HomeMy WebLinkAbout2000 Resolution No. 033RESOLUTION No._j3°
SERIES OF 2000
A RESOLUTION AUTHORIZING AN AGREEMENT ESTABLISHING A LINE OF CREDIT
FOR THE CONTINUANCE OF THE HOUSING REHABILITATION FUND .
WHEREAS , the existing line of credit for th, continuance of the Englewood Houainc
Rehabilitation Fund has expiNd ; and
WHEREAS , a new line of credit is needed in order to continue the Rehab Prosram at ita
maximum funding levels ; and
WHEREAS , the City of Englewood aBBumed all aBBeta and liabilities of the Rehab
Program from the Englewood Housing Authority ; and
WHEREAS , the passage of this Resolution will authorize an agreement between Vectra
Bank and the City of Englewood for a new line of credit which will s upport the Housina
Rehabilitation Fund;
NO\V, THEREFORE , BE IT RESOLVED BY THE CITY CO UNCIL OF THE CITY OF
ENGLEWOOD, COLORADO , THAT:
~-The Agreement for the new line of credit for the Housing Rehabilitation Fund
between Vectra Bank and the City of Englewood, Colorado , attached 11 "Exhibit A", is
hereby accepted and approved by the Englewood City Council .
Smiwl.1. The Agreement shall terminate on December 31 , 2000 . Three (3) additional
one (I) year periods may be negotiated by the City Manager or designee .
Sm:tism...a . The uiNctor of Financi al Services is authorized to execute and the City Clerk to
attest and seal the Agreement for and on behalf of the City of Engle wood, Colorado .
ADOPTED AND APPROVED this 7th day of February, 2000 .
I, Loucrishia A. Ellis , City Clerk for the City of Englew
above is a true copy of Re solution N~ Series of 2
•
•
Ja■■ary ,25, ZOOO
" I
TIie City or En1lewoocl -TIie Housh111 RebblUtatloa Fuad
3400 Soa~ Elatl Si..·eet
Englewood, CO 80ll 0
To Whom It May Concern:
We are pleased 10 infonn you that, effecti ve February 7, 2000 , Vectra Bnnk Englewood
("Bank") has approved the request of Tbe City or Eaelewood -The Housfne Rebabilltatfon
Fund of Englewood, Colorado ("Borrower") for a new 5400,000 .00 drawdown credit facili1 y, in
accordance with and subject 10 1he tenns and condi1ions of this Lener Agreemem (this
"Agreement").
I. ~: The total p-:~cipaf amoum ou1s1and ing a1 any time shall not ex ce ed
S400,000 .00.
2. Borrower: Tbe City or Englewood -Tbe Housing Rehabilitation Fund , a
Colorado public entity.
3. ~: Subject to the tenns and condi1ions of this Agreem em, Advances
(individually, an "Advance" and collectivel y, "Advances") of the proceeds of 1he
Loans have been or shall be disbursed 10 Borrower solely for the purpose of en abling
Borrower 10 make property rehabilitation loans to low and moderare income
homeowners ("Homeowners ") of primarily owner-occupied and owner/investor
residen1ial propert ies located in the City of En glewood , Colorado . For purposes of
this Agreement, low income Homeowners are those whose household incom e is
greater than 50% and less than 80% of lhe median income for similarl y-sized fam ilies
in th e City of Engle wood , Colorado , and moderate income Hom eowners are 1hose
whose household income is a1 least 80 %, but nor more than 100%, of 1he medi an
income for similarl y sized families in En gle wood, Colorado . Re.siden1 ial properti es
for which Loan proceeds have been or will hereaft er be disbursed are hereinafter
referren •o as "Reno va1 ed Properties ").
4. Ad\'ances : Each Ad van ce recei \'ed by Borro wer has been or sh all be disbursed by
Borrower 10 or for the benefit of the Home owner(s) of a Renova1ed Propert y durin g
the construction phas e of a rehab ilitation projecl appro ved by Bank ("Rehabili1a1ion
Projecl "). Such a disbursemenl by Borrower is hereinaft er referred 10 as an "lnl erim
Homeowner Loan ". Upon comple1ion of each Rehabili1a1i on Project , the fmerim
Homeowner Loan shall be or has been con verte d 10 a permanent loan ("Permanen1
Homeowner Loan ") with monlh.ly payments based on a full y-amorti zing schedule nor
to exceed twenty (20) years . E3ch lmerim and Pennanenl Homeowner Loan
(some1imes collec1i vely and imerchangeabl y referred 10 herein as a "Homeowner
Loan ") is evidenced by a Promissory l'iote from lbe City of Englewood -The
Housing Rehabilitation Fund to VectraBank Is siened by the Director of
Community Development plus an Assl1umeot or Deed and • bla■k 1odonement
by tbe Director on tbe back side or tbe ho.meowoers note to tbe Clrv. lo addition
tbe documents signed lly tbe borrow ·er and a ropy or 'die approved
Rebabllltatlon Loan Criteria Sheet and the Site Specific l!avlrolinlealll Clleck
List, subject only to Pennined Liens (as defined in Subparagraph 4(A)(vi) below).
