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TC Res. No. 1998-38TOWN OF AVON, COLORADO RESOLUTION NO, 98- 38 RESOLUTION APPROVING THE ISSUANCE BY EAGLEBEND DOWD AFFORDABLE HOUSING CORPORATION OF MULTIFAMILY HOUSING PROJECT REVENUE BONDS, SERIES 1998, IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $11,100,000; AUTHORIZING A PROJECT AGREEMENT; AND AUTHORIZING INCIDENTAL ACTION. WHEREAS, EagleBend Dowd Affordable Housing Corporation (the "Corporation") has been duly organized under the provisions of Colorado law governing nonprofit corporations, for the purpose of acquiring interests in real property and to construct, install and operate certain improvements in or near the Town of Avon (the "Town"); and WHEREAS, the Corporation intends to enter into a Trust Indenture to be dated as of July 1, 1998 (the "Indenture") and to issue its Multifamily Housing Project Revenue Bonds, Series 1998A, in an aggregate principal amount not to exceed $9,500,000, its Multifamily Housing Project Subordinate Revenue Bonds, Series 1998B, in an aggregate principal amount not to exceed $600,000, and its Multifamily Housing Project Subordinate Revenue Bonds, Series 1998C, in an aggregate principal amount not to exceed $1,000,000 (collectively, the "Series 1998 Bonds") to acquire and construct real and personal property, buildings and improvements, to provide dwelling accommodations at rentals within the means of individuals or families of low or moderate income (the "Project"), to be known as "Kayak Crossing" on a site of approximately 4.73 acres in unincorporated Eagle County, Colorado, near the Town; and WHEREAS, in order to assure that responsibility for operation of the Project is vested in the Corporation, the Town and the Corporation propose to execute and deliver a Project Agreement to be dated as of July 1, 1998' (the "Project Agreement"), under the terms of which the Corporation is responsible to operate the Project, and title to the Project shall vest in the Town upon the end of the term of the Project Agreement; and WHEREAS, proposed forms of the Indenture (including the forms of the Series 1998 Bonds contained therein), the Project Agreement, and the Operating Deficit Agreement to be-dated as of July 1998 (the "Operating Deficit Agreement") among the Corporation and the EagleBend Affordable Housing Corporation and each of their trustees, have been presented before the Town Council (the "Council") at this meeting. NOW, THEREFORE, BE IT RESOLVED BY THE TOWN COUNCIL OF THE TOWN OF AVON, COLORADO, AS FOLLOWS: 2 \\\DE - 6846411- 0038618.01 1. Approval of Project Agreement and Operating Deficit Agreement. The terms of the proposed Project Agreement and Operating Deficit Agreement in substantially the forms presented at this meeting are hereby approved. 2. Issuance of the Series 1998 Bonds. The Series 1998 Bonds and the issuance thereof by the Corporation for the purpose of financing the Project are, in all respects, hereby approved. The Series 1998 Bonds shall be issued solely as fully registered bonds without coupons in the denominations as provided in the Indenture. The Series 1998 Bonds_ shall bear interest payable at the rates and times and will mature in the amounts and on the dates set forth in the Indenture, as finally executed. The Series 1998 Bonds shall be issued and secured as set forth in the Indenture, and the forms, terms and provisions of the Series 1998 Bonds and the provisions for their execution, authentication, payment, registration, transfer, exchange, redemption and number shall be as set forth in the Indenture. .3. Town Action. The Mayor of the Town and the Town Clerk are hereby authorized and directed to execute and deliver such documents and to take all action necessary or reasonably required by the terms of the Project Agreement to carry out, give effect to and consummate the transactions contemplated hereby and thereby, including the execution and delivery of the Project Agreement in substantially the form presented at this meeting, with such variations or revisions thereto deemed necessary by the Mayor. Execution of the Project Agreement by the Mayor shall be deemed to be final approval by the Town of the issuance of the Series 1998 Bonds and all the provisions contained in the Project Agreement. 4. No Indebtedness of the Town. No provision of this Resolution or of the Project Agreement, the Indenture, the Series 1998 Bonds or any other instrument executed in connection therewith, shall be construed as creating an obligation on the part of the Town to pay the principal of, premium, if any, or interest on the Series 1998 Bonds, nor as creating an indebtedness or financial obligation on the part of the Town within the provisions or limitations of any statutory or constitutional provision of the laws of the State of Colorado or any provision of the home rule charter of the Town. 5. Title to Project. The Town hereby determines that it will accept title to the Project, including any additions thereto, when all the Series 1998 Bonds are fully paid and discharged. 6. Severability. If any provision of this Resolution should be held invalid, the invalidity of such provision shall not affect any of the other provisions of this Resolution, the intention being that the various provisions hereof are severable. - 7. Other Actions. The appropriate officers of the Town are hereby authorized to execute and deliver for and on behalf of the Town, any or all additional certificates, documents and other papers and to perform all other acts they may deem necessary or 3 \\\DE - 68464/1 - 0039619 01 appropriate in order to implement and carry out the matters authorized in this Resolution and in any resolution of the Corporation. 8. Effective Date; Repealer. This Resolution shall take effect immediately upon its passage, and all acts, orders, resolutions, or parts thereof, taken by the Town in conflict with this Resolution are hereby repealed or modified to the extent of such conflict. ADOPTED AND APPROVED this 30th day of June, 1998. ~~tj0Fq S own Clerk TOWN OF AVON, COLORADO By: 0a_'_Z ayor 4 \\\DE - 68464/1 - 0038618.01 The motion to adopt the foregoing Resolution was duly seconded by Council Member Yoder , put to a vote and carried upon the following vote: Those voting YES: Jim Benson, Buz Reynolds, Jr., Buz Reynolds, Sr., Judy Yoder9 Those voting NO: Those absent: Richard Carnes, Bob McIlveen Thereupon the Mayor declared the motion had carried and the Resolution duly and adopted. After consideration of other business to come before the Council, the y-ladjourned. [SEAL] S F A `z Mayor ~Q1.ORA~ 5 \ME - 6846411 - 0038618 01 STATE OF COLORADO ) COUNTY OF EAGLE ) ss. TOWN OF AVON ) I, Kris wash , the duly appointed, qualified and acting Town Clerk of the Town of Avon, Colorado, do hereby certify that the foregoing pages numbered 1 through 5, inclusive, constitute a true and correct copy of the Record of Proceedings of the Town Council of Avon, Colorado, adopted at a special meeting of the Council held at the regular meeting place thereof in Avon, Colorado, on Tuesday, the 30th day of June, 1998, commencing at the hour of 5:30 p.m., as recorded in the official Record of the Proceedings of the Town kept in my office, insofar as said proceedings relate to the Resolution contained therein; that said proceedings were duly had and taken; that the meeting was duly held; and that the persons were present at said meeting as therein shown. ...i~ ~ 4X+ EAL] I.