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HomeMy WebLinkAboutECHDA18-004 6 West Apartments LLC Subordinate Loan AgreementECHDA SUBORDINATE LOAN AGREEMENT BETWEEN EAGLE COUNTY HOUSING AND DEVELOPMENT AUTHORITY AND 6 West Apartments LLC THIS Eagle County Housing & Development Authority SUBPRDJNATE LOAN AGREEMENT (this "Agreement") is made and entered into this 2 27 (1-vle, by and between the Eagle County Housing and Development Authority, a body corporate and politic ("ECHDA" or "Lender"), and 6 West Apartments LLC, a Colorado limited liability company ("Borrower"). WITNESSETH: WHEREAS, Borrower desires to acquire, own, develop, finance, construct, manage, and operate an apartment complex that will consist of 8 apartment buildings, which will contain 120 rental apartments, and a clubhouse building and other improvements at 32532 Highway 5 in Edwards Colorado, which will be known as the 6 West Apartments (the "Project"), on the real property in Eagle County, Colorado that is legally described in Exhibit A attached hereto and incorporated herein by this reference ("Property"); and WHEREAS, Borrower has obtained construction financing from FirstBank, a Colorado banking corporation ("Construction Lender") for construction of the Project; and WHEREAS, as part of the approval of an Amendment to the VIA Planned Unit Development a/k/a 6 West Apartments Planned Unit Development, pursuant to Eagle County Resolution No. 2017-002, Eagle County (the "County") granted a dedication of water rights of 12.56024 acre feet from the County's share of the Eagle Park Reservoir stock on behalf of Borrower, valued at $323,879.00, to satisfy all or a portion of the Eagle River Water & Sanitation District's water dedication requirement for the Project. The Borrower has agreed to repay the value of the water dedication to the Lender as more fully set forth in this Agreement; and WHEREAS, Lender is authorized to grant or lend moneys or otherwise provide financing for any project or part thereof pursuant to C.R.S. 29-4-209 (d.3). IN CONSIDERATION of the foregoing recitals and mutual covenants and agreements herein contained, the receipt and sufficiency of which are hereby acknowledged, Borrower and Lender hereby agree as follows: ARTICLE I DEFINITIONS Certain Definitions. The following terms shall have the meanings indicated whenever used herein: Default — means any event or condition that, with the giving of notice or lapse of time there would become an Event of Default. Eagle County, CO 201803212 Regina O'Brien 03/01/2018 Pgs: 16 09:42:51 AM ECHDAI8- $0.00 D . $0.00 ECHDA Restrictive Covenant — shall mean the Restrictive Covenant for the Project entered into by 6 West Apartments, LLC for the benefit of the Eagle County Housing and Development Authority, of even date herewith, together with all amendments, modifications, extension, replacements, and substitutions thereto. ECHDA Subordinate Deed of Trust — shall mean the Eagle County Housing and Development Authority Subordinated Deed of Trust, dated of even date herewith from Borrower to the Public Trustee of Eagle County, Colorado for the use and benefit of Lender, together with all amendments, modifications, extensions, replacements and substitutions thereto. ECHDA Subordinate Loan — has the meaning set forth in Section 2.01 hereof. ECHDA Subordinate Loan Documents — means the ECHDA Subordinate Note, ECHDA Subordinate Deed of Trust, this Agreement, and all other documents and instruments evidencing, securing or otherwise pertaining to the ECHDA Subordinate Loan, together with all amendments, modifications, extension, replacements, and substitutions thereto. ECHDA Subordinate Note — shall mean the ECHDA Subordinate Note dated of even date herewith in the principal face amount of the ECHDA Subordinate Loan from Borrower made payable to the order of Lender, together with all amendments, modifications, extensions, replacements and substitutions thereto. Event of Default — has the meaning set forth in Article VI hereof. Obligations - all obligations of Borrower to Lender, whether now existing or hereafter arising, including without limitation Borrower's obligations, covenants and agreements hereunder and under the ECHDA Subordinate Loan Documents. ARTICLE II THE LOAN Section 2.01. Agreement for Loan. As part of the approval of an Amendment to the VIA Planned Unit Development a/k/a 6 West Apartments Planned Unit Development, pursuant to Eagle County Resolution No. 2017-002, the County granted a dedication of water rights of 12.56024 acre feet from the County's