03-01-2011 BRAHC Bond Refinance March 2011GENERAL AND NO- LITIGATION CERTIFICATE
TOWN OF AVON, COLORADO
This General and No- Litigation Certificate is delivered by the Town of Avon, Colorado
(the "Town") in connection with the issuance by Buffalo Ridge Affordable Housing Corporation
(the "Corporation ") of subordinate debt relating to the Project as defined below, part of which
was originally financed with the proceeds of the Corporation's Multifamily Housing Project
Revenue Bonds (GNMA Mortgage - Backed Securities Program — Buffalo Ridge I Apartments
Project), Series 2002, in an aggregate principal amount of $10,315,000 (the "Bonds "), pursuant
to the terms of a Trust Indenture dated as of May 1, 2002 (the "Indenture ") between the
Corporation and Wells Fargo Bank, N.A., formerly known as Wells Fargo Bank West, National
Association, as Trustee (the "Trustee "). The "Project" consists of a 68 -unit multifamily rental
housing complex in the Town (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, CERTIFY THAT:
1. The Town is a political subdivision of the State with full power and authority to
execute, deliver, acknowledge or consent to, as applicable, the documents listed on Exhibit `B"
hereto (the "Agreements "), 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 Resolution
No. [ , Series of 2011 (the "Resolution "), duly adopted by the Town Council
approving the Agreements; such Resolution was duly adopted by a majority of the members of
the Town Council at a regular meeting duly convened and conducted in accordance with all
requirements of Colorado law and the procedural rules of the Town Council held on March 8,
2011, and such Resolution has not been modified, amended or repealed and is in full force and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 Agreements 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 Agreements. The Agreements
were duly executed, delivered, acknowledged or consented to, as applicable, on behalf of the
Town by Rich Carroll, as Mayor of the Town, and attested on behalf of the Town by Patty
McKenny, as Town Clerk; the signatures of said officials thereon are their respective genuine
signatures; and the seal thereunto affixed is the official seal of the Town.
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
4810.5518-6952.4
adversely affect the Corporation, the Project, the enforceability of or the authority or ability of
the Town to perform its obligations under the Agreements 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 Subordinate Note identified in Exhibit B hereto, the adoption of the Resolution, the
execution and delivery of the Agreements or compliance by the Town with the provisions
thereof.
[Signatures on following page]
4810 -5518- 6952.4 A -2
IN WITNESS WHEREOF, we have hereunto set our respective signatures as Town
officials and have affixed the seal of the Town this day of March, 2011.
[SEAL]
Attest:
VIV
TOWN OF AVON, COLORADO
�pWN 0icq
G�2
By
�� Rich Carroll
Mayor
c O ADo
[Signature Page to General and No- Litigation Certificate]
4810 -5518 -6952.
Exhibit A
Resolution No. [__]
4810 -5518- 6952.4 A -4
EXHIBIT B
LIST OF AGREEMENTS
1. First Supplemental Indenture, dated as of March [_], 2011, by and between the
Corporation and the Trustee.
2. First Amendment to Buffalo Ridge Affordable Housing Project Project
Agreement, dated as of March [_], 2011, by and between the Corporation and the Town.
3. Subordinate Note, dated as of March [_], 2011 in the amount of $[ I
4810 -5518- 6952.4
RESOLUTION NO. J l - C4
TOWN OF AVON, COLORADO
SERIES OF 2011
RESOLUTION APPROVING THE ISSUANCE BY BUFFALO RIDGE
AFFORDABLE HOUSING CORPORATION OF SUBORDINATE NOTES;
AUTHORIZING CERTAIN AMENDMENTS; AND AUTHORIZING
INCIDENTAL ACTION.