• WITNESS my hand and seal as of this 1st day of July , 1998. Td*'n Clerk ` Town of Avon, Colorado 6 \\\DE - 6846411 - 0038618 01 CERTIFIED RECORD OF PROCEEDINGS OF THE TOWN COUNCIL APPROVING THE ISSUANCE OF MULTIFAMILY HOUSING PROJECT REVENUE BONDS„ SERIES 1998 BY THE EAGLEBEND DOWD AFFORDABLE HOUSING CORPORATION \\\DE - 6846'4/1- 0038618.01 STATE OF COLORADO ) COUNTY OF EAGLE ) ss. TOWN OF AVON ) The Town Council of the Town of Avon, Colorado, met in special session at the Town Hall in Avon, Colorado, on Tuesday, the 30th day of June," 1998, at the hour of 5:30. P.m. The following members of the Council were present: Jim Benson, Jack Fawcett Buz Reynolds, Jr., Buz Reynolds, Sr., Judy Yoder The following members were absent: Richard Carnes, Bob Mcllveen The following persons were also present: Town Manager Bill Efting; Town Attorney John, Dunn, Public Relations Kristin Kenney-Williams, Assistant Town Manager Larry Brooks, Town Clerk Kris-Nash, Town Engineer Norm Wood, Fire Chief Charles Moore,. Police Chief Gary Thomas, Recreation Director Meryl Jacobs, Special Events Coord. Dana Mauer, Town PIanner'Geor9e Harrison, Town Planner Karen Griffit]A, as well as members of the press and public Thereupon, Council Member Jack Fawcett introduced and moved the adoption of the following Resolution, which was read by title, copies thereof having been made available to the Council and the public prior thereto: 1 \\\DE - 68464/1 - 0038618.01 EAGLEBEND DOWD AFFORDABLE HOUSING-PROJECT PROJECT AGREEMENT THIS PROJECT AGREEMENT (the "Agreement") is made as of July 1, 1998, by and between EAGLEBEND DOWD AFFORDABLE HOUSING CORPORATION, a Colorado nonprofit corporation (the "Corporation") and the TOWN OF AVON, COLORADO (the "Town"). RECITALS: A. The Corporation has been organized under the Colorado- Nonprofit Corporations Act to acquire property in order to provide affordable housing facilities, for the benefit and on behalf of the Town and its inhabitants. B. The, Corporation shall issue its EagleBend Dowd Affordable Housing Corporation Multifamily Housing Project Revenue ~ Bonds, Series 1998 (the "Series, 1998 Bonds") in an aggregate principal amount not to exceed $11,100,000 for the purpose of acquiring and constructing real and personal property to be operated by the Corporation and known as "Kayak Crossing" (the "Project"), located within eight miles of the boundaries of the Town on the property described, in Exhibit A hereto, to provide dwelling accommodations at rentals within the means of individuals or families of low or moderate income, as determined by the Board of Directors of the Corporation from time to time. C. The Series 1998 Bonds shall be issued pursuant to the Trust Indenture dated as of July 1, 1998 (the "Indenture") between the Corporation and U.S. Bank National Association,. as Trustee (the "Trustee"). The Series 1998 Bonds and any Additional Bonds issued under the Indenture are referred to hereinafter as the "Bonds." All capitalized terms used herein, unless otherwise defined, shall have the meanings ascribed thereto in the Indenture. TERMS For good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Town and the Corporation, on behalf of themselves and their respective successors and assigns, agree as follows: Section 1. Project Operation. The Corporation hereby covenants and agrees to operate the Project at standards required to provide decent, safe, and sanitary housing facilities at reasonable rental rates, in a sound and economical manner, as provided in the Indenture. In leasing units of the Project, the Corporation shall give priority to natural persons meeting the requirements of "Qualified Renters" as defined in the Indenture, and may allow a mark-up of not exceeding 20% in rental rates charged to subtenants by master lessees to permit the recovery of \\\DE - 67496/1- 0034439.01 .r actual administrative costs. Nothing herein or in any resolutions of the Town shall be interpreted to require the Town to undertake responsibility for operation of the Project. The Corporation shall indemnify and hold harmless the Town, its officers, agents and employees and members of its Town Council with respect to any liability or damages arising under actions or claims against the Town as a result of the operation of the Project by the Corporation. Section 2. Town Benefit. The Corporation covenants and agrees that all activities of the Corporation shall be undertaken for the benefit of the Town. Upon termination of this Agreement, the Town shall be entitled to acquire title to the Project without cost, as provided in the Indenture. Section 3. Right to Acquire. As further provided in Section 14.02 of the Indenture, the Town is hereby granted the right to obtain, at any time, fee title and exclusive possession of property (including the Project) financed by obligations of the Corporation (including the Bonds) free from liens and encumbrances created by the Corporation related to the Bonds (but subject to other Permitted Encumbrances, as defined in the Indenture), and any . additions to such property, by (1) placing into escrow an amount that will be sufficient to defease such Bonds and other obligations, (2) paying reasonable costs incident to the defeasance, and (3) complying with all other requirements of Article XIV of the Indenture. The Town, at any time before it defeases such obligations, shall not agree or otherwise be obligated to convey any interest in such property to any person (including the United States of America or its agencies or instrumentalities) for any period extending beyond or beginning after the Town defeases such obligations. In addition, the Town shall not agree or otherwise be obligated to convey a fee interest in such property to any person who was a user thereof (or a related person), before the defeasance within 90 days after the Town defeases such obligations. Section 4. Unencumbered Title. If the Town exercises its option under Section 3, the Corporation shall immediately cancel all encumbrances on such property, including all leases and management agreements (subject to certain Permitted Encumbrances as aforesaid). Any lease, management contract, or similar encumbrance on such property will be .considered immediately cancelled if the lessee, management company, or other user vacates such property within a reasonable time, not to exceed 90 days, after the date the Town exercises its rights under Section 3. Section 5. Default Rights. Upon the occurrence of an "Event of Default" as defined in Section 10.01 of the Indenture, the Corporation shall cause the Trustee, within five days of such occurrence, to provide notice to the Town, and the Town shall have the option to cure such Event of Default within 90 days after receipt of such notice. As provided in Section 10.02 of the Indenture, amounts advanced by the Town as a result of the exercise of this option to cure monetary defaults hereunder and reasonable, direct expenses of the Town advanced to cure nonmonetary defaults hereunder shall be deemed to be Indebtedness of the Corporation to the Town. In addition to the foregoing and consistent with Article XIV of the Indenture, if pursuant to Article X of the Indenture, the Trustee declares the principal of any Bonds then 2 XNTE - 67496/1 - 0034439.01 outstanding to be due and payable and any foreclosure proceeding or other action is commenced under the Indenture or the Deeds of Trust, as defined in the Indenture, which could lead