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TC Ord. No. 1992-04 Did not pass on 2nd readingC) (~lnAr~c~ l J I L L Z-,L L cr-~,D- - . C~e r r-,, STATE OF COLORADO ) COUNTY OF EAGLE ) SS TOWN OF AVON ) NOTICE IS HEREBY GIVEN OF A PUBLIC HEARING BEFORE THE TOWN COUNCIL OF THE TOWN OF AVON, COLORADO, AT 7:30 P.M. ON THE 14TH DAY OF APRIL, 1992, AT THE TOWN HALL FOR THE PURPOSE OF CONSIDERING THE ADOPTION OF ORDINANCE NO. 92-4, SERIES OF 1992: AN ORDINANCE AUTHORIZING THE ISSUANCE BY THE TOWN OF AVON, COLORADO, OF LOCAL ASSESSMENT BONDS IN THE MAXIMUM AGGREGATE PRINCIPAL AMOUNT OF $[PAR], FOR LOCAL IMPROVEMENT DISTRICT NO. 1992-1; PRESCRIBING THE FORM OF THE BONDS; PROVIDING FOR THE PAYMENT OF THE BONDS AND THE INTEREST THERON; AND PROVIDING OTHER DETAILS IN CONNECTION THEREWITH. A copy of said Ordinance is attached hereto, and is also on file at the office of the Town Clerk, and may be inspected during regular business hours. Following this hearing the Council may consider final passage of this Ordinance. This notice is given and posted by order of the Town Council of the Town of Avon, Colorado. Dated this 26th day of March, 1992. TOWN OF AVON, COLORADO BY: Patty Ne hart Town Cle k POSTED AT THE FOLLOWING PUBLIC PLACES WITHIN THE TOWN OF AVON ON MARCH 26, 1992: AVON POST OFFICE IN THE MAIN LOBBY CITY MARKET IN THE MAIN LOBBY COASTAL MART, INC.; AND AVON MUNICIPAL BUILDING IN THE MAIN LOBBY ORDINANCE NO. 9 2 - 4 AN ORDINANCE AUTHORIZING THE ISSUANCE BY THE TOWN OF AVON, COLORADO, OF LOCAL ASSESSMENT BONDS IN THE MAXD" AGGREGATE PRINCIPAL AMOUNT OF $[PAR], FOR LOCAL 1TVIPROVEMENT DISTRICT NO. 1992- 1; PRESCRIBING THE FORM OF THE BONDS; PROVIDING FOR THE PAYMENT OF THE BONDS AND THE INTEREST THEREON; AND PROVIDING OTHER DETAILS IN CONNECTION THEREWITH. WHEREAS, the Town Council (the "Council") of the Town of Avon, Colorado (the "Town"), has created Local Improvement District No. 1992-1 (the "District"), for the purpose of making certain local improvements (the "improvements"), as described in Ordinance No. 92-2, passed and adopted on March 10, 1992 (the "Creation Ordinance") and providing for payment of the costs of the improvements; and WHEREAS, pursuant to Chapter XV of the Charter of the Town (the "Charter") and Section 14.7 of the Charter, the Council may issue bonds payable from assessments levied within local improvement districts without an election and without limitation as to amount; and WHEREAS, the total cost of the improvements has been reasonably ascertained; and WHEREAS, the Council has determined that special assessment bonds of the Town should be issued for the District in an amount of $[PAR]; and WHEREAS, the Council has heretofore received a proposal from Coughlin & Company, Inc., Denver, Colorado (the "Underwriter"), for the purchase of said bonds; and WHEREAS, the Council has determined that said proposal is to the best advantage of the Town, and has determined to accept said proposal; and WHEREAS, it is necessary to provide for the issuance of said bonds, the form and payment thereof, and other details in connection therewith; and WHEREAS, there has also been submitted to the Council a form of Paying Agent and Registrar Agreement dated as of April 1, 1992 (the "Registrar Agreement") between the Town and Affiliated Denver National Bank and a form of the Bond Purchase Agreement dated [DATE] (the "Bond Purchase Agreement") between the Town and the Underwriter; BE IT ORDAINED BY THE TOWN COUNCIL OF THE TOWN OF AVON, COLORADO: Section 1. Bond Details. By virtue of and pursuant to the Constitution of the State of Colorado, the Town Charter, and Town ordinances there shall be issued the "Town of Avon, Colorado, Local Improvement District No. 1992-1, Local Assessment Bonds, Series 1992" (the "Bonds"), for the purpose of defraying a portion of the costs of the improvements. The Bonds shall be in an aggregate principal amount of $[PAR], shall be dated as of April 1, 1992, and shall consist of Bonds in the denomination of $5,000 each. The Bonds shall be numbered consecutively from 1 to with such prefix or suffix as the Registrar may determine. The Bonds shall be issued only as fully registered bonds and shall be due and payable in regular numerical order on December 1, 2007, subject to prior redemption as provided in Section 11 hereof. The Bonds shall bear interest payable semiannually on each June 1 and December 1, commencing