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TC Res. No. 2011-04 Approving the issuance by buffalo ridge affordable housing corporation of subordinae notes authorizing certain amendments and authorizing incidential actionRESOLUTION NO. I ( - Dq 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 to, the 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 1 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 2 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 8th day of March 2011. [SEAL] Attest: M. (OWN.pF9G TOWN OF AVON, COLORADO .aft A By Rich Carroll, Mayor c`U 0 4840 -1334- 8872.5 4 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 8`h day of March 2011, at 5_3V.m. The following members of the Town Council, constituting a quorum thereof, were present: Council Members: v� 4Ja�1-ia S Ck.PaS 9-VaAS The following members of the Town Council were absent: Council Members: `1-t I a The following persons were also present: `loin 07k V-0 ell E2,kCr -t ke"A r zm s`r1oa1 Lc-t 6 (-Co�\S @SSts-ta,n* 0 (�i� }Zd a,* Z `� k* Council Member no 1d moved that the )solution be finally passed and adopted and numbered �� -O . Council Member seconded the motion, and the question being upon the final passage and adoption of the Re olution, the roll was called with the following results: Council Members Voting "Yes ": C6- VL QCLl l o S i Q�d �d t-4 Council Members Voting "No ": am S Co��� ��- n'Lh�S ���c� c�►�� �}b �j�l� -1 � G� 2� cf1' �QS'I-' ' 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] �1N OFq�,�� TOWN OF AVON, COLORADO S EA By Y�O[riRact` Rich Carroll, Mayor Attest: By Path McK, nny, Town Cl' k 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. ; 'b , 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 8th 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 81h day of March, 2011. �N OF AVp� �OOLOF�P� 4840 - 1334 -8872. 7 TOWN OF AVON, COLORADO By atty /Mc envy, To •rr' rk c- EXHIBIT A 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 -I • Memo To: Honorable Mayor and Town Council Thru: Larry Brooks, Town Manager Legal: Eric Heil, Town Attorney From: Scott Wright, Asst. Town Manager — Finance Date: March 2, 2011 Initials Re: Buffalo Ridge I Apartments Project; Sale of GNMA Securities and Redemption of Bonds • Summary: • The Buffalo Ridge I Apartments Project consists of 68 units composed of 2 and 3 bedroom units in four buildings located on the north side of Interstate 70 east of the Town of Avon municipal fleet maintenance facility. The owner of the Buffalo Ridge I Apartments is the Buffalo Ridge Affordable Housing Corporation and is part of a larger total development consisting of 244 units. In 2002, revenue bonds in the amount of $10,315,000 were issued by the Corporation (and sponsored by the Town) in order to finance the construction of this project. These bonds do not constitute a liability of the Town. As explained in the attached memo from Dee Wisor with Sherman and Howard, this proposed sale of GNMA securities and redemption of existing bonds takes advantage of current market and interest rate conditions and will result in a net positive cash flow to the Buffalo Ridge Affordable Housing Corporation of approximately $375,000. The existing permanent mortgage does not change and matures in the year 2043. The new subordinate note of $50,000 and the existing subordinate debt are all payable based on cash flow in 2043 (or earlier, depending on excess cash flow) and it is expected that paydowns will occur in 2011 from surplus cash resulting from the GNMA proceeds. Page 1 Gerry Flynn from Polar Star Properties, representatives from bond counsel for both the • Town and the Corporation, and a representative from the bond underwriting firm will be present on Tuesday evening to present this transaction to the Council and answer questions. Financial Implications: There are no financial implication to the Town. As mentioned above, the existing bonds that will be redeemed, as well as the existing mortgage that remains in place are not and will never constitute a pecuniary liability of the Town of Avon. As mentioned in the cover memo for the engagement of Sherman and Howard, those fees are being paid for from the gross proceeds of the sale of the GNMA securities. Recommendation: Town staff recommends that Council adopt Resolution No. 11 -04, Series of 2011, Resolution Approving the Issuance by Buffalo Ridge Affordable Housing Corporation of Subordinate Notes; Authorizing Certain Amendments; and Authorizing Incidental Action. Staff also recommends that Council authorize the Mayor to sign and delivery the attached General and No- Litigation Certificate in connection with the issuance by Buffalo Ridge Affordable Housing Corporation of subordinate debt relating to the project. Town Manager Comments: • Attachments: A - Memorandum from Dee Wisor B - GNMA Sale Diagram C - Resolution No. 11 -04 and Exhibits D - General and No- Litigation Certificate • • Page 2 lm suull 11TH TUMU 1 To: Scott Wright, Assistant Town Manager — Finance Town Council Town of Avon, Colorado From: Dee P. Wisor Date: March 1, 2011 Re: Document Amendments and Issuance of Subordinate Note Relating to Buffalo Ridge I Apartments As you are aware, in 2002, Buffalo Ridge Affordable Housing Corporation (the "Corporation ") issued its Multifamily Housing Project Revenue Bonds (GNMA Mortgage- Backed