HomeMy WebLinkAboutCORRESPONDENCE - PURCHASE ORDER - 92008734810-7991-0321.7
LOAN AGREEMENT
by and between
CITY OF FORT COLLINS, COLORADO, ELECTRIC UTILITY ENTERPRISE
AND
ZB, N.A., DBA VECTRA BANK COLORADO
Relating to:
Not to exceed $2,500,000 2020 Taxable Subordinate Lien Revenue Note
Dated as of April 17, 2020
TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS ............................................................................................................................... 2
ARTICLE II
LOAN
Section 2.01. Loan ................................................................................................................. 8
Section 2.02. Interest Rate; Interest Payments; Principal Payments ..................................... 9
Section 2.03. Costs, Expenses and Taxes ............................................................................ 11
Section 2.04. Pledge ............................................................................................................. 11
Section 2.05. Conditions to Closing .................................................................................... 12
Section 2.06. Procedure for Requesting and Funding Advances ......................................... 13
Section 2.07. Conversion to Amortizing Term Loan ........................................................... 14
ARTICLE III
FUNDS AND ACCOUNTS
Section 3.01. Light and Power Fund .................................................................................... 14
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE ENTERPRISE
Section 4.01. Due Organization ........................................................................................... 15
Section 4.02. Power and Authorization ............................................................................... 15
Section 4.03. No Legal Bar .................................................................................................. 15
Section 4.04. Consents ......................................................................................................... 15
Section 4.05. Litigation ........................................................................................................ 15
Section 4.06. Enforceability ................................................................................................. 16
Section 4.07. Changes in Law.............................................................................................. 16
Section 4.08. Financial Information and Statements ........................................................... 16
Section 4.09. Accuracy of Information ................................................................................ 16
Section 4.10. Financing Documents .................................................................................... 16
Section 4.11. Regulations U and X ...................................................................................... 16
Section 4.12. Default, Etc .................................................................................................... 16
Section 4.13. Sovereign Immunity....................................................................................... 17
Section 4.14. No Filings....................................................................................................... 17
Section 4.15. Outstanding Debt ........................................................................................... 17
ARTICLE V
COVENANTS OF THE ENTERPRISE
Section 5.01. Performance of Covenants, Authority ........................................................... 17
Section 5.02. Contractual Obligations ................................................................................. 17
Section 5.03. Further Assurances......................................................................................... 17
Section 5.04. Conditions Precedent ..................................................................................... 18
Section 5.05. Rules, Regulations and Other Details ............................................................ 18
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Section 5.06. Payment of Governmental Charges ............................................................... 18
Section 5.07. Protection of Security .................................................................................... 18
Section 5.08. Prompt Payment ............................................................................................. 19
Section 5.09. Use of Funds and Accounts ........................................................................... 19
Section 5.10. Other Liens..................................................................................................... 19
Section 5.11. Reasonable and Adequate Charges ................................................................ 19
Section 5.12. Adequacy and Applicability of Charges ........................................................ 19
Section 5.13. Limitations Upon Free Service ...................................................................... 19
Section 5.14. Collection of Charges .................................................................................... 20
Section 5.15. Maintenance of Records ................................................................................ 20
Section 5.16. Accounting Principles .................................................................................... 20
Section 5.17. Laws, Permits and Obligations ...................................................................... 20
Section 5.18. Bonding and Insurance .................................................................................. 20
Section 5.19. Other Liabilities ............................................................................................. 20
Section 5.20. Proper Books and Records ............................................................................. 20
Section 5.21. Reporting Requirements ................................................................................ 21
Section 5.22. Visitation and Examination............................................................................ 21
Section 5.23. Additional Debt .............................................................................................. 21
ARTICLE VI
INVESTMENTS
Section 6.01. Permitted Investments Only ........................................................................... 22
ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES
Section 7.01. Events of Default ........................................................................................... 22
Section 7.02. Remedies ........................................................................................................ 23
Section 7.03. Notice to Bank of Default .............................................................................. 24
Section 7.04. Additional Bank Rights.................................................................................. 24
Section 7.05. Delay or Omission No Waiver ....................................................................... 24
Section 7.06. No Waiver of One Default to Affect Another; All Remedies
Cumulative ..................................................................................................... 24
Section 7.07. Other Remedies .............................................................................................. 24
ARTICLE VIII
MISCELLANEOUS
Section 8.01. Loan Agreement and Relationship to Other Documents ............................... 24
Section 8.02. Assignments, Participations, etc. by the Bank ............................................... 24
Section 8.03. Notice of Claims Against Bank; Limitation of Certain Damages ................. 24
Section 8.04. Notices ........................................................................................................... 25
Section 8.05. Payments ........................................................................................................ 25
Section 8.06. Applicable Law and Jurisdiction; Interpretation; Severability ...................... 25
Section 8.07. Copies; Entire Agreement; Modification ....................................................... 26
Section 8.08. Waiver of Jury Trial; Class Action Waiver ................................................... 26
Section 8.09. Attachments ................................................................................................... 26
Section 8.10. No Recourse Against Officers and Agents .................................................... 26
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Section 8.11. Conclusive Recital ......................................................................................... 27
Section 8.12. Limitation of Actions ..................................................................................... 27
Section 8.13. Pledge of Revenues ........................................................................................ 27
Section 8.14. No Liability .................................................................................................... 27
Section 8.15. No Waiver; Modifications in Writing ............................................................ 27
Section 8.16. Document Imaging......................................................................................... 28
Section 8.17. Payment on Non-Business Days .................................................................... 28
Section 8.18. Execution in Counterparts; Electronic Storage .............................................. 28
Section 8.19. Severability .................................................................................................... 28
Section 8.20. Headings ........................................................................................................ 28
Section 8.21. Waiver of Rules of Construction ................................................................... 28
Section 8.22. Integration ...................................................................................................... 28
Section 8.23. Patriot Act Notice .......................................................................................... 29
Section 8.24. Termination of Agreement ............................................................................. 29
EXHIBIT A FORM OF 2020 NOTE
EXHIBIT B FORM OF ADVANCE REQUEST
4810-7991-0321.7
LOAN AGREEMENT
THIS LOAN AGREEMENT (this “Agreement”) is made and entered into as of April
17, 2020, by and between CITY OF FORT COLLINS, COLORADO, ELECTRIC
UTILITY ENTERPRISE, an enterprise established and existing pursuant to the home rule
charter of the City of Fort Collins, Colorado (the “Enterprise”), and ZB, N.A., DBA VECTRA
BANK COLORADO, a national banking association, in its capacity as lender (the “Bank”).
W I T N E S S E T H :
WHEREAS, the City of Fort Collins, Colorado (the “City”) is a duly organized and
existing home rule municipality of the State of Colorado, created and operating pursuant to
Article XX of the Constitution of the State of Colorado and the home rule charter of the City (the
“Charter”); and
WHEREAS, the members of the City Council of the City (the “Council”) have been duly
elected and qualified; and
WHEREAS, Section 19.3(b) of the Charter Article V (“Section 19.3(b)”) provides that
the Council may, by ordinance establish the City’s electric utility (the “Utility”) as an enterprise
of the City; and
WHEREAS, pursuant to Section 19.3(b), the Council has heretofore established the
Utility as an enterprise of the City (the “Enterprise”) in ordinances codified in Section 26-392 of
the Code of the City of Fort Collins (“Section 26-392”); and
WHEREAS, pursuant to Section 19.3(b) and Section 26-392, the Council has authorized
the Enterprise, by and through the Council, sitting as the board of the Enterprise (the “Board”),
to issue revenue and refunding securities and other debt; and
WHEREAS, the Enterprise has established a program (the “Epic Program”) to assist
certain customers of the Utility in financing home energy efficiency and renewable energy
improvements by making loans to customers who are property owners (“Epic Loans”); and
WHEREAS, the Board has determined that in order to finance Epic Loans (the
“Project”), it is necessary and advisable and in the best interests of the Enterprise (i) to enter into
this Agreement with the Bank pursuant to which the Bank shall loan the Enterprise an amount of
not to exceed $2,500,000 (the “Loan”) for such purposes, and (ii) to issue a promissory note (the
“Note”) to the Bank to evidence the Enterprise’s repayment obligations under this Agreement;
and
WHEREAS, the Enterprise has previously issued its “City of Fort Collins, Colorado,
Electric Utility Enterprise, Tax-Exempt Revenue Bonds, Series 2018A” (the “2018A Bonds”)
and its “City of Fort Collins, Colorado, Electric Utility Enterprise, Taxable Revenue Bonds,
Series 2018B” (the “2018B Bonds” and, together with the 2018A Bonds, the “2018 Bonds”)
which are payable from a secured by a lien on the Net Pledged Revenues (as herein defined); and
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WHEREAS, the Enterprise has previously issued in 2019 its “City of Fort Collins,
Colorado, Electric Utility Enterprise, Taxable Subordinate Lien Revenue Note in an amount not
to exceed $2,500,000 (the “2019 Note”) which is payable from a secured by a subordinate lien
on the Net Pledged Revenues; and
WHEREAS, except for the 2018 Bonds and the 2019 Note, neither the City nor the
Enterprise has pledged or hypothecated the Gross Net Pledged Revenues (as herein defined) to
the payment of any bonds or for any other purpose, with the result that the Net Pledged Revenues
may now be pledged lawfully and irrevocably to the payment of the Loan which pledge will be
subordinate to the pledge of Net Pledged Revenues to the payment of the 2018 Bonds and on a
parity with the 2019 Note; and
WHEREAS, the Bank is willing to enter into this Agreement and to make the Loan to the
Enterprise pursuant to the terms and conditions stated below; and
WHEREAS, the Loan shall be payable from and secured by the Net Pledged Revenues
on a parity basis with the 2019 Note as more fully set forth herein;
NOW THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Words and terms defined in the recitals hereof, as hereby supplemented and amended,
shall have the same meanings herein or therein assigned to them, unless the context or use
indicates another meaning or intent, and except to the extent amended by the definitions
hereinafter set forth. In addition, the following terms shall have the meanings set forth herein:
“2018 Bond Ordinance” means the ordinance of the Enterprise which provides for the
issuance and delivery of the 2018A Bonds and 2018B Bonds.
“2018A Bonds” means the Enterprise’s Tax-Exempt Revenue Bonds, Series 2018A.
“2018B Bonds” means the Enterprise’s Taxable Revenue Bonds, Series 2018B.
“2019 Note” means the City of Fort Collins, Colorado, Electric Utility Enterprise not to
exceed $2,500,000 2019 Taxable Subordinate Lien Revenue Note evidencing the Loan from the
Enterprise, as maker, to US Bank, N.A. as payee.
“2020 Note” or “Note” means the City of Fort Collins, Colorado, Electric Utility
Enterprise not to exceed $2,500,000 2020 Taxable Subordinate Lien Revenue Note evidencing
the Loan from the Enterprise, as maker, to the Bank, as payee.
“Advance” means a disbursement of proceeds of the Unfunded Portion of the Loan
pursuant to the terms hereof.
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“Advance Period” means the period commencing on the date of the Closing Date and
terminating on the second anniversary of the Closing Date unless terminated or extended as
provided herein.
“Advance Termination Date” means the earlier to occur of (a) the Full Funding Date;
(b) the date which is the last day of the Advance Period or (c) a date determined by the
Enterprise and provided in writing to the Bank.