to the sale or other disposition of the property pledged thereunder, the Town is hereby granted an exclusive option to purchase all such property (including the Project), for the amount of the outstanding Bonds and other indebtedness of the Corporation and accrued interest to the date of default. The, Town shall have not less than 90 days from the date it is notified by the Trustee of such action in which to both exercise the option and purchase the property. Nothing herein shall be construed to create any obligation of the Town to cure any Event of Default. Section 6. Funds in Indenture. As required under Section 14.02 of the Indenture, in the event the Town exercises its options under Section 3 or 5 hereof, the Town shall receive a credit towards its defeasance or purchase costs in the amount of any fund or account balances held under the Indenture with the exception of (1) the Excess Investment Earnings Fund, as defined in the Indenture, (2) an amount representing Operation and Maintenance Expenses, as defined in the Indenture, required by the Corporation's current operating budget through the date of defeasance or purchase, and (3) any amount needed to pay additional interest on the Bonds or expenses in connection with such defeasance under Section 14.01 of the Indenture. Section 7. lith. Unencumbered fee title (subject to certain Permitted Encumbrances as aforesaid) to the Project and any additions thereto and exclusive possession and use thereof will vest in the Town without demand or further action on its part when all obligations issued under the Indenture (including the Bonds) are discharged. For purposes of this Section 7, such obligations will be discharged when (a) cash is available at the place of payment on the date that the obligations are due (whether at maturity or upon call for redemption) and (b) interest ceases to accrue on the obligations or (c) as otherwise provided in Article XIV of the Indenture. All leases, management contracts and similar encumbrances on the Project shall terminate upon discharge of said obligations. Encumbrances that do not significantly interfere with the enjoyment of such property, such as the Permitted Encumbrances, are not considered encumbrances for purposes of this Section. Section S. Indenture Rights; Approval of Town. The Corporation hereby covenants and agrees that the provisions of the Indenture granting any rights to the Town shall not be amended or modified without the consent of the Town. By execution hereof, the Town hereby consents to the provisions of the Indenture relating to the rights of the Town and confirms its approval of the issuance of the Series 1998 Bonds. The Town also consents to and approves the provisions of the Operating Deficit Agreement dated as of July 1, 1998, among the Corporation, EagleBend Affordable Housing Corporation, and the respective trustees in respect of the bonds issued by such corporations. Section 9. Term. This Agreement shall terminate upon the vesting of title to the Project in the Town as herein provided. Section 10. Burden on Property. This Agreement is a burden upon and.runs with the property described in Exhibit A hereto and is binding upon the Corporation and upon 3 %ADE - 67496/1 - 0034439.01 i all persons or entities with any. right, title or interest to such property or any part thereof. This Agreement may be released therefrom in the same manner as the release of property under the Deeds of Trust executed in connection with the issuance of the Bonds. Section 11. Construction. In the event of any conflict between the terms and provisions of this Agreement and the terms and provisions of the Indenture, the terms and provisions of the Indenture shall govern. IN WITNESS WHEREOF, the undersigned have hereunto set their hand as of the day and year first mentioned above. TOWN OF AVON, COLORADO By C" May EAGLEBEND DOWD AFFORDABLE HOUSING CORPORATION By: President [SEAL] [SEAL] ATTEST: Secretary 4 \\\DE - 67496/1 - 0034439.01 STATE OF COLORADO ) ) ss. CITY AND COUNTY OF DENVER ) The foregoing instrument was acknowledged before me this _ day of July, 1998 by Gerald E. Flynn, as President, on behalf of EAGLEBEND DOWD AFFORDABLE HOUSING CORPORATION, a Colorado nonprofit corporation. WITNESS my hand and official seal: My Commission expires: [SEAL] Notary Public STATE OF COLORADO ) ) ss. COUNTY OF EAGLE ) The foregoing instrument was acknowledged before me this Tl day of July, 1998 by Jack Fawcett, as Mayor, on behalf of the TOWN OF AVON, COLORADO. WITNESS my hand and official seal. My Commission expires: q - -e-1, .9 ~F-' [SEAL] CAtary Public 5 \\\DE - 67496/1 - 0034439.01 EXHIBIT A Description of Kayak Crossing Project Site The following real property and all buildings and improvements, and fixtures or appurtenances, now or hereafter erected thereon: Parcel Tract A: A tract of land in the East half of Section 16, Township 5 South, Range 81 West of the 6th Principal Meridian, County of Eagle, State of Colorado, more fWly described as follows: commencing at the Southeast comer of Section 16; thence North 34 degrees 08 minutes 01 seconds West, 2348.72 feet to the Point of Beginning, said point being on the Easterly line of the Denver and Rio Grande Western Railroad; thence Northwesterly 629.55 feet on the arc of a curve to the left, with a radius of 1495.71 feet and a central angle of 24 degrees 06 minutes 57 seconds (being subtended by a chord that bears North 37 degrees 59 minutes 19 seconds West, a distance of 624.91 feet); thence North 84 degrees 16 minutes 04 seconds East, 321.88 feet; thence South 82 degrees 32 minutes 46 seconds East, 150.39 feet; thence South 47 degrees 39 minutes 16 seconds East, 122.44 feet; thence South 33 degrees 00 minutes 19 seconds East, 242.45 feet; thence South 24 degrees 53 minutes 35 seconds East, 163.93 feet; thence South 68 degrees 33 minutes 19 seconds West, 145.00 feet; thence South 40 degrees 42 minutes 45 seconds West, 32.20 feet; thence North 51 degrees 05 minutes 45 seconds West, 240.00 feet; thence South 08 degrees 54 minutes 15 seconds West, 65.00 feet; thence South 16 degrees 05 minutes 45 seconds East, 65.00 feet; thence South 67 degrees 24 minutes 15 seconds West, 45.00 feet to the Point of Beginning, County of Eagle, State of Colorado. Parcel 1, Access Parcels, Cliffside Village Condominiums, according to the Plat recorded August 26, 1992 in Book 587 at Page 178, County of Eagle, State of Colorado. Parcel Parcel 2, Access Parcels, Cliffside Village Condominiums, according to the Plat recorded August 26, 1992 in Book 587 at Page 778, County of Eagle, State of Colorado. A-1 \\\DE - 67496/1 - 0034439 01 TOWN OF AVON, COLORADO GENERAL AND NO-LITIGATION CERTIFICATE This General and No-Litigation Certificate is delivered by the Town of Avon, Colorado (the "Town") in connection with the issuance by EagleBend Dowd Affordable Housing Corporation (the "Corporation") of its Multifamily Housing Project Revenue Bonds, Series 1998A, Series 1998B, and Series 1998C, in an aggregate principal amount not to exceed $11,100,000 (collectively, the "Bonds"), pursuant to the terms of a Trust Indenture dated as of July 1, 1998 (the "Indenture") between the Corporation and U.S. Bank National Association, as Trustee (the "Trustee"). The proceeds of the Bonds will be used to finance the costs of a 50-unit apartment project known as "Kayak Crossing" and related facilities (the "Project"). All initially-capitalized terms used in this