Securities Program - Buffalo Ridge I Apartments Project), Series 2002 (the "Bonds ") in order to finance the project known as the Buffalo Ridge I Apartments (the "Project "). As part of the Bond transaction, AMI Capital, Inc. (the "Lender ") originated a • mortgage loan to the Corporation insured by the FHA (the "Mortgage Loan"), which is secured by a promissory note and a deed of trust on the Project. In addition, in order to provide security for the Bonds, the Corporation entered into a Financing Agreement among the Corporation, the Lender and Wells Fargo Bank, National Association, as trustee for the Bonds (the "Trustee "), pursuant to which the Corporation directed the Trustee to use proceeds of the Bonds to purchase from the Lender fully modified mortgage- backed securities secured by the Government National Mortgage Association (the "GNMA Securities "). The purchase of the GNMA Securities funded the Mortgage Loan. Due to recent market events, the GNMA Securities can be sold at a price that is greater than the cost required to redeem the Bonds. The existing Bond documents do not contemplate the sale of the GNMA Securities and the redemption of the Bonds without also (a) terminating the Trust Indenture which the Bonds were issued under (the "Indenture "), (b) paying off the Mortgage Loan, and (c) having the Project revert back to the Town of Avon (the "Town "). The Corporation has proposed the issuance of a new subordinate note under the Indenture and the modification of certain of the Bond documents to allow the sale of the GNMA Securities and the redemption of the Bonds without having the Project revert to the Town with the Mortgage Loan in place. The Town is being asked to (i) enter into a First Amendment to Buffalo Ridge Affordable Housing Project Project Agreement (the "First Amendment to Project Agreement') between the Corporation and the Town, (ii) consent to a First Supplemental Indenture between the • Corporation and the Trustee, (iii) approve the issuance of a new subordinate note in an amount anticipated not to exceed $50,000, and (iv) ratify certain existing subordinate debt of the 001024.054/1373377.3 Scott Wright, Assistant Town Manager — Finance Town Council Town of Avon, Colorado March 1, 2011 • Page 2 Corporation (the existing subordinate debt together with the new subordinate note, the "Subordinate Notes "). The First Amendment to Project Agreement modifies the Town's right to acquire the Project so that the Town may acquire the Project upon the payment of the Bonds, the Mortgage Loan and the Subordinate Notes. Previously, the Town's right to acquire the Project was upon payment or defeasance of the Bonds and the Mortgage Loan. Similarly, the First Supplemental Indenture modifies the Town's right to acquire the Project so that the Town may acquire the Project upon the payment of the Bonds, the Mortgage Loan, and the Subordinate Notes. The First Supplemental Indenture also makes modifications to the existing Indenture so that the payment of the Bonds does not trigger the transfer of the Project to the Town. Previously, the Town's right to acquire the Project was upon payment or defeasance of the Bonds and the Mortgage Loan. The new Subordinate Note explicitly acknowledges that it is not a debt or indebtedness of the Town, and does not obligate the Town or create a liability of the Town or a charge against the Town's general credit or taxing powers. The fees of Sherman & Howard in connection with the amendments to the Bond documents and issuance of the new Subordinate Note will be paid by the Corporation from the proceeds of the sale of the GNMA Securities. • Following the redemption of the Bonds with the proceeds of the sale of the GNMA Securities and the issuance of the new Subordinate Note, the subordinate debt structure of the Corporation will be as follows in the listed order of priority. The Mortgage Loan will remain a senior obligation of the Corporation. 1. Taxable Subordinate Note in the principal amount of $100,000 issued to EagleBend Affordable Housing Corporation (existing obligation). 2. • Development fees in the principal amount of $403,695 payable to Corum Real Estate Group (existing obligation). Deferred tap fees in the principal amount of $54,400 payable to Eagle -Vail Metropolitan District (existing obligation). 3. Legal fees in the amount of $28,500 payable to Isaacson Rosenbaum P.C. (existing obligation). 4. Letter of credit reimbursement obligation in the amount of $69,000 payable to Corum Real Estate Group (existing obligation). 5. Taxable Subordinate Note in the anticipated principal amount of $50,000 issued to EagleBend Affordable Housing Corporation (new obligation). • • • • MO TRTG�ATGE LOAN BONDS H O�LDE R�5 BO VDS P. 4G3� U Par @aHIIa GNMA SALE DIAGRAM BUFFALO RIDGE AHC $ Premium Purchase Price O oOGJOo $$$ A. vavIuwn xnM %nM.vuw III vNcn 111011%c►NIaa.c 2. Davidson purchases GNMA from Trustee, which releases a. par to retire bondholders; and b. premium to Corporation once Bonds are redeemed 3. Existing Mortgage Loan stays in place — all terms and conditions; the investor is simply changing. (GNMA evidences the Loan, and was credit enhancement for the Bonds, which is no longer needed.) GNMA security is transferred to new holders. 