on December 1, 1992, as follows: Interest Rate Amount Bond Numbers (per annum) Section 2. Payment of Bonds: Paying Agent and Registrar. The principal of any Bond shall be payable to the registered owner thereof as shown in the registration records kept by Affiliated Denver National Bank in Denver, Colorado, or its successor (the -2- "Registrar"), upon maturity and presentation and surrender thereof at the office of Affiliated Denver National Bank in Denver, Colorado, or its successor (the "Paying Agent"). If, upon presentation of any Bond at or after its maturity, payment is not made as herein provided, interest thereon shall continue at the same rate per annum until the principal thereof is paid in full. Payment of interest on any Bond shall be made to the registered owner thereof by check or draft mailed by the Paying Agent on or before each interest payment date (or, if such interest payment date is not a business day, on or before the next succeeding business day), to the registered owner thereof at his address as shown on the registration records kept by the Registrar at the close of business on the fifteenth day (whether or not a business day) of the calendar month preceding the interest payment date (the "Record Date"); but any such interest not so timely paid or duly provided for shall cease to be payable to the person who is the registered owner thereof at the close of business on the Record Date and shall be payable to the person who is the registered owner thereof at the close of business on a Security Record Date for the payment of any defaulted interest. Such Security Record Date shall be fixed by the Registrar whenever moneys become available for payment of the defaulted interest, and notice of the Security Record Date shall be given to the registered owners of the Bonds not less than ten days prior to the Security Record Date by first-class mail to each such registered owner as shown on the registration records on a date selected by the Registrar, stating the date of the Security Record Date and the date fixed for the payment of such defaulted interest. The Paying Agent may make payments of interest by such alternative means as may be mutually agreed to between the owner of any Bond and the Paying Agent. All such payments shall be made in lawful money of the United States of America without deduction for the services of the Paying Agent or the Registrar. Section 3. Form and Execution of Bonds. The Bonds shall be signed with the manual or facsimile signature of the Mayor, attested and countersigned by the manual or facsimile signature of the Town Clerk, and sealed with a manual impression or a facsimile of the seal of the Town. Should any officer whose manual or facsimile signature appears on the Bonds cease to be such officer before delivery of the Bonds to the Underwriter, such manual or facsimile signature shall nevertheless be valid and sufficient for all purposes. -3- I - The Bonds shall be in substantially the following form (provided that any portion of the text of the Bonds may, with appropriate reference, be printed or otherwise reproduced on the reverse of the Bonds): -4- [Form of Bond] No. UNITED STATES OF AMERICA STATE OF COLORADO COUNTY OF EAGLE TOWN OF AVON LOCAL ROROVEMENT DISTRICT NO. 1992-1 LOCAL ASSESSMENT BOND, SERIES 1992 INTEREST RATE REGISTERED OWNER: MATURITY DATE December 1, 2007 PRINCIPAL AMOUNT: FIVE THOUSAND DOLLARS $5,000 DATED AS OF April 1, 1992 The Town of Avon, in the County of Eagle and the State of Colorado (the 'Town"), for value received, hereby promises to pay solely out of the special fund hereinafter designated, but not otherwise, to the registered owner named above, or registered assigns, upon presentation and surrender hereof at the principal office of Affiliated Denver National Bank in Denver, Colorado (the "Paying Agent"), the Principal Amount specified above, on the Maturity Date specified above (subject to the right of prior redemption hereinbelow mentioned), and to pay from such sources interest on such Principal Amount (computed on the basis of a 360-day year of twelve 30-day months), from the most recent interest payment date to which interest has been paid, or, if no interest has been paid, from the Dated As Of date specified above, at the Interest Rate per annum specified above, payable semiannually on December 1 and June 1 each year, commencing on December 1, 1992, until