A. Uodlsbursed Portion. Advances will be disbursed to Borrower from the
Closing (as defined below) through and including December 31, 2000, upon
wrinen request of Borrower and upon approval by Banlc; provided, that (i) no
such Advance shall exceed the amount of the Homeowner Loan for which
funding is sought, (ii) Advances shall not , in aggregate, exceed the sum of
5400,000 .00 . Bank will not approve an Advance if an Ev-.nt of Default or
pending Event of Default exists hereunder.
Each request for an Advance by Borrower shall be accompanied by the
following 1ocumems and infonnation regarding the Homeowner Loan to be
funded by the requested Advance, all of which documents shall be in fonn and
substance satisfactory to Bank :
(i) An anal ys is . perfonned by a Colorado licensed Realtor used by Borrower
and acceptable to Bank, evidenced that , after completion of the Rehabilitation
Project, the aggregate LTV ratio of the Renovated Property is not greater than
90% (w ith LTV ratio being defined as the quotient with a numerJtor equal to the
sum of all Pennitted Liens (as defined below) plus the subject Advance and
with a denominator equal to the market value of the Renovated Property;
(ii) A copy of Borrower's internal underwriting worksheet showing Borrower's
loan-to-value ratio for the Renovated Property;
(iii) A copy of the Truth-in-Lending Disclosure Statement issued to the
Homeowner by Borrower;
(iv) The original Homeowner Note , endorsed in blank , in ar. arnoun1 equal to
the Advance requested ;
(v) A copy of the recorded Homeowner Deed of Trust securing repayment of
the Homeowner ~Ole;
(v i) An AL TA extended coverage mortgagee's 1i1le insurance pol icy. with such
endorsemenls as Bank may require , issued by a title insurance compan y
salisfactory to Bank in the amounl of the reques1ed Advance insu ring the lien of
the Homeo wner Deed of Trust to be a val id and enforceable lien upon the
Reno vated Property, subject only to such excep1ions as Lender may expressly
approve in writing (such appro ved exc ept ions being here in referred to as
"Pennined Liens");
2
•
•
•
(vii) Evio ~nce thnt the Homcol'ltler bas provided polic ies of fire and extended
coverage of the Renovated Propeny from an insurance company approvo=d by
Bank in an amount 1101 less than the requested Advance with standard, without
contribution, mongagee's loss payable endorsements in favor of Borrower;
(viii) A Term Note executed by Borrower and payable to the order of Lender in
the Amount of the Advance, substantially in the form of Exhibit "B" hereto ; and
(ix) Such other information and documentation as Bank may reasonably
request.
A. Rates: Except as provided below in Paragraph 6. imerest shall accrue on the
oumanding principal balance at the rate set forth in th~ Term Notes and
executed and delivered by Borrower 10 Bank for each Advance. The interest
rat e shall be 8.50% per annum , subject to annual adjustment as outlined below .
On December 31st of each year, the interest rate shall be adjusted to equal Wall
Street Journal published 0 rime Rate (as defined in the notts) plus 1.5% times
67% (rounded up to the nearest 1/4%).
B. Payment: All accrued inte,est shall be payable monthly in arrears of the tenth
day (10th) of each month (each such date , in sequence, being referred to herein
as an "Interest Payment Date"). If an y Interest Payment Date is not a day upon
which Bank is open for business ("Bank Business Day"), Borrower's monthl y
interest payment shall be due on the next succetding Bank Business Day . Such
extension of time shall , in such case, be included in the computation of interest
due and payable to Bank . Interest shall be calculated on a 360-day year basis
and actual days elapsed from disbursement date until pai d (including first day
ou~ excluding the last dayl . Default interest shall accrue and be payable as set
forth in the Term Notes ("Term ~oles'').
6. Loss of Tax Exempt Status : L'pon a Determination of Taxabilit y (as defined
below), and as long as there has been no Event of Defau lt by Borrowe r, the parties
hereto agree that all terms and conditions of this Agreement will remain in full force
and effect , except that the interest rate applicable to all of the Term Notes shall equal
one and one-fourth percent (1.25%) per annum in excess of Wall Street Journal Prime
Rate (the "Change Rate"). Borrower agrees that Bank shall recalculate the interest
becoming due and pa yab le on the Term Notes from the Change Date (as defined
below) at the Change Rate. For purposes of this Agreement , t~.e following capitalized
terms shall have the meanin gs designated below :
A. "Determination of Ta.xability" shall be deemed to have occurred if (I) the
Internal Revenue Service or any other governmental qenc:y having appropriate
jutisdiction ("Ta.xing Authority") hu Issued a noti.:e of proposed adjustment or
other notice to Bank or any other llender panicipaling in the Loans
("Participant") stating that an Event of Tanbility (as hereinafter defined) has
occurred .
B. An "Event of Taxability" shall be deemed to mean any event which causes or
results in the interest to be included in the gross income of the holder(s) of or
any Participant in the Term Notes.
C. The '"Change Date " shall be the cl.le upon which Bank or any Participant
receives a Determination ofTa.xability .