share of the Eagle Park Reservoir stock on behalf of Borrower, valued at $323,879.00, to satisfy all or a portion of the Eagle River Water & Sanitation District's water dedication requirement for the Project. The Borrower has agreed to repay the value of the water rights dedication in , the sum of Three Hundred Twenty Three Thousand, Eight Hundred Seventy Nine Dollars ($323,879) (the "ECHDA Subordinate Loan") to the Lender, subject to all of the terms, covenants, conditions, provisions and agreements contained in this Agreement. The ECHDA Subordinate Loan is evidenced by the ECHDA Subordinate Note and is non -revolving, and no portion thereof may be borrowed, repaid and reborrowed. Section 2.02. Maturity Date and Shared Appreciation. The "Maturity Date" of the ECHDA Subordinate Loan is defined in Section 3(A) of the ECHDA Subordinate Note. The entire outstanding principal amount not theretofore paid on the ECHDA Subordinate Loan shall be due and payable on the Maturity Date. If Borrower does not pay the principal amount of the 2 ECHDA Subordinate Note off in full on or before the fifth anniversary of the date of said Note, Borrower agrees to pay Lender the "Shared Appreciation" under Section 3(B) of the Note. No interest will accrue on the outstanding principal amount of the ECHDA Subordinate Loan, except that when an uncured Event of Default exists, Lender may impose interest on the ECHDA Subordinate Loan at the Default Rate under Section 10 of the ECHDA Subordinate Note. Section 2.03. Purpose of Loan. The purpose of the ECHDA Subordinate Loan was to satisfy all or a portion of the Eagle River Water & Sanitation District's water dedication requirement for the Project. Section 2.04. Repayment. Repayment terms are set forth in the ECHDA Subordinate Note. If not sooner paid, all unpaid principal and, if the principal balance is not repaid in full on or before the fifth anniversary of the Maturity Date, the Shared Appreciation under Section 3(B) of the ECHDA Subordinate Note, shall be due and payable in full on the Maturity Date. Borrower shall have the right at any time to prepay all or any portion of the ECHDA Subordinate Loan without prepayment penalty. Section 2.05. Security. The ECHDA Subordinate Loan shall be secured by (a) the ECHDA Subordinate Deed of Trust(b) the other ECHDA Subordinate Loan Documents. Section 2.06. Disbursement of Loan Proceeds. Eagle County, Colorado has, on or before the date of this Agreement, transferred water rights for the Project to the Upper Eagle Regional Water Authority. The value of the water rights required to satisfy all or a portion of the Eagle River Water & Sanitation District's water dedication requirement for the Project is $323,879. ARTICLE III REPRESENTATIONS AND WARRANTIES OF BORROWER Borrower hereby represents and warrants to Lender as follows: Section 3.01. Organization and Oualification. Borrower is a Colorado limited liability company, duly organized, validly existing and in good standing under the laws of the state of Colorado, and is qualified to do business in the State of Colorado. Section 3.02. Authority and Enforceability. Borrower has full power to enter into and perform its obligations under this Agreement, the ECHDA Subordinate Note and the other ECHDA Subordinate Loan Documents. The execution and delivery of this Agreement, the ECHDA Subordinate Note and the other ECHDA Subordinate Loan Documents and the performance and observance of their terms, conditions and obligations have been duly authorized by all necessary action on the part of Borrower. This Agreement, the ECHDA Subordinate Note and the other ECHDA Subordinate Loan Documents constitute, and any other agreement required hereby will constitute, when executed and delivered by Borrower to Lender, valid and binding obligations of Borrower enforceable in accordance with their terms. Section 3.03. No Conflict. The execution and delivery of this Agreement, the ECHDA Subordinate Note and the other ECHDA Subordinate Loan Documents and consummation of all the transactions contemplated hereby and thereby, do not and will not conflict with, or be in 3 contravention of, any of Borrower's governing documents, any law, order, rule or regulation applicable to Borrower or any agreement or instrument to which Borrower is a party or by which the Project are bound or affected, and will not result in the creation of any lien, charge or encumbrance of any nature upon the Premises other than that contemplated hereby. Section 3.04 Financial Condition. Borrower and its affiliates are now solvent; and