“Authorized Person” means the President of the Enterprise or the Treasurer of the
Enterprise and also means any other individual authorized by the President to act as an
Authorized Person hereunder.
“Authorizing Ordinance” means the Ordinance adopted by the Board on April 7, 2020
authorizing the Enterprise to finance the Project, enter into the Loan and execute and deliver the
Note, this Agreement, and the other Financing Documents.
“Bank” means ZB, N.A., dba Vectra Bank Colorado, a national banking association, in its
capacity as lender of the Loan.
“Business Day” means any day of the week on which the Bank is conducting its banking
operations nationally and on which day the Bank’s offices are open for business in Denver,
Colorado.
“Capital Improvements” means the acquisition of land, easements, facilities, and
equipment (other than ordinary repairs and replacements), and those property improvements or
any combination of property improvements which will constitute enlargements, extensions or
betterments to the System and will be incorporated into the System.
“Closing” means the date of the execution and delivery of the Note, this Agreement, and
the other Financing Documents by the respective parties thereto.
“Closing Date” means date of the Closing for the Loan.
“Commitment Fee” has the meaning set forth in Section 2.01(d) hereof.
“C.R.S.” means the Colorado Revised Statutes, as amended and supplemented as of the
date hereof.
“Debt” means, without duplication, all of the following obligations of the Enterprise for
the payment of which the Enterprise has promised or is required to pay from the Net Pledged
Revenues: (a) borrowed money of any kind; (b) obligations evidenced by bonds, debentures,
notes or similar instruments; (c) obligations upon which interest charges are customarily paid;
(d) obligations arising from guarantees made by the Enterprise; (e) obligations as an account
party in respect of letters of credit and bankers’ acceptances or similar obligations issued in
respect of the Enterprise; and (f) obligations evidenced by any interest rate exchange agreement;
provided that notwithstanding the foregoing, the term “Debt” does not include obligations issued
for any purpose, the repayment of which is contingent upon the Enterprise’s annual
determination to appropriate moneys therefore.
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“Default Interest Rate” means a rate per annum equal to the lesser of the sum of the Wall
Street Journal Prime Rate plus 4% or the Maximum Rate.
“Electronic Notification” means telecopy, facsimile transmissions, email transmissions or
other similar electronic means of communication providing evidence of transmission.
“Event of Default” has the meaning set forth in Section 7.01 hereof.
“Financing Documents” means this Agreement, the Note, the Authorizing Ordinance,
and any other document or instrument required or stated to be delivered hereunder or thereunder,
all in form and substance satisfactory to the Bank.
“Fiscal Year” means the 12 months commencing January 1 of any year and ending
December 31 of such year.
“Full Funding Date” means the date on which, if at all, the aggregate amount of all
Advances equals the Maximum Advance Amount.
“Gross Pledged Revenues” means all rates, fees, charges and revenues derived directly or
indirectly by the City from the operation and use of and otherwise pertaining to the System, or
any part thereof, whether resulting from Capital Improvements or otherwise, and includes all
rates, fees, charges and revenues received by the City from the System, including without
limitation:
(a) All rates, fees and other charges for the use of the System, or for any
service rendered by the City or the Enterprise in the operation thereof, directly or
indirectly, the availability of any such service, or the sale or other disposal of any
commodities derived therefrom, including, without limitation, connection charges, but:
(i) Excluding any moneys borrowed and used for the acquisition of
Capital Improvements or for the refunding of securities, and all income or other
gain from any investment of such borrowed moneys; and
(ii) Excluding any moneys received as grants, appropriations or gifts
from the Federal Government, the State, or other sources, the use of which is
limited by the grantor or donor to the construction of Capital Improvements,
except to the extent any such moneys shall be received as payments for the use of
the System, services rendered thereby, the availability of any such service, or the
disposal of any commodities therefrom; and
(b) All income or other gain from any investment of Gross Pledged Revenues
(including without limitation the income or gain from any investment of all Net Pledged
Revenues, but excluding borrowed moneys and all income or other gain thereon in any
project fund, construction fund, reserve fund, or any escrow fund for any Parity Bonds
payable from Net Pledged Revenues heretofore or hereafter issued and excluding any
unrealized gains or losses on any investment of Gross Pledged Revenues); and
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(c) All income and revenues derived from the operation of any other utility or
other income-producing facilities added to the System and to which the pledge and lien
herein provided are lawfully extended by the Board or by the qualified electors of the
City; and
(d) All revenues which the Enterprise receives from the repayment of Epic
Loans.
“Initial Advance” means the first Advance made by the Bank to the Enterprise pursuant
to Section 2.06 hereof.
“Interest Payment Date” means the first Business Day of each month, commencing the
first such day occurring after the Initial Advance continuing through and including the Maturity
Date.
“Interest Rate” means fixed rate of interest equal to 3.38% per annum.
“Light and Power Fund” means the special fund of that name heretofore created by the
City pursuant to Section 8-77 of the Code of the City of Fort Collins.
“Loan” means the Loan Amount bearing interest pursuant to the terms of this Agreement.
“Loan Amount” means, with respect to the Loan, a maximum amount of Two Million
Five Hundred Thousand and 00/100 U.S. Dollars ($2,500,000), or such lesser amount that has
been Advanced by the Bank from time to time in accordance with the terms and provisions of
this Agreement.
“Material Adverse Effect” means a material adverse effect on (a) the business, property,
liabilities (actual and contingent), operations or condition (financial or otherwise), results of
operations, or prospects of the Enterprise taken as a whole, (b) the ability of the Enterprise to
perform its obligation under this Agreement, or (c) the validity or enforceability of this
Agreement or the rights or remedies of the Bank under this Agreement.
“Maturity Date” means April 17, 2037.
“Maximum Advance Amount” means, with respect to the 2020 Note, $2,500,000.
“Maximum Rate” means 18% per annum.
“Net Pledged Revenues” means the Gross Pledged Revenues remaining after the payment
of the Operation and Maintenance Expenses of the System.
“Operation and Maintenance Expenses” means such reasonable and necessary current
expenses of the City, paid or accrued, of operating, maintaining and repairing the System
including, except as limited by contract or otherwise limited by law, without limiting the
generality of the foregoing:
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(a) All payments made to the Platte River Power Authority, a wholesale
electricity provider that acquires, constructs and operates generation capacity for the City,
or its successor in function;
(b) Engineering, auditing, legal and other overhead expenses directly related
and reasonably allocable to the administration, operation and maintenance of the System;
(c) Insurance and surety bond premiums appertaining to the System;
(d) The reasonable charges of any paying agent, registrar, transfer agent,
depository or escrow agent appertaining to the System or any bonds or other securities
issued therefor;
(e) Annual payments to pension, retirement, health and hospitalization funds
appertaining to the System;
(f) Any taxes, assessments, franchise fees or other charges or payments in
lieu of the foregoing;
(g) Ordinary and current rentals of equipment or other property;
(h) Contractual services, professional services, salaries, administrative
expenses, and costs of labor appertaining to the System and the cost of materials and
supplies used for current operation of the System;
(i) The costs incurred in the billing and collection of all or any part of the
Gross Pledged Revenues; and
(j) Any costs of utility services furnished to the System by the City or
otherwise.
“Operation and Maintenance Expenses” does not include:
(a) Any allowance for depreciation;
(b) Any costs of reconstruction, improvement, extensions, or betterments,
including without limitation any costs of Capital Improvements;
(c) Any accumulation of reserves for capital replacements;
(d) Any reserves for operation, maintenance, or repair of the System;
(e) Any allowance for the redemption of any bonds or other securities payable
from the Net Pledged Revenues or the payment of any interest thereon;
(f) Any liabilities incurred in the acquisition of any properties comprising the
System; and
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(g) Any other ground of legal liability not based on contract.
“Parity Debt” means any obligations of the Enterprise payable from and with a lien on
the Net Pledged Revenues on a parity basis with the 2019 Note and the 2020 Note.
“Permitted Investments” means any investment or deposit permissible under then
applicable law for governmental entities such as the Enterprise.
“Person” means an individual, a corporation, a partnership, an association, a joint
venture, a trust, an unincorporated organization or any other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof.
“Prime Rate” means a variable per annum rate of interest equal at all times to the rate of
interest established and quoted by the Bank as its “Prime Rate,” “Base Rate” or “Reference
Rate,” such rate to change contemporaneously with each change in such established and quoted
rate, provided that it is understood that the Prime Rate shall not necessarily be representative of
the rate of interest actually charged by the Bank on any loan or class of loans.
“Principal Payment Date” means the first Business Day of each month, commencing the
first such day occurring after the conversion to a term loan pursuant to Section 2.07 hereof and
continuing through and including the Maturity Date.
“Senior Debt” means the 2018A Bonds, the 2018B Bonds, and any obligations of the
Enterprise payable from and with a lien on the Net Pledged Revenues on a basis superior to the
2020 Note.
“Supplemental Public Securities Act” means Title 11, Article 57, C.R.S.
“System” means the City’s electric distribution system that furnishes electricity and
related services and excludes the City’s broadband system using fiber-optic technology. The
System consists of all properties, real, personal, mixed and otherwise, now owned or hereafter
acquired by the City, through purchase, construction and otherwise, and used in connection with
such system of the City, and in any way pertaining thereto and consisting of all properties, real,
personal, mixed or otherwise, now owned or hereafter acquired by the City, whether situated
within or without the City boundaries, used in connection with such system of the City, and in
any way appertaining thereto, including all present or future improvements, extensions,
enlargements, betterments, replacements or additions thereof or thereto and administrative
facilities.
“Unfunded Portion” means, as of any date, an amount equal to the Maximum Advance
Amount, less the total amount of all Advances funded as of such date, less any reduction of the
Unfunded Portion made pursuant to Section 2.01 hereof.
“Wall Street Journal Prime Rate” means the Wall Street Journal Prime Rate quoted by
the Bank from the Wall Street Journal or any successor thereto.
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ARTICLE II
LOAN
Section 2.01. Loan.
(a) Agreement to Make Loan. The Bank hereby agrees to extend the Loan to
the Enterprise in the maximum aggregate principal amount of $2,500,000 subject to the
terms and conditions of this Agreement. The Loan shall be evidenced by the 2020 Note,
the form of which is set forth in Exhibit A attached hereto.
(b) Advances. Subject to the terms and conditions of this Agreement,
including without limitation satisfaction of the conditions set forth in Section 2.06 hereof
and upon delivery to the Bank of an Advance Request in the form of Exhibit B hereto, the
Bank hereby agrees to make Advances to the Enterprise from time to time during the
Advance Period in the aggregate original principal amounts not to exceed $2,500,000
with respect to the Loan (as more particularly defined in Article I hereof, the “Maximum
Advance Amount”). On the Advance Termination Date, the Unfunded Portion shall be
reduced to zero and no further Advances will be made hereunder.
(c) Note. The Loan shall be evidenced by the 2020 Note. On the Closing
Date, the Enterprise shall execute and deliver the 2020 Note payable to the Bank, in
substantially the form set forth in Exhibit A attached hereto. The Enterprise shall
maintain a book for the registration of ownership of the 2020 Note. Upon any transfer of
the 2020 Note as provided herein, such transfer shall be entered on such registration
books of the Enterprise.