7. Maturltv : The maturity date of each Tenn Note shall correspond with the
respective maturity c!ate of the underlying Hom :owner Note. subjec : to a ma.ximum
maturity date of twenty (20) years from the dishursement date of the correspond ing
Advance hereunder. In the event there has been no Event of Default hereunder and all
interest and principal payments have been made on a timel y basis . Bank will not
unreasonabl y deny a request from Borrower for extensions or renewals on
01•.::aanding Term Notes , subject to Bank 's then customary credit standards and
requirements for loans similar to the Loans of Borrower. In no event shall any such
extension or renewal of an ind ivi dual Term Note extend beyond the earlier of l I)
twenty (20) years from the disbursement dat e of the Advance evidenced by the Term
Nme for which an extension is requested, or (i i) the maturit y date of the underlyin g
Homeowner :><ote .
8. Pa,·ments : Principal payments will be due under Loans as set forth in the Term
Notes and upon maturity of the Term Notes, whether by acceleration or otherw ise .
Borrower will collect monthly payments from the individual Homeowners liable for
repayment of each Homeowner Note and will remit such. payments to Bank for
application to interest and principal due under the corresponding Term Note.
Whether or not the in,1ividual Homeowners remit their monthl y payments to
Borrower, Borrower shall he obligated to make all principal and interest payments
due to Bank under the Torm Notes on a timely basis . All payments required under
this Agreement shall be tendered 10 Bank prior to I :00 p.m ., Denver. Colorado, time
of the date due and shall be r,1ade in immediatel y available funds. If any payment is
not made in immediatel y available funds , Bank reserves the right 10 credit Borrower
for such payment when the funds are deemed available in accordance with Bank 's
avail abiiity guidelines then ir. effect or. at Bank 's option , when such funds become
collected funds.
9. Prepavment The Lo ans may be prepaid in full or in part any time and from time to
time . All prepayments sha ll be app!ied first 10 accrued intere st and then to the unpaid •
princ ipal Loan installments in inverse order of sche duled maturates. In the event of
4
•
prepayment of an underlying Homeowner Loan, Borrower shall remit such prepaid
funds to Bank for application to the related Tenn Note. When an individual
Homeowner Note is paid in full and the remittance has been properly tendered 10
bank, the Homeowner Note and related Homeowner Loan files shall be teturned by
Bank 10 Borrower, with an endorsement, if necessary , executed by Bank .
IO. ~: Borrower shall secure repayment of the Term ~otes, each Advance, and
every modification, extension , renewal or refinancing thereof, if any, and the
performance of all obligat ions of Borrower and the compliance by Borrower with all
conditions, representations and warranties set forth in this Agreement, and all other
documents executed by Borrower in connection here with. by endorsing, with recourse
and in blank, and del iv ering 10 Bank ear.h original Homeowner . ote, and by
assigning and transferring to Bank the benefici al interest granted lo Borro wer under
all Homeowner Deed s of Trust securi ng repayment of each Homeowner :-lore. The
Homeowner ~oles and Homeowner Deeds of Trust arc sometimes hereinafter referred
10 as the "'Security"'. Borrower shall execute such documentation as Bank may
request in order to effectuate Borrower's pledge of all of the Securit y 10 Bank ,
includ ing, without limitat ion, a collat eral assignment ('"Collateral Assignment ") of the
Hr.meowner Deeds of Trust in form and substance acceptable 10 Bank . Bo rrower
hereby confirms and agree s that , upon request of Bank, Borrow er shall execute and
deliver to Bank ind iviu ual collatera l assignments. in recordable form and substance
satisfactory 10 Bank, of any or all Ho · 1eowncr De ed s of Trust securing repyment of
Homeowner Notes ruid Homeow".~: !Jeeds of Trust Note arising from or relating 10
each future Ad vance of Lvan . Documentation for all Homeowner Lo~n ~, i11cludin g
the Homeowner Notes and Homeowner Deeds of Trust, shall be s•JhJ~Ct 10 the
appro\'al of Bank "s le g:il counsel. and shall be deli\'cred by Borrower to Bank ~rior to
or with any request for an Advance rclat:ng to eac h such Homeowner loan.
Borrowtr shall make an y mo dificati on or additions 10 th e documentation for all
Homeowner lo ans which Bank reasonabl y deems necessary or appropriate .
11. Dellggueoc\'/Deticieucv Reserve : Upon exe cuti on of .hi, Agreement. Borrower
shall deposit funds in a sum equal 10 eight percent (8°~) cf the oumandin g amount of
the loan in a separate, inte rest camin~ deposit account (s) at Bank which shall be
known as the Delinquenc y/Detic ,e ncy Re:'rvc . Ifby the twentieth (20 th ) day of any
month an amount sufficient enough for Bo rrower to make full payment of principal
and interest then due 10 Bank has not been received in the fo rm of payments from the
Homeowners , Borrower will dra w from the Delinqucnc :,.'Deticienc y Reserve . and pay
the Bank. the amvunt necessary to cover the full payme nt ("'Reserve Payment"') tl,en
due under of the applicable Homeowner Note . If, afte r remittance of a Reserve
Payment to Bank , a Homeowner subsequently remits the same installm en t payment 10
Borrower, such Homeo wner payment shall be depos ited by Borrower in the
Del inquenc y:Defic iency Reserve. If Borrower forecloses any Homeowner De!d of
Trust. and if the proceeds of such foreclosure arc insuffici ent to fully repay t~e
principal and interest on the Advance from which the Homeowner loan was made,
Borrower will draw from the Delinquenc y/D efi cie ncy Reser\'e and pay to Bank an
amount equal to the resulting deficiency. The Deflbquency/Deflciency Res:rve shall
be maintained 11t eight pen:ent (8%) of the outstanding bal11nces at all times until the
Loans arc paid in full and must be replenished by Borrower if draws arc made due to
a delinquent payment or deficient foreclosure as described above . Excess balances in
the Delinquency/Deficiency Reserve returned to Borrower will be targeted back into
th-. Housing Rehabilitation Program in accordance with applicable program
regulations, guidelines. or requirements . Whenever the Delinquency/Deficiency
Reserve is at its required amounts, intmst earned thereon and interest and other
charges paid to Borro wer on all Homeowner Loans in excess of amount owing by
Borrowe:-to Bank under the Term Notes shall be the unrestricted property of
Borrower. The interest gained from the Delinquency/Deficiency Reserve will be
targewd back into the Borrower's Housing Rehabilitation Prc.;ram in accordllnce with
applicable program regulations, guidelines, or requirements unless such interest is
required to replenish the rese rv t acco~nt in accordance with this P:iragraph .