Certificate and not otherwise defined herein shall have the meanings given such terms in the Indenture. WE, THE UNDERSIGNED OFFICIALS OF THE TOWN, HEREBY CERTIFY THAT: 1. The Town is a political subdivision of the State of Colorado with full power and authority to execute and deliver the Project Agreement, to perform its obligations thereunder and to carry out the transactions contemplated thereby to be carried out by it and has taken all proceedings and obtained all approvals required in connection therewith by applicable law. 2. Attached as Exhibit A hereto is a true, correct and complete copy of a Resolution finally approved by the Town Council on June 30, 1998, approving the Project Agreement between the Town and the Corporation and the issuance of the Bonds by the Corporation. Said Resolution was duly adopted by a majority of the members of the Town Council of the Town at a duly noticed special public meeting of the Town Council, the convening of such meeting and the adoption of such Resolution being in accordance with all requirements of law, the Home Rule Charter of the Town and procedural rules of the Town Council. Such Resolution has not been repealed, amended or modified since its adoption and is in full force and effect on the date hereof. 3. The Town has authorized, by all necessary official action, the execution, delivery, and due performance of the Project Agreement and any and all such other agreements and documents as may be required to be executed, delivered and received by the Town in order to carry out, give effect to and consummate the transactions contemplated by the Project Agreement. The Project Agreement was duly executed and delivered on behalf of the Town by Jack Fawcett, as Mayor and attested on behalf of the Town by Kristen Nash, as Clerk; the signatures of said officers thereon are their respective genuine signatures; and the seal thereunto affixed is the official seal of the Town. \\\DE - 68464/1- 0040316.01 4. To the best of the knowledge of the undersigned officers, there is no action, suit, proceeding or investigation at law or in equity, before or by any court or any federal, state or local governmental authority or agency, pending or, to the knowledge of the Town, threatened against the Town (a) wherein an unfavorable decision, finding or ruling would contest or adversely affect the Corporation, the Project, the enforceability of or the authority or ability of the Town to perform its obligations under the Project Agreement or the existence or powers of the Town or its governing body or officials, or (b) to contest, restrain or enjoin the issuance or sale of the Bonds, the adoption of the Town Resolution approving the Bonds, the execution and delivery of the Project Agreement or compliance by the Town with the provisions thereof. 5. The Corporation has no taxing power. The Corporation does.not receive any support from any Town fund, and the Town expects the Corporation to continue operating as a business on a self-supporting basis and without reliance on grants or subsidies from the Town, the State of Colorado or other local governments, whether in the form of cash, services, construction, repair or maintenance of Corporation assets, or any other thing of value. IN WITNESS WHEREOF, we hereunto set our respective signatures as such officials of the Town and have affixed the seal of the Town as of the day of July, 1998. [SEAL] TOWN OF AVON, COLORADO By: Ma or \\\DE - 6846411 - 0040315.01 2 EAGLEBEND DOWD AFFORDABLE HOUSING PROJECT PROJECT AGREEMENT THIS PROJECT AGREEMENT (the "Agreement") is made as Of A Jift 1, 1998, by and between EAGLEBEND DOWD AFFORDABLE HOUSING CORPORATION, a Colorado nonprofit corporation (the "Corporation") and the TOWN OF AVON, COLORADO (the "Town"). RECITALS: A. The Corporation has been organized under the Colorado Nonprofit Corporations Act to acquire property in order to provide affordable housing facilities, for the benefit and on behalf of the Town and its inhabitants. B. The. Corporation shall issue its EagleBend Dowd Affordable Housing Corporation Multifamily Housing Project Revenue Bonds, Series 1998 (the "Series 1998 Bonds") in an aggregate principal amount not to exceed ^ $j11.100;0001 for the purpose of acquiring and constructing real and personal property to be operated by the Corporation - and known as "Kayak Crossing" (the "Project"), located within eight miles of the boundaries of the Town -on the property described in, Exhibit A hereto, to provide dwelling accommodations at rentals within the means of individuals or families of low or moderate income, as determined by the Board of Directors of the Corporation from time to time. C. The Series 1998 Bonds shall be issued pursuant to the Trust Indenture dated as of ^ JAIX 1, 1998 (the "Indenture") between the Corporation and U.S. Bank National Association, as Trustee (the "Trustee"). The Series 1998 Bonds and any Additional Bonds issued under the Indenture are referred to hereinafter as the "Bonds." All capitalized terms used herein, unless otherwise defined, shall have the meanings ascribed thereto in the Indenture. TERMS For good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Town and the Corporation, on behalf of themselves and their respective successors and assigns, agree as follows: Section 1. Project O erg anon. The Corporation hereby covenants and agrees to operate the Project at standards required to provide decent, safe, and sanitary housing facilities at reasonable rental rates, in a sound and economical manner, as provided in the Indenture. In leasing units of the Project, the Corporation shall give priority to natural persons meeting the requirements of "Qualified Renters" as defined in the Indenture, and may allow a mark-up of not exceeding 20% in rental rates charged to subtenants by master lessees to permit the recovery of \\\DE - 67496/1 - 0034439 04 B 1 actual administrative costs. Nothing herein or in any resolutions of the Town shall be interpreted to require the Town to undertake responsibility for operation of the Project. The Corporation shall indemnify and hold harmless the Town, its officers, agents and employees and members of its Town Council with respect to any liability or damages arising under actions or claims against the Town as a result of the operation of the Project by the Corporation. Section 2. Town Benefit. The Corporation covenants and agrees that all activities of the Corporation shall be undertaken for the benefit of the Town. Upon termination of this Agreement, the Town shall be entitled to acquire title to the Project without cost, as provided in the Indenture. Section 3. Right to Acquire. As further provided in Section 14.02 of the Indenture, the Town is hereby granted the right to obtain, at any time, fee title and exclusive possession of property (including the Project) financed by obligations of the Corporation (including the Bonds) free from liens and encumbrances created by the Corporation related to the Bonds (but subject to other Permitted Encumbrances, as defined in the Indenture), and any additions to such property, by (1) placing into escrow an amount that will be sufficient to defease such Bonds and other obligations, (2) paying reasonable costs incident to the defeasance, and (3) complying with all other requirements of Article XIV of the Indenture. The Town, at any time before it defeases such obligations, shall not agree or otherwise be obligated to convey any interest