Changes and Modifications. ...................................................... 31
Section 7.8 Governing Law. ................................................................................................ 31
Section 7.9 Term of Agreement. .......................................................................................... 31
Section 7.10 Non-Business Days. .......................................................................................... 31
Section 7.11 Parties to Act Reasonably. ................................................................................ 31
Section 7.12 No Violations of Law........................................................................................ 32
Section 7.13 Agreement of the State...................................................................................... 32
Exhibit A – Form of Bond A-1
Exhibit B – Investor Letter B-1
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FINANCING AGREEMENT
THIS FINANCING AGREEMENT (this “Agreement”), dated as of July __, 2016, is by
and among the COLORADO HOUSING AND FINANCE AUTHORITY (the “Authority”), a
body corporate and political subdivision of the State of Colorado, the CITY OF ASPEN,
COLORADO, a home rule municipality of the State of Colorado (the “Lender”), as the
registered owner and servicer or any successor in interest, and ACI AFFORDABLE 1 LLLP, a
Colorado limited liability limited partnership (the “Borrower”).
W I T N E S S E T H:
WHEREAS, the Colorado Housing and Finance Authority Act, being part 7 of article 4
of title 29, Colorado Revised Statutes (the “Act”), authorizes the Authority to issue bonds and
other obligations to finance the cost of the provision of decent, safe and sanitary dwelling
accommodations constituting “Housing Facilities” (as such term is defined in the Act); and
WHEREAS, the Authority, the Lender and the Borrower each have full power and
authority to enter into this Agreement; and
WHEREAS, pursuant to an authorizing resolution, the Authority has authorized the
issuance of its Multifamily Housing Revenue Bond (Aspen Country Inn Project) Series 2016 in
the maximum principal amount of $7,600,000 (the “Bond”), the proceeds of which are to be used
to fund a loan to the Borrower in the maximum principal amount of $7,600,000 (the “Loan”) in
order to finance a portion of the costs of the rehabilitation and equipping by the Borrower of a
40-unit multifamily housing facility known as Aspen Country Inn, located at 38996 Highway 82,
in Aspen, Colorado (the “Project”); and
WHEREAS, the Borrower desires to borrow funds to finance the Project upon the terms
and conditions in this Agreement set forth below.
WHEREAS, the Lender has agreed to purchase and to pay the purchase price of such
Bond pursuant to and in accordance with this Agreement; and
WHEREAS, the payment of the Bond will be secured by an assignment primarily for
security purposes of the Note evidencing the Loan and First Deed of Trust and Security
Agreement by the Borrower in favor of the Authority;
WHEREAS, the parties hereto desire to confirm the underlying financial transactions
between the Lender and the Borrower, and in particular that in the event of a default under the
Loan, the Bond would be accelerated and the Loan and the Security pledged thereto would be
transferred to the Lender, as registered owner of the Bond, in full satisfaction of the Bond; and
NOW, THEREFORE, for and in consideration of the premises and the mutual covenants
herein contained, the parties hereto formally covenant, agree and bind themselves as follows:
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ARTICLE I
DEFINITIONS AND INTERPRETATION
Section 1.1 Definitions.
Capitalized words and terms as used in this Agreement shall have the following
meanings, unless the context or use otherwise requires:
“Act” means the Colorado Housing and Finance Authority Act, being Part 7, Article 4,
Title 29 of Colorado Revised Statutes, as now in effect and as it may from time to time hereafter
be amended and supplemented.
“Act of Bankruptcy of the Borrower” means the filing of a petition in bankruptcy (or
other commencement of a bankruptcy or similar proceeding) by or against the Borrower, under
any applicable bankruptcy, insolvency or similar law now or hereafter in effect which has not
been dismissed within sixty (60) days of such filing.
“Agreement” means this Financing Agreement dated as of July __, 2016 by and among
the Authority, the Lender and the Borrower, as amended and supplemented from time to time.
“Assignment of Security” means the assignment by the Authority of the Security (except
for the Unassigned Issuer’s Rights) to the Lender, as registered owner of the Bond pursuant to
the Assignment of Loan Documents dated the Closing Date from the Authority to and for the
benefit of the Lender.
“Authority” means the Colorado Housing and Finance Authority, the body corporate and
political subdivision of the State created pursuant to the Act, or any successor thereto under or
with respect to the Act.
“Bond” means the Authority’s Multifamily Housing Revenue Bond (Aspen Country Inn
Project) Series 2016 in the maximum Principal Amount of $7,600,000.
“Bond Counsel” means an attorney at law or a firm of attorneys, designated by the
Authority, of nationally recognized standing in matters pertaining to the tax status of interest on
bonds issued by states and their political subdivisions, duly admitted to the practice of law before
the highest court of any state of the United States of America or the District of Columbia.
“Borrower” means ACI Affordable 1 LLLP, a Colorado limited liability limited
partnership, and its successors and assigns.
“Borrower Representative” means the person or persons at the time designated by the
Borrower to act on behalf of the Borrower by written certificate furnished to the Authority and
the Lender containing the specimen signatures of such person or persons and signed on behalf of
the Borrower by one of the Borrower’s officers. Such certificate may designate an alternate or
alternates.
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“Business Day” means a day other than a Saturday, a Sunday or a day on which banks in
Colorado are authorized or required by law or executive order to remain closed.
“Closing Date” means July __, 2016, being the date of initial issuance and delivery of the
Bond.
“Code” means the Internal Revenue Code of 1986, as amended to the Closing Date, and
the Regulations thereunder or any successor to the Internal Revenue Code of 1986. Reference to
any particular Code section shall, in the event of such successor Code, be deemed to be reference
to the successor to such Code section.
“Default” means any occurrence described in Section 6.1 hereof.
“Determination of Taxability” means (a) the occurrence of any action that, in the
judgment of the Lender, in reliance on the advice of Bond Counsel, will adversely affect the tax-
exempt status of the Bond, (b) the failure to take any action that, in the judgment of the Lender,
in reliance on the advice of Bond Counsel, is necessary to preserve the exemption from income
taxation of interest on the Bond, (c) a final judgment or order of a court of competent
jurisdiction, or a final ruling or decision of the Internal Revenue Service, in any such case to the
effect that the interest on the Bond is includable for Federal income tax purposes in the gross
incomes of the recipients thereof, or (d) the enactment of Federal legislation that would cause the
interest on the Bond to be includable for Federal income tax purposes in the gross incomes of the
recipients thereof. A judgment or order of a court of competent jurisdiction or a ruling or
decision of the Internal Revenue Service shall be considered final only if no appeal or action for
judicial review has been filed (and is pending) and the time for filing such appeal or action has
expired.
“Environmental Indemnity Agreement” means the Environmental Indemnity Agreement
dated as of the Closing Date, executed by the Borrower in favor of the Authority and the Lender.
“Facilities” means the multifamily housing project consisting of a 40 rental housing units
located at 38996 Highway 82, in Aspen, Colorado.
“Interest Payment Date” means (a) the first (1st) day of each month, commencing on
[September] 1, 2016, (b) any other date on which principal of and interest on the Bond is due and
payable, whether at maturity, prior redemption, acceleration or otherwise, or (c) any other date
on which principal of and interest on the Note is due and payable, whether at maturity,
prepayment, acceleration or otherwise.
“Interest Rate” means the _____________ percent (____%) per annum.
“Loan” means the secured loan originated by the Authority, as secured lender, to the
Borrower and assigned to the Lender pursuant to the Assignment of Security, maturing on
[August 1, 2017] in the maximum Principal Amount of $7,600,000 plus interest at the Interest
Rate, for the purpose of rehabilitating and/or equipping the Project, which will be made in
accordance with the terms of the Loan Agreement.
“Loan Acceleration Default” means any occurrence described in Section 6.2 hereof.
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“Loan Agreement” means the Loan Agreement dated as of the Closing Date between the
Lender and the Borrower, as the same may from time to time be amended or supplemented as
provided therein.
“Loan Documents” means this Agreement, the Tax Certificate, the Regulatory
Agreement, the Note, the Loan Agreement, the Security and the Environmental Indemnity
Agreement.
“Note” means the Promissory Note executed by the Borrower to evidence the Loan.
“Outstanding” means, when used as of any particular time with reference to the Bond, the
initial Principal Amount of the Bond plus the principal amount of each draw delivered pursuant
to Section 3.3 hereof, less any payments of such principal previously received by the Lender.
“Person,” unless the context requires, includes any individual, corporation, limited
liability company, partnership, joint venture, association, joint-stock company, trust company,
trust, unincorporated organization or government or agency or political subdivision thereof.
“Principal Amount” means $7,600,000, the maximum principal amount of the Bond and
the Loan.
“Project” means the financing of the Facilities.
“Rebate Amount” means the amount, if any, determined to be payable with respect to the
Bond by the Borrower to the United States of America in accordance with Section 5.4 hereof and
Section 148(f) of the Code.
“Regulatory Agreement” means the Regulatory Agreement and Declaration of Restrictive
Covenants dated the Closing Date between the Authority and the Borrower required to be
executed, delivered and recorded with respect to the Project, as the same may be amended from
time to time in accordance with the provisions thereof.
“Revenues” means all moneys paid or payable to the Authority in respect of payments or
prepayments of principal of and interest on the Note, and all receipts of the Lender, including but
not limited to payment and prepayments of the Note, proceeds of insurance or condemnation
awards that are not used to repair or replace the Facilities and proceeds of Transfers pursuant to
Section 5.3(b) hereof, which reduce the principal balance of the Note.
“Security” means First Deed of Trust and Security Agreement dated the Closing Date, by
the Borrower in favor of the Authority.
“State” means the State of Colorado.
“Supplemental Act” means the Supplemental Public Securities Act, being Part 2 of
Article 57 of Title 11, Colorado Revised Statutes.
“Tax Certificate” means, together, the Authority’s and the Borrower’s respective Federal
Tax Exemption Certificates, each dated as of the Closing Date.
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“Tax Credit Regulatory Agreement” means the Low Income Housing Tax Credit
Extended Use Agreement with respect to the allocation of Federal low income housing tax
credits available to the Project.
“Transfer” means the sale, transfer, lease, encumbrance or other conveyance of title to
ownership of or an interest in the Facilities or any portion thereof, including to a “related person”
pursuant to the provisions of Section 267 or 707(b) or under Section 1563(a) of the Code.
“Transferee” means the Person to whom the Borrower Transfers the Facilities or any
portion thereof.
“Unassigned Issuer’s Rights” means any and all of the rights of the Authority under this
Agreement, the Note, the Security and the other Loan Documents to receive payments, fees and
expenses, to be held harmless and indemnified, to be an insured under any insurance policy
pursuant to any Loan Document, to be reimbursed for attorney’s fees and expenses, to receive
notices and to give or withhold consent to amendments, changes, modifications, alterations and
termination of such Loan Documents.
Section 1.2 Interpretation.
Unless the context clearly requires otherwise, words of masculine gender shall be
construed to include correlative words of the feminine and neuter genders and vice versa, and
words of the singular number shall be construed to include correlative words of the plural
number and vice versa. Any reference herein to the Authority or to any officer, employee or
official thereof includes entities, officers, employees or officials succeeding to their respective
functions, duties or responsibilities pursuant to or by operation of law or who are lawfully
performing their functions. This Agreement and all the terms and provisions hereof shall be
construed to effectuate the purpose set forth herein and to sustain the validity hereof.
Section 1.3 Recitals, Titles and Headings.
The terms and phrases used in the recitals of this Agreement have been included for
convenience of reference only, and the meaning, construction and interpretation of all such terms
and phrases for purposes of this Agreement shall be determined by references to Section 1.1.
hereof. The titles and headings of the articles and sections of this Agreement have been inserted
for convenience of reference only and are not to be considered a part hereof, and shall not in any
way modify or restrict any of the terms or provisions hereof and shall never be considered or
given any effect, in construing this Agreement or any provision hereof or in ascertaining intent,
if any question of intent should arise.
Section 1.4 Exhibits.
All exhibits to this Agreement, including but not limited to any additional terms or
provisions contained therein, are hereby incorporated into this Agreement. In the event of any
conflict between the provisions of Article I through VII hereof and of said exhibits, the terms and
provisions of said exhibits shall control.
(End of Article I)
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ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1 Representations and Warranties of the Authority.
The Authority represents and warrants as follows:
(a) The Authority is a body corporate and political subdivision of the State,
established and acting pursuant to the Act.
(b) The Authority has lawful power and authority under the laws of the State,
including, without limitation, the Act and the Supplemental Act, acting through its Board
of Directors, to enter into the transactions contemplated by this Agreement and to carry
out its obligations hereunder, including but not limited to lending the proceeds of the sale
of the Bond to the Borrower to finance the Project, and to enter into and perform its
obligations under this Agreement, the Bond and the Assignment of Security.
(c) To the Authority’s knowledge, no member of the Board of Directors of the
Authority or any other officer of the Authority has any significant or conflicting interest,
financial, employment or otherwise, in the Borrower, the Project or the transactions
described herein.
(d) The Authority has duly authorized the execution and delivery of this
Agreement, the Bond, the Assignment of Security and the Regulatory Agreement, has
duly executed and delivered this Agreement, the Bond, the Assignment of Security and
the Regulatory Agreement, and, assuming due authorization, execution and delivery by
the other parties thereto, this Agreement, the Bond, the Assignment of Security and the
Regulatory Agreement are the valid, legal and binding obligations of the Authority
enforceable in accordance with their respective terms except as enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws of
general applicability affecting the enforcement of creditors’ rights and to general
principles of equity and judicial discretion.
(e) To the Authority’s knowledge, the performance and the consummation of
the transactions on the part of the Authority contemplated in this Agreement and the
compliance by the Authority with the terms, conditions and provisions of this Agreement,
the Bond, the Assignment of Security and the Regulatory Agreement do not conflict with,
or constitute on the part of the Authority a violation of, breach of or default under (i) the
Act; (ii) any order, rule or regulation applicable to the Authority; (iii) any agreement or
instrument to which the Authority is a party or by which the Authority is bound; or
(iv) any court order or consent decree to which the Authority is subject.
(f) No litigation at law or in equity or administrative action of any nature has
been served on the Authority and is now pending materially adversely affecting (i) the
creation, organization or existence of the Authority; (ii) the authority of the Authority to
accept or perform the duties and obligations of the Authority under this Agreement, the
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Bond, the Assignment of Security and the Regulatory Agreement; or (iii) the Authority’s
ability to fulfill its duties and obligations under this Agreement, the Bond, the
Assignment of Security and the Regulatory Agreement.
(g) The Authority makes no other representations, either expressly or
impliedly, as to the Project or the financing thereof. THE AUTHORITY MAKES NO
WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO THE PROJECT OR
ANY PORTION THEREOF, INCLUDING, WITHOUT LIMITATION, THE
HABITABILITY THEREOF; THE MERCHANTABILITY OR FITNESS OR
SUITABILITY THEREOF FOR ANY PARTICULAR PURPOSES; THE DESIGN OR
CONDITION THEREOF; THE WORKMANSHIP, QUALITY OR CAPACITY
THEREOF; LATENT DEFECTS THEREIN; OR THE COMPLIANCE THEREOF
WITH ANY LEGAL REQUIREMENTS.
Section 2.2 Representations, Warranties and Covenants of the Borrower.