WITNESSETH:
WHEREAS, Buffalo Ridge Affordable Housing Corporation (the "Corporation ") has
been duly organized under the provisions of the Colorado Revised Nonprofit Corporation Act,
Articles 121 through 137 of Title 7, Colorado Revised Statutes, as amended, for the purpose of
acquiring interests in real property and to construct, install and operate certain improvements in
the Town of Avon, Colorado (the "Town "); and
WHEREAS, the Corporation acquired real and personal property and constructed
improvements to provide dwelling accommodations at rentals within the means of individuals or
families of low or moderate income (the "Project "), known as the Buffalo Ridge I Apartments;
and
WHEREAS, in order to finance the Project, the Corporation entered into a Trust
Indenture dated as of May 1, 2002 (the "Indenture ") with Wells Fargo Bank, N.A., formerly
known as Wells Fargo Bank West, National Association, as Trustee under the Indenture (the
"Trustee ") and issued its Multifamily Housing Project Revenue Bonds (GNMA
Mortgage - Backed Securities Program — Buffalo Ridge I Apartments Project), Series 2002, in an
aggregate principal amount of $10,315,000 (collectively, the "Bonds "); and
WHEREAS, the Town and the Corporation executed and delivered a Project Agreement
dated as of May 1, 2002 (the "Project Agreement "), under the terms of which the Corporation is
responsible for operating the Project, and title to the Project shall vest in the Town upon the end
of the term of the Project Agreement; and
WHEREAS, in order to provide funds for the Project, AMI Capital, Inc. (the "Lender ")
originated a mortgage loan Wthe Corporation insured by the FHA; and
WHEREAS, in order to evidence its obligations under the Mortgage Loan, the
Corporation executed and delivered to the Lender a promissory note in the amount of
$10,315,400 (the "Mortgage Note ") and in order to secure its obligations under the Mortgage
Note the Corporation executed and delivered to the Lender a deed of trust on the Project (the
"Mortgage ") for the benefit of the Lender; and
WHEREAS, in order to provide security for the Bonds, the Corporation entered into a
Financing Agreement dated as of May 1, 2002 (the "Financing Agreement ") among the
Corporation, the Lender and the Trustee, pursuant to which the Corporation directed the Trustee
4840.1334 - 8872.5
to use proceeds of the Bonds to purchase from the Lender fully modified mortgage - backed
securities secured by the Government National Banking Association ( "GNMA Securities "); and
WHEREAS, the Corporation desires to direct a sale of the GNMA Securities and defease
and redeem the Bonds, and to amend certain documents relating to the Bonds and the Project,
including the Indenture and the Project Agreement, in connection the issuance of subordinate
debt to finance and refinance certain expenditures related to the Project in the form of one or
more "Subordinate Notes" as defined in the proposed amendment to the Indenture; and
WHEREAS, proposed forms of the amendments and Subordinate Note listed on Exhibit
"A" hereto (the "Agreements ") (such Subordinate Note, together with the pre - existing debt
described in the definition of Subordinate Notes contained in the First Supplemental Indenture,
collectively, the "Subordinate Notes "), have been presented before the Town Council at this
meeting;
NOW, THEREFORE, BE IT RESOLVED BY THE TOWN COUNCIL OF THE TOWN
OF AVON, COLORADO, AS FOLLOWS:
1. Approval. The terms of the proposed Agreements, in substantially the forms
presented at this meeting, with such changes as may be approved by the Mayor, are hereby
approved.
2. Issuance of Subordinate Notes. The Subordinate Note listed on Exhibit "A" and
the issuance thereof by the Corporation for the purpose of financing and/or refinancing the
Project, as well as the Subordinate Notes previously issued, with such changes as may be
approved by the Mayor, are, in all respects, hereby approved. The new Subordinate Note shall
bear interest payable at the rates and times and will mature in the amounts and on the dates set
forth in the Subordinate Note, as finally executed; provided that the maximum net effective
interest rate on the new Subordinate Note shall not exceed 8% and the maximum maturity of
such Subordinate Note shall be no later than December 31, 2043. The terms and provisions of
the new Subordinate Note and the provisions for its execution, payment, registration, transfer,
exchange, redemption and number shall be as set forth in the new Subordinate Note. In addition,
the debt evidenced by the Subordinate Notes previously issued may be reissued as new
Subordinate Notes in such form as approved by the Mayor, and such reissuance, if elected by the
Corporation, is hereby approved.
3. Town Action. All actions taken by the members of the Town Council and other
officials of the Town with respect to the Agreements are hereby ratified and confirmed. The
Mayor of the Town (the "Mayor") and the Town Clerk of the Town (the "Town Clerk ") are
hereby authorized and directed to execute, deliver, acknowledge or consent to, as applicable, the
Agreements and to take all action necessary or reasonably required by the terms of the
Agreements to carry out, give effect to and consummate the transactions contemplated hereby
and thereby, including the execution and delivery of the First Supplemental Indenture and First
Amendment to Buffalo Ridge Affordable Housing Project Project Agreement in substantially the
form presented at this meeting, with such variations or revisions thereto deemed necessary or
appropriate by the Mayor. Execution of the Agreements by the Mayor shall be deemed to be
4840.1334- 8872.5 1)
final approval by the Town of the issuance of the Subordinate Notes and all the provisions
contained in the Agreements.