in such property to any person (including the United States of America or its agencies or instrumentalities) for any period extending beyond or beginning after the Town defeases such obligations. In addition, the Town shall not agree or otherwise be obligated to convey a fee interest in such property to any person who was a user thereof (or a related person), before the defeasance within 90 days after the Town defeases such obligations. Section 4. Unencumbered Title. If the Town exercises its option under Section 3, the Corporation shall immediately cancel all encumbrances on such property; including all leases and management agreements (subject to certain Permitted Encumbrances as aforesaid). Any lease, management contract, or similar encumbrance on such property will be considered immediately cancelled if the lessee, management company, or other user vacates such property within a reasonable time, not to exceed 90 days, after the date the Town exercises its rights under Section 3. Section 5. Default Rights . Upon the occurrence of an "Event of Default" as defined in Section 10.01 of the Indenture, the Corporation shall cause the Trustee, within five days of such occurrence, to provide notice to the Town, and the Town shall have the option to cure such Event of Default within 90 days after receipt of such notice. As provided in Section 10.02 of the Indenture, amounts advanced by the Town as a result of the exercise of this option to cure monetary defaults hereunder and reasonable, direct expenses of the Town advanced to cure nonmonetary defaults hereunder shall be deemed to be Indebtedness of the Corporation to the Town. In addition to the foregoing and consistent with Article XIV of the Indenture, if pursuant to Article X of the Indenture, the Trustee declares the principal of any Bonds then %DE - 6749611 - 0034439 04 2 r, outstanding to be due and payable and any foreclosure proceeding or other action is commenced under the Indenture or the Deeds of Trust, as defined in the Indenture, which could lead to the sale or other disposition of the property pledged thereunder, the Town is hereby granted an exclusive option to purchase all such property (including the Project), for the amount of the outstanding Bonds and other indebtedness of the Corporation and accrued interest to the date of default. The Town shall have not less than 90 days from the date it is notified by the Trustee of such action in which to both exercise the option and purchase the property. Nothing herein shall be construed to create any obligation of the Town to cure any Event of Default. Section 6. Funds in Indenture. As required under Section 14.02 of the Indenture, in the event the Town exercises its options under Section 3 or 5 hereof, the Town shall receive a credit towards its defeasance or purchase costs in the amount of any fund or account balances held under the Indenture with the exception of (1) the Excess Investment Earnings Fund, as defined in the Indenture, (2) an amount representing Operation and Maintenance Expenses, as defined in the Indenture, required by the Corporation's current operating budget through the date of defeasance or purchase, and (3) any amount needed to pay additional interest on the Bonds or expenses in connection with such defeasance under Section 14.01 of the Indenture. Section 7. Tag. Unencumbered fee title (subject to certain Permitted Encumbrances as aforesaid) to the Project and any additions thereto and exclusive possession and use thereof will vest in the Town without demand or further action on its part when all obligations issued under the Indenture (including the Bonds) are discharged. For purposes of this Section 7, such obligations will be discharged when (a) cash is available at the place of payment on the date that the obligations are due (whether at maturity or upon call for redemption) and (b) interest ceases to accrue on the obligations or (c) as otherwise provided in Article XIV of the Indenture. All leases, management contracts and similar encumbrances on the Project shall terminate upon discharge of said obligations. Encumbrances that do not significantly interfere with the enjoyment of such property, such as the Permitted Encumbrances, are not considered encumbrances for purposes of this Section. Section 8. Indenture Rights; Approval of Town. The Corporation hereby covenants . and agrees that the provisions of the Indenture granting any rights to. the Town shall not be amended or modified without the consent of the Town. By execution hereof, the Town hereby consents to the provisions of the Indenture relating to the rights of the Town and confirms its approval of the issuance of the Series 1998 Bonds. The Town also consents to and approves the provisions of the Operating Deficit Agreement dated as of ^ ,may 1, 1998, among the Corporation, EagleBend Affordable Housing Corporation, and the respective trustees in respect of the bonds issued by such corporations. Section 9. Term. This Agreement shall terminate upon the vesting of title to the Project in the Town as herein provided. Section 10. Burden on Property. This Agreement is a burden upon and runs with the property described in Exhibit A hereto and is binding upon the Corporation and upon 3 \\\DE - 67496/1 -0034439 04 all persons or entities with any right, title or interest to such property or any part thereof. This Agreement may be released therefrom in the same mariner as the release of property under the Deeds of Trust executed in connection with the issuance of the Bonds. Section 11. Construction. In the event of any conflict between the terms and provisions of this Agreement and the terms and provisions of the Indenture, the terms and provisions of the Indenture shall govern. IN WITNESS WHEREOF, the undersigned have hereunto set their hand as of the day and year first mentioned above. TOWN OF AVON, COLORADO EAGLEBEND DOWD AFFORDABLE HOUSING CORPORATION By By: Mayo President [SEAL] [SEAL] ATTEST: Town Clerk ATTEST: Secretary 4 \ADE - 67496/1 - 0034439 04 STATE OF COLORADO ) ) ss. CITY AND COUNTY OF DENVER ) The foregoing instrument was acknowledged before me this - day of ^ 1998 by Gerald E. Flynn, as President, on behalf of EAGLEBEND DOWD AFFORDABLE HOUSING CORPORATION, a Colorado nonprofit corporation. WITNESS my hand and official seal. My Commission expires: [SEAL] Notary Public STATE OF COLORADO ) ) ss. COUNTY OF EAGLE ) The foregoing instrument was acknowledged before me this -Z day of ^ July, 1998 by Jack Fawcett, as Mayor, on behalf of the TOWN OF AVON, COLORADO. WITNESS my hand and official seal. My Commission expires: Ztc ' R& JULE- A. KESSi 4141 J \\\DE .6749611 .0034439 04 (L-Nit'-ar'y`-;ublic 5 1 EXHIBIT A Descriution of Kayak Crossing Project Site The following real property and all buildings and improvements, and fixtures or appurtenances, now or hereafter erected thereon: Parcel l Tract A: A tract of land in the East half of Section 16, Township 5 South, Range 81 West of the 6th Principal Meridian, County of Eagle, State of Colorado, more fully described as follows: commencing at the'Southeast corner of Section 16; thence North 34 degrees 08 minutes 01 seconds West, 2348.72 feet to the Point of Beginning, said point being on the Easterly line of the Denver and Rio Grande Western Railroad; thence Northwesterly 629.55 feet on the arc of a curve to the left, with a radius of 1495.71 feet and a central angle of 24 degrees 06 minutes 57 seconds (being