The Borrower represents, as of the date hereof and as of the date of each request for
disbursement, and warrants and covenants that:
(a) The Borrower is a limited liability limited partnership and is qualified to transact
business in the State.
(b) The Loan Documents to which the Borrower is a party have been duly executed
and delivered by the Borrower and, when executed by all applicable parties, will constitute the
legal, valid and binding obligation of the Borrower, enforceable in accordance with their
respective terms, except as limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws or judicial decisions affecting the rights of creditors generally and by general
principles of equity (regardless of whether such enforceability is considered in a proceeding in
equity or at law).
(c) The Borrower has duly authorized as necessary (i) the execution and delivery of
the Loan Documents to which the Borrower is a party, (ii) the performance by the Borrower of
its obligations hereunder and thereunder, and (iii) the consummation of the transactions
contemplated by the Loan Documents to which the Borrower is a party.
(d) The execution and delivery of the Loan Documents to which the Borrower is a
party, the performance by the Borrower of its obligations hereunder and thereunder, and the
consummation of the transactions contemplated hereby and thereby (i) to the Borrower’s
knowledge, do not and will not violate any law, regulation, rule or ordinance or any order,
judgment or decree of any Federal, state or local court applicable to the Borrower, (ii) do not and
will not conflict with or constitute a breach of, or a default under, the Borrower’s organizational
documents, and (iii) do not and will not conflict with or constitute a breach of, or a material
default under, any document, instrument or commitment to which the Borrower is a party or by
which the Borrower or any of its property is bound.
(e) There is no action, suit, proceeding, inquiry or investigation by or before any
court, governmental agency or public board or body pending against the Borrower or, to the
Borrower’s knowledge, threatened against the Borrower (nor, to the Borrower’s knowledge, is
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there any basis therefor) which (i) affects or seeks to prohibit, restrain or enjoin the execution
and delivery of the Loan Documents to which the Borrower is a party, (ii) affects or questions
the validity or enforceability of the Loan Documents to which the Borrower is a party or (iii)
questions the power or authority of the Borrower to carry out the transactions contemplated by,
or to perform its obligations contemplated by, or to perform its obligations under the Loan
Documents to which the Borrower is a party, or the powers of the Borrower to own, rehabilitate
equip, develop and/or operate the Facilities or to finance the Facilities.
(f) The Borrower is not in default under any document, instrument or commitment to
which the Borrower is a party or to which it or any of its property is subject which default would
or could materially and adversely affect the ability of the Borrower to carry out its obligations
under the Loan Documents.
(g) Neither the Loan Documents nor any document, certificate or written statement
(including but not limited to information with respect to the Facilities or the financing thereof,
but excluding any projections, opinions and forward looking statements), when taken as whole,
prepared and furnished to the Lender, the Authority or Bond Counsel by or on behalf of the
Borrower, contains any untrue statement of a material fact by Borrower or omits to state a
material fact with respect to the Borrower or the Project necessary in order to make the
statements contained herein and therein, in light of the circumstances under which they were
made, not misleading as of the date hereof and as of the Closing Date. It is specifically
understood by the Borrower that all such statements, representations and warranties shall be
deemed to have been relied upon by the Authority and the Lender as an inducement to effectuate
the Loan, and that if any such statements, representations and warranties were materially
incorrect at the time they were made or as of Closing Date, the Authority may consider any such
misrepresentation or breach a Loan Acceleration Default, subject to the terms set forth in Section
6.1(a)(iii) hereof.
(h) The Borrower shall admit, treat and/or serve individuals, as applicable, in the
Facilities without regard to race, creed, color, sex, sexual preference, source of income
(e.g., TANF, SSI), disability, religion, national origin, marital status, familial status or political
opinion or affiliation and shall respect, permit and not interfere with the religious beliefs of
persons using the Project. Except to the extent permitted by the constitutions, statutes and laws
of the United States and the State, the Borrower further agrees that it will not use or permit the
use of the Project as a place of religious worship or sectarian instruction.
(i) The acquisition, development, rehabilitation, equipping, ownership and/or
operation of the Facilities is consistent with the Borrower’s organizational documents.
(j) Any statements regarding the Project or the Borrower and set forth in a certificate
signed by a Borrower Representative and delivered pursuant to this Agreement shall be deemed a
representation and warranty by the Borrower as to such statements.
(k) The Borrower has filed or caused to be filed all Federal, state and local tax returns
or information returns which are required to be filed with respect to the Facilities on or before
the date hereof, and has paid or caused to be paid all taxes as shown on said returns or on any
assessment received by it, to the extent that such taxes have become due and payable other than
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those presently being or to be contested by the Borrower in good faith in accordance with
Section 4.3(a) hereof.
(l) To the extent the Loan is to be treated as a “program investment” as defined in
Treasury Regulation Section 1.148-1(b), the Borrower (or any “related person” as such term is
used in Section 147(a) of the Code) shall not purchase the Bond in an amount related to the
amount of the Loan.
Section 2.3 Representations and Warranties of the Lender.
The Lender makes the following representations and warranties:
(a) The Lender hereby agrees to purchase from the Authority the Bond in the
Principal Amount of up to $7,600,000 in installments by funding draws under the Loan as
provided herein and in the Loan Agreement for the purpose of financing the development,
acquisition, rehabilitation and/or equipping of such Facilities.
(b) The Lender represents that it is purchasing the Bond for its own account and not
for reoffering to the public. In connection with its purchase of the Bond, the Lender agrees to
deliver to the Authority an investor letter substantially in the form of Exhibit B hereto. In the
event the Lender transfers the Bond, it shall be subject to transfer in whole and not in part;
subsequent purchasers shall deliver investor letters to the Authority substantially in the form of
Exhibit B hereto. ANY TRANSFEREE SHALL AGREE TO INDEMNIFY THE AUTHORITY
FROM AND AGAINST ANY AND ALL LIABILITY, COST OR EXPENSE (INCLUDING
ATTORNEYS’ FEES AND EXPENSES) THAT MAY RESULT IF THE
REPRESENTATIONS OF SUCH TRANSFEREE CONTAINED IN ITS INVESTOR LETTER
ARE FALSE IN ANY MATERIAL RESPECT.
(End of Article II)
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ARTICLE III
ISSUANCE OF THE BOND
Section 3.1 Issuance and Sale of the Bond.
In order to provide funds to make the Loan, the Authority will issue the Bond and sell
and deliver it to the Lender on the Closing Date, subject to and as provided in the Loan
Agreement. The Bond shall be issued as a draw-down bond, as further described in Section 3.3
below, and shall be deemed issued for federal income tax purposes only upon receipt by the
Authority of not less than $50,001 from the Lender on account of its purchase of the Bond.
Simultaneously with the delivery of the Bond on the Closing Date and subject to the
provisions set forth below, the Authority, as secured lender, shall make the Loan to the Borrower
and shall assign the Note and the Security to the Lender (except for the Unassigned Issuer’s
Rights). The Loan shall be initially funded on the Closing Date and in periodic draws thereafter,
subject to and as provided in the Loan Agreement.
Section 3.2 Delivery of the Bond and Closing of the Loan.
The delivery of the Bond and the closing of the Loan shall not occur until the following
conditions are met:
(a) The Authority and the Lender shall have received the original executed
Loan Documents.
(b) The Authority shall have received certified copies of the resolution of the
City Council of the City of Aspen, Colorado, authorizing the Lender to purchase the Bond from
the Authority and authorizing all actions taken or to be taken in connection with each of the Loan
Documents, if applicable.
(c) The Authority and the Lender shall have received (i) certified copies of
resolutions of the Borrower authorizing all actions taken or to be taken in connection with each
of the Loan Documents, if applicable, (ii) copies of the Borrower’s formation documents and (iii)
an opinion of counsel to the Borrower in a form reasonably acceptable to the Authority and the
Lender.
(d) The Lender shall have received the additional documents specified in
Section 4.2 of the Loan Agreement, and such other documents as it may reasonably require.
(e) The Authority shall have executed and delivered to the Lender an
endorsement of the Note and the Assignment of Security, for security purposes only (except as
otherwise provided therein), to secure all obligations of the Authority under the Bond.
(f) No Loan Acceleration Default nor any event which with the passage of
time or the giving of notice would constitute a Loan Acceleration Default under the Loan
Documents shall have occurred, as certified by a Borrower Representative.
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(g) All legal matters incident to the transactions contemplated by the Loan
Documents shall be concluded to the reasonable satisfaction of Bond Counsel.
(h) The Borrower shall have paid to the Authority a closing fee equal to
$15,200 (0.20% of the maximum Principal Amount).
(i) Bond Counsel shall have delivered to the Authority, with a reliance letter
to the Lender, an opinion with respect to the tax-exempt status of the interest on the Bond.
Section 3.3 Terms of the Bond.
The Bond shall be deemed issued for federal income tax purposes only upon the funding
of not less than $50,001 from the Lender. Other than with respect to the first draw on the
Closing Date, the Borrower shall provide notice to the Lender of the principal amount of each
draw to be delivered hereunder at least one Business Day in advance of such draw.
The Bond shall be issued as a fully registered bond in the maximum Principal Amount of
$7,600,000, shall bear interest on the Principal Amount Outstanding at the Interest Rate
(calculated on a 360-day basis for the actual number of days principal is outstanding). The Bond
shall be in the form contained in Exhibit A hereto. Payments of principal of and interest on the
Bond shall be made to the Lender, as the registered owner of the Bond.
Principal of and interest on the Bond shall be payable only from the Revenues. The
Authority hereby directs the Lender, as servicer, to pay to the Lender, as the registered owner,
when due and payable principal of and interest on the Bond from the Revenues. Upon receipt of
payment in full of the outstanding principal balance of the Bond plus all accrued and unpaid
interest, the Lender, shall immediately deliver the Bond to the Authority for cancellation.
The Authority hereby agrees to assign to the Lender, as the registered owner, but only as
security for payment of amounts payable on the Bond, the Note and the Security (except as
otherwise provided in the Assignment of Security). The Lender and the Authority agree that the
Authority shall have no responsibility for the perfection of the Lender’s security interest in the
Note and the Security.
Section 3.4 Redemption of the Bond.
(a) Mandatory Redemption. The Bond is subject to redemption at a price equal to the
outstanding Principal Amount of the Bond to be redeemed plus accrued interest thereon to the
date fixed for redemption, as follows:
(i) in whole, upon the receipt by all parties of a notice of Loan Acceleration
Default hereunder; or
(ii) in whole or in part, upon the occurrence of events described in
Sections 4.5(a) and 4.9(b) hereof, if all or part of any insurance or condemnation proceeds will
not be used to repair or replace the Facilities or to reimburse the Borrower therefor, in a principal
amount equal to the proceeds not used for such repair or replacement.
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(b) Optional Redemption. The Bond is subject to redemption, in whole or in part,
upon and in the amount of the prepayment of the Note in accordance with Section 4.5(b) hereof,
on any day permitted under the Note and for which notice of such prepayment is given in
accordance with Section 3.4(c) hereof, at a price equal to the outstanding Principal Amount of
the Bond to be redeemed plus accrued interest thereon to the date fixed for redemption.
(c) Notice. The Borrower shall give written notice to the Lender and the Authority of
redemption of the Bond pursuant to Sections 3.4(a)(i) and (ii) hereof not less than five Business
Days prior to the date set for redemption, specifying the reason for the redemption, the date set
for redemption and the Principal Amount of the Bond to be redeemed. If notice of prepayment
of the Note shall be given pursuant to Section 4.5 hereof, such notice shall be deemed to
constitute notice of redemption of the Bond pursuant to Section 3.4(b) hereof, and the parties
hereto waive any further notice of redemption pursuant to Section 3.4(b) hereof.
(d) Miscellaneous.
(i) If the Bond is redeemed pursuant to Section 3.4(a)(i) hereof, payment of
the redemption price shall be deemed made by the Authority’s absolute assignment to the Lender
of all right, title and interest of the Authority in the Note and the Security (except for the
Unassigned Issuer’s Rights).
(ii) Upon payment of the redemption price in accordance with this Section
3.4, the Bond (or portion thereof so redeemed) shall cease to bear interest from and after the date
on which the redemption price is paid. If the Bond is redeemed in whole, the Lender shall
immediately deliver the Bond to the Authority for cancellation.
Section 3.5 Registration and Transfer.
(a) The Authority shall maintain the registration records containing the name and
address of the registered owner of the Bond.
(b) The Lender hereby acknowledges that the Authority has agreed to sell the Bond to
the Lender, enter into this Agreement and consummate the transactions hereunder only upon the
Lender’s agreeing that it will only sell, assign or transfer the Bond or any interest therein, or any
interest in the proceeds thereof as described in this Section 3.5 or with the Authority’s prior
written consent, which consent shall not be unreasonably withheld, conditioned or delayed if the
transfer is within the Authority’s policy for the transfer of unrated, non-credit enhanced bonds,
and the Lender so agrees.
(c) The Lender hereby agrees that in the event the Lender transfers the Bond: (i) the
Bond shall be subject to transfer in whole and not in part; and (ii) subsequent purchasers shall
deliver investor letters to the Authority substantially in the form of Exhibit B hereto. Any
transferee of the Bond must assume in writing the obligations of the Lender hereunder and under
the Loan Agreement, including the obligation to fund additional draws under the Loan as
provided herein and in the Loan Agreement.
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(d) The Authority and the Borrower each hereby approves the assignment or transfer
of the Bond in whole to an entity succeeding or resulting from a merger or acquisition of the
Lender.
Section 3.6 Limitation on Liability of Authority.
The Authority shall not be obligated to pay the principal of or interest on the Bond,
except from Revenues. The Lender hereby acknowledges that the Authority’s sole source of
moneys to pay principal of or interest on the Bond will be provided by such Revenues.
THE BOND SHALL BE A SPECIAL, LIMITED OBLIGATION OF THE
AUTHORITY PAYABLE SOLELY FROM REVENUES. THE BOND SHALL CONSTITUTE
A VALID CLAIM OF THE OWNERS THEREOF AGAINST THE REVENUES, WHICH ARE
PLEDGED TO SECURE THE PAYMENT OF THE PRINCIPAL OF AND INTEREST ON
THE BOND, AND WHICH SHALL BE USED FOR NO OTHER PURPOSE EXCEPT AS
EXPRESSLY AUTHORIZED IN THIS AGREEMENT. THE BOND SHALL NOT BE A
DEBT OR INDEBTEDNESS OF THE STATE OR ANY POLITICAL SUBDIVISION
THEREOF (INCLUDING THE AUTHORITY), AND NEITHER THE STATE NOR ANY
POLITICAL SUBDIVISION THEREOF SHALL BE LIABLE THEREON, NOR IN ANY
EVENT SHALL THE BOND BE PAYABLE OUT OF ANY FUNDS OR PROPERTIES
OTHER THAN THOSE OF THE AUTHORITY PLEDGED UNDER THIS AGREEMENT.