4. No Indebtedness of the Town. No provision of this Resolution or of the
Agreements 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 Subordinate Notes, 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.
5. Title to Project. The Town hereby determines that it will accept title to the
Project, including any additions thereto, when the Mortgage Loan, the Bonds and the
Subordinate Notes are fully paid and discharged in accordance with the Indenture and the
Agreements.
6. Corporation's Board of Directors. The Town hereby confirms the following as
the current Board of Directors of the Corporation.
Gerald E. Flynn
Jeffrey Spanel
Larry Brooks
Michele Evans
Craig Ferraro
7. 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.
8. 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,
acknowledgments, documents and other papers and to carry all other acts they may deem
necessary or appropriate in order to implement and carry out the matters authorized in this
Resolution and in the Agreements.
9. 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.
[Remainder of page intentionally left blank]
4840 -1334- 8872.5 3
INTRODUCED, APPROVED AND ADOPTED the 8h day of March 2011.
[SEAL]
Attest:
D** TOWN OF AVON, COLORADO
B
y
Rich Carroll, Mayor
4840 -1334- 8872.5
STATE OF COLORADO )
ss.
COUNTY OF EAGLE )
The Town Council of the Town of Avon, Colorado, held a regular meeting open to the
public at the Town Council Chambers at 400 Benchmark Road, Avon, Colorado, on Tuesday, the
8t' day of March 2011, at�,cp.m.
The following members of the Town Council, constituting a quorum thereof, were
present:
Council Members:
II-R k6\- Co-KC7- L
�►V� 4J�Z�a S
*eke � e D
Cti-P,�S &VdAS
The following members of the Town Council were absent:
Council Members: -,-t ( a
The following persons were also present: ,
—Tom aiToP.�l mac- -t�e�
1-1—azyk nco� L � 6 (-COyS
k`k-
Council Member no `d moved that the Resolution be finally passed and
adopted and numbered -0 . Council Member } �'� seconded the motion,
and the question being upon the final passage and adoption of the Resolution, the roll was called
with the following results:
Council Members Voting "Yes ":
� add ��.ld art
Council Members Voting "No":
4840 -1334- 8872.5 5
The Mayor thereupon declared the Resolution finally passed and adopted and instructed
the Town Clerk to number the same as moved.
After consideration of other business to come before the Town Council, the meeting was
adjourned.
[SEAL]
" OFgI/O
SEA L'
Attest:
By
Pa Mc K y,
TOWN OF AVON, COLORADO
By
Rich Carroll, Mayor
4840.1334 - 8872.5 6
STATE OF COLORADO )
) ss.
COUNTY OF EAGLE )
I, Patty McKenny, Town Clerk of the Town of Avon, Colorado, do hereby certify that the
attached copy of Resolution No. , Series of 2011, is a true and correct copy; that said
Resolution was passed by the Town Council of the Town of Avon, Colorado, at its regular
meeting held at 400 Benchmark Road, Avon, Colorado, the regular meeting place thereof, on
Tuesday, the 8t` day of March 2011; that a true copy of said Resolution has been authenticated
by the signatures of the Mayor of the Town of Avon and myself as Town Clerk thereof, sealed
with the seal of the Town, and numbered and recorded in a book kept for that purpose in my
office; that the foregoing pages 1 through 6, inclusive, constitute a true and correct copy of the
record of the proceedings of said Town Council at its regular meeting of March 8, 2011, insofar
as said proceedings relate to said Resolution; 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.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal of the Town of
Avon, Colorado this 8t` day of March, 2011.
�N OF AVp�
..........
TOWN OF AVON, COLORADO
E
4840 -1334 -8872. 7
11'1: 1 U1.11 III
AGREEMENTS
1 First Supplemental Indenture by and between the Buffalo Ridge Affordable Housing
Corporation (the "Corporation") and Wells Fargo Bank, N.A.
2. First Amendment to Buffalo Ridge Affordable Housing Project Project Agreement by
and between the Corporation and the Town of Avon, Colorado.
3. Subordinate Note in the principal amount of up to $50,000.
4840 - 1334 - 8872.5 -1
The Mayor thereupon declared the Resolution finally passed and adopted and instructed
the Town Clerk to number the same as moved.