subtended by a chord that bears North 37 degrees 59 minutes 19 seconds West, a distance of 624.91 feet); thence North 84 degrees 16 minutes 04 seconds East, 321.88 feet; thence South 82 degrees 32 minutes 46 seconds East, 150.39 feet; thence South 47 degrees 39 minutes 16 seconds East, 122.44 feet; thence South 33 degrees 00 minutes 19 seconds East, 242.45 feet; thence South 24 degrees 53 minutes 35 seconds East, 163.93 feet; thence South 68 degrees 33 minutes 19 seconds West, 145.00 feet; thence South 40 degrees 42 minutes 45 seconds West, 32.20 feet; thence North 51 degrees 05 minutes 45 seconds West, 240.00 feet; thence South 08 degrees 54 minutes 15 seconds West, 65.00 feet; thence South 16 degrees 05 minutes 45 seconds East, 65.00 feet; thence South 67 degrees 24 minutes 15 seconds West, 45.00 feet to the Point of Beginning, County of Eagle, State of Colorado. Parcel 1, Access Parcels, Cliffside Village Condominiums, according to the Plat recorded August 26, 1992 in Book 587 at Page 778, County of Eagle, State of Colorado. Parcel 2, Access Parcels, Cliff side Village Condominiums, according to the Plat recorded August 26, 1992 in Book 587 at Page 778, County of Eagle, State of Colorado. \\\DE - 67496/1 - 0034439 04 A-1 OPERATING DEFICIT AGREEMENT DRAFT: 5/12/98 OPERATING DEFICIT AGREEMENT dated as of June 1, 1998 (as amended, supplemented or modified from time to time, this "Agreement"), among EAGLEBEND AFFORDABLE HOUSING CORPORATION (the "EagleBend Corporation"), EAGLEBEND DOWD AFFORDABLE HOUSING CORPORATION (the "EagleBend Dowd Corporation"), U.S. BANK NATIONAL ASSOCIATION, as trustee (the "EagleBend Trustee") under the EagleBend Corporation's Trust Indenture dated as of November 1, 1997 (the "EagleBend Indenture"), and U.S. BANK NATIONAL ASSOCIATION, as. trustee (the "EagleBend Dowd Trustee") under the EagleBend Dowd Corporation's Trust Indenture dated as of June 1, 1998 (the "EagleBend Dowd Indenture"). BACKGROUND A. The EagleBend Corporation and the EagleBend Dowd Corporation (together, the "Corporations") have been organized under the nonprofit corporation laws of the State of Colorado for the benefit of the Town of Avon, Colorado (the "Town") and the inhabitants thereof to provide decent, safe and sanitary housing at affordable rates. B. The EagleBend Dowd Corporation proposes to undertake the acquisition, construction and operation of a 52-unit affordable housing project (the "EagleBend Dowd Project") known as "Kayak Crossing," and is financing the costs of such Project by the issuance of its Multifamily Housing Project Revenue Bonds, Series 1998 (the "Bonds") in the aggregate principal amount of $ C. The Bonds are issued under and secured by the EagleBend Dowd Indenture, and the EagleBend Dowd Corporation has requested that the EagleBend Corporation enter into this Agreement in order to further secure the Bonds. The Bonds and this Agreement have been approved by the Town and are subject to the rights of the Town under the Project Agreement dated as of November 1, 1997, between the Town and the EagleBend Corporation, and under the Project Agreement dated as of June 1, 1998, between the Town and the EagleBend Dowd Corporation. AGREEMENT For good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the EagleBend Corporation, the EagleBend Dowd Corporation, the EagleBend Trustee and the EagleBend Dowd Trustee, on behalf of themselves and their respective successors and assigns, agree as follows: \\\DE - 67496/1- 0036446.01 Section 1. Deposits to Operating Deficit Escrow Account. (a) In furtherance of its corporate purposes and in order to further secure the Bonds and encourage the provision of affordable housing facilities in the vicinity of the Town, the. EagleBend Corporation hereby agrees, and directs the EagleBend Trustee pursuant to Section 4.08(b) of the EagleBend Indenture, to transfer (i) upon the issuance of the Bonds, the amount, of $ , and (ii) from time to time all other available balances in the Surplus . Account (the "EagleBend Surplus Account") established under the EagleBend Indenture to the EagleBend Dowd Trustee for deposit in the Operating Deficit Escrow Account (the "Operating Deficit Escrow Account") established under the EagleBend Dowd Indenture, subject- to the further provisions of this Agreement and the conditions, limitations and restrictions on such transfers imposed by the EagleBend Indenture. The parties hereto agree that the obligation of the EagleBend Corporation and the EagleBend Trustee to transfer such amounts shall. not be considered as "Indebtedness" within the meaning of the EagleBend Indenture. (b) So long as no Event of Default under the EagleBend Indenture has occurred and is continuing, the EagleBend Trustee shall continue to transfer balances in the EagleBend Surplus Account as provided by Section 1(a) until either (i) at least 50 of the units in the EagleBend Dowd Project have been fully leased at rents at-'least equal to those assumed in the projections contained in the Private Placement Memorandum dated 1998, relating to the Bonds as determined by a certificate of the EagleBend Dowd Corporation Representative, at which time any balance in the Operating Deficit Escrow Account in excess of $300,000 and all income from investment thereof from time to time shall be released pursuant to Section 3 hereof; or (ii) the "Debt Service Coverage Ratio"' as defined in the EagleBend Dowd Indenture for the EagleBend Dowd Corporation's Series 1998A Bonds is at least 1.25 to 1 for a full 12-month period as determined by audited financial statements prepared under Section 5.20 of the EagleBend Dowd Indenture, at which time the entire amount on deposit in the Operating Deficit Escrow Account shall be released pursuant to Section 3 hereof and this Agreement shall terminate. (c) In the event that amounts in the Operating Deficit Escrow Account in excess of $300,000 have been released pursuant to Section 1(b)(i) hereof and the EagleBend Dowd Trustee thereafter uses any funds on deposit in such Account as contemplated by Section 2 hereof, and so long as no Event of Default under the EagleBend Indenture has occurred and is continuing, the EagleBend Trustee shall again transfer any available balances in the EagleBend Surplus Account to the EagleBend Dowd Trustee for deposit in the Operating Deficit Escrow Account until the balance in such Account equals $300,000. The EagleBend Dowd Trustee shall keep the other parties hereto informed from time to time as to balances in, transfers to and uses, of funds on deposit in the Operating Deficit Escrow Account. (d) For purposes of this Section 1, any moneys on deposit in the EagleBend Surplus Fund representing prepaid rents and designated as such by the EagleBend Corporation Representative shall not be considered as "available" for transfer under this Agreement. 