12 . Qiwu: Al ot prior to closing , BoITOwer shall deli ver to Bank the following, in form
and substance satisfactory to Bank :
A. This J._ ·•ment ;
B. The Collateral .-\ssignment described in Paragraph 10 abo ve;
C. UCC·l Financing Statements covering the Security for recording and/or filing
in all appropriate jurisdictions; and
D. Any other documents and opinions as reasonably required by Bank .
All of the above instruments and docum r.~•s are hereby incorporated by
reference herein .
13. Borrower's Representation. Warragties and Covenants : Borrower r ~resents and
warrants to and covenants "ith Bank that, as of the date of this Agreement, as long as
any indebtedness hereunder remains outstanding and as of the date any Advance
hereunder is re quested and accepted :
A. No Violation of Other Agreement : There is no pro vision of an y agreement o,
insrrument to which Borrower is or will be a party or by which it is bound or
affected which would be contravened or vi olated by an y of rhe representation ~.
warranties , covenant s or agreemenrs made or act io ns to be taken hereunder by
Borrower ;
B. Adverse Proceedings or Ag1·•cments: There is no action , proceeding ,
arbitration or invest igat ion pend ing at law or in equiry or before any
governmental agency or instrumentality or, to the knowledge of Borrower,
thrw,atened against or affecting Borrower or the Security or existing default by
6
•
• " )
•
Bo1TOwer under any lense or agreemen\ ivhich mig)u materially adversely affect
the value of the Security or Borrower 's ability 10 perform its obligations to
Bank, continuing operations, business assets , propenies or condi1ion (financial
or ~ 'hcrwise). In the event such action, suit , proceeding , arbitration,
inve: ligation o, default is pending or threatened in 1he future , Bo1TOwer shall
provide Bank wi1h immediate norific~ion and the details thereof;
C. Orgaoizalioo; Authority; Power; Etc.: Borrower (I) is and shall continue to
be a governmental entity organized, validly existing and in good standing under
the laws of Colorado. (ii) has and shall continue 10 have 1he power and authority
to own its assels and to carry out business in every jurisdiction in which the
nature of its business or its µropenies make such qualificalion necessary as now
or then being conducted, and (iii ) is and shall continue to be. in ail material
respects, in compliance with all laws , regulation s. ordinanc es. and orders of
public authorities applicable 10 it;
D. Validity of loan Instruments : The execution , delivery lnd performance by
B01TOwer of this Agreement. the individual Term Notes. 1h~ Collateral
Assignm,nl , and each and every document incide n1 thereto and hereto (i) are
within the powers of Borrower, (ii) have been dul y authorized by all requisi1e
actions on th e pan of Bo1TOwer, (iii ) do nol requ ir e addi tional approval of any
governmental authorit y, and (is) do not viola1e an y provision of law , any order
of any coun or ocher governmental authority, the Mieles of Incorpora ti on .
bylaws or any agreemen1 , instrument or ocher undenaking to which Borrower is
a party, or which purpons to be binding on Borrow er. This Agreement, the
individual Term Notes and such other documen1s are, or upon execution and
deli very will be, the legal , valid and bindin g obliga1ions of the persons
purponin g 10 he bound !hereby. fully enforce;Jbl e in accordance with their
respecti ve lerms , subje r.t to bankruptc y, insolnncy. rece i,·ership , reorganization
or similar laws no w or hereinafter in dTect and are 001 and will not be . with out
Bank 's prior wri11en consent. subordina1ed in righ1 of pa ymenl to an y 01her
obli galion of Borro we r:
E. Tide: Borrower has good, sufficienl and le gal litle to the Security and has the
legal right to pledge the same 10 Bank . The Securi ty is free from all security
interest , claims , encumbrances, charges or liens whatsoev er other than those
created or allowed by .his Agreement and excepl as discl osed in wri1in g prior 10
the execution of chis Agreement ;
F. Security Agreements : Borrow er shall nolify Bank of an y material ,greements
entered into with regard to the Security. Borrower ,hall pro ,·ide Bank with
execu1ed no1 ices of assignments of Borrower 's right s under such agreemer.ts.