With respect to each Advance funded by the Bank from time to time hereunder,
the Bank shall maintain, in accordance with its usual practices, records evidencing the
indebtedness resulting from each such Advance and the amounts of principal and interest
payable and paid from time to time hereunder. In any legal action or proceeding in
respect of any Advance or the Loan, the entries made in such records shall be conclusive
evidence (absent manifest error) of the existence and amounts of the obligations therein
recorded. The Note shall evidence the obligation of the Enterprise to pay the Loan and
shall evidence the obligation of the Enterprise to pay the principal amount of each
Advance funded by the Bank hereunder, as such amounts are outstanding from time to
time, and accrued interest
(d) Commitment Fee. The Enterprise shall pay to the Bank a nonrefundable
fee (the “Commitment Fee”), which shall be in the amount of 0.005% ($12,500) of the
maximum aggregate principal amount of the Loan. The Commitment Fee shall be paid
on the Closing Date.
(e) Application of Loan Proceeds. The Enterprise shall apply the proceeds of
each Advance to pay the costs of the Project.
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(f) Special Obligations. All amounts due under this Agreement or the 2020
Note shall be payable and collectible solely out of the Net Pledged Revenues, which
revenues are hereby so pledged which pledge is in all respects subordinate to the pledge
and lien thereon of the Senior Debt at any time outstanding. The Bank may not look to
any general or other fund for the payment of such amounts; this Agreement and the 2020
Note shall not constitute a debt or indebtedness within the meaning of any constitutional,
charter, or statutory provision or limitation; and this Agreement and the 2020 Note shall
not be considered or held to be general obligations of the Enterprise or the City but shall
constitute special obligations of the Enterprise. No statutory or constitutional provision
enacted after the execution and delivery of this Agreement or the 2020 Note shall in any
manner be construed as limiting or impairing the obligation of the Enterprise to comply
with the provisions of this Agreement or the 2020 Note. None of the covenants,
agreements, representations and warranties contained herein or in the 2020 Note shall
ever impose or shall be construed as imposing any liability, obligation or charge against
the Enterprise or the City (except the Net Pledged Revenues and the special funds
pledged therefor), or against its general credit, or as payable out of its general fund or out
of any funds derived from taxation or out of any other revenue source (other than those
pledged therefor). The payment of the amounts due under this Agreement or the 2020
Note is not secured by an encumbrance, mortgage or other pledge of property of the City
or the Enterprise, except for the Net Pledged Revenues. No property of the City or the
Enterprise, subject to such exception, shall be liable to be forfeited or taken in payment of
such amounts.
Section 2.02. Interest Rate; Interest Payments; Principal Payments.
(a) Interest Rate. The unpaid principal balance of the Loan will bear interest
at the Interest Rate. All interest due and payable under this Agreement shall be
calculated on the basis of actual interest due based on a 360-day year. Interest payments
on the Loan shall be due on each Interest Payment Date and on the Maturity Date.
(b) Default Interest Rate. Immediately upon the occurrence of an Event of
Default or upon the Maturity Date, interest shall begin to accrue on all principal amounts
owing on the Loan at the Default Interest Rate for so long as such Event of Default
continues and remains uncured or, if after the Maturity Date, for so long as amounts due
on the Loan remain unpaid.
(c) Principal Payments. Repayment of principal amounts owing under the
Loan shall occur on each Principal Payment Date. During the Advance Period, no
principal amounts shall be due on the Loan.
(d) Prepayment. The Loan may be prepaid, in whole or in part, at the option
of the Enterprise, at a prepayment price equal to the principal amount so prepaid, plus
accrued interest to the prepayment date and the prepayment fee set forth below. Any
prepayment under this paragraph shall only be made after the Enterprise gives two
Business Days written notice to the Bank. The following prepayment fee shall apply:
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(i) April 17, 2025 to April 16, 2027; a prepayment fee equal to 1% of
the outstanding balance of the Loan; and
(ii) On any date after April 17, 2027; no prepayment fee shall be due.
(iii) Notwithstanding the foregoing, if on December 2 of each year any
revenue of the EPIC Program applicable to Long-Term portion of the EPIC
Program is available for repayment of the Loan, the Enterprise may deem such
amounts “excess revenue” and prepay the Loan without penalty on or before
December 15 of each year upon written notice to the Bank two Business Days in
advance of such prepayment.
(e) Obligations Unconditional. The Enterprise’s obligation to repay the Loan
hereunder and all of its other obligations under this Agreement shall be absolute and
unconditional under any and all circumstances and irrespective of any setoff,
counterclaim or defense to payment which the Enterprise may have against the Bank or
any other Person, including, without limitation, any defense based on the failure of any
nonapplication or misapplication of the proceeds of the Loan hereunder, and irrespective
of the legality, validity, regularity or enforceability of all or any of the Financing
Documents, and notwithstanding any amendment or waiver of (other than an amendment
or waiver signed by the Bank explicitly reciting the release or discharge of any such
obligation), or any consent to, or departure from, all or any of the Financing Documents
or any exchange, release, or nonperfection of any collateral securing the obligations of
the Enterprise hereunder and any other circumstances or happening whatsoever, whether
or not similar to any of the foregoing; provided, however, that nothing contained in this
Section 2.02(e) shall abrogate or otherwise affect the rights of the Enterprise pursuant to
Section 8.05 hereof.
(f) Waivers, Etc. To the full extent permitted by law: (i) the Enterprise
hereby waives (A) presentment, demand, notice of demand, protest, notice of protest,
notice of dishonor and notice of nonpayment; (B) to the extent the Bank is not in default
hereunder, the right, if any, to the benefit of, or to direct application of, any security
hypothecated to the Bank until all obligations of the Enterprise to the Bank hereunder,
howsoever arising, have been paid; (C) the right to require the Bank to proceed against
the Enterprise hereunder, or against any Person under any guaranty or similar
arrangement, or under any agreement between the Bank and any Person or to pursue any
other remedy in the Bank’s power; and (D) any defense arising out of the election by the
Bank to foreclose on any security by one or more non-judicial or judicial sales; (ii) the
Bank may exercise any other right or remedy, even though any such election operates to
impair or extinguish the Enterprise’s right to repayment from, or any other right or
remedy it may have against, any Person, or any security; and (iii) the Enterprise agrees
that the Bank may proceed against the Enterprise or any Person directly and
independently of any other, and that any forbearance, change of rate of interest, or
acceptance, release or substitution of any security, guaranty, or loan or change of any
term or condition thereunder or under any Financing Document (other than by mutual
agreement between the Enterprise and the Bank) shall not in any way affect the liability
of the Enterprise hereunder.
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(g) Manner of Payments. All interest, fees, and other payments to be made
hereunder by or on behalf of the Enterprise to the Bank shall be made, and shall not be
considered made until received, in United States dollars in immediately available funds.
The Enterprise shall make each payment hereunder in the manner and at the time
necessary so that each such payment is received by the Bank not later than 12:00 p.m.,
Colorado time, on the day when due in lawful money of the United States of America in
immediately available funds. Any payment received after 12:00 p.m., Colorado time,
shall be deemed made on the next succeeding Business Day. All payments made
hereunder by or on behalf of the Enterprise to the Bank shall be applied to such amounts
due hereunder and under the Financing Documents in the following order: first, to unpaid
Commitment Fee, second, to accrued but unpaid interest, third, to principal and, fourth, to
any other amounts due hereunder.
(h) Default Interest Rate; Calculation of Interest and Fees. All interest and
fees due and payable under this Agreement shall be calculated on the basis of actual
interest due based on a 360-day year. Any sum due to the Bank and not paid when due
and any sum due to the Bank upon the occurrence or during the continuance of any Event
of Default hereunder shall bear interest at the Default Interest Rate.
Section 2.03. Costs, Expenses and Taxes. The Enterprise agrees to pay all reasonable
costs and expenses actually incurred by the Bank in connection with (a) the preparation,
execution and delivery of this Agreement or any other documents, including the other Financing
Documents, which may be delivered by any party in connection with this Agreement and the
other Financing Document, and (b) the filing, recording, administration (other than normal,
routine administration), enforcement, transfer, amendment, maintenance, renewal or cancellation
of this Agreement and all amendments or modifications thereto (or supplements hereto),
including, without limitation, the reasonable fees and out of pocket expenses of counsel for the
Bank and independent public accountants and other outside experts retained by the Bank in
connection with any of the foregoing; and. In addition, the Enterprise agrees to pay promptly all
reasonable costs and expenses of the Bank, including, without limitation, the actual, reasonable
fees and expenses of external counsel, for (i) any and all amounts which the Bank has paid
relative to the Bank’s curing of any Event of Default under this Agreement or any of the
Financing Documents; (ii) the enforcement of this Agreement or any of the Financing
Documents; or (iii) any action or proceeding relating to a court order, injunction, or other process
or decree restraining or seeking to restrain the Bank from paying any amount hereunder.
Without prejudice to the survival of any other agreement of the Enterprise hereunder, the
agreements and obligations contained in this Section 2.03 shall survive the payment in full of all
amounts owing to the Bank hereunder.
Section 2.04. Pledge. The Enterprise hereby pledges, assigns and grants to the Bank a
lien in the Net Pledged Revenues, which is subordinate to the lien which is pledged to secure the
payment of Senior Debt but on a pari passu basis with the Parity Debt, to secure its obligations to
the Bank hereunder and under the other Financing Documents. The lien of the Bank on the Net
Pledged Revenues hereunder shall be subject to no other liens except those liens granted on the
Net Pledged Revenues to any Senior Debt heretofore or hereafter issued in accordance with the
terms hereof and the Subordinate Debt. The Enterprise represents and warrants that, except for
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the Senior Debt, the Net Pledged Revenues is not and shall not be subject to any other lien or
encumbrance without the prior written consent of the Bank except as otherwise permitted
pursuant to this Agreement.