2 %DE - 68464/1 - 0035446 03 Section 2. Use of Funds in the Operating Deficit Escrow Account. The parties hereto agree that funds on deposit in the Operating Deficit Escrow Account shall be held by the EagleBend Dowd Trustee in escrow for the benefit of the parties hereto and shall be used from time to time, without notice or demand, subject to the requirements of this Agreement and to the provisions of the EagleBend Dowd Indenture. As provided in Sections 4.03, 4.04, 4.05, 4.12, and 5.20, of the EagleBend Dowd Indenture, such use may include (a) [payment of the Cost of Construction in respect of the EagleBend Dowd Project in excess of funds available for -such purpose from the proceeds of the Bonds, (b)] payment of principal of and interest on the' Bonds, (c) make up of deficiencies in the Debt Service Reserve Fund established under the EagleBend Dowd Indenture, and (d) payment of Operating and Maintenance Expenses of the EagleBend Dowd Project. Section 3. Repayment of Funds. Upon the satisfaction of the conditions set forth in Section 1(b) hereof, the EagleBend Dowd Trustee shall immediately transfer all balances in the Operating Deficit Escrow Account in excess of the amount required at the time in question to the EagleBend Trustee for deposit in the EagleBend Surplus Account. To the extent that funds are available from time to time in the Surplus Account established under the EagleBend Dowd Indenture, the EagleBend Dowd Corporation agrees to consider using such funds to reimburse the EagleBend Corporation for amounts previously withdrawn from the Operating Deficit Escrow Account and used for purposes contemplated by Section 2 hereof. MISCELLANEOUS PROVISIONS Section 4. No Personal Recourse. No recourse shall be had for any claim based on this Agreement against any member, officer, agent or employee, past, present or future, of the EagleBend Corporation, the EagleBend Dowd Corporation, or of any successor body, as such, either directly or through either such Corporation or any such successor body, under any constitutional provision,, statute or rule of law or by the enforcement of any assessment or penalty or by any legal or equitable proceeding or otherwise. Section 5. No Rights Conferred on Others. Nothing herein contained shall confer any right upon any person other than the parties hereto, the owners of the Bonds and the Town. Section 6. Amendments. This Agreement may not be amended except by an instrument in writing signed by each of the : Corporations and consented to by each of the Trustees. If the Corporations propose to amend this Agreement, the Trustees shall have the right to consent thereto; provided, that if any such proposal to which the Trustees are asked to consent would amend this Agreement in such a way as would materially adversely affect the interests of owners of either the Bonds or the bonds issued under the EagleBend Indenture, the Trustees shall notify such bondholders of the proposed amendment and shall consent thereto only with the consent of the Owners of at least a "Majority Interest," as defined in the respective Indentures. 3 \\\DE - 68464/1 - 0035446 03 Section 7. Illegal, etc. Provisions Disregarded. In case any provision in this Agreement shall for any reason be held invalid, illegal or unenforceable in any respect, this Agreement shall be,construed as if such provision had never been contained herein. Section 8. Successors and Assigns. All the covenants, promises and agreements in this Agreement contained by or on behalf of either of the Corporations, or by or on behalf of either of the Trustees, shall bind and inure to the benefit of their respective successors and assigns, whether so expressed, or not; provided that no interest hereon or rights hereunder shall be transferred to or created by a sale of or foreclosure upon the Project. Section 9. Headings for Convenience Only. The descriptive headings in this Agreement are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof. Section 10. Counterparts. This Agreement may be executed in any number of separate counterparts, each of which when so executed and delivered shall be an original; but such counterparts shall together constitute but one and the same instrument. Section 11. Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Colorado. Section 12. Construction. In the event of any conflict between the terms and provisions of this Agreement, the EagleBend Indenture and the EagleBend Dowd Indenture, the terms and provisions of the EagleBend Indenture shall govern. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized representatives as of the day and year first mentioned above. EAGLEBEND AFFORDABLE HOUSING CORPORATION By: President [SEAL] Attest: Secretary U.S. BANK NATIONAL ASSOCIATION, as EagleBend Trustee By Authorized Officer EAGLEBEND_ DOWD AFFORDABLE HOUSING CORPORATION By: [SEAL] President Attest: Secretary U.S. BANK NATIONAL ASSOCIATION, as EagleBend Dowd Trustee By: Authorized Officer 4 VIDE - 68464/1 - 0035446 03 F-,- DRAFT: 5/12/98 OPERATING DEFICIT AGREEMENT OPERATING DEFICIT AGREEMENT dated as of June 1, 1998 (as amended, supplemented or modified from time to time, this "Agreement"), among EAGLEBEND AFFORDABLE HOUSING CORPORATION (the "EagleBend Corporation"), EAGLEBEND DOWD AFFORDABLE HOUSING CORPORATION (the "EagleBend Dowd Corporation"), U.S. BANK NATIONAL ASSOCIATION, as trustee (the "EagleBend Trustee") under the EagleBend Corporation's Trust Indenture dated as of November 1, 1997 (the "EagleBend Indenture"), and U.S. BANK NATIONAL ASSOCIATION, as trustee (the "EagleBend Dowd Trustee") under the EagleBend Dowd Corporation's Trust Indenture dated as of June 1, 1998 (the "EagleBend Dowd Indenture"). A. The EagleBend Corporation and the EagleBend Dowd Corporation (together, the "Corporations") have been organized under the nonprofit corporation laws of the State of Colorado for the benefit of the Town of Avon, Colorado (the "Town") and the inhabitants thereof to provide decent, safe and sanitary housing at affordable rates. B. The EagleBend Dowd Corporation proposes to undertake the acquisition, construction and operation of a 52-unit affordable housing project (the "EagleBend Dowd Project") known as "Kayak Crossing," and is financing the costs of such Project by the issuance of its Multifamily Housing Project Revenue Bonds, Series 1998 (the "Bonds") in the aggregate principal amount of $ C. The Bonds, are issued under and secured by the EagleBend Dowd Indenture, and the EagleBend Dowd Corporation has requested that the EagleBend Corporation enter into this Agreement in order to further secure the Bonds. The Bonds and this Agreement have been approved by the Town and are subject to the rights of the Town under the Project Agreement dated as of November 1, 1997, between the Town and the EagleBend Corporation, and under the Project Agreement dated as of June 1, 1998, between the Town and the EagleBend Dowd Corporation. AGREEMENT For good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the EagleBend Corporation, the EagleBend Dowd Corporation, the EagleBend Trustee and the EagleBend Dowd Trustee, on behalf of themselves and their respective successors and assigns, agree as follows: \\\DE - 67496/1 - 0035446.01 Section 1. Deposits to Operating Deficit Escrow Account. (a) In furtherance of its corporate purposes and in order to further secure the Bonds and encourage the provision of affordable housing facilities in the vicinity of the Town, the EagleBend Corporation hereby agrees, and directs the EagleBend Trustee pursuant to Section 4.08(b) of the EagleBend Indenture, to transfer (i) upon the issuance of the Bonds, the amount of $ , and (ii) from time to time all other available balances in the Surplus Account (the "EagleBend Surplus Account") established under the EagleBend Indenture to the EagleBend Dowd Trustee for deposit in the Operating Deficit Escrow Account (the "Operating Deficit Escrow Account") established under the EagleBend Dowd Indenture, subject to the further provisions of this Agreement and the conditions, limitations and restrictions