These noti ces of assigr,went will be sent to 1he oth er pany to such agreement
upon any Even! ofDefaull by 1he Borrower :
7
G. Flaaaclal StatemenlJ: Borrower shall supply Bank with its annual budget
within sixty (60) days or IIJ adopdoa by tbe City or Ea1lewood's City
Couacll. Within one hundred eighty (180) days of the end of each fiscal year,
Borrower shall supply Bank with audited fiscal year-end financial statements
bearing an unqualified opinion. Borrower shall furnish Bank such additional
financial information, statements and rcpons as Bank m&y reasonably request
with respect to Borrower. Upon the request of Bank, Borrower shall provide
Bank with a cenificate sigrted by Borrower's chief executive (or financial)
officer or independent public accountant that no Event of Default, or act,
condition or event which with notice, failure to cure or the passage of time, or
all the foregoing, would become an Event of Default. has occurred.
All financial data given to Bank with respect to Borrower (i) are (or will be)
complete and correct in all material respects , (ii) accurately present (or ·.-ill
present) the financial condition of Borrower as of the dates. and the result of its
operetions. (iii) have been (or will be) prepared in accordance with generally
accepted accounting principles cdnsistcntly followed throughout the periods
covered thereby. (iv) have been (or will be) cenified as to accuracy and
completeness by the chief executive or financial officer, and (I') if requested by
Bank. will be prepared by a cenified public accountant acceptable to Bank. All
balance sheets disclose (or will disclose ) all liabilities , direct and contingent , as
of their respective dates;
H. Equity: Borrower shall maintain mini:num equity as of each fiscal year end
equal to the equity set fonh in Borrower 's December 31, 1998 financial
statements previously pro vided to Bank for both Borrower's residential propeny
rehabilitation loan program and for Borrower as a whole.
I. Additional Notices: In addition to notices required above. Borrower shall
immediately give notice in writing to Bank of (i) the occurrence of an Event of
Default, or any condition, event or act which with the giving of notice , failure to
cure or the passage of time or all the foregoing woulc\ r.onstitutc such an Event
of Default ; and (ii) any change in the name or bus iness nf i).,rrower, any change
in its form , management or organizational structu ,-' ,ind any change in
Borrower 's address of principal location(s) of business ;
J. Strict Compliance: Borrower agrees to compl y strictly with all terms .
conditions and requirements set fonh in this Agreement. and all related
documents:
K. Character of Representations and Warranties None of the financial
statements or any cenificate , document or statement furnished to Bank (or to be
furnished to Bank) by or on behalf of Borrower in connection with the Loans ,
and none of the representations and warranties in this Agreement, contains (or
will conlai n) any untrue statement of a material fact or omits (or will omit) to •
•
state a material fact necessary in order to make the suuements contained therein
or herein not misleading. There has been no material adverse change in the
credit wonhiness or condition of Borrower, financial or otherwise, or affairs of
Borrower since the date of the most recent financial statements given to Bank
with respect to Borrower.
L. HUD Fundlne: Until all of Borrower's obligations to Bank under this
Agreement have been fully satisfied, Borrower shall take such steps as may be
necessary to obtain and retain such contributions and funding from HUD as may
necessary to allow Borrower to duly perform all its obligations, including,
without limitation, Borrower's obligations under the Term Notes and this
Agreement.
I 4. Borrower's 'legatlve Coveganu : So long as any indebtedness hereunder remains
outstanding under the Loans, and until performance in full of all of its obligations
hereunder, Borrower will not without the prior wrinen consent of Bank :
A. Use Loan proceeds except for purposes stat~d in Paragraph 3;
B. The borrower does not need bank permission to incur indebtedness for the
obligations created in the ordinary course of business, or indebtedness due
HUD under terms and conditions substantially similar to the Hl'D debt
presently outstanding as described in the Borrower's December 31, 1998
financial statements. "The ordinary course of business~ would include
rebahllltatlon, reno,·atioo, or total rebuilding projects which fall under tbe
borrower's normal plans and parameters .
C. Merge into or consolidate with an y corporat ion or other entity ; or acquire all or
substant ially all of the assets of any other corporation or entity: sell. lease,
assign , transfer or otherwise dispose of all or substantially all of its assets: or
change materially the nature of its business ;
D. Guarantee or become liable in any way as surety, endorser (other than as
endorser of negotiable instruments in the ordinary course of busine ss) or
accommodation endorser or otherwise for the debt or obligations of an y other
person or entity .
15 . Default: The occurrence of an y of the foll owing events (wh ether voluntary or
involunt:iry or efJected by operation of law or otherwise) shall constitute an Event of
Default by Borrower under this Agreement
A. The nonpayment of any installment of prin cip al or inte rest when due to Bank by
Borrower.