no bankruptcy or insolvency proceedings are pending or contemplated by Borrower or any of its affiliates or, to Borrower's actual knowledge, against Borrower or any of its affiliates. Section 3.05. Litigation. There is no action, suit, legal proceeding or proceeding pending or threatened (or, to Borrower's actual knowledge, any basis therefor) against Borrower or affecting the Property in any court or before any arbitrator of any kind or before or by any governmental body. Section 3.06. Approvals. All governmental licenses, permits and other approvals necessary for the intended use, operation and occupancy of the Project that may be obtained prior to construction of the Project have been obtained and are in full force and effect. All other governmental licenses, permits and other approvals necessary for the intended use, operation and occupancy of the Project will be timely applied for by Borrower to allow prompt lease -up and operation of the Project. The operation of the Project and its intended use will comply with all applicable laws, statutes, rules, regulations, codes, covenants, conditions, restrictions and reservations, including, without limitation, subdivision regulations, zoning laws, building codes, height restrictions, flood plain regulations and environmental laws and regulations. Section 3.07. Compliance with Laws. The Project and any and all operations conducted thereon comply with all applicable federal, state and local laws, including, without limitation, any and all applicable building, zoning, environmental and other laws, ordinances and regulations affecting the Project or any operation thereof. Section 3.08. No Brokers. Borrower has dealt with no broker, finder or other party entitled to any commission, fee or other compensation in connection with the ECHDA Subordinate Loan. Section 3.09. No Default. There is no default on the part of the Borrower under this Agreement or any of the other ECHDA Subordinate Loan Documents, or the loan documents that evidence and secure the construction loan that that finances the construction of the Project (the "Construction Loan"). Borrower is in compliance with all provisions of the foregoing documents. ARTICLE IV AFFIRMATIVE COVENANTS OF BORROWER Until payment or performance in full of all the Obligations, Borrower shall: Section 4.01. Payment of Note. Make all payments of principal and interest, when required, under the ECHDA Subordinate Note as and when the same become due and payable, without notice or demand. 4 Section 4.02. Inspection. Permit Lender and its representatives to enter upon the Property and Improvements at all reasonable times and inspect the Property and Improvements. Section 4.03. Compliance with Laws. Comply promptly with all laws, rules, regulations, resolutions, ordinances and codes (including, without limitation, all environmental laws and regulations) applicable to the business of the Borrower and to the conduct and operation of its business, the operation or the use of the Improvements and the Property for its intended purpose and keep in effect all permits, licenses or approvals obtained in connection therewith. Section 4.04. Insurance. Obtain and maintain at all times the policies of insurance required by Construction Lender. All policies of property insurance shall contain a lender's "loss payee" and/or "mortgagee" endorsement for the benefit of Lender. All policies of liability insurance required hereunder shall name Lender as an additional insured. In lieu of the several policies specified herein, a comprehensive liability and property damage insurance policy inclusive of all the insurance and requirements set forth herein, with an umbrella sufficient to cover the Property and Improvements from the risks set forth herein, will be permissible. Section 4.05 Accounts and Records. Keep and maintain full and accurate accounts and records of operations in accordance with accounting principles applicable to businesses of the type in which Borrower is engaged and permit Lender by its duly authorized agents to inspect and copy such accounts and records at any reasonable time. Section 4.06. Reporting Requirements. Furnish to Lender the following, all of which shall be in form and detail acceptable to Lender: (a) Within 90 days after the end of each fiscal year of Borrower, Borrower shall deliver to Lender financial statements of Borrower, internally prepared by Borrower, which annual financial statements shall include the balance sheet of the Borrower as at the end of such fiscal year and the related