on such transfers imposed by the EagleBend Indenture. The parties hereto agree that the obligation of the EagleBend Corporation and the EagleBend Trustee to transfer such amounts shall not be considered as "Indebtedness" within the meaning of the EagleBend Indenture. (b) So long as no Event of Default under the EagleBend Indenture has occurred and is continuing, the EagleBend Trustee shall continue to transfer balances in the EagleBend Surplus Account as provided by Section 1(a) until either (i) at least 50 of the units in the EagleBend Dowd Project ^ have been fully leased at rents at least equal to those assumed in the projections contained in the Private Placement Memorandum dated 1998, relating to the Bonds as determined, by a certificate of the EagleBend Dowd ' Corporation Representative, at which time any balance in the Operating Deficit Escrow Account in excess of $300,000 and all income from investment thereof from time to time shall be released pursuant to Section 3 hereof; or (ii) the "Debt Service Coverage Ratio" as defined in the EagleBend Dowd Indenture for the EagleBend Dowd Corporation's Series 1998A Bonds is at least ^ 25 to 1 for a full 12-month period as determined by audited financial statements prepared under Section 5.20 of the EagleBend Dowd Indenture, at which time the entire amount on deposit in the Operating Deficit Escrow Account shall be released pursuant to Section 3 hereof and this Agreement shall terminate. (c) In the event that amounts in the Operating Deficit Escrow Account in excess of $300,000 have been released pursuant to Section 1(b)(i) hereof and the EagleBend Dowd Trustee thereafter uses any funds on deposit in such Account as contemplated by Section 2 hereof, and so long as no Event of Default under the EagleBend Indenture has occurred and is continuing, the EagleBend Trustee shall again transfer any available balances in the EagleBend Surplus Account to the EagleBend Dowd Trustee for deposit in the Operating Deficit Escrow Account until the balance in such Account equals $300,000. The EagleBend Dowd Trustee shall keep the other parties hereto informed from time to time as to balances in, transfers to and uses of funds on deposit in the Operating Deficit Escrow Account. (d) For purposes of this Section 1, any moneys on deposit in the EagleBend Surplus Fund representing prepaid rents and designated as, such by the EagleBend Corporation Representative shall not be considered as "available" for transfer under this Agreement. 2 \\\DE - 6749611 - 0035446 01 Section 2. Use of Funds in the Operating Deficit Escrow Account. The parties hereto .agree that funds on deposit in the Operating Deficit Escrow Account shall be held by the EagleBend Dowd Trustee in escrow for the benefit of the parties hereto and shall be used from time to time, without notice or demand, subject to the requirements of this Agreement and to the provisions of the EagleBend Dowd Indenture. As provided in Sections 4.03, 4.04, 4.05, 4.12, and 5.20 of the EagleBend Dowd Indenture, such use may include (a) [payment of the Cost of Construction in respect of the EagleBend Dowd Project in excess of funds available for such purpose from the proceeds of the Bonds, (b)] payment of principal of and interest on the Bonds, (c) make tip of deficiencies in the Debt Service Reserve Fund established under the EagleBend Dowd Indenture, and (d) payment of Operating and Maintenance Expenses of the EagleBend Dowd Project. Section 3. Repayment of Funds. Upon the satisfaction of the conditions set forth in Section 1(b) hereof, the EagleBend Dowd Trustee shall immediately transfer all balances in the Operating Deficit Escrow Account in excess of the amount required at the time in question to the EagleBend Trustee for deposit in the EagleBend Surplus Account. To the extent that funds are available from time to time in the Surplus Account established under the EagleBend Dowd Indenture, the EagleBend Dowd Corporation agrees to consider using such funds to reimburse the EagleBend Corporation for amounts previously withdrawn from the Operating Deficit Escrow Account and used for purposes contemplated by Section 2 hereof. Section 4. No Personal Recourse. No recourse shall be had for any claim based on this Agreement against any member, officer, agent or employee, past, present or future, of the EagleBend Corporation, the EagleBend Dowd Corporation, or of any successor body, as such, either directly or through either such Corporation or any such successor body, under any constitutional provision, statute or rule of law or by the enforcement of any assessment or penalty or by any legal or equitable proceeding or otherwise. Section 5. ' No Rights Conferred on Others. Nothing herein contained shall confer any right upon any person other than the parties hereto, the owners of the Bonds and the Town. Section 6. Amendments. This Agreement may not be amended except by an instrument in writing signed by each of the Corporations and consented to by each of the Trustees. If the Corporations propose to amend this Agreement, the Trustees shall have the right to consent thereto; provided, that if any such proposal to which the Trustees are asked to consent would amend this Agreement in such a way as would materially adversely affect the interests of owners of either the Bonds or the'bonds issued under the EagleBend Indenture, the Trustees shall notify such bondholders of the proposed amendment and shall consent thereto only with the consent of the Owners of at least a "Majority Interest," as defined in the respective Indentures. 3 \\\DE - 67496/1 - 0035446 01 Section 7. Illegal, etc. Provisions Disregarded. In case any provision in this Agreement shall for any reason be held invalid, illegal or unenforceable in any respect, this Agreement shall be construed as if such provision had never been contained herein. Section 8. Successors and Assigns. All the covenants, promises and agreements in this Agreement contained by or on behalf of either of the Corporations, or by or on behalf of either of the Trustees, shall bind and inure to the benefit of their respective successors and assigns, whether so expressed or not; provided that no interest hereon or rights hereunder shall be transferred to or created by a sale of or foreclosure upon the Project. Section 9. Headings for Convenience Only. The descriptive headings in this Agreement are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof. Section 10. Counterparts. This Agreement may be executed in any number of separate counterparts, each of which when so executed and delivered shall be an original; but such counterparts shall together constitute but one and the same instrument. Section 11. Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Colorado. Section 12. Construction. In the event of any conflict between the terms and provisions of this Agreement, the EagleBend Indenture and the EagleBend Dowd Indenture, the terms and provisions of the EagleBend Indenture shall govern. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized representatives as of the day and year first mentioned above. EAGLEBEND AFFORDABLE HOUSING CORPORATION By: President [SEAL] Attest: Secretary U.S. BANK NATIONAL ASSOCIATION, as EagleBend Trustee By Authorized Officer EAGLEBEND DOWD. AFFORDABLE HOUSING CORPORATION By: President [SEAL] Attest: Secretary U.S. BANK NATIONAL ASSOCIATION, as EagleBend Dowd Trustee By: Authorized Officer 4 \\\DE - 6749611 - 0035446.01