After consideration of other business to come before the Town Council, the meeting was
adjourned.
[SEAL]
�..NOF�
:S 4
�RADO
Attest:
By4yrc y, o wn Cl k
TOWN OF AVON, COLORADO
By
Rich Carroll, Mayor
4840 - 1334 -8872. 6
KUTAK ROCK DRAFT 2/28/2011
FIRST AMENDMENT TO BUFFALO RIDGE
AFFORDABLE HOUSING PROJECT PROJECT AGREEMENT
This FIRST AMENDMENT TO BUFFALO RIDGE AFFORDABLE HOUSING
PROJECT PROJECT AGREEMENT (this "Amendment') is entered into as of the [ day
of March, 2011, by and between BUFFALO RIDGE AFFORDABLE HOUSING
CORPORATION (together with any successor, the "Corporation "), a nonprofit corporation
organized under the laws of the State of Colorado (the "State "), and the TOWN OF AVON,
COLORADO (the "Town ").
WHEREAS, the Corporation and the Town entered into a Project Agreement, dated as of
May 1, 2002 (the "Original Project Agreement'), relating to Buffalo Ridge Affordable Housing
Corporation Multifamily Housing Project Revenue Bonds, (GNMA Mortgage — Backed
Securities Program — Buffalo Ridge I Apartments Project) Series 2002 (the "Bonds ") issued
pursuant to a Trust Indenture, dated May 1, 2002, between the Corporation and Wells Fargo,
N.A., formerly known as Wells Fargo Bank West, National Association as Trustee (as amended,
restated and/or supplemented from time to time, the "Indenture "), recorded in Eagle County,
Colorado on May 30, 2002, Reception No. 797052.
WHEREAS, the Corporation has requested that the Original Project Agreement be
amended pursuant to the terms hereof to address the issuance of Subordinate Notes under the
Indenture as amended on March [_1, 2011.
WHEREAS, the Town has consented to this amendment and waived any formal notice
requirements with respect to such amendment.
NOW, THEREFORE, the parties hereto, in consideration of the mutual promises
contained herein and other good and valuable consideration, receipt of which is hereby
acknowledged, agree as follows:
1. The definition of "Indenture" in the Original Project Agreement is hereby
modified to expressly refer to the such Indenture as amended, restated and/or supplemented from
time to time, including on the date hereof.
2. The Original Project Agreement is hereby amended by deleting the "." at the end
of Section 2 and adding the following in lieu thereof. `; provided, however, notwithstanding any
other language in this Agreement that may be interpreted to the contrary, this Agreement shall be
deemed to remain outstanding, and shall not be deemed terminated, while the Mortgage Loan or
any Subordinate Notes as defined in the Indenture remain outstanding."
3. The Original Project Agreement is hereby amended by replacing Section 3 thereof
in its entirety with the following:
Section 3. Rieht to Acquire. As further provided in Section 12.02 of the
Indenture, the Town is hereby granted the right to obtain, at any time, fee title and
exclusive possession of all of the Project financed by the Bonds, the Mortgage Loan and
the Subordinate Notes free from liens and encumbrances created by the Corporation (but
4814 -7868 -0072.
subject to other Permitted Encumbrances, as defined in the Indenture), and any additions
to such property by (i) placing into escrow an amount that will be sufficient to defease the
any Bonds Outstanding, the Mortgage Loan, and the Subordinate Notes, if any,
(ii) paying reasonable costs incident to the defeasance, and (iii) complying with all other
requirements of Article XII of the Indenture. The Town, at any time before it defeases
any Bonds Outstanding, the Mortgage Loan and the Subordinate Notes, if any, 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.
4. The Original Project Agreement is hereby amended by replacing Section 7 thereof
in its entirety with the following:
Section 7. Title. Unencumbered fee title (subject to certain Permitted
Encumbrances approved by the Town 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 the Bonds, the Mortgage Loan and Subordinate Notes,
if any, are discharged. For purposes of this Section 7, unless the Bonds, the Mortgage
Loan and the Subordinate Notes, if any, are earlier defeased, such obligations will be
discharged when (i) 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 (ii) interest
ceases to accrue on the obligations, or (iii) when the Bonds, the Mortgage Loan, the
Subordinate Notes, if any, and other obligations are defeased as provided in Article XII
of the Indenture or upon the exercise of the Town's purchase option as provided herein.