9
B. Any representation or warranty made by BotTOwer ( or any of its officers or
representatives) in this Agreement or made by any person malting, executing or
delivering same in any documents oontemplated by or executed or delivered in
coMection herewith shall prove to have been incorrect when made in any
material respect;
C. Any assignment of any rights hereunder by Borrower not in Compliance with
Paragraph 27 .B hereof;
D. Occurrence of any of 1he following evenls se1 forth in Ibis Paragraph D, unless
cured wi1hin 1hirty (30) days of 1he earlier of wri11en nolice 10 Borrower or 1he
dale Bank should have been no1ified of such even! pursuan1 10 Paragraph 13.1
hereof:
(i) the commencemenl of any litiga1ion or proceeding which may ma1eriall y
and adversely affec1 the abili1y of Borrower to perform i1s obliga1ions lo Bank ;
(ii) Borrower's failure 10 perfortn or observe an y condi1ion. letm or covenan1
contained in this Agreement , any individual Term Note , or in any other
agreemenl wi1h Bank;
(iii) the default not cured within the applicable period stated therein of
Borrower under the tetms of any 8!l™'ment or instrument pursuant to which
Borrower has borrowed money from any person or entity ;
(iv) the entry of a final judgmenl against Borrower which combined wi1h any
olher outs1anding judgment or by itself exceeds a material amounl which
requires disclosure or a footnoie on its financial s1a1emen1s and such judgmenl
shall not be discharged or execution stayed 1hereon pending appeal or, in 1he
event of such a stay. such judgment shall not be discharged after such stay
expires; or
(v) an attachment , execu1ion or 01her judicial seizure of, or a.ffec1ing, 1he
assets of Borrower in an aggregale amount exceeding a ma1erial amounl which
requires disclosure or a foo1no1e on i1s financial s1a1emen1s ;
E. A material adverse change in 1he condi1ion (financial or otherwise) of Borrower
or the va lue or marke1ability of lhe Securi1y;
F. Borrower shall become inso lven1, or shall consen1 to or apply for lhe
appointment of a receiver, trus1ee, cus1odian, or liquidator of ilself or any of its
property, or shall generally fail 10 pay i1s deb1s as 1hey become due, or shall
make a general assignmenl for 1he benefil of creditors. or Borrower shall tile a
voluntary pe1i1ion in bankrup1c y. or seek reorganiza1ion or any 01her relief under •
lhe Bar'uup1cy Refortn Act of 19 78, as amended from lime 10 lime, or l.'.llder
10
•
•
any 11a1e or federal law grun1i111 relief 10 debtors , whether now or hereafter in
etTect. or ~hall file an an1wer admitting the jurisdiction of the court and the
mater ial allegations of any involuntary petition filed pursuant to said
Bankruptc y Act or any other applicable state of federal law relating to
bankruptcy or reorgan ization or other relief for debtors . or shall be adjudicated a
bankrupt ;
G. The dis.'IOlution or liquidation of Borrower, or if Borrower, its directors,
majori ty stockholders or members shall take action approving or authorizing the
dissolution or liquidation ofBorrower; or
H. Bank in its sole discretion and in good faith deems itself insecure .
I. If the contributions for funding Borrower is allocated , rece ives or is authorized
10 recei ve from HUD are eliminated or reduced and Bank. it its sole discretion.
determines that such reductions are material to Borrower's financial operations
and/or ad versel y affec t the prospect of paymem or per formanc e by Borrower of
its obligations hereund~r.
16 . Bank's Default Rights : In the event of any Event of Defa ult hereunder or under an y
indi vidual Term Note which is not cured within an y relevant cure period by
Borrower, Bank shall ha ve the following rights without further notice :
A. Bank may declare any outstanding indebtedness 10 Bank under the Loans
immediately due and payable without presentment , protest, demand or notice of
any kind , all of which are hereby expressly wai ,·ed by Borrower and shall be
entitled to automaticall y deb it the amount of such indebtedness to any and all
demand deposit accounts that are or r,1ay be opened at Bank to the extent
permitted by law;
B. Bank may, at its option , even after default by Borrower or aflr.r m~.turity of any
Loan . mnke an y payment or perform any defaulted co v,:na,,,, agreement or act
of Borro w~r hereunder or under any other agreement se,:uring , evidencing or
relat ing to the Loans and any moneys so advanced shall thereupon become part
of the appl icable Loan (even ifin excess of the fa ce value of the Term Note ) and
shall be immediatel y due and payable without not ic e;
C. Bank may also si multaneousl y exercise an y other ri ght conta ined in an y
instrument or document evid encin g, relating to , secu rir.g or guaranteeing the
indebtedness to Bank under this Agreement and the indi vidual Term Notes or at
law or in equity or by statute. All expenses reasonably insured by Bank in
connection with any remedy shall be deemed principal of the Loans for all
purposes and part of the Loans, even if the aggregate amount of Advance
exceeds the principal amount of the Loans. Bank may apply the proceeds from
II
any security or from any other source against any of the Loans as and in any •
order it sees fit
17. Bank's Rlgbu Optjooal: Wherever in 1his Agreement Bank is authorized or given
the right to take any action, Bank may exercise or refrain from exercising such right at
its sole option and shall not be obligated to exercise such right.