Section 2.05. Conditions to Closing. The Closing on the Loan is conditioned upon the
satisfaction of each of the following:
(a) all Financing Documents and other instruments applicable to the Loan are
in form and content satisfactory to the Bank and have been duly executed and delivered
in form and substance satisfactory to the Bank and shall have not been modified,
amended or rescinded, shall be in full force and effect on and as of the Closing Date and
executed original or certified copies of each thereof shall have been delivered to the
Bank;
(b) the Bank has received a certified copy of the Authorizing Ordinance of the
Enterprise, which shall be in form and content satisfactory to the Bank and authorize the
Enterprise to finance the Project, obtain the Loan and perform all acts contemplated by
this Agreement and all other Financing Documents; and a certified copy of all other
ordinances, resolutions and proceedings taken by the Enterprise authorizing the
Enterprise to finance the Project, obtain the Loan and the execution, delivery and
performance of this Agreement and the other Financing Documents and the transactions
contemplated hereunder and thereunder, together with such other certifications as to the
specimen signatures of the officers of the Enterprise authorized to sign this Agreement
and the other Financing Documents to be delivered by the Enterprise hereunder and as to
other matters of fact as shall reasonably be requested by the Bank;
(c) the Enterprise has provided a certificate certifying that on the Closing
Date each representation and warranty on the part of the Enterprise contained in this
Agreement and in any other Financing Document is true and correct and no Event of
Default, or event which would, with the passage of time or the giving of notice, constitute
an Event of Default, has occurred and is continuing and no default exists under any other
Financing Documents, or under any other agreements by and between the Enterprise and
the Bank and certifying as to such other matters as the Bank might reasonably request;
(d) the Enterprise has provided a certificate certifying that the only Senior
Debt outstanding as of the Closing Date is the 2018A Bonds and the 2018B Bonds and
that no Parity Debt (other than the 2019 Note) is outstanding as of the Closing Date;
(e) the Bank shall have received the opinion of Butler Snow LLP to the effect
that (i) the obligation of the Enterprise to pay the principal of and interest on the Loan
constitutes a valid and binding special obligation of the Enterprise payable solely from
the Net Pledged Revenues with a lien on the Net Pledged Revenues which is subordinate
to the lien thereon of the Senior Debt, and (ii) this Agreement and the Note are valid and
binding obligations of the Enterprise, enforceable against the Enterprise in accordance
with their respective terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium, and other similar laws affecting creditors’ rights
generally, and by equitable principles, whether considered at law or in equity;
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(f) all proceedings taken in connection with the transactions contemplated by
this Agreement, and all instruments, authorizations and other documents applicable
thereto, are satisfactory to the Bank and its counsel;
(g) no law, regulation, ruling or other action of the United States, the State of
Colorado or any political subdivision or authority therein or thereof shall be in effect or
shall have occurred, the effect of which would be to prevent the Enterprise from fulfilling
its obligations under this Agreement or the other Financing Documents;
(h) all Bank counsel fees and any other fees and expenses due and payable in
connection with the execution and delivery of this Agreement shall have been paid by the
Enterprise upon execution and delivery of this Agreement;
(i) the Bank shall have been provided with the opportunity to review all
pertinent financial information regarding the Enterprise, agreements, documents, and any
other material information relating to the Enterprise or the Net Pledged Revenues or any
other component of the collateral securing the obligations of the Enterprise hereunder;
(j) all information provided by the Enterprise to the Bank is accurate in all
respects;
(k) the Bank shall have received such other certificates, approvals, filings,
opinions and documents as shall be reasonably requested by the Bank;
(l) all other legal matters pertaining to the execution and delivery of this
Agreement and the other Financing Documents shall be reasonably satisfactory to the
Bank.
Section 2.06. Procedure for Requesting and Funding Advances.
(a) Conditions to Funding Advances. No Advance shall be requested by the
Enterprise and the Bank shall have no obligation to honor an Advance Request except in
accordance with the provisions and upon fulfillment of the terms and conditions set forth
in this Agreement. The funding by the Bank of each Advance is conditioned upon the
satisfaction of each of the following, each of which shall be satisfactory in all respects to
the Bank:
(i) Advance Frequency. Advance Requests may only be made during
the Advance Period and shall be submitted to the Bank no more than once in any
calendar month, unless permitted more frequently by the Bank. Advances shall
be made in amounts of $75,000 or more.
(ii) Representations and Warranties True; No Default. At the time
any Advance is to be made and as a result thereof, immediately thereafter, all
representations and warranties of the Enterprise set forth in Article IV are true and
correct as though made on the date of such Advance Request and on the date
when such Advance is funded and no Event of Default hereunder has occurred
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and is continuing and no litigation is then pending or threatened concerning the
Enterprise’s authority to pledge the Net Pledged Revenues as provided herein, and
the Enterprise shall deliver an executed certificate of an Authorized Person to
such effect in connection with each Advance in substantially the form of
Exhibit B.
(iii) Payments Current. The Enterprise shall be current on all of its
obligations hereunder.
(iv) Advance Request. The Bank shall have received an Advance
Request from the Enterprise, the form of which is attached hereto as Exhibit B
(each, an “Advance Request”), signed by the Authorized Person of the Enterprise
and containing the calculation of the amount of such Advance requested by the
Enterprise.
(v) Amount of Advance. The amount of the requested Advance, when
combined with the sum of all prior Advances made hereunder shall not exceed the
Maximum Advance Amount for the Loan. From each Advance the Bank will
transfer amounts as specified in each Advance Request.
(vi) Material Adverse Changes. Since December 31, 2018, there has
been no change in the business, property, prospects, condition (financial or
otherwise) or results of operations of the Enterprise which could reasonably be
expected to have a Material Adverse Effect.
(vii) Other Conditions Precedent to Funding Each Advance. No
Advance shall be requested or made after the Advance Termination Date.
(b) Funding of Advances. Provided that the conditions set forth in
Section 2.06(a) above are satisfied, within 2 days of receipt by the Bank of an Advance
Request signed by the Authorized Person, the Bank shall provide the amount of such
Advance to the Enterprise at such depository as the Enterprise may direct.
Section 2.07. Conversion to Amortizing Term Loan. Provided that (i) no Event of
Default shall have occurred and be continuing (ii) all representations and certifications and
agreements herein are then true and correct, and (iii) the outstanding Senior Debt is rated in one
of its four highest rating categories by a national recognized organization which regularly rates
obligations such as the Senior Debt on the Advance Loan Maturity Date the Loan shall convert
to a term loan (a “Term Loan”) that shall be payable in full by no later than the 17th anniversary
of the Closing Date. The Term Loan shall bear interest at the Interest Rate pursuant to an
amortization schedule provided by the Bank on or before the Advance Termination Date
providing for substantially level debt service.
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ARTICLE III
FUNDS AND ACCOUNTS
Section 3.01. Light and Power Fund. So long as this Agreement is in effect, the entire
Gross Pledged Revenues, upon their receipt from time to time by the Enterprise, shall be set
aside and credited immediately to the Light and Power Fund. In each month, after making in full
all deposits or payments required in connection with the Senior Debt, the Enterprise shall pay to
the Bank from the Net Pledged Revenues remaining in the Light and Power Fund, the amounts
due under this Agreement and the Note.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE ENTERPRISE
While any obligations hereunder or under any of the other Financing Documents are
unpaid or outstanding, the Enterprise continuously represents and warrants to the Bank as
follows:
Section 4.01. Due Organization. The Enterprise is an enterprise of the City duly
organized and validly existing under Charter and Enterprise Ordinances.
Section 4.02. Power and Authorization. The Enterprise has all requisite power and
authority to own and convey its properties and to carry on its business as now conducted and as
contemplated to be conducted under the Financing Documents; to execute, deliver and to
perform its obligations under this Agreement and the other Financing Documents; and to cause
the execution, delivery and performance of the Financing Documents.
Section 4.03. No Legal Bar. To the best of the Enterprise’s knowledge, the Enterprise
is not in violation of any of the provisions of the laws of the State of Colorado or the United
States of America or any of the provisions of any order of any court of the State of Colorado or
the United States of America which would affect its existence, or its powers referred to in the
preceding Section 4.02. The execution, delivery and performance by the Enterprise of this
Agreement and of the other Financing Documents (a) will not violate any provision of any
applicable law or regulation or of any order, writ, judgment or decree of any court, arbitrator or
governmental authority; (b) will not violate any provisions of any document constituting,
regulating or otherwise affecting the operations or activities of the Enterprise; and (c) will not
violate any provision of, constitute a default under, or result in the creation, imposition or
foreclosure of any lien, mortgage, pledge, charge, security interest or encumbrance of any kind
other than liens created or imposed by the Financing Documents, on any of the revenues or other
assets of the Enterprise which could have a material adverse effect on the assets, financial
condition, business or operations of the Enterprise, on the Enterprise’s power to cause the
Financing Documents to be executed and delivered, or its ability to pay in full in a timely fashion
the obligations of the Enterprise under this Agreement or the other Financing Documents.
Section 4.04. Consents. The Enterprise has obtained all consents, permits, licenses and
approvals of, and has made all registrations and declarations with any governmental authority or
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regulatory body required for the execution, delivery and performance by the Enterprise of this
Agreement and the other Financing Documents.
Section 4.05. Litigation. Except as disclosed in writing to the Bank, there is no action,
suit, inquiry or investigation or proceeding to which the Enterprise is a party, at law or in equity,
before or by any court, arbitrator, governmental or other board, body or official which is pending
or, to the best knowledge of the Enterprise, threatened in connection with any of the transactions
contemplated by this Agreement or the Financing Documents or against or affecting the assets of
the Enterprise, nor, to the best knowledge of the Enterprise, is there any basis therefor, wherein
an unfavorable decision, ruling or finding (a) would adversely affect the validity or
enforceability of, or the authority or ability of the Enterprise to perform its obligations under, the
Financing Documents; or (b) would, in the reasonable opinion of the Enterprise, have a
materially adverse effect on the ability of the Enterprise to conduct its business as presently
conducted or as proposed or contemplated to be conducted.
Section 4.06. Enforceability. This Agreement and each other Financing Document
constitutes the legal, valid and binding special obligation of the Enterprise, enforceable against
the Enterprise in accordance with its terms (except as such enforceability may be limited by
bankruptcy, moratorium or other similar laws affecting creditors’ rights generally and provided
that the application of equitable remedies is subject to the application of equitable principles).
Section 4.07. Changes in Law. To the best knowledge of the Enterprise, there is not
pending any change of law which, if enacted or adopted could have a material adverse effect on
the assets, financial condition, business or operations of the Enterprise, on the Enterprise’s power
to enter into this Agreement or the other Financing Documents or its ability to pay in full in a
timely fashion the obligations of the Enterprise under this Agreement or the other Financing
Documents.
Section 4.08. Financial Information and Statements. The financial statements and
other information previously provided to the Bank or provided to the Bank in the future are or
will be complete and accurate and prepared in accordance with generally accepted accounting
principles. There has been no material adverse change in the Enterprise’s financial condition
since such information was provided to the Bank.
Section 4.09. Accuracy of Information. All information, certificates or statements
given to the Bank pursuant to this Agreement and the other Financing Documents will be true
and complete when given.
Section 4.10. Financing Documents. Each representation and warranty of the
Enterprise contained in any Financing Document is true and correct as of the Closing Date.
Section 4.11. Regulations U and X. The Enterprise is not engaged in the business of
extending credit for the purpose of purchasing or carrying margin stock (within the meaning of
Regulation U or X issued by the Board of Governors of the Federal Reserve System); and no
proceeds of the Loan will be or have been used to extend credit to others for the purpose of
purchasing or carrying any margin stock.
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Section 4.12. Default, Etc. The Enterprise is not in default in the performance,
observance, or fulfillment of any of the obligations, covenants or conditions contained in any
Financing Document or other ordinance, resolution, agreement or instrument to which it is a
party which would have a material adverse effect on the ability of the Enterprise to perform its
obligations hereunder or under the other Financing Documents, or which would affect the
enforceability hereof or thereof.
Section 4.13. Sovereign Immunity. The Enterprise represents that, under
Section 24-10-106, C.R.S., its governmental immunity is limited to claims for injury which lie in
tort or could lie in tort. Under existing law, the Enterprise is not entitled to raise the defense of
sovereign immunity in connection with any legal proceedings to enforce its contractual
obligations under the Financing Documents, or the transactions contemplated hereby or thereby
including, without limitation, the payment of the principal of and interest on the Note.