THE BOND SHALL NOT CONSTITUTE AN INDEBTEDNESS OR A MULTIPLE FISCAL-
YEAR FINANCIAL OBLIGATION WITHIN THE MEANING OF ANY CONSTITUTIONAL
OR STATUTORY DEBT LIMITATION OR RESTRICTION. NEITHER THE STATE NOR
ANY POLITICAL SUBDIVISION THEREOF (EXCEPT THE AUTHORITY FROM THE
SOURCES IDENTIFIED HEREIN) SHALL BE LIABLE FOR PAYMENT OF THE BOND
NOR IN ANY EVENT SHALL PRINCIPAL OF AND INTEREST ON THE BOND BE
PAYABLE OUT OF ANY FUNDS OR ASSETS OTHER THAN THOSE PLEDGED TO
THAT PURPOSE BY THE AUTHORITY HEREIN. THE AUTHORITY HAS NO TAXING
POWER.
NO RECOURSE SHALL BE HAD FOR THE PAYMENT OF THE PRINCIPAL OF
OR INTEREST ON THE BOND AGAINST ANY PAST, PRESENT OR FUTURE MEMBER
OF THE AUTHORITY’S BOARD OF DIRECTORS, OR THE OFFICERS, COUNSEL,
FINANCIAL ADVISORS OR AGENTS OF THE AUTHORITY, OR OF ANY SUCCESSOR
THERETO, UNDER ANY RULE OF LAW OR EQUITY, STATUTE OR CONSTITUTION,
AND ALL SUCH LIABILITY IS HEREBY EXPRESSLY WAIVED AND RELEASED AS A
CONDITION OF, AND CONSIDERATION FOR, THE EXECUTION AND ISSUANCE OF
THE BOND.
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Section 3.7 No Warranty.
The obligation of the Authority hereunder to issue the Bond to provide funds to finance
the Project does not in any way constitute a representation, warranty, guaranty, advice or
suggestion by the Authority as to the feasibility or viability of the Facilities or the financing
thereof, and may not be relied on as such by the Borrower, the Lender or any tenant, lender or
other Person, for any reason.
Section 3.8 Supplemental Public Securities Act Provisions.
Pursuant to the resolution of the Authority authorizing the issuance of the Bond, the
Authority has elected to apply Sections 11-57-205, 11-57-207, 11-57-208, 11-57-209, 11-57-
210, 11-57-211, 11-57-212 and 11-57-214 of the Supplemental Act to the Bond. Pursuant to said
Section 11-57-210, the Bond shall recite that it is issued under the authority of such resolution
and the Supplemental Act and that it is the intention of the Authority that such recital shall be
conclusive evidence of the validity and the regularity of the issuance of the Bond after its
delivery for value. Pursuant to said Section 11-57-208, the Revenues and other assets pledged
under this Agreement for the payment of the Bond, as received by or otherwise credited to the
Authority, shall immediately be subject to the lien of such pledge without any physical delivery,
filing or further act. The lien of such pledge and the obligation to perform the contractual
provisions made in such resolution and this Agreement shall have priority over any or all other
obligations and liabilities of the Authority. 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 Authority irrespective of whether such Persons notice of such lien.
(End of Article III)
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ARTICLE IV
THE LOAN
Section 4.1 Amount, Source and Funding of Loan.
The Authority, as secured lender, hereby makes the Loan to the Borrower, on the terms
and subject to the conditions set forth in this Agreement and the Loan Documents. The
Borrower hereby (a) accepts the Loan from the Authority, upon the terms and conditions set
forth in this Agreement and the Loan Documents, (b) agrees to execute and deliver the Note and
the Security simultaneously with the execution of this Agreement, and (c) agrees to have the
proceeds of the Loan applied and disbursed in accordance with this Agreement and the other
Loan Documents. The Loan shall be deemed made when the Lender acknowledges receipt of the
Bond, upon satisfaction of the conditions specified in Section 3.2 hereof and upon the delivery of
the first installment of the purchase price of the Bond. To the extent there is an inconsistency
between the terms of the Note and the terms of this Agreement, the terms of this Agreement shall
prevail; provided, however, that all rights and remedies of the Lender and the Authority, and all
obligations of the Borrower, in each case as set forth in this Agreement and the other Loan
Documents are cumulative and not exclusive, and the failure to set forth any thereof in more than
one Loan Document shall not be deemed an inconsistency.
On the Closing Date, the Authority shall assign without recourse or warranty (except for
warranties and representations made as of their date and except for the Unassigned Issuer’s
Rights) the Note and the Security to the Lender, which shall accept such assignment. The
Borrower hereby consents to the Authority’s assignment of the Note and the Security, as
provided in the Assignment of Security, to the Lender. The Lender shall file financing
statements and other documents as it deems necessary or desirable to perfect its security
interests, and the Borrower hereby consents to all such filings.
Section 4.2 Loan Repayment.
(a) On each Interest Payment Date, the Borrower shall pay, in repayment of the Loan,
to the Lender as servicer, until the principal of and interest on the Note shall have been paid in
full as provided in the Note, an amount which will equal the sum of (i) the interest on the Note
which is due on such Interest Payment Date and (ii) the principal of the Note due on such Interest
Payment Date.
(b) The Authority hereby directs the Lender, as servicer, to apply the amounts paid
pursuant to Section 4.2(a) hereof to pay principal of and interest on the Bond, and the Lender and
Borrower hereby agree that the application of such amounts to payments due on the Bond in
accordance with Sections 3.3 and 3.4 hereof shall reduce the amount owing on the Note.
Payments made on the Bond shall be deemed to be made on the same date and in the same
amount on the Note.
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Section 4.3 Additional Payments.
In addition to the payments of principal and interest on the Loan, the Borrower shall
make the following additional payments:
(a) All taxes and assessments, general or special, including, without limitation, all ad
valorem taxes, concerning or in any way related to the Facilities, or any part thereof, and any
other governmental charges and impositions whatsoever, foreseen or unforeseen, and all utility
and other charges and assessments; provided, however, that the Borrower reserves the right to
contest in good faith the legality or amount of any tax or governmental charge concerning or in
any way related to the Facilities to the extent permitted by the Security.
(b) (i) The costs incurred by the Borrower for the calculation of the Rebate Amount
and (ii) any amounts required to be paid to the United States of America as the Rebate Amount.
(c) Any out-of-pocket expenses incurred by the Authority in connection with any
Transfer, in accordance with Section 5.3(a)(vi) hereof.
(d) Any additional payments required by the Loan Agreement or the Security.
Section 4.4 Nature of the Borrower’s Obligations.
The Borrower shall repay the Loan and make the additional payments pursuant to the
terms of Sections 4.2 and 4.3 hereof and the Note, irrespective of any rights of set-off,
recoupment or counterclaim it might have against the Authority, the Lender or any other Person;
provided, that any such payment shall not constitute a waiver by the Borrower of any claim for
recoupment or of any counterclaim. The Borrower will not suspend, discontinue or reduce any
such payment or (except as expressly provided herein) terminate this Agreement for any cause,
including, without limiting the generality of the foregoing: (i) any delay or interruption in the
acquisition, rehabilitation, equipping or operation of the Facilities; (ii) the failure to obtain any
permit, order or action of any kind from any governmental agency relating to the Loan or the
Facilities; (iii) any event constituting force majeure; (iv) any acts or circumstances that may
constitute commercial frustration of purpose; (v) the termination of this Agreement or any of the
other Loan Documents; (vi) any change in the laws of the United States of America, the State or
any political subdivision thereof; or (vii) any failure of the Authority to perform or observe any
covenant whether expressed or implied, or to discharge any duty, liability or obligation arising
out of or connected with the Note; it being the intention of the parties that, as long as the Note or
any portion thereof remains outstanding and unpaid, the obligation of the Borrower to repay the
Loan and provide such moneys shall continue in all events. This Section 4.4 shall not be
construed to release the Authority from any of its obligations hereunder, or, except as provided
in this Section 4.4, to prevent or restrict the Borrower from asserting any rights which it may
have against the Authority or the Lender under this Agreement, or under any provision of law, or
to prevent or restrict the Borrower, at its own cost and expense, from prosecuting or defending
any action or proceeding by or against the Authority or the Lender or taking any other action to
protect or secure its rights.
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Section 4.5 Prepayment of Note.
(a) As and to the extent provided in [Article 11 of] the Loan Agreement, the Note
shall be prepaid in whole or in part, in the principal amount equal to any insurance or
condemnation proceeds received by the Lender not used for repair or replacement or applied to
other amounts secured by the Security, plus accrued interest thereon to the date fixed for
prepayment, upon no less than five (5) Business Days written notice to all parties of the
determination of the Lender or the Borrower, as set forth in the Security, if applicable, that all or
part of such insurance or condemnation proceeds will not be used to repair or replace the
Facilities (or to reimburse the Borrower therefor) or applied to other amounts secured by the
Security.
(b) The Note shall be prepaid in whole or in part, in accordance with its terms, at a
price equal to the Principal Amount of the Note to be prepaid and accrued interest to the date
fixed for such prepayment, upon no less than thirty (30) days written notice to the Authority and
the Lender (or such shorter period as the Authority and the Lender may agree), as follows: (i) on
any day permitted under the terms of the Note (but in no event prior to placement in service of
the Facilities), if the Borrower in its sole discretion and to the extent permitted by the Note or the
Security, if applicable, shall choose to prepay all or a portion of the Note or (ii) concurrently
with the Transfer, if the Borrower shall Transfer all or a portion of the Facilities pursuant to
Section 5.3(b) hereof.
(c) In the event of a partial prepayment of the Note, the principal amount of the
Borrower’s obligation under the Note shall be reduced by the Principal Amount of the Note
prepaid, and such prepayment shall correspondingly reduce the principal balance of the Bond.
(d) Each notice of prepayment required by this Section 4.5 shall state the date set for
prepayment, the principal to be prepaid on the Note and the reason for prepayment. Such notice
also shall state that the Bond shall be redeemed, in whole or in part, in a Principal Amount equal
to the amount of the prepayment of the Note, on the date set for such prepayment.
Section 4.6 Servicing Requirements.
(a) The Lender shall service the Loan on behalf of the Authority. The Lender shall
have full power and authority to do any and all things in connection with such servicing which it
may deem necessary or desirable, and will exercise at least the same degree of care with respect
to the Loan that the Lender exercises with respect to servicing loans for its own account.
(b) The Lender will notify the Authority as soon as practicable if the Borrower has
failed to make a payment due under the Note.
(c) The Authority shall have no obligation to service the Loan on behalf of the
Lender, as registered owner, or to enforce any remedies against the Borrower, it being
understood among the parties that all servicing of the Loan and enforcement of any obligations
of the Borrower shall be the sole responsibility of the Lender, as servicer.
(d) The Lender covenants that so long as the Bond shall be unpaid, the Lender will
keep proper books or records and accounts, in which full, true, and correct entries will be made
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of all its financial dealings or transactions in relation to the Project and the payments derived
from the Loan Agreement, this Agreement, the Note and the Security. Upon reasonable notice
and at reasonable times during the Lender’s regular business hours and under reasonable
regulations established by the Lender, such books shall be open to the inspection of the Borrower
or the Authority, and such accountants or other agencies as the Borrower or the Authority may
from time to time designate in writing to the Lender.
Section 4.7 Rights Under Loan Agreement.
The Loan Agreement sets forth covenants and obligations of the Lender and the
Borrower, and reference is hereby made to the same for a detailed statement of said covenants
and obligations. The Authority agrees to cooperate in the enforcement of all covenants and
obligations of the Borrower under the Loan Agreement, at the expense of the Borrower.
Section 4.8 Rights Under Security.
The Authority acknowledges that it has assigned its interest in and to the Security (except
for the Unassigned Issuer’s Rights) to the Lender under this Agreement and that the Security
further secures payment of the Loan, interest thereon, and amounts due under certain other Loan
Documents, and reference is hereby made to the same for a detailed statement of the obligations
of the parties thereto.
Section 4.9 Insurance and Condemnation Proceeds.
(a) The Borrower shall, throughout the term of this Agreement, obtain insurance for
the Facilities to the extent required and in accordance with the Loan Agreement and the Security,
if applicable.
(b) The Lender shall hold and disburse all insurance proceeds or condemnation
awards in accordance with the Security if applicable, and the Loan Agreement. Insurance
proceeds or condemnation awards shall be used to repair or replace the Facilities (or reimburse
the Borrower therefor) or to pay or prepay amounts owing under the Loan Documents in
accordance with the Security and the Loan Agreement. The Lender or the Borrower, as
appropriate, shall forthwith notify the other parties to this Agreement in writing of the use of any
such proceeds or award; provided that such notice shall be sent no later than five Business Days
prior to prepayment of the Note with the proceeds or award.
(End of Article V)
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ARTICLE V
FURTHER AGREEMENTS
Section 5.1 Covenants of the Authority.
The Authority covenants that it will faithfully perform at all times any and all covenants,
undertakings, stipulations and provisions contained in this Agreement, in the Bond executed,
authenticated and delivered hereunder and in all of its proceedings pertaining thereto; provided,
however, that (except for payment of the principal of and interest on the Bond from the
Revenues as herein provided) the Authority shall not be obligated to take any action or execute
any instrument pursuant to any provision hereof until it shall have been requested to do so by the
Borrower or by the Lender, or shall have received the instrument to be executed, and at the
Authority’s option shall have received from the Borrower assurance satisfactory to the Authority
that the Authority shall be reimbursed by the Borrower for its reasonable expenses incurred or to
be incurred in connection with taking such action or executing such instrument. The Authority
covenants that it is duly authorized under the Constitution and laws of the State, including
particularly and without limitation the Act and the Supplemental Act, to issue the Bond and to
enter into this Agreement, to pledge the Revenues and other funds derived from this Agreement
in the manner and to the extent herein set forth; that all action on its part for the issuance of the
Bond and the execution and delivery of this Agreement has been duly and effectively taken; and
that the Bond in the hands of the owners thereof is and will be a valid and enforceable obligation
of the Authority according to the tenor and import thereof.
Section 5.2 Borrower to Maintain its Existence; Conditions Under Which Exceptions
Permitted.
The Borrower agrees that during the term of this Agreement it will maintain its existence
as a limited liability limited partnership, will continue to be duly qualified to do business in the
State, and will neither dispose of all or substantially all of its assets nor consolidate with or
merge into another entity, unless the Borrower shall have prepaid the Note in full or (i) the
Borrower shall have first filed with the Authority an opinion of Bond Counsel at the sole cost
and expense of the Borrower, to the effect that such disposal of assets, consolidation or merger
will not cause the interest on the Bond to become subject to Federal or State income taxation, (ii)
the acquirer of its assets or the entity with which it shall consolidate or into which it shall merge
shall be an entity, organized and existing under the laws of the United States of America or one
of the states of the United States of America and shall be qualified and admitted to do business in
the State, (iii) such acquiring or remaining entity shall assume in writing all of the obligations of
the Borrower under the Loan Documents, subject to all of the limitations of liability applicable to
the Borrower, (iv) such acquisition shall comply with the provisions of the Security and (v) the
Lender shall have provided prior written consent to such disposition, consolidation or merger,
and shall have furnished to the Authority within 10 days after any such action notice thereof and
an executed original document evidencing said consent.
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As soon as practicable, but not less than fifteen (15) days prior to the intended disposition
of assets, consolidation or merger, the Borrower shall notify the Authority and the Lender of
such intended transaction.
Section 5.3 Sale or Conveyance of the Facilities.