18. Rjgbts; Remedies; and Powen. Each and every right , remedy and power granted t(>
Bank hereunder shall be cumulative and in addition to any other right, remedy or
power, contained in an y instrument or document including, but not limited to the
Bank 's right of serolT. herein specifically granted or now or hereafter existing in
equity, at law , or by vinue of statute or document executed or to be executed by
Borrower or otherwise and may be exercised by Bank from time 10 time concurrently
or independenrly and as often and is such order as Bank may deem necessary or
appropriate . Any failure or delay on the pan of Bank in exercising any such right
remedy or power, or abandonment or discontinuance of steps to enforce the same.
shall not oper:ite as a waiver thereof or affect Bank 's right thereafter to exercise 1h,
same . Bank has the right , at any time and 1>ithout advance notice, to set off any funds
in Borrower 's account(s). including the Del inquency/Deficiency Reserve, against any
obligation Borrower owes to Bank. I~ the case of a joint account , if t~~ Bank
exercises its ri2ht of setofT, Bank mav treat all funds in the account as if thev were
owned exclusi;ely by the pany subject to the setolT. ·
19 . Loan Expenses : Borrower agrees to promptly reimburse Bank for all its costs and
expenses, including legal fees in connection with the prepar:ition , execution.
performance , monitoring and enforcement of this Agreement. the individual Term
Notes and any other instrument. document or agreement relating to the Loans and
shall indemnify and hold Bank harmless from and against any and all costs. losses
and liabilities arising in connection therewith and shall reimburse Ba nk fo r same upon
demand. Borrower agrees that Bank, at its option. without funher notice .
authorization or request for such , may advance funds under the Loans to satisfy any
or all such costs aud fees.
20. Acceptance and Closing Dates : This Agreement shall automatically terrnina1e at
Bank 's option unless the original is executed by Borrower and returned to Bank no
later than February 28, 2000 Bank has furnished Borrower with a signed cop y of this
Agreement for Borrower's files.
21. Wah•er; Notice or Demand : Any waiver or panial waiver of any requirements of
Borrower pro,·ided for in th is Agreement or of an y instrument. document or
agreement evidencing, securing or relatirg to the loans at any time by Bank shall not
be effective unless it is in writing and signed by Bank , and such waivers shall be
effective only in the specific instance and for the specific purpose given . Any
Advance of Loan proceeds hereunder shall not constitute a waiver of any of the
conditions of Bank 's obliga1ions to make funher Advances , nor, in the event
12
•
•
•
Borrower is unable to satisfy any such condition, shall any such waivtr preclude Bank
fiom thereafter declaring such inability to be a default hereunder. The living by
Bank of any notice to or demand on Borrower not specifically required hereunder
shall not entitle Borrower to any other or funher notice or demand in the same ,
similar or other circumstance s.
22 . Commgpjc11iop : Any notice or other communic3tion required or pennincd
hereunder shall be in writing and shall be deemed to have been given when persona 1ly
delivered or mailed by United States ccnified mail , return receipt requested, posu.ge
prepaid, addressed to the party for whom it is in1endcd at 1he following addresses:
Borrower : The City of Eoelewood-Tbe Housing
Rehabilitation Fund
3"60 South Elari Scree!
Englewood , Colorado 80 11 0
Bank : Vema Bank Englewood Branch
Ann:Doug Poege , Vice Presidenc
5050 Souch Broadway
Englewood , CO 80110
provided, however, that either party may change ics address for pwposes of receipt of
any such communication by giving ten (10) days' prior wrinen notice of such change
to the ocher party in the manner abo ve prescribed .
23. Time o[Esseace Time is of the essence.
24 . Colorado Law : The substan:ive law of Colorado shall govern all the terms ,
conditions and in1erpre1a1ions 1Jf this Agreement. the Loans and all other instrumenlS
documencs or agreements axecuccd r,ursuan1 hereto. In the even1 of litigatio r
concerning this Agreement, the h1dividual Term No1es, the Loans or any other
instrument, document or agreement relating to 1he Loans. the panics hereto agree that
the exclusive venue and place of jurisdiction shall be the State of Colorado, City and
County of Denver. Funher, Borrower consents to and agrees 10 file a ge neral
:ippe=ce in the event it receives a service of process .
25 . Severabilitv : In the event an y pro vi sion of 1his Agreement or an y of the 01her
instruments , documents or agreements execuicd pursuant hereto shall be held in va lid
or unenforceable by any coun of compelent jurisdic1ion, such holding shall not
invalidate or render unenforceable an y other provision hereof or thereof or affect the
validity or enforce3bility of such provision in 30y other jurisdiction .
26 . Epdn Agreemegt: This Agreement contains the entire agreemen1 between
Borrower and Bank with respect to the subject maner hereof, and supersedes and
car.0 :ls any prior agreements or understanding, oral or wrinen, between us with
13
respect there!o. Each party hereto desires to have, and 10 extend to the other,
protection against miscommunication, misn.'Presentation . misinterpretation and
misunder!tandins with respect to chanaes in, 01 •. aiver of r.ny of the provisions of
this Agreement. Therefore, the panics hereby agree that no change , amendment or
modification of, nor any waive r of or consent given pursuant to, any of the pro vi sions
of this Agreement may be pro ved in any legal or arbitration proceeding except by a
writing signed by the party sought to be bound thereb y; a~d each pany agrees not to
present evidence of ,my kind other than such signed writing in any such proceeding ,
to prove any change , amendment or modification hereof or any waiver or consent
hereunder.