statements of income, and cash flows of Borrower for the fiscal year then ended. (b) Within 60 days after the end of each quarter, internally prepared financial statements of borrower and a rent roll for the Project showing occupancy and the rental rate of each unit. . (c) Within 30 days of their filing, copies of any annual federal income tax returns or forms required by the IRS. (d) As promptly as practicable (but in any event not later than 10 business days) after an officer of Borrower obtains knowledge of the occurrence of any breach, default, or an event of default under any ECHDA Subordinate Loan Document or any event which constitutes a Default or Event of Default hereunder, a notice of such occurrence, together with a detailed statement by a responsible officer of Borrower of the steps being taken by Borrower to cure the effect of such breach, default, or event. 5 (i) Within ten (10) business days, upon knowledge thereof, notice of any loss of or material damage to the Property and Improvements or of any material adverse change in the Property and Improvements. 0) Within ten (10) business days, upon knowledge thereof, notice of the violation by Borrower of any law, rule or regulation, the non-compliance with which could materially and adversely affect its business or its financial condition. Section 4.07. Further Assurances. From time to time record, register and file all such notices, statements and other documents and take such other steps, including, without limitation, effecting the amendment of any ECHDA Subordinate Loan Document, as may be necessary or advisable to render fully valid and enforceable under all applicable laws the rights, liens and priorities of Lender with respect to all security from time to time furnished under this Agreement or intended to be so furnished, in each case in such form and at such times as shall be satisfactory to Lender. Section 4.08. Payment of Taxes and Other Claims. Pay or discharge, when due, (a) all taxes, association (master association or commercial center association dues), assessments and governmental charges levied or imposed upon it or upon its income or profits, upon the Property and Improvements or upon or against the creation, perfection, or continuance of the liens and security interests granted by the ECHDA Subordinate Loan Documents prior to the date on which penalties attach thereto, (b) all federal, state and local taxes required to be withheld by it, and (c) all lawful claims for labor, materials and supplies which, if unpaid, might by law become a lien or charge upon any properties of Borrower; provided, however, Borrower shall not be required to pay any such tax, assessment, charge or claim if Borrower is contesting the amount, applicability or validity thereof in good faith by appropriate proceedings diligently pursued by Borrower and has established unencumbered cash reserves for the payment of the foregoing in an amount acceptable to Lender, in its sole discretion. Section 4.09. Performance of Other Obligations. Promptly and strictly perform and comply with all other terms, conditions, covenants and prohibitions required by the terms of any of the ECHDA Subordinate Loan Documents, as may be required by Lender. Section 4.10. Construction of Improvements. Cause the Improvements to be constructed with diligence and continuity and completed substantially in accordance with the approved plans and specifications and the 6 West Apartments PUD Final Plat. Section 4.11. Maintenance of Project. (a) Keep and maintain the Property and Improvements necessary or useful in its business in good condition, repair and working order (normal wear and tear excepted) and shall from time to time replace or repair any worn, defective or broken parts. (b) Defend the Project against all claims or demands of all persons (other than Lender) claiming the Property and Improvements or any interest therein. 