For so long as any amounts remain owing by the Borrower hereunder or under any of the
other Loan Documents, the Borrower shall not voluntarily Transfer the Facilities or any portion
thereof (other than for leases to residents or for any incidental use, to the extent permissible
under all applicable Federal and state laws and regulations, or by granting a security interest
junior to the Security and the Note if permitted by the Security) except with the written consent
of the Lender and in compliance with the terms of the Security, and as follows:
(a) The Borrower shall obtain the prior written consent of the Authority, which
consent shall not be unreasonably withheld, conditioned or delayed, and shall be conditioned
upon:
(i) reasonable evidence satisfactory to the Authority that the Borrower is not
then in default hereunder beyond any applicable grace period or cure period;
(ii) an opinion of counsel for the Transferee, delivered to the Authority and
the Lender, to the effect that (A) the Transferee is a validly existing entity that meets the then
applicable requirements of the Authority, (B) the Transferee has assumed in writing and in full
all duties and obligations of the Borrower under the Loan Documents, (C) the Loan Documents
constitute the legal, valid and binding obligations of the Transferee and (D) operation of the
Facilities by the Transferee will be within its charter, bylaws and/or comparable organizational
documents;
(iii) an opinion of Bond Counsel, at the sole cost and expense of the Borrower
or the transferee, to the effect that such sale or conveyance of the Facilities will not cause the
interest on the Bond to become subject to Federal income taxation;
(iv) said written assumption of the Transferee and the written agreement of the
Transferee to comply with all provisions of state and Federal law applicable to the Borrower
under this Agreement;
(v) evidence satisfactory to the Authority, with regard to any project of the
Transferee financed by the Authority, that
(A) the Transferee is not now in arrears on any payments of fees due
and owing to the Authority or in default under any agreement with the Authority,
beyond any applicable grace period or cure period, and
(B) the Transferee does not have a documented history of repeated
instances of noncompliance with provisions of the Authority equivalent to those
in this Agreement or the Tax Certificate which are not cured after notice thereof
and within the applicable cure period or grace period;
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(vi) payment to the Authority of any out-of-pocket expenses in connection
with such Transfer; and
(vii) any other conditions which may be reasonably imposed by the Authority
to assure compliance with Federal or State law.
Notwithstanding the foregoing, the Authority’s consent shall not be required: (i) for a
sale, transfer or change in the general partner of the Borrower, including the addition, removal or
withdrawal of a general partner in accordance with the Borrower’s partnership agreement; or (ii)
following foreclosure or with respect to a deed in lieu of foreclosure (but not upon the
subsequent transfer of the Project following foreclosure or a deed in lieu of foreclosure).
(b) If the Transferee does not meet all requirements set forth in Section 5.3(a) hereof,
the Borrower shall notify the Authority in writing no later than fifteen (15) days prior to the
intended Transfer. The Borrower hereby agrees that the proceeds of such Transfer shall,
concurrently with such Transfer, be used to prepay the Note in full pursuant to Section 4.5(b)
hereof and to redeem the Bond in full pursuant to Section 3.4(b) hereof; provided, that all
proceeds of said Transfer in excess of the outstanding principal balance of the Note and accrued
interest to such date shall be retained by the Borrower and, provided further, that until
prepayment in full of the Note and the corresponding redemption of the Bond, this Agreement,
the Tax Certificate, the Note, the Security and the other Loan Documents shall remain in full
force and effect, and the Borrower and the Facilities shall retain all obligations hereunder and
thereunder.
(c) As soon as practicable and not later than fifteen (15) days prior to the intended
date of any transfer of the Facilities, the Borrower shall notify the Authority and the Lender of
such transaction. As soon as practicable following such transaction, the Borrower shall provide
to the Authority and the Lender copies of any executed documents obtained by the Lender
evidencing the transfer of title to the Facilities and any written assumption by the Transferee of
the Loan Documents, as well as copies of all other documents obtained by the Borrower that may
be executed in regard to such Transfer.
(d) No Transfer of the Facilities in violation of Section 5.3(a) or (b) hereof shall
relieve the Borrower or the Facilities of obligations under this Agreement or the Tax Certificate.
Section 5.4 Tax-Exempt Status of Bond; Arbitrage.
It is the intention of the parties hereto that interest on the Bond shall be and remain
excluded from gross income of the holder of the Bond under Federal tax law, and to that end the
covenants and agreements of the Authority, the Lender and the Borrower in this Section 5.4 are
for the benefit of the Authority as issuer of the Bond and the Lender as owner of the Bond.
The Lender, the Borrower and the Authority covenant and agree that they have not taken
or permitted to be taken and will not take or permit to be taken any action that will cause the
interest on the Bond to become included in gross income for Federal tax purposes pursuant to the
Code or cause the Bond to become an “arbitrage bond” within the meaning of Section 103 of the
Code; provided, that none of the covenants and agreements herein contained shall require the
Lender, the Borrower or the Authority to enter an appearance or intervene in any administrative,
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legislative or judicial proceeding in connection with any changes in applicable laws, rules or
regulations or in connection with any decisions of any court or administrative agency or other
governmental body affecting the taxation of interest on the Bond; and provided further, that each
party’s responsibility under this Section 5.4 shall be limited to actions within its respective
control.
The Borrower agrees to pay in accordance with Section 4.3(b) hereof, the costs of the
calculation of the Rebate Amount and the amount of the Rebate Amount, if any, owing to the
United States of America on the Bond.
The Borrower specifically covenants to comply with the provisions of the Tax
Certificate.
Without limiting the generality of the foregoing, the Borrower and the other parties
hereto covenant and agree that they will take such action or actions (including, without
limitation, consenting and agreeing to amendments to the Loan Documents as may be necessary
in the opinion of Bond Counsel), at the sole cost and expense of the Borrower, so that the
Borrower, all subsequent owners of the Facilities, and the Facilities comply fully and
continuously with Section 148 of the Code, as amended, and applicable to the Bond from time to
time, all applicable rules, rulings, policies, procedures, regulations or other official statements
now or in the future promulgated or proposed by the Department of the Treasury or the Internal
Revenue Service pertaining to obligations issued under Section 148 of the Code, including,
without limitation, the Treasury Regulations, and with all applicable legislative enactments or
applicable final decisions of courts of competent jurisdiction.
By virtue of the Borrower’s agreeing to comply with future laws or regulations, the
parties do not intend nor shall they be deemed to waive any rights or defenses they may have,
individually or collectively, to contest the application of such laws or regulations to the Facilities
or the Project on the grounds that such application would constitute a prohibited impairment of
contract or on any other applicable grounds. Nevertheless, while contesting the application of
any such laws or regulations, the Borrower shall take such actions deemed necessary in the
opinion of Bond Counsel to maintain the exclusion from gross income of interest on the Bond.
To the extent necessary to retain the exclusion of the interest on the Bond from gross
income for purposes of Federal income taxation or otherwise required by law, the provisions of
this Section 5.4 shall survive termination of this Agreement.
Section 5.5 Additional Instruments.
The Borrower hereby covenants to execute and deliver such additional instruments and to
perform such additional acts as may be necessary, in the reasonable opinion of the Authority or
the Lender, to carry out the intent of the Loan Documents or to perfect or give further assurances
of any of the rights granted or provided for in the Loan Documents; provided that no such
instruments or acts shall change the economic terms of the transactions described herein or
expand the liabilities of the parties hereunder without the consent of all the parties hereto.
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Section 5.6 Books and Records.
(a) The Borrower hereby covenants to permit the Authority, the Lender or their duly
authorized representatives access, upon reasonable notice, during normal business hours to the
books and records of the Borrower pertaining to the Loan and the Facilities, and to make such
books and records available for audit and inspection, at reasonable times and under reasonable
conditions, to the Authority and the Lender and their duly authorized representatives.
(b) The Borrower hereby agrees to retain all draw requests submitted by the Borrower
to the Lender pertaining to the Loan and the Facilities for a period of seven (7) years from the
date of the final payment on the Bond.
Section 5.7 Notice of Certain Events.
The Borrower and the Lender each hereby covenants to advise the Authority and the
other party hereto promptly in writing of the occurrence of any Default hereunder of which it has
actual notice or any event which, with the passage of time or service of notice, or both, would
constitute a Loan Acceleration Default hereunder of which it has actual notice, specifying the
nature and period of existence of such event and the actions being taken or proposed to be taken
with respect thereto. In addition, the Borrower hereby covenants to advise the Authority and the
Lender promptly in writing of the occurrence of any default under the Loan Documents or of the
occurrence of an Act of Bankruptcy of the Borrower.
Section 5.8 Indemnification of the Authority and the Lender.
The Borrower shall indemnify, hold harmless and defend the Authority and the Lender
(except to the extent of gross negligence or willful misconduct by the Authority or the Lender,
respectively) and the officers, members, directors, officials, agents and employees of each of
them from and against: (i) any and all claims or proceedings by or on behalf of any Person
directly or indirectly arising from any cause whatsoever in connection with the Facilities, the
Project, the Loan Documents or any act or omission of the Borrower or any of its agents,
servants, employees or licensees, in connection with the Loan or the Facilities and (ii) all
reasonable costs, expenses, damages, counsel fees or liabilities incurred in connection with any
such claim or proceeding brought thereon. In the event that any action or proceeding is brought
against the Authority or the Lender or any of its officers, members, directors, officials, agents or
employees, with respect to which indemnity may be sought from the Borrower hereunder, the
Borrower, upon written notice from the Authority or the Lender, shall assume the investigation
and defense of the Authority and/or the Lender thereof, including the employment of counsel
selected by the Authority or the Lender and the payment of all reasonable expenses related
thereto; provided, that no settlement of a claim or proceeding against an indemnified party shall
occur without the consent of such indemnified party. Notwithstanding any Transfer of the
Facilities in accordance with the provisions of this Agreement and the other Loan Documents,
the Borrower shall remain obligated to indemnify the Authority and the Lender against claims
arising from the period prior to such Transfer and during all times when the Borrower owned or
had an interest in the Facilities.
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The rights of the Authority and the Lender under this Section shall survive the payment
in full of the Bond and termination of this Agreement.
Section 5.9 Compliance with Usury Laws.
Notwithstanding any other provision of this Agreement, it is agreed and understood that
in no event shall this Agreement, with respect to the Note or other instrument of indebtedness, be
construed as requiring the Borrower or any other Person to pay interest and other costs or
considerations that constitute interest under any applicable law which are contracted for, charged
or received pursuant to this Agreement in an amount in excess of the maximum amount of
interest allowed under any applicable law.
In the event of any acceleration of the payment of the Principal Amount of the Note, that
portion of any interest payment in excess of the maximum legal rate of interest, if any, provided
for in this Agreement or related documents shall be canceled automatically as of the date of such
acceleration, or if theretofore paid, shall be credited against the Borrower’s obligations under the
Note and the payments due on the Bond shall be correspondingly reduced.
The provisions of this Section 5.9 shall prevail over any other provision of this
Agreement.
Section 5.10 Compliance with Other Laws.
To the Borrower’s knowledge, the design, construction and operation of the Facilities as
described herein do not and will not conflict with any zoning, water or air pollution or other
ordinance, order, law or regulation applicable thereto; if the Project is new construction, the
Borrower has caused the Facilities to be designed in accordance with all the applicable Federal,
state and local laws or ordinances (including rules and regulations) relating to zoning, building,
safety, and environmental quality; and the Borrower has not failed to obtain (or will obtain when
required) and maintain in effect any licenses, permits, franchises or other governmental
authorizations necessary for the operation and conduct of the Facilities.
The Borrower shall comply with Federal housing policy governing nondiscrimination and
accessibility, as determined under the Americans with Disabilities Act, the Fair Housing
Amendments Act of 1988, the rules and regulations of HUD and any other applicable Federal,
state and local law.
Section 5.11 Maintenance and Repair of Facilities.
The Borrower agrees to maintain the Facilities or cause the Facilities to be maintained,
during the term of this Agreement, (a) in a reasonably safe condition and (b) in good repair and
in good operating condition, ordinary wear and tear excepted.
Section 5.12 Additional Covenants Required by the Lender.
The Borrower covenants to comply with the terms and conditions set forth in the Loan
Agreement and the other Security, which are required by the Lender as a condition for providing
the Loan.
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(End of Article VI)
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ARTICLE VI
EVENTS OF DEFAULT AND REMEDIES
Section 6.1 Defaults.
(a) A “Default” of the Borrower under this Agreement shall exist when any one or
more of the following shall occur (whatever the reason for such event and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree
or order of any court or any order, rule or regulation of any administrative or governmental
authority):
(i) The Borrower fails to pay (A) any installment of principal or
interest payable pursuant to the Note or the Loan Agreement on the date when due, or (B) any
other amount payable under the Note, the Loan Agreement, this Agreement, or the Security
within five (5) days after the date when any such payment is due in accordance with the terms of
such document and not cured within applicable cure periods.
(ii) The Borrower and the Authority shall receive written notice from the
Lender that an “Event of Default” has occurred under the Loan Agreement, the Note and/or the
Security, if applicable (other than a failure to pay any amount due on the Note), and that the
Lender declares that such occurrence shall be treated as a Default hereunder; provided, however,
that the Lender shall have given the Borrower and Borrower’s limited partner notice of such
default and at least 15 days within which to cure such default before the Lender shall exercise the
remedies described in Sections 6.2 and 6.3 hereof.
(iii) The Borrower (A) shall transfer the Facilities in violation of the provisions
hereof or the Security, (B) shall receive written notice from the Lender or the Authority (with a
copy to the other parties hereto) that the Borrower has failed to observe any of its obligations,
covenants or agreements hereunder (other than as specified in Section 6.l(a)(i) hereof), under the
Tax Certificate, the Regulatory Agreement or the Tax Credit Regulatory Agreement, if
applicable, and such failure shall continue for thirty (30) days following such notice to the
Borrower and the Borrower’s limited partner unless the Lender and the Authority shall agree in
writing to an extension of such time prior to its expiration, or (C) shall receive written notice
from the Lender or the Authority (with a copy to the other parties hereto) that the Borrower has
made any material representation or warranty hereunder or under the Tax Certificate or the
Regulatory Agreement, if applicable, that was false when made.
(iv) The Borrower purports to revoke, disputes the validity of or disputes the
enforceability of its obligations under any of the Loan Documents.
(v) An Act of Bankruptcy of the Borrower.
(b) A “Default” of the Lender shall occur when (i) the Lender shall receive written
notice from the Authority that the Lender has failed to observe any of its obligations, covenants
or agreements hereunder, and such failure shall continue for thirty (30) days following such
notice or (ii) the Lender shall receive written notice from the Authority that the Lender has made
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any material representation or warranty hereunder or under the Tax Certificate or the Regulatory
Agreement, if applicable, that was false when made.
(c) A “Default” shall occur when the Borrower and the Authority receive written
notice from the Lender that a Determination of Taxability has occurred and the cure period, if
any, provided for in such notice of a Determination of Taxability has expired without the cure, to
the satisfaction of the Lender, in reliance on the advice of Bond Counsel, of the problem
identified in the Lender’s notice; provided, that in the event of a Determination of Taxability
pursuant to clause (a) or (b) of the definition thereof, such notice shall provide for a cure period
of at least 30 days unless, in the judgment of the Authority, in reliance on the advice of Bond
Counsel, no cure is possible.
(d) If practicable, any party, including the Borrower’s limited partner, may, but is not
obligated to, cure an action or inaction of another party that, if uncured within the applicable
time period, would become a Default hereunder and such cure shall be accepted or rejected on
the same basis as if made or tendered by the party.