All leases, management contracts and similar encumbrances on the Project shall
terminate upon discharge of said obligations, except as otherwise provided in this
Agreement. Encumbrances that do not significantly interfere with the enjoyment of such
property, such as most easements granted to utility companies or such other
encumbrances as may be agreed to by the Town with an approving opinion of bond
counsel, are not considered encumbrances for purposes of this Section.
5. This Amendment shall be governed by and construed in accordance with the laws
of the State of Colorado.
6. The provisions of the Original Project Agreement are hereby ratified, approved
and confirmed and, except as otherwise provided in this Amendment.
[Remainder of page intentionally left blank]
4814- 7868-0072.6 2
IN WITNESS WHEREOF, the undersigned have hereunto set their hand as of the day
and year first mentioned above.
TOWN OF AVON, COLORADO
By
Mayor
i
i
u
ATTEST:
4814-7868-0072.
BUFFALO RIDGE AFFORDABLE
HOUSING CORPORATION
President
[SEAL]
ATTEST:
Secretary
STATE OF COLORADO )
) ss.
CITY AND COUNTY OF DENVER )
The foregoing instrument was acknowledged before me this — day of
2011 by , as President, on behalf of BUFFALO RIDGE
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 e— day of
2011 by Rich Carroll, as Mayor, on behalf of the TOWN OF AVON, COLORADO.
[SEAL]
WITNESS my hand and official seal.
My Commission expires:
4814 - 7868 -0072.
5111 (IL(
ary Pu lie
KUTAK ROCK DRAFT 2/28/2011
FIRST SUPPLEMENTAL INDENTURE
This FIRST SUPPLEMENTAL INDENTURE (this "Amendment ") is entered into as of the
[] day of March 2011, by and between BUFFALO RIDGE AFFORDABLE HOUSING
CORPORATION (together with any successor, the "Corporation "), a nonprofit corporation
organized under the laws of the State of Colorado (the "State "), and WELLS FARGO BANK, N.A.,
formerly known as Wells Fargo Bank, West, National Association, as trustee (together with any
successor trustee, the "Trustee "), a national banking association.
WHEREAS, the Corporation and Trustee entered into a Trust Indenture, dated as of May 1,
2002 (the "Original Indenture "), relating to Buffalo Ridge Affordable Housing Corporation
Multifamily Housing Project Revenue Bonds, (GNMA Mortgage — Backed Securities Program —
Buffalo Ridge I Apartments Project) Series 2002 (the "Bonds ").
WHEREAS, Section 11.01 of the Original Indenture provides that the Original Indenture
may be amended by a supplemental indenture authorized by a resolution of the Corporation, and
consented to by the Town of Avon, Colorado (the "Town "), without the consent of the owners of the
Bonds (the "Owners ") to amend or supplement the provisions the Original Indenture in a manner
that would not materially and adversely affect the existing Owners or the security afforded by the
Original Indenture.
WHEREAS, the Corporation has requested that the Original Indenture be amended pursuant
to the terms hereof to address the issuance of Subordinate Notes as defined herein.
WHEREAS, inter alia, the Subordinate Notes are being executed in connection with or
following a defeasance of the Bonds, and thus, the amendments will not materially and adversely
affect the existing Owners or the Security afforded by the Original Indenture.
WHEREAS, the Trustee and the Town have consented to this amendment and waived any
formal notice requirements with respect to such amendment.
NOW, THEREFORE, the parties hereto, in consideration of the mutual promises contained
herein and other good and valuable consideration, receipt of which is hereby acknowledged, agree as
follows:
The Original Indenture is hereby amended by deleting RECITAL D therefrom.
2. The definition of "Project Agreement" in the Original Indenture is hereby modified to
expressly refer to such document as amended, restated and/or supplemented from time to time,
including on the date hereof.
3. The Original Indenture is hereby amended by adding the following definitions to
Article I thereof-
4831-1209-7544.9
"Subordinate Notes" has the meaning set forth in Section 14.01 hereof.
4. The Original Indenture is hereby amended by deleting the "." at the end the first
paragraph of Section 12.01 and adding the following in lieu thereof: "; provided, however,
notwithstanding any other language in this Indenture that may be interpreted to the contrary, for
purposes of the Town's rights hereunder, including under Section 12.02 hereof, to the extent that the
Mortgage Loan or any Subordinate Notes remain outstanding, this Indenture shall be deemed to
remain outstanding, and shall not be deemed terminated (including without limitation, for the
purpose of applying Section 12.02 hereof)."