6 (c) Keep the Project free and clear of all claims, encumbrances, liens and security interests except the liens and security interests in favor of Lender, except as otherwise provided for in this Agreement. Section 4.12. Indemnity. In addition to the payment of various costs, fees and expenses pursuant to the terms hereof and the other indemnities set forth herein and in the other ECHDA Subordinate Loan Documents, Borrower agrees to indemnify, defend and hold harmless Lender, and any of its affiliates, successors, and Eagle County and all present and future officers, directors, employees and agents of the foregoing (the "Indemnitees"), from and against (i) any and all transfer taxes, documentary taxes, assessments or charges made by any governmental authority by reason of the execution and delivery of this Agreement and the other ECHDA Subordinate Loan Documents, and (ii) any and all liabilities, losses, damages, penalties, judgments, suits, claims, costs and expenses of any kind or nature whatsoever (except for those arising primarily from the gross negligence or willful misconduct of the Indemnitees), including, without limitation, the reasonable fees and disbursements of counsel in connection with any investigative, administrative or judicial proceedings, whether or not such Indemnitee shall be designated a party thereto, which may be imposed on, incurred by or asserted against such Indemnitee, in any manner relating to or arising out of or in connection with this Agreement and all other ECHDA Subordinate Loan Documents ("Indemnified Liabilities"). If any investigative, judicial, or administrative proceeding arising from any of the foregoing is brought against any Indemnitee, upon request of such Indemnitee, Borrower, or counsel designated by Borrower and satisfactory to the Indemnitee, shall resist and defend such action, suit or proceeding to the extent and in the manner directed by the Indemnitee, at Borrower's sole cost and expense. Each Indemnitee shall use its best efforts to cooperate in the defense of any such action, suit or proceeding. If the foregoing undertaking to indemnify, defend and hold harmless may be held to be unenforceable because it violates any law or public policy, Borrower shall nevertheless make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable Law. The obligations of Borrower under this Section shall survive the termination of this Agreement and the discharge of Borrower's Obligations to Lender. ARTICLE V NEGATIVE COVENANTS OF BORROWER Until payment and performance in full of all of the Obligations, Borrower shall not, without the prior written consent of Lender: Section 5.01. Transfer. Permit or allow any transfer that is not permitted without Lender's consent under paragraph 16 of the ECHDA Subordinate Deed of Trust. Section 5.02. Liens. Create, assume, incur or suffer to exist any mortgage, pledge, security interest, lien or other encumbrance upon the Project, or any encumbrance otherwise not permitted pursuant to the terms of the Construction Loan documents or this Agreement, except liens for taxes not delinquent, the security interests created or contemplated hereunder, and any lien or encumbrance created by the deed of trust and security interests that secure the Construction Loan. 7 Section 5.03. Assignment. Assign or attempt to assign any of its rights or delegate any of its duties hereunder or under the other ECHDA Subordinate Loan Documents. Section 5.04. Environmental Hazards. Permit the Property and Improvements to be used or operated in any manner such that the Project may or does become contaminated by any hazardous substance or environmental pollutant in material violation of any federal, state or local environmental statute or ordinances, including without limitation violation of the Comprehensive Environmental Response, Compensation and Liability Act of 1980, the Hazardous Materials Transportation Act and the Resource Conservation and Recovery Act, all as amended from time to time. Section 5.05. Other Defaults. Permit any material breach, default, or event of default to occur under the loan documents that evidence and secure the Construction Loan. ARTICLE VI EVENTS OF DEFAULTS AND REMEDIES Section 6.01. Default. The occurrence of any one or more of the following events or conditions shall constitute an "Event of Default" by Borrower under this Agreement: (a) Borrower shall fail to pay, when due, the principal of, or if due, any Shared Appreciation under Section 3(B) of the ECHDA Subordinate Note; (b) any representation or warranty made in writing to Lender herein or in connection with the making of the ECHDA Subordinate Loan shall have been incorrect or misleading in any material respect when made; (c) Borrower shall fail to perform or observe any covenant contained in Article V of this Agreement (or, with regard to any other term or condition of this Agreement, or the other ECHDA Subordinate Loan Documents, shall fail to perform or observe such term or condition thereof) and such failure shall not be cured within 30 days after notice thereof from Lender to Borrower; (d) there shall occur a default or event of default (however defined) under the terms of the ECHDA Subordinate