Section 6.2 Loan Acceleration Default.
No Default under Section 6.1 hereof (other than Section 6.1(a)(v) hereof) shall constitute
a Loan Acceleration Default unless or until the Borrower and the Authority receive a written
“Notice of Loan Acceleration Default” from the Lender. A Default under Section 6.1(a)(v)
hereof shall constitute a Loan Acceleration Default immediately upon the occurrence thereof.
Section 6.3 Remedies.
(a) Whenever any Loan Acceleration Default under Section 6.2 hereof shall have
occurred and be continuing:
(i) The Bond shall be subject to mandatory redemption in whole pursuant to
Section 3.4(a)(i) hereof.
(ii) Subject to the provisions of Section 4.4 hereof, the non-defaulting parties
also may take whatever action at law or in equity appears necessary or desirable to enforce
performance and observance of any obligation or agreement in respect of which the Loan
Acceleration Default has occurred.
(iii) The Lender may exercise any and all of its rights under the Loan
Documents, including but not limited to its rights under the Assignment of Security and the
Security.
(b) Whenever any Default under Section 6.1 hereof shall have occurred and be
continuing, the non-defaulting parties, subject to the provisions of Section 4.4 hereof, may
exercise any or all remedies set forth in the Security and may take whatever additional action at
law or in equity that appears necessary or desirable to enforce performance and observance of
any obligation or agreement in respect of which the Default has occurred.
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(c) Any amounts collected as payments of principal of or interest on the Note, or
applicable to such payments, pursuant to action taken under this Section 6.3 shall be applied to
payments of amounts due on the Bond.
Section 6.4 Attorneys’ Fees and Costs.
If (a) a Default pursuant to Section 6.1 hereof occurs or (b) any non-defaulting party
should employ attorneys or incur expenses for the enforcement of any obligation or agreement of
the defaulting party or parties contained herein, then the defaulting party or parties, as applicable,
on demand will pay to the non-defaulting party the reasonable fees of such attorneys and the
reasonable costs so incurred, including, without limitation, reasonable fees and costs of court
appeals.
Section 6.5 No Remedy Exclusive.
No remedy herein conferred upon or reserved to any party is intended to be exclusive of
any other available remedy or remedies, but each and every such remedy shall be cumulative and
shall be in addition to every other remedy given under this Agreement, the Loan Agreement or
the Security or now or hereafter existing at law or in equity or by statute. No delay or omission
to exercise any right or power accruing upon any default shall impair any such right or power or
shall be construed to be a waiver thereof, but any such right and power may be exercised from
time to time and as often as may be deemed expedient. In order to entitle any non-defaulting
party or parties to exercise any remedy reserved to it in this Article VI, it shall not be necessary
to give any notice, other than such notice as may be herein expressly required.
Section 6.6 No Additional Waiver Implied by One Waiver.
In the event any agreement or covenant contained in this Agreement should be breached
by a party hereto and thereafter waived by another party, such waiver shall be limited to the
particular breach so waived and shall not be deemed to waive any other breach hereunder.
(End of Article VI)
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ARTICLE VII
MISCELLANEOUS
Section 7.1 Entire Agreement.
This Agreement, the Tax Certificate and the other Loan Documents constitute the entire
agreement and supersede all prior agreements and understandings, both written and oral, among
the Authority, the Lender and the Borrower with respect to the subject matter hereof.
Section 7.2 Notices.
All notices, certificates or other communications shall be in writing and shall be
sufficiently given and shall be deemed received on the Business Day on which the same have
been sent by facsimile or other electronic communication, on the next Business Day following
the day on which the same have been personally delivered (either by messenger or courier
service which guarantees next day delivery) or (if not by such messenger or by courier service),
on the second Business Day following the date on which the same has been mailed by certified
mail, return receipt requested, postage prepaid, addressed as follows:
If to Authority:
Colorado Housing and Finance Authority
1981 Blake Street
Denver, Colorado
Attention: Director of Community Development
Telephone: (303) 297-7363
Fax: (303) 291-5709
and
Colorado Housing and Finance Authority
1981 Blake Street
Denver, Colorado 80202
Attention: General Counsel
Telephone: (303) 297-7314
Fax: (303) 291-5712
If to the Lender:
City of Aspen, Colorado
130 S. Galena Street
Aspen, Colorado 81611
Attention: Finance Director
Telephone: (970) 920-5027
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with a copy to:
City of Aspen, Colorado
130 S. Galena Street
Aspen, Colorado 81611
Attention: City Attorney
Telephone: (970) 920-5708
If to Borrower:
ACI Affordable 1 LLLP
c/o City of Aspen, Colorado
130 S. Galena Street
Aspen, Colorado 81611
Attention: _______________
Telephone: ______________
with a copy to:
Bryan Cave LLP
One Boulder Plaza
1801 13th Avenue, Suite 300
Boulder, Colorado 80302
Attention: Paul Smith, Esq.
Telephone: (303) 417-8508
A duplicate copy of each notice, certificate or other communication given hereunder by
any party hereto to another party hereto shall also be given to all of the parties. All other
documents required to be submitted to any of the foregoing parties shall also be submitted to
such party at its address set forth above. Any of the foregoing parties may, by notice given
hereunder, designate any further or different addresses to which subsequent notices, certificates,
documents, or other communications shall be sent.
Section 7.3 Assignments.
This Agreement may not be assigned by any party without the prior written consent of all
parties hereto, which consent shall not be unreasonably withheld, conditioned or delayed;
provided, that (a) the Borrower may assign to any transferee or any surviving or resulting entity
its rights under this Agreement as provided by Section 5.2 or Section 5.3 hereof and (b) the
Lender may assign this Agreement without the further consent of any party hereto to any
assignee of the Bond in accordance with Section 3.5 hereof.
Section 7.4 Waiver of Jury Trial.
TO THE EXTENT ALLOWED BY LAW, THE AUTHORITY, THE BORROWER
AND THE LENDER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVE ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
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LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION
WITH THIS AGREEMENT. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE
LENDER’S EXECUTION OF THIS AGREEMENT.
Section 7.5 Severability.
If any provision of this Agreement shall be held or deemed to be or shall, in fact, be
illegal, inoperative or unenforceable, the same shall not affect any other provision or provisions
herein contained or render the same invalid, inoperative, or unenforceable to any extent
whatever.
Section 7.6 Execution of Counterparts.
This Agreement may be simultaneously executed in several counterparts, each of which
shall be an original and all of which shall constitute but one and the same instrument.
Section 7.7 Amendments, Changes and Modifications.
Except as otherwise specifically provided in this Agreement, this Agreement may not be
effectively amended, changed, modified, altered or terminated without the written consent of all
the parties hereto. In addition to all requirements contained therein, the terms of the Note, the
Regulatory Agreement or the Security may not be amended, changed, modified, altered or
terminated without the written consent of the Authority. The Lender or the Borrower shall
provide the Authority with notice of any change, modification, alteration, or termination of the
Security.
Section 7.8 Governing Law.
This Agreement shall be governed exclusively by and construed in accordance with the
applicable laws of the State.
Section 7.9 Term of Agreement.
This Agreement shall be in full force and effect from the date hereof until such time as
the Bond, and all other payment obligations of the Borrower hereunder and under the other Loan
Documents (other than contingent obligations), shall have been fully paid; provided, that the
Lender’s and the Authority’s rights to indemnification under Section 5.8 hereof and the
provisions of Section 5.4 hereof, and Section 5.3 hereof to the extent provided therein, shall
survive the termination of this Agreement. Time is of the essence in this Agreement.
Section 7.10 Non-Business Days.
Any payment or act required to be done or made on a day that is not a Business Day shall
be done or made on the next succeeding day that is a Business Day with the same force and
effect as if it had been done on the date originally scheduled for such payment or act.
Section 7.11 Parties to Act Reasonably.
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When the consent, approval, determination or authorization of any party to this
Agreement is required, unless otherwise provided, such party will act reasonably in deciding
whether to provide such consent, approval, determination or authorization and will not
unreasonably withhold, condition or delay such decision or such consent, approval,
determination or authorization.
Section 7.12 No Violations of Law.
Any other term or provision in this Agreement to the contrary notwithstanding, (a) in no
event shall this Agreement be construed as (i) depriving the Authority of any right or privilege,
or (ii) requiring the Authority or any member of its Board of Directors, official, officer, agent,
employee, representative or advisor of the Authority to take or omit to take, or to permit or suffer
the taking of, any action by itself or by anyone else, which deprivation or requirement would
violate, or result in the Authority’s being in violation of the Act or any other applicable state or
federal law; and (b) at no time and in no event will the Borrower permit, suffer or allow any of
the proceeds of the Bond to be transferred to any Person in violation of, or to be used in any
manner which is prohibited by, the Act or any other state or federal law.
Section 7.13 Agreement of the State.
In accordance with the Act, the Authority hereby includes as a part of its contract with
owners of the Bond the following pledge and agreement of the State: The State does hereby
pledge to and agree with the owners of the Bond that the State will not limit or alter the rights
hereby vested in the Authority to fulfill the terms of any agreements made with the owners of the
Bond or in any way impair the rights and remedies of the owners of the Bond until the Bond,
together with the interest thereon, with interest on any unpaid installments of interest, and all
costs and expenses in connection with any action or proceeding by or on behalf of the owners of
the Bond are fully met and discharged.
[Signature page follows]
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[Signature page to Financing Agreement]
IN WITNESS WHEREOF, the parties hereto have executed this Financing Agreement,
all as of the day and year first above mentioned.
COLORADO HOUSING AND FINANCE
AUTHORITY
By: _____________________________________
Chief Financial Officer
Attest:
By:
Assistant Secretary
ACI AFFORDABLE 1 LLLP,
a Colorado limited liability limited partnership
By: City of Aspen, Colorado, general partner
By: ______________________________
Name: Steve Skadron
Title: Mayor
(SEAL)
Attest:
City Clerk
CITY OF ASPEN, COLORADO
By: _________________________________
Name: Steve Skadron
Title: Mayor
(SEAL)
Attest:
City Clerk
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EXHIBIT A
FORM OF BOND
No. __ $__________
COLORADO HOUSING AND FINANCE AUTHORITY
MULTIFAMILY HOUSING REVENUE BOND
(ASPEN COUNTRY INN PROJECT)
SERIES 2016
INTEREST RATE: ____% per annum
DATED DATE: July __, 2016
MATURITY DATE: [August 1, 2017]
REGISTERED OWNER: __________________________
MAXIMUM PRINCIPAL AMOUNT: $7,600,000
NOTICE: THIS BOND IS NOT REGISTERED UNDER STATE OR
FEDERAL SECURITIES LAWS AND MAY NOT BE OFFERED
OR SOLD, PLEDGED (EXCEPT BY A PLEDGE PURSUANT TO
THE TERMS OF WHICH ANY OFFER OR SALE UPON
FORECLOSURE WOULD BE MADE IN A MANNER THAT
WOULD NOT VIOLATE THE REGISTRATION PROVISIONS OF
FEDERAL OR STATE SECURITIES LAWS) OR OTHERWISE
DISTRIBUTED FOR VALUE, NOR MAY THIS BOND BE
TRANSFERRED ON THE BOOKS OF THE AUTHORITY,
EXCEPT IN ACCORDANCE WITH SECTION 3.5 OF THE
FINANCING AGREEMENT. TO THE EXTENT REQUIRED
UNDER THE FINANCING AGREEMENT. ANY ATTEMPT TO
TRANSFER THIS BOND IN VIOLATION OF THIS
RESTRICTION SHALL BE VOID.
THIS BOND AND THE ISSUE OF WHICH IT FORMS A PART
ARE NOT GENERAL OBLIGATIONS OF THE AUTHORITY BUT
ARE LIMITED OBLIGATIONS PAYABLE SOLELY FROM THE
MONEY AND PROPERTIES PLEDGED FOR PAYMENT
THEREOF.
COLORADO HOUSING AND FINANCE AUTHORITY (the “Authority”), a body
corporate and political subdivision of the State of Colorado (the “State”), for value received,
promises to pay to the registered owner specified above or registered assigns, but solely from the
sources and in the manner referred to herein, the Principal Amount specified above on the
aforesaid Maturity Date or on such earlier date as provided herein, and interest on the balance of
said Principal Amount from time to time as determined by the records of the Lender and
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remaining unpaid from the later of the date hereof or the most recent Interest Payment Date (as
defined below) to which interest has been paid, at the Interest Rate per annum set forth above,
payable on the first day of each month, commencing [September] 1, 2016 (each, an “Interest
Payment Date”). Principal of and interest on this Bond are payable at the principal office of the
Registered Owner, or at such other place and in such other manner as may be elected by the
Registered Owner hereof in accordance with the Financing Agreement (as defined below). Upon
payment in full of the principal of this Bond, whether at maturity or prior redemption, the
Registered Owner shall forthwith deliver this Bond to the Authority for cancellation.
Principal and interest are payable at the times and in the amounts that principal and
interest, respectively, are payable under the Note by the Borrower (as defined below).
NO RECOURSE SHALL BE HAD FOR THE PAYMENT OF THE PRINCIPAL OF
OR INTEREST ON THIS BOND AGAINST ANY PAST, PRESENT OR FUTURE MEMBER
OF THE AUTHORITY’S BOARD OF DIRECTORS, OR THE OFFICERS, COUNSEL OR
AGENTS OF THE AUTHORITY, OR OF ANY SUCCESSOR THERETO, UNDER ANY
RULE OF LAW OR EQUITY, STATUTE OR CONSTITUTION, AND ALL SUCH
LIABILITY IS HEREBY EXPRESSLY WAIVED AND RELEASED AS A CONDITION OF,
AND CONSIDERATION FOR, THE EXECUTION AND ISSUANCE OF THIS BOND.
THE BOND SHALL BE A SPECIAL, LIMITED OBLIGATION OF THE
AUTHORITY PAYABLE, AS TO PRINCIPAL AND INTEREST SOLELY FROM THE
REVENUES, AS PROVIDED IN THE FINANCING AGREEMENT. THE BOND SHALL
CONSTITUTE A VALID CLAIM OF THE REGISTERED OWNERS THEREOF AGAINST
SUCH REVENUES, WHICH ARE PLEDGED TO SECURE THE PAYMENT OF THE
PRINCIPAL OF AND INTEREST ON THE BOND, AND WHICH SHALL BE USED FOR
NO OTHER PURPOSE EXCEPT AS EXPRESSLY AUTHORIZED IN THE FINANCING
AGREEMENT. THE BOND SHALL NOT BE A DEBT OR INDEBTEDNESS OF THE
STATE OR ANY POLITICAL SUBDIVISION THEREOF (INCLUDING THE AUTHORITY),
AND NEITHER THE STATE NOR ANY POLITICAL SUBDIVISION THEREOF SHALL BE
LIABLE THEREON, NOR IN ANY EVENT SHALL THE BOND BE PAYABLE OUT OF
ANY FUNDS OR PROPERTIES OTHER THAN THOSE OF THE AUTHORITY PLEDGED
UNDER THE FINANCING AGREEMENT. THE BOND SHALL NOT CONSTITUTE AN
INDEBTEDNESS OR A MULTIPLE FISCAL-YEAR FINANCIAL OBLIGATION WITHIN
THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY DEBT LIMITATION OR
RESTRICTION. NEITHER THE STATE NOR ANY POLITICAL SUBDIVISION THEREOF
(EXCEPT THE AUTHORITY FROM THE SOURCES IDENTIFIED HEREIN) SHALL BE
LIABLE FOR PAYMENT OF THE BOND NOR IN ANY EVENT SHALL PRINCIPAL OF
AND INTEREST ON THE BOND BE PAYABLE OUT OF ANY FUNDS OR ASSETS OF
THE AUTHORITY OTHER THAN THOSE PLEDGED TO THAT PURPOSE BY THE
AUTHORITY HEREIN. THE AUTHORITY HAS NO TAXING POWER.