such Principal Amount is paid. Interest on this Bond will be paid on or before each interest payment date (ur, if such interest payment date is not a business day, on or before the next succeeding business day) to the registered owner hereof by check or draft of the Paying Agent mailed by the Paying Agent to such registered owner at the address appearing on the registration records kept for that purpose at the office of Affiliated Denver National Bank in Denver, Colorado (the "Registrar"), at the close of business on the fifteenth day (whether or not a -5- business day) of the calendar month preceding the interest payment date (the "Record Date"). Any such interest not so timely paid shall cease to be payable to the person who is the registered owner hereof at the close of business on the Record Date and shall be payable to the person who is the registered owner hereof at the close of business on a Security Record Date for the payment of any defaulted interest. Such Security Record Date shall be fixed by the Registrar whenever moneys become available for payment of the defaulted interest, and notice of the Security Record Date shall be given to the registered owners of the bonds of the series of which this is one (the "Bonds") not less than ten days prior to the Security Record Date. Alternative means of payment of interest may be used if mutually agreed to between the owner of any Bond and the Paying Agent, as provided in the ordinance authorizing the issuance of the Bonds (the 'Bond Ordinance"). The principal of and interest on this Bond are payable in lawful money of the United States of America, without deduction for the services of the Paying Agent or Registrar. If upon presentation and surrender of this Bond to the Paying Agent at or after its maturity payment of this Bond is not made as herein provided, interest hereon shall continue at the Interest Rate specified above until the Principal Amount hereof is paid in full. Whenever considered advisable by the Town Manager, he may, and whenever funds may be held to the credit of the District exceeding the amount of interest on the unpaid principal becoming due on and prior to one year next after the last interest payment date, he shall call for prior redemption at any time a suitable number of Bonds in regular numerical order. Notice of prior redemption shall be given by mailing a copy of the redemption notice, not less than thirty (30) days prior to the date fixed for redemption, to the registered owner of this Bond at the address shown on the registration records maintained by the Registrar, all as set forth in the Bond Ordinance. On the redemption date specified in the redemption notice, interest on the Bonds so called shall cease. Tl? Bonds are being issued by the Town in the aggregate principal amount of $[PAR] for the purpose of paying a portion of the costs of local improvements to be constructed in Local Improvement District No. 1992-1, in the Town by virtue of and in full conformity with the Constitution of the State of Colorado, the Town Charter and ordinances, and pursuant to the duly adopted Bond Ordinance. -6- Except as otherwise provided herein, payment of this Bond and the interest thereon shall be made from, and as security for such payment there is pledged, a special fund designated as the "Local Improvement District No. 1992-1 Bond Fund" (the "Bond Fund"). The Bond Fund shall contain the proceeds of the Bonds remaining after the cost of the improvements (including all incidental costs) has been paid in full, the Bond proceeds set aside as accrued interest, and the proceeds from special assessments levied against property within the District and specially benefited by the improvements, all as more particularly set forth in the Bond Ordinance. The assessments constitute liens on and against the assessed property in the respective amounts apportioned by the ordinance of the Town levying the assessments. Pursuant to Section 15.3 of the Town Charter in consideration of general benefits conferred on the Town at large from the construction or installation of improvements in the District, the Town has covenanted in the Bond Ordinance to levy general (ad valorem) property taxes on all taxable property in the Town, or to transfer other legally available moneys of the Town for the purpose of advancing money to maintain current payments of interest and equal annual payments