Note, the ECHDA Subordinate Deed of Trust, the ECHDA Restrictive Covenant or any other ECHDA Subordinate Loan Document and the default or event of default is not cured after any required notice is given and any available notice period expires; (e) Borrower shall make an assignment for the benefit of creditors; file a petition in bankruptcy; be adjudicated insolvent or bankrupt or admit in writing the inability to pay debts as they mature; petition or apply to any tribunal for the appointment of a receiver or any trustee or similar officer for Borrower or a substantial part of the assets of Borrower; or shall commence any proceeding under any bankruptcy, reorganization, arrangement, readjustment of debt, dissolution or liquidation law or statute of any jurisdiction, whether now or hereafter in effect; or if there shall have been filed any such petition or application, or any such proceeding shall have been commenced against Borrower, that remains undismissed for a period of thirty (30) days or more; (f) this Agreement, the ECHDA Subordinate Note, the ECHDA Subordinate Deed of Trust, the ECDHA Restrictive Covenant or any other ECHDA Subordinate Loan Document shall at any time for any reason cease to be in full force and effect; or Borrower shall contest the validity of any ECHDA Subordinate Loan Document or the ECHDA Restrictive Covenant, or; (h) there shall occur a default, breach, or violation under any of the documents that evidence or secure the Construction Loan that is not cured or waived after any required notice is given and any available cure period expires. (i) the admission of Borrower, or any other party liable for the payment of the ECHDA Subordinate Loan, whether as maker, endorser, guarantor, surety or otherwise, in writing of any such party's inability to pay such party's debts as they become due. Section 6.02. Remedies. Upon the occurrence of any Event of Default described in Section 6.01, and at any time as long as the Event of Default continues, the ECHDA Subordinate Loan, together with any Shared Appreciation, and all accrued interest and any other amounts payable hereunder, shall, at the option of Lender, become immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are expressly waived by Borrower. Upon the occurrence of an Event of Default under Section 6.01(e) above, the ECHDA Subordinate Loan, together with any Shared Appreciation, and all accrued interest and other amounts payable shall automatically be due and payable in full without the need for any action by the Lender. Lender may proceed with every remedy available at law or in equity or provided for herein or in any document executed in connection herewith, and all expenses incurred by Lender in connection with any remedy shall be deemed indebtedness of Borrower to Lender and a part of the ECHDA Subordinate Loan. Section 6.03. Waiver. No delay or failure of Lender in the exercise of any right or remedy provided for hereunder shall be deemed a waiver of the right by Lender, and no exercise or partial exercise or waiver of any right or remedy shall be deemed a waiver of any further exercise of such right or remedy or of any other right or remedy that Lender may have. ARTICLE VII RIGHTS AND DUTIES OF LENDER Section 7.01. No Joint Venture, Partnership, etc. Nothing herein shall be construed as establishing a relationship between Lender and any other party except the lender -borrower relationship between Lender and Borrower. Lender shall owe no duty to any person by reason of this Agreement to exercise any of its rights hereunder. Section 7.02. Environmental Indemnity. Borrower hereby agrees to indemnify, defend and hold harmless Lender and its agents, affiliates, officers, directors and employees of and from any and all liability, claims, demands, actions and causes of action whatsoever (including, without limitation, reasonable attorneys' fees and expenses, and costs and expenses reasonably incurred in investigating, preparing or defending against any litigation or claim, action, suit, proceeding or demand of any kind or character) arising out of or related to the contamination of the Property by any hazardous substance or environmental pollutants in violation of any federal, E state or local environmental statutes or ordinances, including, without limitation, violation of the Comprehensive Environmental Response, Compensation and Liability Act of 1980, the Hazardous Materials Transportation Act and the Resource Conservation and Recovery Act, all as amended from time to time. Section 7.03. No Responsibility for