This Bond shall not constitute the personal obligation, either jointly or severally, of the
Authority or of any director, officer, employee or official of the Authority.
This Bond constitutes a duly authorized issue of the Colorado Housing and Finance
Authority Multifamily Housing Revenue Bond (Aspen Country Inn Project) Series 2016 (the
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“Bond”), issuable under the Financing Agreement dated as of July __, 2016 (the “Financing
Agreement”) among the Authority, the City of Aspen, Colorado, a home rule municipality of the
State of Colorado (the “Lender”) and ACI Affordable 1 LLLP, a Colorado limited liability
limited partnership (the “Borrower”). This Bond is issued pursuant to the Colorado Housing and
Finance Authority Act, being part 7 of article 4 of title 29, Colorado Revised Statutes (the
“Act”), the Supplemental Public Securities Act, constituting Article 57, Title 11, Sections 201, et
seq. of the Colorado Revised Statutes, as amended (the “Supplemental Act”) and a resolution
duly adopted by the Authority. The principal amount of this Bond shall be the initial principal
amount hereof plus the principal amount of each draw delivered pursuant to the Financing
Agreement, less any principal payments of such Bond previously received by the Lender.
This Bond is issued to provide funds for the Authority’s making of a loan (the “Loan”) to
finance eligible facilities of the Borrower and to pay certain costs of such financing. The
Authority has assigned the Loan, the Note and the Security (to the extent granted for the benefit
of the Authority and except for the Unassigned Issuer’s Rights) to the Lender as the initial
Registered Owner of this Bond.
Reference is hereby made to the Financing Agreement, the Note, the Security and the
Loan Agreement between the Lender and the Borrower, which are on file with the Lender, for
the provisions, among others, with respect to the nature and extent of the rights, duties and
obligations of the Authority, the Lender, the Borrower and the Registered Owner, the terms upon
which this Bond is issued and secured; the collection and disposition of Revenues; a description
of the properties and interests pledged; the modification or amendment of the Financing
Agreement; and other matters, to all of which the Registered Owner of this Bond assents by the
acceptance of this Bond.
This Bond is subject to mandatory redemption at a price equal to the outstanding
principal amount of this Bond plus accrued interest thereon to the date fixed for redemption, as
follows:
(a) in whole, upon the receipt by all parties of notice of Loan Acceleration Default
under the Financing Agreement; and
(b) in whole or in part, upon the occurrence of events described in Sections 4.5(a)
and 4.9(b) of the Financing Agreement, if all or part of any insurance or condemnation proceeds
will not be used to repair or replace the Facilities or to reimburse the Borrower therefor, in a
principal amount equal to the proceeds not used for such repair or replacement.
(c) This Bond also is subject to optional redemption, in whole or in part, upon and in
the amount of the prepayment of the Note at the option of the Borrower in accordance with
Section 4.5(b) of the Financing Agreement on any day permitted under the Note and for which
notice of such prepayment is given in accordance with the Financing Agreement and the Note, at
a price equal to the outstanding principal amount of this Bond plus accrued interest thereon to the
date fixed for redemption.
Written notice of redemption pursuant to subparagraphs (a), (b) and (c) above shall be
given by the Authority, in accordance with the Financing Agreement, not less than five Business
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Days prior to the date set for redemption. By the acceptance of this Bond, the Registered Owner
agrees that the notices required under the Financing Agreement regarding the use of insurance or
condemnation proceeds and the prepayment of the Note will provide sufficient notice of any
redemption of this Bond pursuant to the immediately preceding paragraph or subparagraph (b) or
(c) above, and the Registered Owner waives any additional notice from the Authority of such
redemption. Failure of the Registered Owner to receive notice by mail or any defect in any
notice so mailed shall not affect the validity of the proceedings for such redemption. This Bond
or portion thereof called for redemption will cease to bear interest on the specified redemption
date if, on such date, the redemption price is paid or is deemed paid as provided in the Financing
Agreement.
If this Bond is redeemed pursuant to subparagraph (a) above, payment of the redemption
price shall be deemed to have been made in accordance with the Authority’s prior absolute
assignment to the Lender of all right, title and interest of the Authority in the Note, the Security
and the other Loan Documents (except for the Unassigned Issuer’s Rights). In the event of any
other redemption of this Bond, payment of the redemption price shall be made from the
Revenues.
No recourse for the payment of the principal of or interest on this Bond or for any claim
based thereon or under or upon any obligation, covenant, acceptance or agreement contained in
the Financing Agreement, or in this Bond, or under any judgment obtained against the Authority
or by the enforcement of any assessment or by any legal or equitable proceeding by virtue of any
constitution or statute or otherwise, or under any circumstances, shall be had against any member
or officer, as such, past, present, or future, of the Authority, for the payment for or to the
Authority or any receiver thereof, or for or to the Registered Owner of this Bond, or otherwise,
of any sum that may be due and unpaid by the Authority upon this Bond. Any and all personal
liability of every nature, whether at common law or in equity, or by statute or by constitution or
otherwise, of any such member or officer, as such, to respond by reason of any act or omission
on his or her part, or otherwise, for, directly or indirectly, the payment for or to the Authority or
any receiver thereof, or for or to the owner or the Registered Owner of this Bond, or otherwise,
of any sum that may remain due and unpaid upon this Bond, shall be deemed to be and is hereby
expressly waived and released as a condition of and consideration for the execution and delivery
of the Financing Agreement and the issuance of this Bond.
The Registered Owner shall have no right to enforce the provisions of the Financing
Agreement or to institute action to enforce the covenants therein, or to take any action with
respect to any Default under the Financing Agreement, or to institute, appear in or defend any
suit or other proceedings with respect thereto, except as provided in the Financing Agreement. If
a Loan Acceleration Default occurs, this Bond shall be subject to mandatory redemption in
whole.
Any capitalized term not defined herein shall have the meaning assigned in the Financing
Agreement or the Note.
It is certified and recited that there have been performed and have happened in regular
and due form, as required by law, all acts and conditions necessary to be done or performed by
the Authority or to have happened (a) precedent to and in the issuing of this Bond in order to
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make it a legal, valid and binding special limited obligation of the Authority, and (b) precedent to
and in the execution and delivery of the Financing Agreement; and that this Bond does not
exceed or violate any constitutional or statutory limitation.
It is certified, recited, and warranted that this Bond is issued under the authority of a
resolution duly adopted by the Board of Directors of the Authority and the Supplemental Public
Securities Act, constituting Part 2 of Article 57 of Title 11, Colorado Revised Statutes. It is the
intention of the Authority, as expressed in said resolution, that this recital shall conclusively
impart full compliance with all of the provisions of said resolution and shall be conclusive
evidence of the validity and the regularity of the issuance of this Bond after its delivery for value
and that this Bond is incontestable for any cause whatsoever after its delivery for value.
This Bond will not be entitled to any security or benefit under the Financing Agreement,
or be valid or become obligatory for any purpose, until the Certificate of Authentication hereon
shall have been manually signed by the Registrar.
IN WITNESS WHEREOF, the Colorado Housing and Finance Authority has caused this
Bond to be executed in its name by the manual or facsimile signature of its Chair and its
corporate seal (or a facsimile thereof) to be impressed or imprinted hereon and attested by the
manual or facsimile signature of its Executive Director.
COLORADO HOUSING AND FINANCE
AUTHORITY
By: _____________________________________
Chair
(SEAL)
Attest:
Executive Director
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CERTIFICATE OF AUTHENTICATION
This Bond is the Bond described in the Financing Agreement referred to herein.
Date of Authentication: ________________________
COLORADO HOUSING AND FINANCE
AUTHORITY, as Registrar
By: _____________________________________
Authorized Officer
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EXHIBIT B
INVESTOR LETTER
To: Colorado Housing and Finance Authority
RE: Colorado Housing and Finance Authority Multifamily Housing Revenue Bond
(Aspen Country Inn Project) Series 2016
In connection with the purchase by the undersigned (the "Purchaser") of the captioned
bond (the "Bond") issued pursuant to the terms of, and as defined in, the Financing Agreement
dated as of July __, 2016 (the “Financing Agreement”) among the Colorado Housing and
Finance Authority (the "Authority"), the City of Aspen, Colorado, a home rule municipality of
the State of Colorado, as the original purchaser of the Bond, and ACI Affordable 1 LLLP, a
Colorado limited liability limited partnership (the “Borrower”) relating to the Bond, the
Purchaser hereby certifies, represents and warrants for the benefit of the Authority [as follows:]
[INSERT FOR INVESTOR LETTER OTHER THAN INITIAL PURCHASER’S INVESTOR
LETTER: that the Purchaser is either a “qualified institutional buyer” as defined in Rule 144A
under the Securities Act of 1933, as amended (a “QIB”), or an institutional “accredited investor”
(as defined in Rule 501(a)(1), (2), (3), (4), (7) or (8) of Regulation D promulgated under the
Securities Act of 1933) (an “Accredited Investor”), and hereby further acknowledges, represents,
and warrants to, and agrees with, the Authority as follows:]
A. The Purchaser is purchasing the Bond with its own funds (or with funds
from accounts over which it has sole investment authority) and not the funds of any other person,
and for its own account (or for accounts over which it has sole investment authority) and not as
nominee or agent for the account of any other person and not with a view to any distribution
thereof, other than the deposit or sale of the Bond in or to a custodial or trust arrangement each
of the beneficial owners of which shall be required to be [a QIB or an Accredited Investor] [a
“qualified institutional buyer” as defined in Rule 144A under the Securities Act of 1933, as
amended (a “QIB”), or an institutional “accredited investor” (as defined in Rule 501(a)(1), (2),
(3), (4), (7) or (8) of Regulation D promulgated under the Securities Act of 1933) (an
“Accredited Investor”)].
B. The Purchaser has such knowledge and experience in business and
financial matters, including (i) the evaluation of residential real estate developments such as the
Project (as defined in the Financing Agreement), (ii) the evaluation of the capabilities of persons
such as the Borrower, and the manager of the Project to operate and maintain the Project, and
(iii) the analysis, purchase and ownership of multifamily housing revenue bonds, tax-exempt
securities and other investment vehicles similar in character to the Bond, so as to enable it to
understand and evaluate the risks of such investments and form an investment decision with
respect thereto, the Purchaser has no need for liquidity in such investment and the Purchaser is
(or any account for which it is purchasing is) able to bear the risk of such investment for an
indefinite period and to afford a complete loss thereof.
C. The Purchaser acknowledges that it has been provided with, and has had
the opportunity to review, the Financing Agreement and all other documents relating to the
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issuance of the Bond. The Purchaser has conducted its own investigation of the Project, the
Borrower, the manager of the Project, the Bond, the Financing Agreement and related documents
and the transactions relating thereto, to the extent it deemed necessary. The Purchaser has been
offered an opportunity to have made available to it any and all such information it might request
from the Authority, the Borrower and the manager of the Project. On this basis, it is agreed by
the Purchaser that the Purchaser is not relying on the Authority or any other party or person to
undertake the furnishing or verification of information related to the referenced transaction.
D. In connection with the purchase of the Bond, the Purchaser has been
advised that (i) the Authority has not undertaken steps to ascertain the accuracy, completeness or
truth of any statements made or omitted to be made to the undersigned concerning any of the
facts relating to the business, operations, financial condition, or future prospects of the Borrower
or the manager of the Project, and (ii) the Authority has not made any representations concerning
the accuracy or completeness of any information supplied to the undersigned by the Borrower or
the manager of the Project.
E. THE PURCHASER UNDERSTANDS THAT:
1. THE BOND IS A SPECIAL, LIMITED OBLIGATION OF THE
AUTHORITY, PAYABLE SOLELY OUT OF THE REVENUES, RECEIPTS AND OTHER
MONEYS PLEDGED THEREFOR UNDER THE FINANCING AGREEMENT. THE BOND
SHALL NOT BE A DEBT OR INDEBTEDNESS OF THE STATE OR ANY POLITICAL
SUBDIVISION THEREOF (INCLUDING THE AUTHORITY), AND NEITHER THE STATE
NOR ANY POLITICAL SUBDIVISION THEREOF SHALL BE LIABLE THEREON, NOR IN
ANY EVENT SHALL THE BOND BE PAYABLE OUT OF ANY FUNDS OR PROPERTIES
OTHER THAN THOSE OF THE AUTHORITY PLEDGED UNDER THE FINANCING
AGREEMENT. THE BOND SHALL NOT CONSTITUTE AN INDEBTEDNESS OR A
MULTIPLE FISCAL-YEAR FINANCIAL OBLIGATION WITHIN THE MEANING OF ANY
CONSTITUTIONAL OR STATUTORY DEBT LIMITATION OR RESTRICTION.
2. THE AUTHORITY HAS NO TAXING POWER AND
PRINCIPAL AND INTEREST ON THE BOND IS PAYABLE SOLELY OUT OF THE
MONEYS TO BE RECEIVED BY THE AUTHORITY UNDER THE FINANCING
AGREEMENT AND AMOUNTS ON DEPOSIT IN THE FUNDS AND ACCOUNTS
ESTABLISHED AND PLEDGED UNDER THE FINANCING AGREEMENT. NEITHER
THE STATE NOR ANY POLITICAL SUBDIVISION THEREOF (EXCEPT THE
AUTHORITY FROM THE SOURCES IDENTIFIED ABOVE) SHALL BE LIABLE FOR
PAYMENT OF THE BOND NOR IN ANY EVENT SHALL PRINCIPAL OF AND
INTEREST ON THE BOND BE PAYABLE OUT OF ANY FUNDS OR ASSETS OTHER
THAN THOSE PLEDGED TO THAT PURPOSE BY THE AUTHORITY UNDER THE
FINANCING AGREEMENT.
F. The Purchaser understands that in connection with any proposed transfer
or exchange of the Bond, there must be delivered to the Authority a letter of the transferee to
substantially the same effect as this letter or otherwise as permitted under the Financing
Agreement.
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G. The Purchaser understands that, in connection with any proposed transfer
of the Bond, such transfer must be limited to a QIB or an Accredited Investor that makes
representations with respect to itself to substantially the same effect as the representations set
forth herein.
H. [INSERT FOR INVESTOR LETTER OTHER THAN INITIAL
PURCHASER’S INVESTOR LETTER: Any Transferee of this Bond also understands that it
shall indemnify the Authority as set forth in the Financing Agreement: “ANY TRANSFEREE
SHALL AGREE TO INDEMNIFY THE AUTHORITY FROM AND AGAINST ANY AND
ALL LIABILITY, COST OR EXPENSE (INCLUDING ATTORNEYS’ FEES AND
EXPENSES) THAT MAY RESULT IF THE REPRESENTATIONS OF SUCH TRANSFEREE
CONTAINED IN ITS INVESTOR LETTER ARE FALSE IN ANY MATERIAL RESPECT.”]