of the principal amount of said Bonds or for any prior redemption premium appertaining to such Bonds; provided, however, that such levy or transfer shall not exceed 15 mills or an amount which would result from the levy of 15 mills in any one year in the aggregate for all special improvement districts heretofore or hereafter created by the Town, such tax proceeds or other moneys to be deposited in a special fund designated "Local Improvement District No. 1992-1 Security Fund," which shall be used solely for paying principal of or interest on the Bonds. The Bonds, together with bonds of other special or local improvement districts in the Town, shall be additionally secured and their payment shall be supplemented by moneys in the Town's Local Improvement District Surplus and Deficiency Fund. Whenever there is a deficiency in said Bond Fund to meet the payment of outstanding Bonds, principal and interest, as the same become due, the deficiency shall be paid out of said Surplus and Defi 'envy Fund. Whenever three-fourths of the Bonds have been paid and cancelled and for any reason the remaining assessments are not paid in time to pay the remaining Bonds, and there is not sufficient money in the Surplus and Deficiency Fund, then the Town shall pay the Bonds when due and reimburse itself by collecting the unpaid assessments due the District. The Bond Ordinance provides that, if and to the extent that -7- the Town Charter may hereafter be amended so that the Surplus and Deficiency Fund is not required to be applied as security for the Bonds, the Surplus and Deficiency Fund will not constitute security for the Bonds; and by the acceptance of this Bond any owner hereof consents to such amendment and in such event waives any security provided by the Surplus and Deficiency Fund. It is hereby recited, certified, and warranted that the aggregate principal of the Bonds issued, including this Bond, does not exceed the amount authorized by law; that every requirement of law relating to the creation of Local Improvement District No. 1992-1, the construction, installation and other acquisition of the improvements, the assessment of a portion of the cost thereof, and the issuance of this Bond has been fully complied with by the proper officers of the Town; and that all conditions required to exist and things required to be done precedent to and in the issuance of this Bond to render the same lawful and valid, have happened, been properly done and performed, and did exist in regular and due time, form, and manner, as required by law. This Bond does not constitute a debt or an indebtedness of the Town within the meaning of any constitutional, Town charter, or statutory limitation or provision, and shall not be considered or held to be a general obligation of the Town. The payment of this Bond and the interest thereon is not secured by an encumbrance, mortgage or other pledge of property of the Town, except for such special assessments and other moneys pledged for the payment of Bonds as set forth above. The Bonds are issuable only in the form of registered bonds in the denomination of $5,000 each. The Registrar shall not be required to transfer any Bonds: (1) during a period beginning at the opening of business 15 days before the day of mailing by the Registrar of a notice of prior redemption of Bonds and ending at the close of business on the day of such mailing, or (2) with respect to a particular Bond, after the mailing of notice calling such Bond for prior -Aemption. Except as otherwise provided herein and in the Bond Ordinance with respect to record dates for the payment of interest, the Town, the Paying Agent and the Registrar may deem and treat the registered owner of any Bond as the absolute owner thereof for all -8- purposes (whether or not such Bond shall be overdue) and any notice to the contrary shall not be binding upon the Town, the Paying Agent or the Registrar. This Bond is transferable by the registered owner hereof or by his duly authorized attorney, upon surrender hereof to the Registrar, accompanied by a written instrument of transfer satisfactory to the Registrar, but only in the manner, subject to the limitations, and upon payment of the charges provided in the authorizing Bond Ordinance. Upon such transfer, the Registrar shall enter the transfer of ownership in the registration records and shall authenticate and deliver in the name