Section 4.14. No Filings. No filings, recordings, registrations or other actions are
necessary to create and perfect the pledges provided for herein; all obligations of the Enterprise
hereunder are secured by the lien and pledge provided for herein; and the liens and pledges
provided for herein constitute valid prior liens subject to no other liens.
Section 4.15. Outstanding Debt. Upon the execution and delivery of this Agreement,
except for the Financing Documents and the 2018A Bonds and 2018B Bonds, the Enterprise will
have no other Debt outstanding payable from or secured by the Net Pledged Revenues or any
portion thereof. The Enterprise represents and warrants that it will incur additional Debt only in
accordance with the provisions of Section 5.23 of this Agreement.
ARTICLE V
COVENANTS OF THE ENTERPRISE
While any obligations hereunder or under any of the other Financing Documents are
unpaid or outstanding, the Enterprise continuously warrants and agrees as follows:
Section 5.01. Performance of Covenants, Authority. The Enterprise covenants that it
will faithfully perform and observe at all times any and all covenants, undertakings, stipulations,
and provisions contained in the Authorizing Ordinance, this Agreement, the Note, the other
Financing Documents and all its proceedings pertaining thereto as though such covenants,
undertakings, stipulations, and provisions were set forth in full herein (for the purpose of this
provision the Financing Documents shall be deemed to continue in full force and effect
notwithstanding any earlier termination thereof so long as any obligation of the Enterprise under
this Agreement shall be unpaid or unperformed). The Enterprise covenants that it is duly
authorized under the constitution and laws of the State of Colorado, including, particularly and
without limitation, the Charter and the Enterprise Ordinances, to obtain the Loan and to execute
and deliver the Note, this Agreement, and the other Financing Documents, and that all action on
its part for the execution and delivery of the Note, this Agreement, and the other Financing
Documents has been duly and effectively taken and will be duly taken as provided herein, and
that the Loan, the Note, this Agreement, and the other Financing Documents are and will be
valid and enforceable obligations of the Enterprise according to the terms hereof and thereof.
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Section 5.02. Contractual Obligations. The Enterprise shall perform all contractual
obligations undertaken by it under any agreements relating to the Loan, the Gross Pledged
Revenues, the Project, or the System, or any combination thereof.
Section 5.03. Further Assurances. At any and all times the Enterprise shall, so far as it
may be authorized by law, pass, make, do, execute, acknowledge, deliver and file or record all
and every such further instruments, acts, deeds, conveyances, assignments, transfers, other
documents and assurances as may be reasonably necessary or desirable for better assuring,
conveying, granting, assigning and confirming all and singular the rights, the Net Pledged
Revenues and other moneys and accounts hereby pledged or assigned, or intended so to be, or
which the Enterprise may hereafter become bound to pledge or to assign, or as may be
reasonable and required to carry out the purposes of this Agreement and to comply with any
instrument of the Enterprise amendatory thereof, or supplemental thereto. The Enterprise, acting
by and through its officers, or otherwise, shall at all times, to the extent permitted by law, defend,
preserve and protect the pledge of the Net Pledged Revenues and other moneys and accounts
pledged hereunder and all the rights of the Bank hereunder against all claims and demands of all
Persons whomsoever.
Section 5.04. Conditions Precedent. Upon the date of the execution and delivery of
this Agreement, all conditions, acts and things required by the Federal or State Constitution, the
Charter, the Supplemental Act, the Enterprise Ordinances, or any other applicable law to exist, to
have happened and to have been performed precedent to the execution and delivery of this
Agreement shall exist, have happened, and have been performed; and the Bonds, together with
all other obligations of the Enterprise, shall not contravene any debt or other limitation
prescribed by the State Constitution.
Section 5.05. Rules, Regulations and Other Details. The Enterprise shall observe and
perform all of the terms and conditions contained in this Agreement, and shall comply with all
valid acts, rules, regulations, orders and directions of any legislative, executive, administrative or
judicial body applicable to the System, the Enterprise, except for any period during which the
same are being contested in good faith by proper legal proceedings.
Section 5.06. Payment of Governmental Charges. The Enterprise shall pay or cause
to be paid all taxes and assessments or other governmental charges, if any, lawfully levied or
assessed upon or in respect of the System, or upon any part thereof, or upon any portion of the
Gross Pledged Revenues, when the same shall become due, and shall duly observe and comply
with all valid requirements of any governmental authority relative to the System or any part
thereof, except for any period during which the same are being contested in good faith by proper
legal proceedings. The Enterprise shall not create or suffer to be created any lien upon the
System, or any part thereof, or upon the Gross Pledged Revenues, except the pledge and lien
created by for Senior Debt and Parity Debt and except as herein otherwise permitted. The
Enterprise shall pay or cause to be discharged or shall make adequate provision to satisfy and to
discharge, within 60 days after the same shall become payable, all lawful claims and demands
for labor, materials, supplies or other objects which, if unpaid, might by law become a lien upon
the System, or any part thereof, or the Gross Pledged Revenues; but nothing herein requires the
Enterprise to pay or cause to be discharged or to make provision for any such tax, assessment,
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lien or charge, so long as the validity thereof is contested in good faith and by appropriate legal
proceedings.
Section 5.07. Protection of Security. The Enterprise and its officers, agents and
employees shall not take any action in such manner or to such extent as might prejudice the
security for the payment of the amounts due under this Agreement or the Note. No contract shall
be entered into nor any other action taken by which the rights of the Bank might be prejudicially
and materially impaired or diminished.
Section 5.08. Prompt Payment. The Enterprise shall promptly pay the amounts due
under this Agreement or the Note at the places, on the dates and in the manner specified herein
and in the Agreement or the Note according to the true intent and meaning hereof.
Section 5.09. Use of Funds and Accounts. The funds and accounts described herein
shall be used solely and only for the purposes described herein.
Section 5.10. Other Liens. Other than the 2018A Bonds and 2018B Bonds, there are no
liens or encumbrances of any nature whatsoever on or against the System, or any part thereof, or
on or against the Net Pledged Revenues on a parity with or superior to the lien thereon of this
Agreement and the Note.
Section 5.11. Reasonable and Adequate Charges. The fees, rates and other charges
due to the Enterprise for the use of or otherwise pertaining to and services rendered by the
System to the Enterprise, to its inhabitants and to all other users within and without the
boundaries of the Enterprise shall be reasonable and just, taking into account and consideration
public interests and needs, the cost and value of the System, the Operation and Maintenance
Expenses thereof, and the amounts necessary to meet the debt service requirements of all Senior
Debt, Parity Debt, and any other securities payable from the Net Pledged Revenues, including,
without limitation, reserves and any replacement accounts therefor.
Section 5.12. Adequacy and Applicability of Charges. There shall be charged against
users of service pertaining to and users of the System, except as provided by Section 5.13 hereof,
such fees, rates and other charges so that the Gross Pledged Revenues shall be adequate to meet
the requirements of this Section. Such charges pertaining to the System shall be at least
sufficient so that the Gross Pledged Revenues annually are sufficient to pay in each Fiscal Year:
(a) Operation and Maintenance Expenses. amount equal to the annual
Operation and Maintenance Expenses for such Fiscal Year that are payable from the
Gross Pledged Revenues
(b) Principal and Interest. An amount equal to 125% of the debt service
requirements on the Senior Debt and any Parity Debt then outstanding in that Fiscal Year
(excluding the reserves therefor), and
(c) Deficiencies. All sums, if any, due and owing to meet then existing
deficiencies pertaining to any fund or account relating to the Gross Pledged Revenues or
any securities payable therefrom.
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Section 5.13. Limitations Upon Free Service. No free service or facilities shall be
furnished by the System, except that the City shall not be required to pay for any use by the City
of any facilities of the System for municipal purposes. If the City chooses, in its sole discretion,
to pay for its use of the System, all the income so derived from the City shall be deemed to be
income derived from the operation of the System, to be used and to be accounted for in the same
manner as any other income derived from the operation of the System.
Section 5.14. Collection of Charges. The Enterprise shall cause all fees, rates and other
charges pertaining to the System to be collected as soon as is reasonable, shall reasonably
prescribe and enforce rules and regulations or impose contractual obligations for the payment of
such charges, and for the use of the System, and shall provide methods of collection and
penalties, to the end that the Gross Pledged Revenues shall be adequate to meet the requirements
of this Agreement and the Note.
Section 5.15. Maintenance of Records. Proper books of record and account shall be
kept by the Enterprise, separate and apart from all other records and accounts.
Section 5.16. Accounting Principles. System records and accounts, and audits thereof,
shall be currently kept and made, as nearly as practicable, in accordance with the then generally
accepted accounting principles, methods and terminology followed and construed for utility
operations comparable to the System, except as may be otherwise provided herein or required by
applicable law or regulation or by contractual obligation existing on the execution and delivery
of this Agreement.
Section 5.17. Laws, Permits and Obligations. The Enterprise will comply in all
material respects with all applicable laws, rules, regulations, orders and directions of any
governmental authority and all agreements and obligations binding on the Enterprise,
noncompliance with which would have a material adverse effect on the Enterprise, its financial
condition, assets or ability to perform its obligations under the other Financing Documents;
provided that the Enterprise may in good faith contest such laws, rules, regulations, orders and
directions and the applicability thereof to the Enterprise to the extent that such action would not
be likely to have a material adverse effect on the Enterprise’s ability to perform its obligations
hereunder.
Section 5.18. Bonding and Insurance. The Enterprise shall carry general liability
coverage, workers’ compensation, public liability, and such other forms of insurance on
insurable Enterprise property upon the terms and conditions, and issued by recognized insurance
companies, as in the judgment of the Enterprise would ordinarily be carried by entities having
similar properties of equal value, such insurance being in such amounts as will protect the
Enterprise and its operations.
Section 5.19. Other Liabilities. The Enterprise shall pay and discharge, when due, all
of its liabilities, except when the payment thereof is being contested in good faith by appropriate
procedures which will avoid financial liability and with adequate reserves provided therefor.
Section 5.20. Proper Books and Records. The Enterprise shall keep or cause to be
kept adequate and proper records and books of account in which complete and correct entries
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shall be made with respect to the Enterprise, the Net Pledged Revenues and all of the funds and
accounts established or maintained pursuant to any of the Financing Documents. The Enterprise
shall (a) maintain accounting records in accordance with generally recognized and accepted
principles of accounting consistently applied throughout the accounting periods involved;
(b) provide the Bank with such information concerning the business affairs and financial
condition (including insurance coverage) of Enterprise as the Bank may request; and (c) without
request, provide the Bank with the information set forth below.
Section 5.21. Reporting Requirements.
(a) The Enterprise shall notify the Bank promptly of all interim litigation or
administrative proceedings, threatened or pending, against the Enterprise which would, if
adversely determined, in the Enterprise’s reasonable opinion, have a material effect on
the Enterprise’s financial condition arising after the date hereof.
(b) The Enterprise shall provide the following to the Bank at the times and in
the manner provided below:
(i) as soon as available, but not later than 210 days following the end
of each Fiscal Year, the Enterprise shall furnish to the Bank its audited financial
statements prepared in accordance with generally accepted accounting principles
consistently applied, in reasonable detail and certified by a firm of independent
certified public accountants selected by the Enterprise;
(ii) within 30 days of each calendar year’s quarter end, the Enterprise’s
financial statements with respect to the collection of revenue of the EPIC Program
(including the total number of EPIC Loans, the principal balance of EPIC Loans,
the percentage of delinquent EPIC Loans and the monthly principal and interest
due on EPIC Loans); and
(iii) promptly upon request of the Bank, the Enterprise shall furnish to
the Bank such other reports or information regarding the collateral securing the
obligations of the Enterprise hereunder or the assets, financial condition, business
or operations of the Enterprise, as the Bank may reasonably request.