All confirmations, affirmations, statements and provisions of the Purchaser in this
Investor Letter are made solely and exclusively for the benefit of the Authority in connection
with its purchase of the Bond. The Purchaser is aware of the significance to the Authority of the
foregoing representations, and they are made with the intention that the Authority will rely on
them.
The foregoing representation shall survive the execution and delivery to the Purchaser of
the Bond and the instruments and documents contemplated thereby.
Very truly yours,
___________________________, Purchaser
By_________________________________
Title:_______________________________
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RESOLUTION #__
(Series of 2016)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ASPEN
CONCERNING THE ASPEN COUNTRY INN PROJECT AND
APPROVING AND AUTHORIZING THE EXECTUTION OF A
PARTNERSHIP AGREEMENT, A FINANCING AGREEMENT, AND A
LOAN AGREEMENT AND AUTHORIZING THE PURCHASE BY THE
CITY OF THE COLORADO HOUSING AND FINANCE AUTHORITY’S
MULTIFAMILY HOUSING REVENUE BOND (ASPEN COUNTRY INN
PROJECT) SERIES 2016, THE LOAN OF THE PROCEEDS THEREOF
AND THE EXECUTION OF RELATED DOCUMENTS
WHEREAS the provision of affordable housing is important to allow people who work in
the City of Aspen (the “City”) and Pitkin County to live near where they work and to be part of
the community; and
WHEREAS, the Aspen Country Inn (the “Project”) is a 40 unit rental project located in
the City; and
WHEREAS, in order to obtain financing for the acquisition, rehabilitation and equipping
of the Project, the City wishes to become the general partner in ACI Affordable 1 LLLP, a
Colorado limited liability limited partnership (“ACI”); and
WHEREAS, the Colorado Housing and Finance Authority (“CHAFA”) wishes to
authorize the issuance of up to $7,600,000 principal amount of its Multifamily Revenue Bond
(Aspen County Inn Project) Series 2016 (the “Bond”), and to use the proceeds thereof to provide
a loan to ACI to pay a portion of the costs of the Project; and
WHEREAS, there are on file with the City Clerk the proposed forms of the following
documents (the “Documents”):
(a) ACI Affordable 1 LLLP Agreement of Limited Partnership (the
“Partnership Agreement”) creating ACI; and
(b) Financing Agreement (the “Financing Agreement”) among the CHAFA,
the Borrower and the City; and
(c) Loan Agreement (the “Loan Agreement”) between the City and ACI; and
WHEREAS, the City is willing to approve and authorize the purchase of the Bond and
the execution and delivery of the Documents.
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NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
ASPEN:
1. The Council hereby determines that the provision of affordable housing such as
the Project and, in connection therewith, the authorization and approval of the Documents and
the purchase of the Bond, serves an important public purpose.
2. The financing of all or a portion of the costs of the Project through the City’s
purchase of the Bond, is hereby authorized and approved.
3. The Documents, in substantially the forms on file with the City Clerk, are hereby
approved. The Mayor, the City Manager and the Director of Finance, as required, are hereby
authorized to execute such Documents and the City Clerk or the Deputy City Clerk is hereby
authorized to affix the seal of the City thereto and to attest the same, as required.
4. The officers of the City are hereby authorized, empowered and directed to execute
and deliver all such additional certificates, instruments, agreements and documents, pay all such
fees, charges and expenses and to do all such further acts and things as may be necessary, or in
the reasonable discretion of the person acting, desirable and proper to effect the purposes of this
resolution and to cause compliance by the City with all the terms, covenants and provisions of
the Documents binding upon the City.
5. No provision of this Resolution or of any of the Documents shall be construed or
interpreted (i) to directly or indirectly obligate the City to make any payment in any fiscal year in
excess of amounts appropriated for such fiscal year, (ii) as creating a debt or multiple fiscal year
direct or indirect debt or other financial obligation whatsoever of the City within the meaning of
the City Charter or Article X, Section 20 of the Colorado Constitution or any other constitutional
or statutory limitation or provision. No provision of this Agreement or of any of the Documents
shall be construed to pledge or to create a lien on any class or source of moneys of the City, nor
shall any provision of this Agreement or of any of the Documents restrict the future issuance of
any obligations of the City, payable from any class or source of moneys of the City.
6. All resolutions, or parts thereof, inconsistent herewith are hereby repealed to the
extent only of the inconsistency.
7. This resolution shall take effect immediately.
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INTRODUCED, READ AND ADOPTED by the City Council of the City of Aspen on
the 8th day of August, 2016.
Steven Skadron, Mayor
I, Linda Manning, duly appointed and acting City Clerk do certify that the foregoing is a
true and accurate copy of that resolution adopted by the City Council of the City of Aspen,
Colorado, at a meeting held, August 8, 2016.
_____________________________________
Linda Manning, City Clerk
31850848v1
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135350.2
ACI AFFORDABLE 1 LLLP
AGREEMENT OF LIMITED PARTNERSHIP
June 30, 2016
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135350.2
ACI AFFORDABLE 1 LLLP
AGREEMENT OF LIMITED PARTNERSHIP
THIS AGREEMENT OF LIMITED PARTNERSHIP is entered into effective the
30th day of June, 2016, by and between City of Aspen, Colorado, a municipal corporation of the
State of Colorado (the “General Partner”), and Aspen Pitkin County Housing Authority, a
Colorado body corporate and politic (the “Limited Partner”). The Limited Partner and the
General Partner are sometimes referred to individually as a “Partner” and collectively they are
sometimes referred to as the “Partners.” In consideration of the mutual promises set forth below,
the parties agree as follows:
ARTICLE I
FORMATION OF THE LIMITED PARTNERSHIP
1.1 Formation. The General Partners have caused a Certificate of Limited Partnership
and a Statement of Registration for ACI Affordable 1 LLLP (the “Partnership”) to be filed with
the Colorado Secretary of State. Subject to section 1.5, the parties hereby agree to operate the
Partnership under the name ACI Affordable 1 LLLP upon the terms and conditions provided in
this Agreement, subject to the provisions of the Colorado Uniform Limited Partnership Act of
1981, as amended (the “Act”). If there is a conflict between the provisions of this Agreement
and the Act, the provisions of this Agreement shall control except that if the conflict is with
respect to a provision that would cause the Partnership to be taxed as an association for federal
income tax purposes, then the provisions of the Act shall control. The parties intend that the
Partnership shall be taxed as a partnership.
1.2 Compliance With Laws. The General Partner, acting directly or through an
attorney-in-fact shall execute such documents (including amendments to the Combined
Certificate and Statement of Registration described above) and take such further action as shall
be appropriate or helpful to comply with the requirements of law for the formation and operation
of a limited liability limited partnership in Colorado, the counties therein, and all other states and
counties where the Partnership elects to carry on its business. The General Partner shall not be
required to deliver to the Limited Partner copies of the Partnership’s Certificate of Limited
Partnership and Statement of Registration or any amendments thereto.
1.3 Business. The business of the Partnership shall be: (a) to acquire, develop,
construct, own, operate, manage and maintain an affordable housing development located in
Aspen, Colorado, to be known as Aspen Country Inn (the “Project”) in order to provide safe,
decent and affordable housing for low-income persons and families; (b) to obtain financing and
refinancing to accomplish the foregoing purposes; and (c) to do any and all other things
necessary, desirable or incidental to the foregoing purposes. The Partnership may sell or
otherwise dispose of all or substantially all of its assets as provided in this Agreement, and any
such sale or disposition shall be considered to be within the scope of the Partnership’s business.
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135350.2
1.4 Principal Office; Agent. (a) The principal office of the Partnership shall be at 130
Galena Street, Aspen, Colorado 81611, or such other place in Colorado as the General Partner
may select from time to time.
(b) The Partnership’s agent for service of process, and its address, shall be
City of Aspen, Colorado, 130 Galena Street, Aspen, Colorado 81611, or such other person or
address as the General Partner may select from time to time.
1.5 Term. The Partnership shall commence on the date that the certificate of limited
partnership is filed in the office of the Secretary of State of the State of Colorado and shall
continue until terminated as provided in Article 11.
ARTICLE II
DEFINITIONS
2.1 Affiliate. An “Affiliate” of a Partner is a person or entity that controls, is
controlled by or is under common control with such Partner. A person or entity that has a 20
percent or more interest, directly or indirectly, in another person or entity shall be conclusively
deemed to be a controlling person.
2.2 Code. The Internal Revenue Code of 1986, as amended from time to time. Any
reference herein to a specific section or sections of the Code shall be deemed to include a
reference to any corresponding provision of future law.
2.3 Sharing Ratio. The “Sharing Ratio” of each Partner shall mean the percentage
interest as follows: Limited Partner – 90.01 percent; General Partner – 9.99 percent. The
Sharing Ratios of the Partners shall be adjusted from time to time as provided in section 10.1.
2.4 Treasury Regulations. Regulations issued by the Department of Treasury under
the Code. Any reference herein to a specific section or sections of the Treasury Regulations
shall be deemed to include a reference to any corresponding provision of future regulations under
the Code.
ARTICLE III
CAPITAL CONTRIBUTIONS
3.1 Initial Capital Contributions. Upon execution of this Agreement, the General
Partner and the Limited Partner shall each contribute $100.00 to the capital of the Partnership.
3.2 Additional Capital Contributions. Additional contributions to the Partnership
shall be made only upon the consent of all Partners.
3.3 Interest on Capital Contributions. No Partner shall be entitled to interest on its
capital contributions.
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135350.2
3.4 Right to Enforce. No person other than a Partner shall have the right to enforce
any obligation of a Partner to contribute capital or lend funds hereunder and specifically no
lender or other third party shall have any such rights.
ARTICLE IV
ACQUISITION AND FINANCING OF THE PROJECT
4.1 Acquisition of the Project. The General Partner is authorized to execute any and
all agreements, assignments or other documents or instruments considered necessary or desirable
in connection with the acquisition of the property for the Project.
4.2 Financing. The Partnership is authorized to obtain such financing as the General
Partner considers appropriate on behalf of the Partnership in connection with the acquisition,
rehabilitation and operation of the Project, including without limitation construction loans,
permanent financing, and bridge financing. In connection with any and all financing
transactions, the General Partner is authorized to execute and deliver any and all loan
agreements, deeds of trust, financing statements, pledges or other documents and instruments
necessary or desirable in connection with such financing.
ARTICLE V
DISTRIBUTIONS
5.1 Distributable Cash. The General Partner shall from time to time determine the
amount of cash available for distribution to the Partners, taking into account the need for reserves
to cover operating deficits, capital improvements and anticipated liabilities.
5.2 Cash Distributions. All cash available for distribution to the Partners shall be
allocated in accordance with Sharing Ratios.
ARTICLE VI
ALLOCATION OF PROFIT AND LOSS
6.1 Determination of Profit and Loss. This Article provides for the allocation among
the Partners of the profits and losses of the Partnership for purposes of crediting and debiting the
capital accounts of the Partners. All items of profit or loss shall be determined on an annual
basis, and for such other periods as may be determined appropriate by the General Partner.
6.2 Allocation of Profit and Loss. All items of profit and loss shall be allocated in
accordance with Sharing Ratios.
ARTICLE VII
ALLOCATION OF TAXABLE INCOME AND TAX LOSSES
7.1 In General. (a) Except as provided in sections 7.1(b) and 7.2, each item of
income, gain, loss and deduction of the Partnership for federal income tax purposes shall be
allocated among the Partners in the same manner as such item is allocated for book purposes
under Article VI.
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(b) To the extent of any recapture income (as defined below) resulting from
the sale or other taxable disposition of a Partnership asset, the amount of any gain from such
disposition allocated to (or recognized by) a Partner for federal income tax purposes pursuant to
sections 7.1(a) or 7.2 shall be deemed to consist of recapture income to the extent such Partner
has been allocated or has claimed any deduction directly or indirectly giving rise to the treatment
of such gain as recapture income. For this purpose “recapture income” shall mean any gain
recognized by the Partnership (but computed without regard to any adjustment required by
sections 734 and 743 of the Code) upon the disposition of any property or asset of the
Partnership that does not constitute capital gain for federal income tax purposes because such
gain represents the recapture of deductions previously taken with respect to such property or
assets.
7.2 Allocation of Section 704(c) Items. The Partners recognize that with respect to
property contributed to the Partnership by a partner and with respect to property revalued in
accordance with Treasury Regulation § 1.704-1(b)(2)(iv)(f) (referred to as “Adjusted
Properties”), there will be a difference between the agreed values or Carrying Values, as the case
may be, of such property at the time of contribution or revaluation, as the case may be, and the
adjusted tax basis of such property at that time. All items of tax depreciation, cost recovery,
amortization and gain or loss with respect to such contributed properties and Adjusted Properties
shall be allocated among the Partners to take into account the book-tax disparities with respect to
such properties in accordance with the provisions of sections 704(b) and 704(c) of the Code and
the Treasury Regulations under those sections. Any gain or loss attributable to a contributed
property or an Adjusted Property (exclusive of gain or loss allocated to eliminate such book-tax
disparities) shall be allocated in the same manner as such gain or loss would be allocated for
book purposes under Article VI.
7.3 Integration With Section 754 Election. All items of income, gain, loss, deduction,
credit and basis allocations recognized by the Partnership for federal income tax purposes and
allocated to the partners in accordance with the provisions hereof shall be determined without
regard to any election under section 754 of the Code that may be made by the Partnership;
provided, however, such allocations, once made, shall be adjusted as necessary or appropriate to
take into account the adjustments permitted by sections 734 and 743 of the Code.
7.4 Allocation of Tax Credits. All low income housing tax credits with respect to any
building owned by the Partnership shall be allocated in the same fashion as the depreciation
deductions with respect to the building are allocated. All other tax credits, including the
investment tax credit, with respect to the Partnership’s property or operations shall be allocated
in the manner required by the Code or the Regulations to obtain the maximum aggregate benefit
from the credit, or otherwise in the same manner as the expenditures or other deductions giving
rise to the credit are allocated under this Agreement.
ARTICLE VIII
MANAGEMENT POWERS
8.1 Limited Liability. The liability of the Limited Partner shall be limited as set forth
in the Act. Except as permitted by Colorado law and section 8.3, the Limited Partner shall take
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no part in the control, management, direction or operation of the affairs of the Partnership and
shall have no power to bind the Partnership. The General Partner may from time to time seek
suggestions and expressions of opinion from the Limited Partner on major policy decisions, but
need not act on such advice, and at all times the sole control and management of the Partnership
shall rest with the General Partner, subject to the provisions of this Article VIII.
8.2 Management Authority. (a) Except as otherwise provided in this Article VIII, the
General Partner is hereby expressly authorized on behalf of the Partnership to make all decisions
with respect to the Partnership’s business and to take all actions to carry out such decisions.
Without limiting the generality of the foregoing, the General Partner is authorized to make all
decisions and to take all actions with respect to the operation, management, and maintenance of
all or any part of the Project and the disposition of property in the ordinary course of business,
subject to any required consent under section 8.3.