5. The Original Indenture is hereby amended by replacing Section 12.02 thereof in its
entirety with the following:
12.02. Town's Rights.
(a) The Corporation covenants and agrees that all activities of the Corporation
shall be undertaken for the benefit of the Town. Upon termination of this Indenture, the
Town shall acquire title to the Project without cost.
(b) In furtherance of the Project Agreement, the Town is hereby granted the right
to obtain, at any time, fee title and exclusive possession of all of the Project financed by any
Bonds outstanding, the Mortgage Loan and the Subordinate Notes free from liens and
encumbrances created by the Corporation (but subject to other Permitted Encumbrances),
and any additions to such property by (1) placing into escrow an amount that will be
sufficient to defease any Bonds Outstanding, the Mortgage Loan, and the Subordinate Notes,
if any, (2) paying reasonable costs incident to the defeasance, and (3) complying with all
other requirements of Article XII hereof. The Town, at any time before it defeases any
Bonds Outstanding, the Mortgage Loan and the Subordinate Notes, if any, 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.
(c) The Corporation shall provide in each agreement it enters into in connection
with the leasing and management of the Project that such agreement shall terminate in the
event that the Town exercises its purchase option right hereunder; provided however that
with respect to leases to natural persons entered into in the ordinary course of business for a
period of 12 months or less, such termination shall not take effect unless the Town
determines to use such Project for other than residential housing. If the Town exercises its
option under subsection (b) hereof, the Corporation shall immediately cancel all
encumbrances on such property, including all leases and management agreements (subject to
Permitted Encumbrances as aforesaid); provided, however, that the Corporation shall not be
required to cancel leases to natural persons entered into in the ordinary course of business for
a period of not greater than 12 months unless the Town has determined to use the Project for
other than residential housing. Any lease, management contract, or similar encumbrance on
4831- 1209 - 7544.9 2
such property will be considered immediately canceled 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 subsection (b) above.
(d) In addition to the foregoing, if pursuant to Article VIII hereof, the Trustee
declares the principal of any Bonds then Outstanding to be due and payable and any action is
commenced under this Indenture or the FHA Loan Documents which could lead to the sale
or other disposition of the property pledged thereunder or there is a payment default on the
Mortgage Note or the Lender has a right to foreclose on the Mortgage, the Town is hereby
granted an exclusive option to purchase all such property (including the Project) for the
amount of the Bonds, the Mortgage Loan and Subordinate Notes and accrued interest to the
date of default. The Trustee shall provide notice to the Town of the commencement of any
such action within 10 days of the occurrence thereof The Town shall have 90 days from the
date it is notified by the Trustee or the Lender of such action in which to both exercise the
option (which shall be exercised by giving written notice of such exercise to the Trustee and
the Corporation) and purchase the property. The Trustee or any Bondholders responsible for
commencing any such foreclosure proceeding or other action shall be required to take any
action necessary, including submission of requests for continuance of foreclosure to the
Public Trustee of Eagle County, Colorado, in order to ensure that the foreclosure sale does
not occur prior to the expiration of the 90 -day period referred to herein. Other than the
foregoing requirement, the provisions of this Section 12.02 are not intended and shall not be
interpreted so as to limit the Bondholders' rights to pursue their remedies hereunder and
under the Financing Agreement.
(e) In the event the Town exercises its options under paragraph (b) or (d) hereof,
the Town shall receive a credit towards its defeasance or purchase costs in the amount of any
fund or account balances held under this Indenture with the exception of (1) the Excess
Investment Earnings Fund, and (2) any amount needed to pay additional interest on the
Bonds or expenses in connection with such defeasance.
(f) Unencumbered fee title (subject to certain Permitted Encumbrances approved
by the Town 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
the Bonds, the Mortgage Loan and Subordinate Notes, if any, are discharged. Unless the
Bonds, the Mortgage Loan and the Subordinate Notes, if any, are earlier defeased, for
purposes of this subsection (f), such obligations will be discharged when (1) 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 (2) interest ceases to accrue on the obligations, or (3) when the
Bonds, the Mortgage Loan, the Subordinate Notes, if any, and other obligations are defeased
as provided in Article XII hereof or upon the exercise of the Town's purchase option as
provided herein. All leases, management contracts and similar encumbrances on the Project
shall terminate upon discharge of said obligations, except as otherwise provided in this
Section 12.02. Encumbrances that do not significantly interfere with the enjoyment of such
property, such as most easements granted to utility companies or such other encumbrances as
may be agreed to by the Town with an approving opinion of bond counsel, are not
considered encumbrances for purposes of this Section.