4. Subordinate debt of Corporation is being issued separately to EBAHC, which is junior in priority to GNMA and Mortgage Loan. GJ� I 0 0° D.A. Davidson & Co. member SIPC RESOLUTION NO. [ 0 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 to the 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 1 • 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 2 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 • [SEAL] INTRODUCED, APPROVED AND ADOPTED the 8`" day of March 2011. Attest: Patty McKenny, Town Clerk 4840 -1334- 8872.5 4 TOWN OF AVON, COLORADO Rich Carroll, Mayor 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 Stn day of March 2011, at [] p.m. The following members of the Town Council, constituting a quorum thereof, were present: Council Members: The following members of the Town Council were absent: Council Members: • The following persons were also present: Council Member moved that the Resolution be finally passed and adopted and numbered 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 ": 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] Attest: Im Patty McKenny, Town Clerk TOWN OF AVON, COLORADO LIZ 4840 -1334- 8872.5 6 Rich Carroll, Mayor 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 8th 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 [ , 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 8th day of March, 2011. [SEAL] TOWN OF AVON, COLORADO • By Patty McKenny, Town Clerk • 4840 - 1334 - 8872.5 7 • EXHIBIT A AGREEMENTS r� • 1 First Supplemental Indenture, dated as of March ", 2011, 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, dated as of March ", 2011, by and between the Corporation and the Town of Avon, Colorado. 3. Subordinate Note, dated as of March ", 2011 in the amount of $r ]. 4840 -1334- 8872.5 -1 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 • P ) 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 3 • (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 131, 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 • • IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental Indenture to be duly executed, all as of the date set forth above. BUFFALO RIDGE AFFORDABLE HOUSING, as the Corporation Attest: By By Name Name Title Title [SEAL] Attest: By • • Authorized Officer Acknowledged and Consented to By: Attest: WELLS FARGO BANK WEST, NATIONAL ASSOCIATION, as Trustee In Authorized Officer TOWN OF AVON, COLORADO By By Name Name Title Title [SEAL] 4831 -1209- 7544.9 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 ", 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. Right 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 - 0072.6 • 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 Utz Mayor [SEAL] ATTEST: Town Clerk 4814- 7868 - 0072.6 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 _ day of Rich Carroll, as Mayor, on behalf of the TOWN OF AVON, COLORADO. [SEAL] 4814 - 7868 - 0072.6 WITNESS my hand and official seal. My Commission expires: Notary Public 2011 by 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 r percent ([] %) per annum payable annually, computed on a f ] 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 F], 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 Lam; 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. is 4831 - 1209 - 7544.9 A -1 • The undersigned hereby waives presentment, demand, protest and notice of demand, protest and nonpayment of this note. C7 Dated at Edwards, Colorado, this [_]`" Day of [] 2011. BUFFALO RIDGE AFFORDABLE HOUSING CORPORATION, as the Corporation Attest: By By Name Name Title Title [SEAL] 4831 -1209- 7544.9 A -2 Acknowledged to and consented by: WELLS FARGO BANK, N.A., as Trustee :S Authorized Officer 4831 -1209- 7544.9 A -3 C7 • • • FORM OF SUBORDINATE NOTE For Value Received, on or before [October 1, 2043], Buffalo Ridge Affordable Housing Corporation (the "Corporation ") promises to pay Eaglebend Affordable Housing Corporation (the "Purchaser ") the sum of [ dollars and " cents ($[ ) [UP TO $50,000], payable at 28 2nd Street, Suite 215, Edwards, Colorado 81632, 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 [October 1, 2043]. 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 [_ 1, 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. This note and the debt evidenced hereby is fully subordinate to the "Bonds," the "Mortgage Loan" and the "Pre- Existing Debt Obligations" as defined in the Indenture, with such other obligations payable out Surplus Cash before payment on this note, 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. • The undersigned hereby waives presentment, demand, protest and notice of demand, protest and nonpayment of this note. 4811 -6614- 4264.4 A -1 Dated at Edwards, Colorado, this [_]`" Day of [ 2011. • BUFFALO RIDGE AFFORDABLE HOUSING CORPORATION, as the Corporation Attest: By By Name Name Title Title [SEAL] • 4811- 6614- 4264.4 A -2 • Acknowledged to and consented by: • • WELLS FARGO BANK, N.A., as Trustee 4811- 6614- 4264.4 A -3 Authorized Officer GENERAL 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. 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: • By — • Patty McKenny, Town Clerk 4810 -5518- 6952.4 Town Attorney TOWN OF AVON, COLORADO 2 Fa Rich Carroll, Mayor EXHIBIT A RESOLUTION NO. [J 4810 -5518- 6952.4 C7 • • • 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. 4810 -5518- 6952.4 Subordinate Note, dated as of March ", 2011 in the amount of $r I