(b) After execution of this Agreement, all documents executed on behalf of
the Partnership must be signed by the General Partner, including (i) all deeds, assignments,
leases, subleases, management and maintenance contracts; (ii) all checks, drafts and other orders
for the payment of Partnership funds; (iii) all promissory notes, mortgages, deeds of trust,
security agreements, financing statements and other similar documents; and (iv) all other
instruments of any kind or nature relating to the affairs of the Partnership whether like or unlike
the foregoing.
(c) The General Partner may cause the Partnership to enter into any
transactions or agreements with Partners (including the General Partner) or its Affiliates (in
addition to the agreements described in section 8.4) for goods and services without the prior
approval of all Partners.
8.3 Approval of Other Partners. Without the prior written approval of the Limited
Partner, the General Partner shall not cause the Partnership to acquire any assets or conduct any
activity other than as described in Section 1.3.
8.4 Management, Development and License Agreements. The General Partner is
authorized on behalf of the Partnership to enter into such management agreements, development
agreements, franchise agreements and other agreements appropriate or helpful to carry out the
business of the Partnership, including without limitation, agreements with Affiliates of the
Partnership.
8.5 Time Devoted to Business. The General Partner shall devote such time to the
business of the Partnership as is reasonably necessary for the efficient carrying on of the
Partnership’s business.
8.6 Information Relating to Partnership. Upon request, the General Partner shall
supply to any Partner any information reasonably requested regarding the Partnership or its
activities, provided that obtaining the information is not unduly burdensome to the General
Partner. During ordinary business hours, and at the reasonable convenience of the General
Partner, any Partner or its authorized representative shall have access to all books, records and
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materials regarding the Partnership and its activities, and the General Partner shall make all
reasonable attempts to provide access to books, records and materials not otherwise in the
General Partner’s possession.
8.7 Exculpation. In carrying out their duties hereunder the Partners shall not be liable
to the Partnership nor to any Partner for their good faith actions, or failure to act, nor for any
errors of judgment, nor for any act or omission believed in good faith to be within the scope of
authority conferred by this Agreement, but only for willful misconduct or gross negligence in the
performance of their obligations under this Agreement. The Partnership shall indemnify and
hold harmless each of the Partners and their officers, directors, partners, agents, employees and
Affiliates as to third parties against and from any personal loss, liability or damage incurred as a
result of any act or omission of any Partner believed in good faith to be within the scope of
authority conferred by this Agreement, except for willful misconduct or gross negligence, but not
in excess of the value of the assets of the Partnership as of the date the General Partner learns of
such act or omission resulting in the personal loss, liability or damage to a third party (the “Date
of Notice”). In all cases, indemnification shall be provided only out of and to the extent of the
assets of the Partnership as of the Date of Notice, and no individual Partner shall have any
personal liability whatsoever on account thereof. In no event shall the Partnership be liable to a
third party under this section 8.7 for the amount of any additional contributions made to the
Partnership after the Date of Notice or for the amount of any increase in value of any Partnership
assets after the Date of Notice. Notwithstanding the foregoing, the Partnership’s indemnification
of the Partners and their officers, directors, agents and employees as to a third party shall be only
with respect to such loss, liability or damage that is not otherwise compensated for by insurance
carried for the benefit of the Partnership.
8.8 Insurance. The General Partner shall maintain in force at all times for the
protection of the Partnership and all Partners to the extent of their insurable interests such
insurance as it believes is warranted for the operations being conducted.
8.9 Other Activities. Each Partner shall at all times be free to engage and possess an
interest in any business or venture for its own account, including without limitation the formation
of partnerships, joint ventures and corporations, which business or venture may directly or
indirectly compete with the business of the Partnership.
8.10 Reliance by Third Parties. No third party dealing with the Partnership shall be
required to ascertain whether the General Partner is acting in accordance with the provisions of
this Agreement. Such third parties may rely on documents executed by the General Partner as
binding the Partnership. The foregoing provisions of this section 8.10 shall not apply to third
parties who are Affiliates of a Partner.
8.11 Tax Matters Partner. Pursuant to section 6231(a) of the Code, the General Partner
is hereby designated as the tax matters partner for the Partnership. The General Partner is
expressly authorized to perform, on behalf of the Partnership or any Partner, any act that may be
necessary to make this designation effective under any regulation, ruling, procedure or
instruction that may be issued by the Internal Revenue Service.
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8.12 Duties of General Partner. (a) The General Partner shall carry out its duties as
General Partner hereunder in a diligent and workmanlike manner, in accordance with sound
business practices and consistent with the fiduciary duties partners owe to each other, and shall
use its best efforts to employ and engage qualified personnel in furthering the purposes of the
Partnership.
(b) The General Partner may delegate any or all of its duties under this section
8.12.
8.13 Fees and Reimbursements. (a) No Partner shall be entitled to any management
fee or salary for managing the operations of the Partnership.
(b) The General Partner shall be reimbursed by the Partnership for all
reasonable out-of-pocket costs incurred by it in the organization and management of the
Partnership, including fees and costs for legal, accounting and administrative services.
ARTICLE IX
ACCOUNTING AND REPORTING
9.1 Books. The General Partner shall maintain complete and accurate books of
account of the Partnership’s affairs at the principal office of the Partnership. The Partnership’s
books shall be kept on the accrual basis of accounting. The Partnership’s accounting period shall
be the calendar year ending December 31.
9.2 Capital Accounts. (a) The General Partner shall maintain a separate capital
account for each Partner and such other Partner accounts as may be necessary or desirable to
comply with the requirements of applicable laws and regulations, including the Treasury
Regulation issued under Section 704 of the Code.
9.3 Transfers During Year. In order to avoid an interim closing of the Partnership’s
books, the share of profits and losses under Article VI of a Partner who transfers part or all of its
interest in the Partnership during the Partnership’s accounting year may be determined by taking
its pro rata share of the amount of such profits and losses for the year and the balance of the
profits and losses attributable to the Partnership interest transferred shall be allocated to the
transferee of such interest. The proration shall be made by the General Partner after consultation
with the accountants for the Partnership and may be based on the portion of the Partnership’s
accounting year which has elapsed prior to the transfer or may be determined under any other
reasonable method; provided, however, that any income or loss arising from the sale of property
other than in the ordinary course of business shall be allocated to the owner of the Partnership
interest at the time such income or loss was realized.
9.4 Reports. The General Partner shall deliver to each Partner annual statements on
the Partnership’s operations at the end of each fiscal year. The books of account shall be closed
promptly after the end of each fiscal year. As soon as practicable thereafter, the General Partner
shall make a written report to each Partner which shall include a statement of receipts,
expenditures, profits and losses, and such additional statements with respect to the status of the
Partnership’s assets and the distribution of Partnership funds as are necessary to advise all
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Partners properly about their investment in the Partnership. Prior to March 1st of each year each
Partner shall also be provided with sufficient information as is necessary to allow it to file its
own income tax return for the preceding year.
9.5 Section 754 Election. If requested by a Partner the Partnership shall make the
election provided for under section 754 of the Code. Any costs attributable to making such
election shall be borne solely by the requesting Partner.
ARTICLE X
TRANSFER OF PARTNER’S INTEREST
10.1 General Partner. Notwithstanding anything to the contrary contained herein,
without the prior written approval of all of the Partners, no additional general or limited partner
shall be admitted to the Partnership and the General Partner shall not substitute a successor
General Partner in its stead.
ARTICLE XI
TERM; WITHDRAWAL, DISSOLUTION OR
BANKRUPTCY OF A PARTNER
11.1 Events of Dissolution. (a) The Partnership shall continue until December 31,
2035, unless sooner dissolved by (i) determination of the General Partner to dissolve the
Partnership, or (ii) by the withdrawal, dissolution, bankruptcy or termination of a General Partner
(unless the Partnership is continued under section 11.1(b) below) or (iii) any other event causing
dissolution of a limited partnership under the Act. For purposes of this Agreement: a Partner
shall be considered bankrupt if an order for relief under Chapter 7 of the Bankruptcy Reform Act
of 1978 has been entered against him; and a General Partner that is a partnership shall be
considered dissolved only if the General Partner commences winding up and termination of its
business after an event of dissolution.
(b) Upon the withdrawal, dissolution, bankruptcy, or termination of the
General Partner, the Partnership shall be dissolved unless within 90 days after the occurrence of
such event all of the remaining Partners agree in writing to continue the business of the
Partnership and to the appointment of one or more additional General Partners if necessary or
desired, under an agreement containing the terms and conditions set forth in this Agreement,
with such amendments as may then be adopted.
11.2 Limited Partners. Except as expressly provided otherwise in this Agreement, a
Limited Partner shall have no power to withdraw from or terminate his membership in the
Partnership, and the Limited Partners shall have no power to dissolve the Partnership. Upon
withdrawal pursuant to the provisions of this Agreement, a Limited Partner shall have no right to
receive any value for his interest in the Partnership except as expressly provided in this
Agreement.
11.3 Withdrawal of General Partner. Notwithstanding the provisions of section 11.1
with respect to the withdrawal, dissolution or bankruptcy of a General Partner, the General
Partner covenants and agrees that it will not withdraw from the Partnership or take any voluntary
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action in bankruptcy or any voluntary action to dissolve itself prior to the sixteenth anniversary
date of the commencement of the Partnership. If the General Partner violates this covenant and
agreement, the wrongful withdrawal, bankruptcy or dissolution shall be effective for purposes of
this Article XI, but such Partner shall be liable for damages to the other Partners and to the
Partnership for such wrongful withdrawal, bankruptcy or dissolution.
11.4 Waiver of Appraisal, Valuation Rights and Partition. In the event of the
withdrawal, dissolution or bankruptcy of any Partner, the rights of the Partner or its successors
and assigns under applicable Colorado law with respect to the inventory of assets, appraisals,
accounting or sale of assets shall not apply and are hereby expressly waived by all Partners.
Each Partner expressly agrees that the provisions contained in this Agreement shall bind and
control its successors and assigns, including without limitation, the provisions applicable in the
event of the withdrawal, dissolution or bankruptcy of a Partner. Each of the Partners hereby
waives any and all rights, duties, obligations and benefits with respect to any action for partition
of the Partnership property, or to compel any sale thereof.
ARTICLE XII
DISSOLUTION AND TERMINATION
12.1 Final Accounting. In case of the dissolution of the Partnership, a proper
accounting shall be made as provided in section 9.4 from the date of the last previous accounting
to the date of dissolution.
12.2 Liquidation. (a) Upon the dissolution of the Partnership, the General Partner, or,
in the case of its dissolution, insolvency, bankruptcy or withdrawal, the other General Partner or
(if none) some person selected by the Partners whose Sharing Ratios total 51 percent or more of
the total Sharing Ratios of all the remaining Partners, shall act as liquidator to wind up the
Partnership. Subject to the required consent of other Partners under section 8.3, the liquidator
shall have full power and authority to sell, assign and encumber any or all of the Partnership’s
assets and to wind up and liquidate the affairs of the Partnership in an orderly and businesslike
manner. All proceeds from liquidation shall be distributed in the following order of priority:
(i) to the payment of debts and liabilities of the Partnership and the expenses of liquidation,
including any advances to the Partnership by any Partner to the extent such advances have not
been reimbursed previously; (ii) to the setting up of such reserves as the liquidator may
reasonably deem necessary for any contingent liabilities of the Partnership; and (iii) to the
Partners in accordance with Article V.
(b) In the event that any Partner’s capital account balance is a negative
amount after all allocations to such account in accordance with Article VI and distribution in
accordance with section 12.2(a), such Partner shall have no obligation to contribute any amount
to the Partnership as a result of such negative capital account.
12.3 Distribution in Kind. If a portion of the Partnership’s assets is to be distributed in
kind to the Partners, the liquidator, with the approval of the Partners possessing a majority-in-
interest of the Sharing Ratios, shall obtain an independent appraisal of the fair market value of
each such asset at a date reasonably close to the date of liquidation. Any unrealized appreciation
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or depreciation with respect to such assets shall be allocated among the Partners in accordance
with the provisions of Article VI as if the assets had been sold for the appraised value and taken
into consideration in determining the balance in the Partners’ capital accounts as of the date of
liquidation. Distribution of assets in kind shall be made to the Partners in the order of priority set
forth in section 12.2 as if the assets had been sold for the appraised value. Distribution of any
asset in kind to a Partner shall be considered a distribution of an amount equal to the asset’s fair
market value for purposes of section 12.2. Except as otherwise determined by the liquidator
pursuant to this section 12.3, no Partner shall have any right to receive distributions of property,
other than cash, from the Partnership.
12.4 Waiver of Right to Court Decree of Dissolution. The Partners agree that
irreparable damage would be done to the Partnership if any Partner brought an action in court to
dissolve the Partnership. Accordingly, each of the Partners accepts the provisions of this
Agreement as its sole entitlement on termination of his membership in the Partnership. Each
Partner hereby waives and renounces its right to seek a court decree of dissolution or to seek the
appointment by a court of a liquidator for the Partnership.
12.5 Cancellation of Certificate. Upon the completion of the distribution of
Partnership assets as provided in this Article XII, the Partnership shall be terminated, and the
person acting as liquidator (or the General Partner if necessary) shall cause the cancellation of
the Partnership’s certificate of limited partnership and shall take such other actions as may be
necessary to terminate the Partnership.
ARTICLE XIII
GENERAL PROVISIONS
13.1 Entire Agreement. This agreement embodies the entire understanding and
agreement among the parties concerning the Partnership and supersedes any and all prior
negotiations, understandings or agreements in regard thereto.
13.2 Amendment. This Agreement may not be amended nor may any rights hereunder
be waived except by an instrument in writing signed by the party sought to be charged with such
amendment or waiver.
13.3 Applicable Law. This agreement shall be construed in accordance with and
governed by the laws of the State of Colorado.
13.4 Pronouns. References to a Partner, including by use of a pronoun, shall be
deemed to include masculine, feminine, singular, plural, individuals, partnerships or corporations
where applicable.
13.5 Counterparts. This instrument may be executed in any number of counterparts
each of which shall be considered an original.
13.6 Additional Documents. The Partners hereto covenant and agree to execute such
additional documents and to perform additional acts as are or may become necessary or
convenient to carry out the purposes of this Agreement.
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13.7 Written Consents. All consents or approvals required or permitted under this
Agreement shall be in writing.
13.8 Method of Notices. All notices required or permitted by this Agreement shall be
in writing and shall be hand delivered or sent by registered or certified mail, postage prepaid,
addressed as set forth on the signature page hereof (except that any Partner may from time to
time give notice changing his address for that purpose) and shall be effective when personally
delivered, or, if mailed, on the date set forth on the receipt of registered or certified mail, or on
the fifth day after mailing, whichever is earlier.
13.9 Computation of Time. In computing any period of time under this Agreement,
the day of the act, event or default from which the designated period of time begins to run shall
not be included. The last day of the period so computed shall be included, unless it is a Saturday,
Sunday or legal holiday, in which event the period shall run until the end of the next day which is
not a Saturday, Sunday or legal holiday.
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IN WITNESS WHEREOF the parties have executed this Agreement on the dates
stated below their signatures.
GENERAL PARTNER:
CITY OF ASPEN, COLORADO
By:
Name:
Title:
Address: 130 Galena Street
Aspen, CO 81611
Date: June ___, 2016
LIMITED PARTNER:
ASPEN PITKIN COUNTY HOUSING
AUTHORITY
By:
Name:
Address: 130 Galena Street
Aspen, Colorado 81611
Date: June ___, 2016
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