4831 -1209- 7544.9
(g) The Corporation shall notify the Town of any default under the Subordinate
Notes, and the Town shall have all rights with respect to curing defaults, defeasing, or paying
off the Subordinate Notes as may be deemed required by bond counsel to ensure that the
Corporation is in compliance with Rev. Rul. 63 -20, including the provisions of Rev.
Proc. 82 -26.
6. The Original Indenture is hereby amended by adding an Article XIV thereto which
shall read as follows:
ARTICLE XIV
SUBORDINATE NOTES
14.01. Subordinate Notes Authorized.
(a) The Corporation has previously incurred the following debt obligations
(together with interest thereon as applicable, the "Pre- Existing Debt Obligations): deferred
development fees owed to Corum Real Estate Group with principal and interest outstanding
thereon, as of December 31, 2010, in the principal amount of $403,695 and the interest
amount of $227,498, maturing on December 31, 2043; deferred tap fees owed to Eagle -Vail
Metropolitan District with principal and interest outstanding thereon, as of December 31,
2010, in the principal amount of $54,400 and the interest amount of $31,090, maturing on
December 31, 2043; amounts owed to Eaglebend Affordable Housing Corporation with
principal and interest outstanding thereon, as of December 31, 2010, in the principal amount
of $100,000 and the interest amount of $40,701, maturing on December 31, 2043; legal fees
owed to Isaacson, Rosenbaum, Woods & Levy, P.C. with principal outstanding thereon, as
of December 31, 2010, in the principal amount of $28,500, maturing on December 31,2043;
and amounts owed to Corum Real Estate Group relating to a letter of credit draw with
principal outstanding thereon, as of December 31, 2010, in the principal amount of $69,000.
In addition, the Corporation may issue one or more notes substantially in the form of Exhibit
A hereto, which notes, subject to the rights of the Town set forth in such notes to refund or
defease such notes, shall be payable solely from "Surplus Cash" as such term is defined, and
in accordance with the conditions prescribed, in that certain Regulatory Agreement for
Multifamily Housing Projects between the maker and U.S. Department of Housing and
Urban Development dated May 29, 2002, as amended, restated and/or supplemented from
time to time (each, including the Subordinate Note issued on March [_], 2011 in the
principal amount of $[ ]], together with each Pre - Existing Debt Obligation, a
"Subordinate Note," and collectively, the "Subordinate Notes ").
(b) With the exception of the Pre - Existing Debt Obligations, the issuance of
Subordinate Notes shall be conditioned upon delivery of an opinion of bond counsel
addressed to the Corporation and the Town that the issuance of such Subordinate Notes will
not have an adverse tax consequence with respect to the excludability of interest on the
Bonds, or any outstanding Subordinate Notes, if any, which were issued as tax- exempt
obligations as evidenced by an opinion of bond counsel described in subsection (d), from
gross income for federal tax purposes.
4831 -1209- 7544.9 4
(c) Subordinate Notes will not be secured by the Trust Estate and payment
thereon will not flow through this Indenture or the Trustee, and the Trustee shall have no
obligation with respect thereto other than to acknowledge their existence at the request of the
Corporation. Thus, once the Bonds are redeemed, the Trustee shall have no further
obligations under this Indenture expect for those obligations with respect to the Bonds
intended to survive the redemption of the Bonds and the obligation to acknowledge the
existence of Subordinate Notes at the request of the Corporation. The final terms of the
Subordinate Notes, including with respect to the security therefor, the remedies with respect
thereto, and priority thereof, shall be set forth therein.
(d) Unless bond counsel delivers an opinion that interest on a Subordinate Note is
excludable from gross income for federal income tax purposes, no such opinion shall be
deemed inferred.
7. This Amendment may be simultaneously executed in several counterparts, each of
which shall be an original and all of which shall constitute but one and the same instrument.
8. This Amendment shall be governed by and construed in accordance with the laws of
the State of Colorado.
9. The provisions of the Original Indenture are hereby ratified, approved and confirmed
and, except as otherwise provided in this Amendment.
10. In executing and delivering this Amendment, the Trustee shall be entitled to all of the
privileges and immunities afforded to the Trustee under the terms and provisions of the Original
Indenture.