(c) The Enterprise shall promptly notify the Bank of any Event of Default of
which the Enterprise has knowledge, setting forth the details of such Event of Default and
any action which the Enterprise proposes to take with respect thereto.
(d) The Enterprise shall notify the Bank as soon as possible after the
Enterprise acquires knowledge of the occurrence of any event which, in the reasonable
judgment of the Enterprise, is likely to have a material adverse effect on the financial
condition of the Enterprise or affect the ability of the Enterprise to perform its obligations
under this Agreement or under any other Financing Documents.
Section 5.22. Visitation and Examination. Unless otherwise prohibited by law, the
Enterprise will permit any Person designated by the Bank to visit any of its offices to examine
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the Enterprise’s books and financial records, and make copies thereof or extracts therefrom, and
to discuss its affairs, finances and accounts with its principal officers, all at such reasonable
times and as often as the Bank may reasonably request.
Section 5.23. Additional Debt. The Enterprise may issue Debt with a lien on the Net
Pledged Revenues that is on a parity with or subordinate to the lien of this Agreement, without
the Bank’s prior written consent. The Enterprise may issue Debt with a lien on the Net Pledged
Revenues that is senior to the lien of this Agreement, without the Bank’s prior written consent, if
such Debt is issued pursuant to the provisions of the 2018 Bond Ordinance.
ARTICLE VI
INVESTMENTS
Section 6.01. Permitted Investments Only. All moneys held in the Light and Power
Fund shall be invested in Permitted Investments only.
ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES
Section 7.01. Events of Default. The occurrence of any one or more of the following
events or the existence of any one or more of the following conditions shall constitute an Event
of Default under this Agreement (whatever the reason for such event or condition and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment,
decree, rule, regulation or order of any court or any administrative or governmental body):
(a) the Enterprise fails to pay the principal of or interest on the Note or any
Parity Debt when due;
(b) the Enterprise fails to pay when due any other amounts due and payable to
the Bank under this Agreement or any other Financing Documents;
(c) the Enterprise fails to observe or perform any other of the covenants,
agreements or conditions on the part of the Enterprise in this Agreement, the Note, or the
Authorizing Ordinance and the Enterprise fails to remedy the same within 30 days after
the Bank has provided the Enterprise with notice thereof;
(d) any representation or warranty made by the Enterprise in this Agreement
or in any other Financing Document or any certificate, instrument, financial or other
statement furnished by the Enterprise to the Bank, proves to have been untrue or
incomplete in any material respect when made or deemed made;
(e) the pledge of the collateral or any other security interest created hereunder
fails to be fully enforceable with the priority required hereunder or thereunder;
(f) any judgment or court order for the payment of money exceeding any
applicable insurance coverage by more than $100,000 in the aggregate is rendered against
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the Enterprise and the Enterprise fails to vacate, bond, stay, contest, pay or satisfy such
judgment or court order for 60 days;
(g) the Enterprise shall initiate, acquiesce or consent to any proceedings to
dissolve the Enterprise or to consolidate the Enterprise with other similar entities into a
single entity or the Enterprise shall otherwise cease to exist;
(h) a change occurs in the financial or operating conditions of the Enterprise,
or the occurrence of any other event that, in the Bank’s reasonable judgment, will have a
materially adverse impact on the ability of the Enterprise to generate Net Pledged
Revenues sufficient to satisfy the Enterprise’s obligations under this Agreement or its
other obligations, and the Enterprise fails to cure such condition within six months after
receipt by the Enterprise of written notice thereof from the Bank;
(i) the Enterprise shall commence any case, proceeding or other action
(A) under any existing or future law of any jurisdiction relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking to have an order for relief entered
with respect to it or seeking to adjudicate it insolvent or a bankrupt or seeking
reorganization, arrangement, adjustment, winding-up, liquidation, dissolution,
composition or other relief with respect to it or its debts; or (B) seeking appointment of a
receiver, trustee, custodian or other similar official for itself or for any substantial part of
its property, or the Enterprise shall make a general assignment for the benefit of its
creditors; or (ii) there shall be commenced against the Enterprise any case, proceeding or
other action of a nature referred to in clause (i) and the same shall remain undismissed; or
(iii) there shall be commenced against the Enterprise any case, proceeding or other action
seeking issuance of a warrant of attachment, execution, distraint or similar process
against all or any substantial part of its property which results in the entry of an order for
any such relief which shall not have been vacated, discharged, or stayed or bonded
pending appeal, within 60 days from the entry thereof; (iv) the Enterprise shall take
action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any
of the acts set forth in clause (i), (ii) or (iii) above; or (v) the Enterprise shall generally
not, or shall be unable to, or shall admit in writing its inability to, pay its debts as they
become due;
(j) this Agreement or any other Financing Document, or any material
provision hereof or thereof, (i) ceases to be valid and binding on the Enterprise or is
declared null and void, or the validity or enforceability thereof is contested by the
Enterprise (unless being contested by the Enterprise in good faith), or the Enterprise
denies it has any or further liability under any such document to which it is a party; or
(ii) any pledge or security interest created fails to be fully enforceable with the priority
required hereunder or thereunder; and
(k) the Enterprise’s auditor delivers a qualified opinion with respect to the
Enterprise’s status as an on-going concern.
Section 7.02. Remedies. Upon the occurrence and during the continuance of any Event
of Default, the Loan shall bear interest at the Default Interest Rate. Upon the occurrence and
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4810-7991-0321.7
during the continuance of any Event of Default, the Bank, at its option, may take any action or
remedy available under the other Financing Documents or any other document, or at law or in
equity. Notwithstanding anything to the contrary herein, acceleration of the Loan shall not be an
available remedy for the occurrence or continuance of an Event of Default. In exercising any
remedy hereunder, the Bank shall give notice to all Notice Parties.
Section 7.03. Notice to Bank of Default. Notwithstanding any cure period described
above, the Enterprise will immediately notify the Bank in writing when the Enterprise obtains
knowledge of the occurrence of any Event of Default or any event which would, with the
passage of time or the giving of notice, constitute an Event of Default.
Section 7.04. Additional Bank Rights. Upon the occurrence of an Event of Default the
Bank may at any time take such other steps to protect or preserve the Bank’s interest in the Net
Pledged Revenues.
Section 7.05. Delay or Omission No Waiver. No delay or omission of the Bank to
exercise any right or power accruing upon any default shall exhaust or impair any such right or
power or shall be construed to be a waiver of any such default, or acquiescence therein; and
every power and remedy given by this Agreement may be exercised from time to time and as
often as may be deemed expedient.
Section 7.06. No Waiver of One Default to Affect Another; All Remedies
Cumulative. No waiver of any Event of Default hereunder shall extend to or affect any
subsequent or any other then existing Event of Default or shall impair any rights or remedies
consequent thereon. All rights and remedies of the Bank provided herein shall be cumulative
and the exercise of any such right or remedy shall not affect or impair the exercise of any other
right or remedy.
Section 7.07. Other Remedies. Nothing in this Article VII is intended to restrict the
Bank’s rights under any of the Financing Documents or at law or in equity, and the Bank may
exercise all such rights and remedies as and when they are available.
ARTICLE VIII
MISCELLANEOUS
Section 8.01. Loan Agreement and Relationship to Other Documents. The
warranties, covenants and other obligations of the Enterprise (and the rights and remedies of the
Bank) that are outlined in this Agreement and the other Financing Documents are intended to
supplement each other. In the event of any inconsistencies in any of the terms in the Financing
Documents, all terms will be cumulative so as to give the Bank the most favorable rights set
forth in the conflicting documents, except that if there is a direct conflict between any preprinted
terms and specifically negotiated terms (whether included in an addendum or otherwise), the
specifically negotiated terms will control.
Section 8.02. Assignments, Participations, etc. by the Bank. The Bank may not
assign or transfer this Agreement or the Note or participate any of the Bank’s interests in the
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Agreement or the Note without the Enterprise’s prior written consent. Any such assignment
without the Enterprise’s prior written consent shall be deemed null and void and of no effect.
Section 8.03. Notice of Claims Against Bank; Limitation of Certain Damages. In
order to allow the Bank to mitigate any damages to the Enterprise from the Bank’s alleged
breach of its duties under the Financing Documents or any other duty, if any, to the Enterprise,
the Enterprise agrees to give the Bank written notice no later than 30 days after the Enterprise
knows of any claim or defense it has against the Bank, whether in tort or contract, relating to any
action or inaction by the Bank under the Financing Documents, or the transactions related
thereto, or of any defense to payment of the obligations of the Enterprise hereunder for any
reason. The requirement of providing timely notice to the Bank represents the parties’ agreed to
standard of performance regarding the duty of the Bank to mitigate damages related to claims
against the Bank. Notwithstanding any claim that the Enterprise may have against the Bank, and
regardless of any notice the Enterprise may have given the Bank, the Bank will not be liable to
the Enterprise for indirect, consequential and/or special damages arising therefrom, except those
damages arising from the Bank’s willful misconduct, negligence or bad faith. Failure by the
Enterprise to give notice to the Bank shall not waive any claims of the Enterprise but such failure
shall relieve the Bank of any duty to mitigate damages prior to receiving notice.
Section 8.04. Notices. Notices shall be deemed delivered when the notice has been
(a) deposited in the United States Mail, postage pre-paid; (b) received by overnight delivery
service; (c) received by Electronic Notification; or (d) when personally delivered at the following
addresses (the “Notice Parties”):
to Enterprise: City of Fort Collins
P.O. Box 580
Fort Collins, CO 80522
Attn: City Manager
with a copy to: City of Fort Collins
P.O. Box 580
Fort Collins, CO 80522
Attn: City Attorney
to Bank: ZB, N.A., dba Vectra Bank Colorado
2000 S. Colorado Boulevard
Suite 2-1200
Denver, CO 80222
Attention: Conrad Freeman
Email: cfreeman@vectrabank.com
Telephone: (720) 947-8802
Section 8.05. Payments. Payments due on the Loan shall be made in lawful money of
the United States. All payments may be applied by the Bank to principal, interest and other
amounts due under the Note and this Agreement pursuant to the terms of this Agreement.
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4810-7991-0321.7
Section 8.06. Applicable Law and Jurisdiction; Interpretation; Severability. This
Agreement and all other Financing Documents will be governed by and interpreted in
accordance with the internal laws of the State of Colorado, except to the extent superseded by
Federal law. Invalidity of any provisions of this Agreement will not affect any other provision.