Completion, Etc. Lender assumes no responsibility for completion of the Improvements, and nothing herein shall be construed as establishing a relationship between Lender and any other party except the lender -borrower relationship between Lender and Borrower. Lender shall owe no duty to any person by reason of this Agreement to construct the Improvements or to exercise any of its rights hereunder. Lender is not, and shall not be construed to be, liable to any party for any damage that may result from defects in the design or construction of the Improvements. Borrower hereby agrees to indemnify and save Lender harmless from any and all such liability, claims for such liability and costs and expenses relating thereto that Lender may incur in defending itself against such claims. Section 7.04. Right to Assign. Lender may assign, negotiate, pledge or otherwise hypothecate this Agreement, the ECHDA Subordinate Note and ECHDA Subordinate Loan Documents or any of its rights and security hereunder or thereunder to Eagle County, Colorado any other subdivision of Eagle, County, or any entity that is wholly-owned, directly or indirectly by Eagle County, or any multi jurisdictional housing authority of which Eagle County is a member and may assign and delegate any or all of its primary supervisory functions to any of Eagle County, any subdivision of Eagle County, any entity that is wholly-owned, directly or indirectly, by Eagle County or any multi jurisdictional housing authority of which Eagle County is a member. In case of such an assignment, Borrower will accord full recognition thereto and hereby agrees that all rights and remedies of Lender in connection with the interest so assigned shall be enforceable against Borrower by the assignee thereof. Lender agrees not to assign, negotiate, pledge, or otherwise hypothecate its interest in the ECHDA Subordinate Loan except as permitted by the preceding two sentences of this Section 7.04. ARTICLE VIII MISCELLANEOUS Section 8.01. Amendments. No provision or term of this Agreement may be amended, modified, revoked, supplemented, waived or otherwise changed except by a written instrument duly executed by Borrower and Lender and designated as an amendment, supplement or waiver. Section 8.02 Notices. Any notice required to be given to any party pursuant to any provision of this Agreement shall be in writing, shall be given by certified mail, return receipt requested, or delivered by hand, and, if mailed, shall be deemed received one day after having been deposited in the United States mail, postage prepaid, addressed as follows: 10 (a) If to Borrower: Stephen S. Spessard 6 West Apartments LLC 1677 Buffehr Creek Road Vail, CO 81657 sspessarda, gorecregkpartners. com (b) If to Lender: Eagle County Housing and Development Authority Attn: Kim Williams, Director Post Office Box 850 Eagle, CO 81631 Telephone: (970) 328-8773 kim.williams(a-)eaglecounty.us with a copy to: Eagle County Attorney Post Office Box 850 Eagle, CO 81631 Telephone: (970) 328-8685 attynea lecounty.us Either party may change its address for the giving of notice by notice hereunder. Section 8.03. Severability. If any provision in this Agreement shall be held invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions of this Agreement shall not be impaired thereby, nor shall the validity, legality or enforceability of any such defective provisions be in any way affected or impaired in any other jurisdiction. Section 8.04. Governing Law. This Agreement and the other ECHDA Subordinate Loan Documents shall be governed by and construed in accordance with the laws of the State of Colorado without regard to choice of law principles. In the event of any claim, controversy or dispute involving this Agreement and ECHDA Subordinate Loan Documents, such claim, controversy or dispute shall be submitted to and tried before the Colorado State District Court in Eagle County, Colorado. Borrower and Lender consent to venue and jurisdiction in such court and each hereby waive any defense to venue in such court on the basis of inconvenient forum. Section 8.05. Time of the Essence. Time is of the essence hereof with respect to the dates, terms and conditions of this Agreement, the ECHDA Subordinate Note and the other ECHDA Subordinate Loan Documents. 11 Section 8.06. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. Section 8.07. Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors, permitted assigns and receivers of the parties hereto. Section 8.08. Attorneys' Fees and Expenses. Borrower shall pay Lender its attorneys' fees and other costs and expenses incurred before trial, at trial and on appeal in the collection or enforcement of this Agreement or the other ECHDA Subordinate Loan Documents or in any litigation pertaining to the negotiation, execution or delivery of this Agreement or the other ECHDA Subordinate Loan Documents, the payment and performance of any indebtedness, liability or obligation or the enforcement of any right or remedy described therein, or any claim, defense, setoff or counterclaim arising or asserted in connection therewith. Section 8.09. Americans with Disabilities Act. Borrower expressly assumes all liability for any changes or modifications required to be made to the Project pursuant to the Americans with Disabilities Act. Borrower shall indemnify and hold Lender harmless from any claim that may be made against Lender pursuant to the Americans with Disabilities Act. The terms and provisions of this Section shall survive the payment of the ECHDA Subordinate Loan or, in the event of the default in the payment of the ECHDA Subordinate Loan, shall survive the foreclosure of any instrument securing the ECHDA Subordinate Loan. In the event Lender is the high bidder at a sale of all or any portion of the Project pursuant to the foreclosure of any of the loan documents, then the terms and provisions of this Section shall survive such sale and the acquisition of the Project by Lender and shall remain in full force and effect notwithstanding the foreclosure of any instrument securing the ECHDA Subordinate Loan and the cancellation of the ECHDA Subordinate Note evidencing the ECHDA Subordinate Loan. Section 8.10. Waivers. Until the Obligations are paid in full, Borrower hereby expressly waives (i) any right of contribution, reimbursement, exoneration, or recourse available to Borrower as to any of the Obligations, against any person liable therefore, or as to any collateral security therefor, (ii) any and all of its rights in connection with the settlement, compromise or release of, or the waiver of any default with respect to, any Obligations, and (iii) to the greatest extent permitted by applicable law, any and all defenses, claims, setoffs and discharges, including, without limitation, all rights to a marshalling of Borrower's properties and assets. With respect to rights of subrogation as to any of the Obligations, against any person liable therefore, or as to any collateral security therefor, Borrower covenants and agrees to defer the enforcement of any such right until such time as all Obligations under the ECHDA Subordinate Loan Documents are paid in full, or otherwise fully performed. Borrower agrees that the amount of the Obligations and the liens and security interests created by the ECHDA Subordinate Loan Documents shall not be diminished and the liability of Borrower hereunder shall not be otherwise impaired or affected by any of the foregoing. Section 8.11. WAIVER OF JURY TRIAL. BORROWER, AND LENDER WAIVE THEIR RESPECTIVE RIGHTS TO DEMAND A JURY TRIAL IN THE EVENT OF ANY LITIGATION PERTAINING TO THE NEGOTIATION, EXECUTION AND DELIVERY OF THIS AGREEMENT OR THE OTHER ECHDA SUBORDINATE LOAN 12 DOCUMENTS, THE ENFORCEMENT OF ANY OBLIGATION, RIGHT OR REMEDY DESCRIBED THEREIN OR ANY CLAIM, DEFENSE, SETOFF OR COUNTERCLAIM IN CONNECTION THEREWITH. Section 8.12. No Presumption Against Drafting Party. Neither this Agreement nor any of the other ECHDA Subordinate Loan Documents shall be subject to any rule of contract construction or interpretation requiring that, in the event of ambiguity, the same be construed against the drafting party and Borrower hereby waives and relinquishes the benefit of any such rule of contract construction or interpretation. [REMAINDER OF PAGE LEFT INTENTIONALLY BLANK] 13 IN WITNESS WHEREOF, Lender has executed this ECHDA Subordinate Loan Agreement as of the date first above written. LENDER: Eagle County Housing and Development Authority, a public body corporate and politic 14 IN WITNESS WHEREOF, Borrower has executed this ECHDA Subordinate Loan Agreement as of the date first above written. BORROWER: 6 West Apartments LLC, a Colorado limited liability company By: West Edwards Apartments LLC, a Colorado limited liability company, its Managing Member Ey: �- Stephen S. Spessard, its manager 15 EXHIBIT A To ECHDA Subordinate Loan Agreement Description of the Real Property Lot 1, 6 West Apartments Subdivision, Eagle County, Colorado, pursuant to that Final Plat recorded in the records of the Eagle County Clerk and Recorder at Reception Number 16