[Remainder of page intentionally left blank]
4831 -1209- 7544.9 5
IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental Indenture
to be duly executed, all as of the date set forth above.
Attest:
By —
Name
Title
[SEAL]
Attest:
Authorized Officer
Acknowledged and Consented to By:
.
Name C'
Title
�NOFA�O�
E A L
4831 -1209 -7544.
BUFFALO RIDGE AFFORDABLE
HOUSING, as the Corporation
By_
Name
Title
WELLS FARGO BANK WEST, NATIONAL
ASSOCIATION, as Trustee
Authorized Officer
TOWN OF AVON, COLORADO
EXHIBIT A
FORM OF SUBORDINATE NOTE
For Value Received, on or before [ ], Buffalo Ridge Affordable Housing
Corporation (the "Corporation ") promises to pay [ ] (the "Purchaser ") the sum of
[ ] dollars and [_] cents ($[ ]), payable at [ ], or such other place
as note holder may designate, with interest on any remaining balance of principal [_] percent
([_] %) per annum payable annually, computed on a [_] basis, commencing [ ], and
thereafter on the last day of [ ] of each year thereafter, until the entire indebtedness has been
paid. Any interest not so paid shall not create any default in the terms of this note but shall accrue
and be payable in full at the date of maturity thereof. In any event, the balance of principal, if any,
remaining unpaid, plus accrued interest, shall be due and payable on [ ]. This subordinate
note is intended to be a "Subordinate Note" as defined in that certain Trust Indenture dated May 1,
2002 between Buffalo Ridge Affordable Housing Corporation and Wells Fargo Bank, N.A.,
formerly known as Wells Fargo Bank West, National Association, as amended, restated and/or
supplemented from time to time, including on [ ], 2011 (the "Indenture ").
THIS NOTE SHALL NOT BE A DEBT OR INDEBTEDNESS OF THE TOWN OF AVON,
COLORADO (THE "TOWN "), THE STATE OF COLORADO OR ANY POLITICAL
SUBDIVISION THEREOF WITHIN THE MEANING OF ANY PROVISION OR LIMITATION
OF THE CONSTITUTION OR STATUTES OF THE STATE OF COLORADO OR THE TOWN'S
CHARTER, AND SHALL NEVER CONSTITUTE NOR GIVE RISE TO A PECUNIARY
LIABILITY OF THE TOWN, THE STATE OR ANY POLITICAL SUBDIVISION THEREOF OR
A CHARGE AGAINST THEIR GENERAL CREDIT OR TAXING POWERS. THE
CORPORATION HAS NO TAXING POWER.
It is a condition of this note that the maker hereof may pay any amount, or all, of the
principal of this note on any interest paying date without penalty or premium, but no such
prepayment of principal in any amount, nor any payment of interest, shall be made except from
"Surplus Cash" as such term is defined, and in accordance with the conditions prescribed, in that
certain Regulatory Agreement for Multifamily Housing Projects between the maker and the U.S.
Department of Housing and Urban Development dated [ ; provided, however, that the Town
may defease or redeem this note in whole or in part at any time without penalty or premium with
other moneys.
[It also is a condition of this note that the maker hereof may pay no other commitment or
note (except [ ]) from "Surplus Cash" before payment of this note.] [This note is
subordinate only to the "Bonds" and the "Mortgage Loan" as defined in the Indenture.] The debt
evidenced hereby is fully subordinated to the Bonds and Mortgage Loan and is nonrecourse to the
Corporation or any of its assets other than "Surplus Cash" and does not constitute a claim against the
Corporation to the extent that funds are insufficient to pay such debt.
The Town has certain rights with respect to this Subordinate Note as set forth in the
Indenture, including but not limited to Section 12.02(g) of the Indenture.
4831 -1209- 7544.9
The undersigned hereby waives presentment, demand, protest and notice of demand, protest
and nonpayment of this note.
Attest:
By_
Name
Title
[SEAL]
Dated at Edwards, Colorado, this [_]`h day of [ ] 2011.
BUFFALO RIDGE AFFORDABLE
HOUSING CORPORATION, as the
Corporation
By—
Name
Title
4831 -1209- 7544.9 A -2
Acknowledged to and consented by:
WELLS FARGO BANK, N.A., as Trustee
.2
Authorized Officer
4831 -1209- 7544.9 A -3