TO THE EXTENT PERMITTED BY LAW, THE ENTERPRISE AND THE BANK HEREBY
CONSENT TO THE EXCLUSIVE JURISDICTION OF ANY STATE COURT SITUATED IN
LARIMER COUNTY, COLORADO, AND WAIVE ANY OBJECTIONS BASED ON FORUM
NON CONVENIENS, WITH REGARD TO ANY ACTIONS, CLAIMS, DISPUTES OR
PROCEEDINGS RELATING TO THIS AGREEMENT, THE NOTE, THE NET PLEDGED
REVENUES, ANY OTHER FINANCING DOCUMENT, OR ANY TRANSACTIONS
ARISING THEREFROM, OR ENFORCEMENT AND/OR INTERPRETATION OF ANY OF
THE FOREGOING. Nothing in this Agreement will affect the Bank’s rights to serve process in
any manner permitted by law. This Agreement, the other Financing Documents and any
amendments hereto (regardless of when executed) will be deemed effective and accepted only at
the Bank’s offices, and only upon the Bank’s receipt of the executed originals thereof. Invalidity
of any provision of this Agreement shall not affect the validity of any other provision.
Section 8.07. Copies; Entire Agreement; Modification. The Enterprise hereby
acknowledges the receipt of a copy of this Agreement and all other Financing Documents.
IMPORTANT: READ BEFORE SIGNING. THE TERMS OF THIS AGREEMENT
SHOULD BE READ CAREFULLY BECAUSE ONLY THOSE TERMS IN WRITING,
EXPRESSING CONSIDERATION AND SIGNED BY THE PARTIES ARE ENFORCEABLE.
NO OTHER TERMS OR ORAL PROMISES NOT CONTAINED IN THIS WRITTEN
CONTRACT MAY BE LEGALLY ENFORCED. THE TERMS OF THIS AGREEMENT
MAY ONLY BE CHANGED BY ANOTHER WRITTEN AGREEMENT. THIS NOTICE
SHALL ALSO BE EFFECTIVE WITH RESPECT TO ALL OTHER CREDIT AGREEMENTS
NOW IN EFFECT BETWEEN THE ENTERPRISE AND THE BANK. A MODIFICATION
OF ANY OTHER CREDIT AGREEMENT NOW IN EFFECT BETWEEN THE ENTERPRISE
AND THE BANK, WHICH OCCURS AFTER RECEIPT BY THE ENTERPRISE OF THIS
NOTICE, MAY BE MADE ONLY BY ANOTHER WRITTEN INSTRUMENT. ORAL OR
IMPLIED MODIFICATIONS TO ANY SUCH CREDIT AGREEMENT IS NOT
ENFORCEABLE AND SHOULD NOT BE RELIED UPON.
Section 8.08. Waiver of Jury Trial; Class Action Waiver. As permitted by applicable
law, each party waives their respective rights to a trial before a jury in connection with any
Dispute (as “Dispute” is hereinafter defined), and Disputes shall be resolved by a judge sitting
without a jury. If a court determines that this provision is not enforceable for any reason and at
any time prior to trial of the Dispute, but not later than 30 days after entry of the order
determining this provision is unenforceable, any party shall be entitled to move the court for an
order compelling arbitration and staying or dismissing such litigation pending arbitration
(“Arbitration Order”). To the extent permitted by applicable law, each party also waives the
right to litigate in court or an arbitration proceeding any Dispute as a class action, either as a
member of a class or as a representative, or to act as a private attorney general.
Section 8.09. Attachments. All documents attached hereto, including any appendices,
schedules, riders and exhibits to this Agreement, are hereby expressly incorporated by reference.
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4810-7991-0321.7
Section 8.10. No Recourse Against Officers and Agents. Pursuant to
Section 11-57-209 of the Supplemental Public Securities Act, if a member of the Board, or any
officer or agent of the Enterprise, acts in good faith in the performance of his duties as a member,
officer, or agent of the Board or the Enterprise and in no other capacity, no civil recourse shall be
available against such member, officer or agent for payment of the principal of and interest on
the Loan. Such recourse shall not be available either directly or indirectly through the Board or
the Enterprise, or otherwise, whether by virtue of any constitution, statute, rule of law,
enforcement of penalty, or otherwise. By the acceptance of the delivery of the Note evidencing
the Loan and as a part of the consideration for such transfer, the Bank and any Person purchasing
or accepting the transfer of the obligation representing the Loan specifically waives any such
recourse.
Section 8.11. Conclusive Recital. Pursuant to Section 11-57-210 of the Supplemental
Public Securities Act, this Agreement is entered into pursuant to certain provisions of the
Supplemental Public Securities Act. Such recital shall be conclusive evidence of the validity and
the regularity of the issuance of this Agreement after delivery for value.
Section 8.12. Limitation of Actions. Pursuant to Section 11-57-212 of the
Supplemental Public Securities Act, no legal or equitable action brought with respect to any
legislative acts or proceedings in connection with the authorization or issuance of the Loan shall
be commenced more than 30 days after the authorization of the Loan.
Section 8.13. Pledge of Revenues. The creation, perfection, enforcement, and priority
of the pledge of revenues to secure or pay the Loan provided herein shall be governed by
Section 11-57-208 of the Supplemental Public Securities Act, this Agreement, the Note, and the
Authorizing Ordinance. The amounts pledged to the payment of the Loan shall immediately be
subject to the lien of such pledge without any physical delivery, filing, or further act. The lien of
such pledge shall have a first priority. The lien of such pledge shall be valid, binding, and
enforceable as against all Persons having claims of any kind in tort, contract, or otherwise
against the Enterprise irrespective of whether such Persons have notice of such liens.
Section 8.14. No Liability. The Bank, including its agents, employees, officers,
directors and controlling Persons, shall not have any liability to the Enterprise, and the Enterprise
assumes all risk, responsibility and liability for (a) the form, sufficiency, correctness, validity,
genuineness, falsification and legal effect of any demands and other documents, instruments and
other papers relating to the Loan even if such documents, should prove to be in any or all
respects invalid, insufficient, fraudulent or forged; (b) the general and particular conditions
stipulated therein; (c) the good faith acts of any Person whosoever in connection therewith;
(d) failure of any Person (other than the Bank, subject to the terms and conditions hereof) to
comply with the terms of the Loan; (e) errors, omissions, interruptions or delays in transmission
or delivery of any messages, by mail, cable, telex, telegraph, wireless or otherwise, whether or
not they be in code; (f) errors in translation or errors in interpretation of technical terms; (g) for
any other consequences arising from causes beyond the Bank’s control; or (h) any use of which
may be made of the proceeds of the Loan, except to the extent of any direct, as opposed to
indirect, consequential, or special damages suffered by the Enterprise which direct damages are
proven by the Enterprise to be caused by the Bank’s willful or grossly negligent failure to make
lawful payment under the Loan.
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4810-7991-0321.7
Section 8.15. No Waiver; Modifications in Writing. No failure or delay on the part of
the Bank in exercising any right, power or remedy hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right, power or remedy preclude any other
right, power or remedy. The remedies provided for herein are cumulative and are not exclusive
of any remedies that may be available to the Bank at law or in equity or otherwise. No
amendment, modification, supplement, termination or waiver of or to any provision of this
Agreement, nor consent to any departure by the Enterprise therefrom, shall be effective unless
the same shall be in writing and signed by or on behalf of the Bank and the Enterprise. Any
amendment, modification or supplement of or to any provision of this Agreement, and any
consent to any departure by the Enterprise from the terms of any provision of this Agreement,
shall be effective only in the specific instance and for the specific purpose for which made or
given. No notice to or demand on the Enterprise in any case shall entitle the Enterprise to any
other or further notice or demand in similar or other circumstances or constitute a waiver of the
right of the Bank to any other or further action in any circumstances without notice or demand.
Section 8.16. Document Imaging. The Bank shall be entitled, in its sole discretion, to
image all or any selection of the Financing Documents, other instruments, documents, items and
records governing, arising from or relating to the Loan, and may destroy or archive the paper
originals. The Enterprise hereby waives any right to insist that the Bank produce paper originals;
agrees that such images shall be accorded the same force and effect as the paper originals; and
further agrees that the Bank is entitled to use such images in lieu of destroyed or archived
originals for any purpose, including as admissible evidence in any demand, presentment or
proceedings.
Section 8.17. Payment on Non-Business Days. Whenever any payment hereunder shall
be stated to be due on a day which is not a Business Day, such payment may be made on the next
succeeding Business Day.
Section 8.18. Execution in Counterparts; Electronic Storage. This Agreement may
be executed in counterparts, each of which when so executed and delivered shall be deemed to
be an original and all of which counterparts, taken together, shall constitute but one and the same
Agreement. The parties hereto agree that the transactions described herein may be conducted
and related documents may be stored by electronic means. Copies, telecopies, facsimiles,
electronic files and other reproductions of original executed documents shall be deemed to be
authentic and valid counterparts of such original documents for all purposes, including the filing
of any claim, action or suit in the appropriate court of law.
Section 8.19. Severability. Any provision of this Agreement which is prohibited,
unenforceable or not authorized in any jurisdiction shall, as to such jurisdiction, be ineffective to
the extent of such prohibition, unenforceability or nonauthorization without invalidating the
remaining provisions hereof or affecting the validity, enforceability or legality of such provision
in any other jurisdiction.
Section 8.20. Headings. Article and Section headings used in this Agreement are for
convenience of reference only and shall not affect the construction of this Agreement.
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4810-7991-0321.7
Section 8.21. Waiver of Rules of Construction. The Enterprise hereby waives any and
all provisions of law to the effect that an ambiguity in a contract or agreement should be
interpreted against the party responsible for its drafting.
Section 8.22. Integration. This Agreement is intended to be the final agreement
between the parties hereto relating to the subject matter hereof and this Agreement and any
agreement, document or instrument attached hereto or referred to herein shall supersede all oral
negotiations and prior writings with respect to the subject matter hereof.
Section 8.23. Patriot Act Notice. The Bank hereby notifies the Enterprise that pursuant
to the requirements of the Patriot Act it is required to obtain, verify and record information that
identifies the Enterprise, which information includes the name and address of the Enterprise and
other information that will allow the Bank to identify the Enterprise in accordance with the
Patriot Act. The Enterprise hereby agrees that it shall promptly provide such information upon
request by the Bank.
Section 8.24. Termination of Agreement. At such time as all amounts due to the Bank
have been duly paid, or provided for, this Agreement shall terminate.
4810-7991-0321.7
EXHIBIT A
FORM OF 2020 NOTE
THIS NOTE MAY NOT BE SOLD TRANSFERRED OR OTHERWISE DISPOSED OF
WITHOUT THE CONSENT OF THE ENTERPRISE.
UNITED STATES OF AMERICA
STATE OF COLORADO
CITY OF FORT COLLINS, COLORADO, ELECTRIC UTILITY ENTERPRISE
2020 TAXABLE SUBORDINATE LIEN REVENUE NOTE
IN THE AGGREGATE PRINCIPAL AMOUNT OF
NOT TO EXCEED $2,500,000
Advances Not to Exceed US $2,500,000 April 17, 2020
FOR VALUE RECEIVED, CITY OF FORT COLLINS, COLORADO, ELECTRIC
UTILITY ENTERPRISE, an enterprise of the City of Fort Collins, Colorado, (hereinafter
referred to as “Maker”), promises to pay to the order of ZB, N.A., DBA VECTRA BANK
COLORADO, a national banking association, its successors and assigns (hereinafter referred to
as “Payee”), at the office of Payee or its agent, designee, or assignee at 2000 S. Colorado
Boulevard, Suite 2-1200, Denver, CO 80222 or at such place as Payee or its agent, designee, or
assignee may from time to time designate in writing, all Advances made in an amount not to
exceed the principal sum of TWO MILLION FIVE HUNDRED THOUSAND AND NO/100
DOLLARS (US $2,500,000) (this “Note”) pursuant to the terms of the Loan Agreement dated of
even date herewith by and between Maker and Payee (the “Loan Agreement”), in lawful money
of the United States of America.