27 . Mt,cellapeous Provblons:
A. At Bank 's request, Borrower agrees to pro vide Bank with thcs~ documents and
legal opinions as reasonably requested by Bank from tim,· to time i~ order to
fulfill the intent of this Agreement ;
B. Borrowe r may not assign any of its rights her~under, withour the pri or wrinen
consent of Bank. Any purponed assignment without such consent shall be ·,oid
and shall constitute a default hereunder and under the loan documents . Bank
reserves the right to sell , assign . transfer, ne gotiate an d grant participation's in
all or any pan of the loans and in connection therewith Bank may disclose all
documents and information which it now has or may hereafter acquire relating •
to the loans. the Borrower or its business . This Agreement shall be bin di ng
upon , and inure to the benefit of and be enforceable by Borrowe r and Bank . and
their respective successors and assigns , if ass igned in accordance wi th this
Paragraph ;
C. This Agreement presumes the accuracy of all inforrnarion submined lo Bank
prior to 1he issuance hereof and is subject to satisfaction of the terms and
conditions set fonh her:in above . The obligation to make ad\'ances pursuant
hereto shall terminate at 1he option of Bank (i) in the event of Borrower's breach
of any of the terms, covenants and condi tions contained in this . .\greement or in
the docum ents executed in connection herewith; or (ii) the status (financial or
otherwise ) of Borrower shall not be substantially the same as. or bene r 1han ,
represented in connection with the application for the loan;
D. Bank ag. ,es to make the records and boo ks of the Ad\'ances disbursed to
Borrower he reunder available for inspection by an auditor s·,lec ted by Borrower.
Borrower agrees to make its records and books a\'ailable to agents of any duly
c,mstituted au thorit y ha\'ing jurisdiction over Bank or the Parti ci pants . Bank
agr· es to allow its books and recc,rds pertaining to this Agreement to be
inspected by the Comptroller General or any authorized representative ofHliD .
14
•
E. Bonower will make all loans involving CDBG funds subject to Community
Development Block Grant ("CDBG") Rcgulalioos . All terms and conditions oi
the Agreement are subject to provisions governing Lump Sum Drawdo'¥115 for
Property Rehabilitation 570 .513 of HUD regulations or CDBG 24 CFR Pan 570
which are incorporated herein by this reference . Borrower reserves the right to
withdraw from the Rehabilitation Fund any unobligated CDBG arnowas
required by HUD in the exercise of com,crive or remedial actions authorized
under 570.9I O(b) of the CDBG regulations .
F. This Agreement may be executed in any num ber of counterparts, each of which
shall be an original , but all of whict togethe.· shall constirute one agreement.
2g_ Applicable Law: Tbis Aerccm,..,1 bas hccn delivered to Lender and
accepted by Lender In the Stu~ of ,:olorado. If there II a lawsuit.
Borrower aerccs uvoa Leader's ri<;Ut~: 10 submit to tbe jurisdiction of the
courts of Arapahoe County, tbe State of Colorado. Tbis A&rccmeat shall
be eoverned by and eo ■strued la accordance with the laws of the State of
Colorado.
Very truly yours,
VECTRA BANK ENGLEWOOD BRANCH
By: __________ _
Vice President
ACCEPTED A},;D AGREED TO :
BORROWER :
THE CITY OF E:-IGLEWOOD
THE HOUSING REHABILITATION
FUND
By : ___________ _
Frank Gryglewic:z
Title: Fi canci al Send ces Di rector
Date : ___________ _
Anesi:
15
•
•
COUNQLCOMMUNCATION
Doto Agondaltom Subject
Fot,nary 7, 2000 Rosolution lltablilhlng I lino of credit
11 c I tor the con1inuance of the Houting
Rehabillt■tlon Fund
lnltlltodBy I Sllfl Source
Citv of Enolewood , Rn■nci■l Services Dooartment Frank Grvalw/:,:. rnrector
COUNQL GOAL AND PREVIOUS COUNQL ACTION
Ctty Council h ■s long supp0!1ed maintaining and improv lny tho hous ing sta,~ l,1 tho City of Englewood. City Council
1pproved Ordinance 23, Sones 1999 providing for the City 111uming ■II the r•,ots ,nd ',abilltlN of tho Rehabliltlllon
Program from tho Englewood Housing Authority. City Council approved Ord, '-"'' e 26. 3etios of 19911 which ts1abll1hod the
Housing Rehabilitation Fund. The rehabilitation program u1n a lin1 of credit to s.i.sll:11 1n funding it1 projects .
RECOMMENDED ACTION
Staff recommend::. Council approve the anached resolution approving an agreement wtth Vectra Bank for a naw lln1 of credh
to support the activities of tho Housing Rehabilltlllon Fund.
BACKGROUND, ANALYSIS, AND ALTERNATIVES IDENTIFIED
The City created I he Hou1lng Rehabilitation Loan Program (Program) In 1976 to preserve the olcilllng housing 11oc• in tho
City , and to addmss the problems of low-income familln with the financing of major repairs. Th• Program was
administered thmugh the Engtowood Housing Authority until early 19119 when the Ctty of Englowood lltablilhod the
Program II an E1 !!"'!lrise ~en~. Tho City then UIUmod all thn assets and liabilities of tho Program, A mljcr component of
tho 1u;:cass of tho Program i1 tho support from the banking community . Various llnn of credit since 19TT lotallng """ $3
milli cf, have l.1een extended to the Program from local banks with Vectra Bank currently acting u th1 lead bank. The line of
credit 11greement being presented here is naentiaHy identical to the agree,nent tha1 tht Authority "lp&rated l.l~~•r prie;r to the
transf., to the City.
ANANQAL IMPACT
None
UST OF ATTACHMENTS
Proposed resolution
Lino of Credit Agroomont