This Note shall bear interest, be payable, and mature pursuant to the terms and provisions
of the Loan Agreement. All capitalized terms used and not otherwise defined herein shall have
the respective meanings ascribed in the Loan Agreement.
All amounts due under this Note shall be payable and collectible solely out of the Net
Pledged Revenues, which revenues are hereby so pledged which pledge is in all respects
subordinate to the pledge and lien thereon of the Senior Debt at any time outstanding. The Bank
may not look to any general or other fund for the payment of such amounts; this Note shall not
constitute a debt or indebtedness within the meaning of any constitutional, charter, or statutory
provision or limitation; and this Note shall not be considered or held to be general obligations of
the Enterprise or the City but shall constitute a special obligation of the Enterprise. No statutory
or constitutional provision enacted after the execution and delivery of the Note shall in any
manner be construed as limiting or impairing the obligation of the Enterprise to comply with the
provisions of this Note. None of the covenants, agreements, representations and warranties
contained herein or in this Note shall ever impose or shall be construed as imposing any liability,
obligation or charge against the Enterprise or the City (except the Net Pledged Revenues and the
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4810-7991-0321.7
special funds pledged therefor), or against its general credit, or as payable out of its general fund
or out of any funds derived from taxation or out of any other revenue source (other than those
pledged therefor). The payment of the amounts due under this Note is not secured by an
encumbrance, mortgage or other pledge of property of the City or the Enterprise, except for the
Net Pledged Revenues. No property of the City or the Enterprise, subject to such exception,
shall be liable to be forfeited or taken in payment of such amounts.
Amounts received by Payee under this Note shall be applied in the manner provided by
the Loan Agreement. All amounts due under this Note shall be payable without setoff,
counterclaim or any other deduction whatsoever by Maker.
Unless payments are made in the required amount in immediately available funds in
accordance with the provisions of the Loan Agreement, remittances in payment of all or any part
of the amounts due and payable hereunder shall not, regardless of any receipt or credit issued
therefor, constitute payment until the required amount is actually received by Payee in funds
immediately available at the place where this Note is payable (or any other place as Payee, in
Payee’s sole discretion, may have established by delivery of written notice thereof to Maker) and
shall be made and accepted subject to the condition that any check or draft may be handled for
collection in accordance with the practice of the collecting bank or banks. Acceptance by Payee
of any payment in an amount less than the amount then due shall be deemed an acceptance on
account only and any unpaid amounts shall remain due hereunder, all as more particularly
provided in the Loan Agreement.
In the event of nonpayment of this Note, Payee shall be entitled to all remedies under the
Loan Agreement and at law or in equity, and all remedies shall be cumulative.
It is expressly stipulated and agreed to be the intent of Maker and Payee at all times to
comply with applicable state law and applicable United States federal law. If the applicable law
(state or federal) is ever judicially interpreted so as to render usurious any amount called for
under this Note or under the Loan Agreement, or contracted for, charged, taken, reserved or
received with respect to the indebtedness evidenced by this Note, then it is Maker’s and Payee’s
express intent that all excess amounts theretofore collected by Payee be credited on the principal
balance of this Note (or, if this Note has been or would thereby be paid in full, refunded to
Maker), and the provisions of this Note shall immediately be deemed reformed and the amounts
thereafter collectible hereunder and thereunder reduced, without the necessity of the execution of
any new document, so as to comply with the applicable law, but so as to permit the recovery of
the fullest amount otherwise called for hereunder and under the Loan Agreement. All sums paid
or agreed to be paid to Payee for the use, forbearance and detention of the indebtedness
evidenced hereby and by the Loan Agreement shall, to the extent permitted by applicable law, be
amortized, prorated, allocated and spread throughout the full term of such indebtedness until
payment in full so that the rate or amount of interest on account of such indebtedness does not
exceed the maximum rate permitted under applicable law from time to time in effect and
applicable to the indebtedness evidenced hereby for so long as such indebtedness remains
outstanding.
Maker and any endorsers, sureties or guarantors hereof jointly and severally waive
presentment and demand for payment, protest and notice of protest and nonpayment, all
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4810-7991-0321.7
applicable exemption rights, valuation and appraisement, notice of demand, and all other notices
in connection with the delivery, acceptance, performance, default or enforcement of the payment
of this Note and the bringing of suit and diligence in taking any action to collect any sums owing
hereunder or in proceeding against any of the rights and collateral securing payment hereof.
Maker and any surety, endorser or guarantor hereof agree (a) that the time for any payments
hereunder may be extended from time to time without notice and consent; (b) to the acceptance
of further collateral; (c) to the release of any existing collateral for the payment of this Note;
(d) to any and all renewals, waivers or modifications that may be granted by Payee with respect
to the payment or other provisions of this Note; and/or (e) that additional makers, endorsers,
guarantors or sureties may become parties hereto all without notice to them and without in any
manner affecting their liability under or with respect to this Note. No extension of time for the
payment of this Note shall affect the liability of Maker under this Note or any endorser or
guarantor hereof even though Maker or such endorser or guarantor is not a party to such
agreement.
Failure of Payee to exercise any of the options granted herein to Payee upon the
happening of one or more of the events giving rise to such options shall not constitute a waiver
of the right to exercise the same or any other option at any subsequent time in respect to the same
or any other event. The acceptance by Payee of any payment hereunder that is less than payment
in full of all amounts due and payable at the time of such payment shall not constitute a waiver
of the right to exercise any of the options granted herein or in the Loan Agreement to Payee at
that time or at any subsequent time or nullify any prior exercise of any such option without the
express written acknowledgment of Payee.
Maker (and the undersigned representative of Maker, if any) represents that Maker has
full power, authority and legal right to execute, deliver and perform its obligations pursuant to
this Note and this Note constitutes the legal, valid and binding obligation of Maker.
All notices or other communications required or permitted to be given hereunder shall be
given in the manner and be effective as specified in the Loan Agreement, directed to the parties
at their respective addresses as provided therein.
This Note is governed by and interpreted in accordance with the internal laws of the State
of Colorado, except to the extent superseded by federal law. Invalidity of any provisions of this
Note will not affect any other provision.
Pursuant to Section 11-57-210 of the Colorado Revised Statutes, as amended, this Note is
entered into pursuant to and under the authority of the Supplemental Public Securities Act, being
Title 11, Article 57, of the Colorado Revised Statutes, as amended. Such recital shall be
conclusive evidence of the validity and the regularity of the issuance of this Note after delivery
for value and shall conclusively impart full compliance with all provisions and limitations of said
statutes, and this Note shall be incontestable for any cause whatsoever after delivery for value.
By acceptance of this instrument, the Payee agrees and consents to all of the limitations
in respect of the payment of the principal of and interest on this Note contained herein, in the
Authorizing Ordinance of the Maker authorizing the issuance of this Note and in the Agreement,
as the same may be amended from time to time.
A-4
4810-7991-0321.7
TO THE EXTENT PERMITTED BY LAW, MAKER HEREBY CONSENTS TO THE
EXCLUSIVE JURISDICTION OF ANY STATE COURT SITUATED IN LARIMER
COUNTY, COLORADO, AND WAIVES ANY OBJECTION BASED ON FORUM NON
CONVENIENS, WITH REGARD TO ANY ACTIONS, CLAIMS, DISPUTES OR
PROCEEDINGS RELATING TO THIS NOTE, THE LOAN AGREEMENT, THE NET
PLEDGED REVENUES, ANY OTHER FINANCING DOCUMENT, OR ANY
TRANSACTIONS ARISING THEREFROM, OR ENFORCEMENT AND/OR
INTERPRETATION OF ANY OF THE FOREGOING.
TO THE EXTENT PERMITTED BY LAW, MAKER HEREBY WAIVES ANY AND
ALL RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING RELATING TO
THIS NOTE, THE LOAN AGREEMENT, OR ANY OF THE OTHER FINANCING
DOCUMENTS, THE OBLIGATIONS THEREUNDER, ANY COLLATERAL SECURING
THE OBLIGATIONS, OR ANY TRANSACTION ARISING THEREFROM OR
CONNECTED THERETO. MAKER REPRESENTS TO PAYEE THAT THIS WAIVER IS
KNOWINGLY, WILLINGLY AND VOLUNTARILY GIVEN.
THE PROVISIONS OF THIS NOTE MAY BE AMENDED OR REVISED ONLY BY
AN INSTRUMENT IN WRITING SIGNED BY MAKER AND PAYEE. THERE ARE NO
ORAL AGREEMENTS BETWEEN MAKER AND PAYEE WITH RESPECT TO THE
SUBJECT MATTER HEREOF.
IN WITNESS WHEREOF, an authorized representative of City of Fort Collins,
Colorado, Electric Utility Enterprise, as Maker, has executed this Note as of the day and year
first above written.
CITY OF FORT COLLINS, COLORADO,
ELECTRIC UTILITY ENTERPRISE
By
President
[SEAL]
Attest:
By
Secretary
4810-7991-0321.7
EXHIBIT B
FORM OF ADVANCE REQUEST
City of Fort Collins, Colorado, Electric Utility Enterprise
Loan Agreement
The undersigned certifies that he/she is an Authorized Person under that certain Loan
Agreement dated as of April 17, 2020 (the “Agreement”) by and between City of Fort Collins,
Colorado, Electric Utility Enterprise and ZB, N.A., dba Vectra Bank Colorado (the “Bank”). All
capitalized terms used in this Advance Request (“Advance Request”) shall have the respective
meanings assigned in the Agreement.
The undersigned Authorized Person hereby makes a request to the Bank for an Advance
on the Loan, and in support thereof states:
(i) The amount of the Advance so requested is $___________ to finance the Project.
(ii) Upon the funding of such Advance, the sum of all Advances will not exceed the
Maximum Advance Amount of the Loan.
(iii) At the time the requested Advance is to be made and as a result thereof,
immediately thereafter, all representations and warranties of the Enterprise set forth in Article IV
of the Loan Agreement are true and correct as though made on the date hereof and will be true
and correct as though made on the Advance Date, the most recent quarterly report required in
Section 5.21(b)(ii) has been delivered to the Bank and no Event of Default shall have occurred
and be continuing on the date hereof and on the Advance Date and no litigation is currently
pending or threatened concerning the Enterprise’s authority to pledge the Net Pledged Revenues
as provided in the Loan Agreement.
(iv) The outstanding Senior Debt is rated in one of its four highest rating categories by
a national recognized organization which regularly rates obligations such as the Senior Debt.
(v) The requested Advance shall be made by the Bank by wire transfer to the
Enterprise in accordance with the instructions set forth below:
[Insert wire instructions]
IN WITNESS WHEREOF, I have hereunto set my hand this ____ day of ________,
20__.
CITY OF FORT COLLINS, COLORADO,
ELECTRIC UTILITY ENTERPRISE
By
Authorized Person