of the transferee or transferees a new fully registered Bond in the denomination of $5,000, of the same maturity, number, and interest rate. The Registrar may impose reasonable charges in connection with transfers of Bonds, which charges (as well as any tax or other governmental charge required to be paid with respect to such transfer) shall be paid by the registered owner requesting such transfer. For the purposes of Section 265(b)(3)(B) of the Internal Revenue Code of 1986, as amended (the "Code"), the Town has designated the Bonds as a qualified tax- exempt obligation. Therefore, banks and other financial institutions are not subject to the 100% interest disallowance rule (but remain subject to the 20% interest disallowance rule) under the Code as in existence on the date of delivery of the Bonds, related to ownership of the Bonds. This Bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Bond Ordinance until the certificate of authentication hereon shall have been manually signed by the Registrar. IN TESTIMONY WHEREOF, the Town Council of the Town of Avon has caused this Bond to be signed by the manual or facsimile signature of the Mayor, attested -9- and countersigned by the manual or facsimile signature of the Town Clerk, and sealed with the corporate seal of the Town or a facsimile thereof, all as of April 1, 1992. (MANUAL OR FACSIMILE TOWN OF AVON, COLORADO SEAL) By: (Manual or Facsimile Signature) Mayor ATTESTED: (Manual or Facsimile Si ature) Town Clerk -10- [Form of Registrar's Certificate of Authentication] CERTIFICATE OF AUTHENTICATION This Bond is one of the Bonds of the issue described in the within-mentioned Bond Ordinance, and this Bond has been duly registered on the registration records kept by the undersigned as Registrar for such Bonds. Date of Registration and Authentication AFFILIATED DENVER NATIONAL BANK, DENVER, COLORADO as Registrar By: Authorized Signatory -11- [Form of Transfer] ASSIGNMENT FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers unto the within Bond and irrevocably constitutes and appoints , attorney-in-fact, to transfer the within Bond on the records kept for registration thereof with full power of substitution in the premises. Dated: Signature of Registered Owner: NOTICE: The signature to this assignment must correspond with the name of the registered owner as it appears upon the face of the within Bond in every particular, without alteration or enlargement or any change whatever. Signature guaranteed: (Bank, Trust Company, or Firm) Address of transferee: Tax Identification Number(s) or Social Security Number(s) of Transferee: (End of Form of Bond) -12- Section 4. Authentication. No Bond shall be valid or obligatory for any purpose or be entitled to any security or benefit under this ordinance unless and until a certificate of authentication on such Bond substantially in the form hereinabove set forth shall have been duly executed by the Registrar, and such executed certificate of the Registrar upon any such Bond shall be conclusive evidence that such Bond has been authenticated and delivered under this ordinance. The Registrar's certificate of authentication on any Bond shall be deemed to have been executed by it if signed by an authorized officer or signatory of the Registrar, but it shall not be necessary that the same officer or signatory sign the certificate of authentication on all of the Bonds issued hereunder. Section 5. Delivery of Bonds. Upon the adoption of this ordinance, the Town shall execute the Bonds and deliver them to the Registrar, and the Registrar shall authenticate the Bonds and deliver them to the Underwriter, as directed by the Town. The Registrar shall initially register the Bonds in the name of the Underwriter, or in the names of such transferees as the Underwriter may designate in writing satisfactory to the Registrar, or any combination thereof as directed by the Underwriter. Section 6. Registration and Transfer of Bonds, Persons Treated as Owners. The Registrar shall maintain records for the registration of ownership of each Bond as provided in this ordinance. Bonds may be transferred upon the registration records upon surrender of such Bonds to the Registrar, accompanied by a written instrument of transfer in form satisfactory to the Registrar, duly executed by the registered owner of the Bonds to be transferred or his duly authorized attorney-in-fact or legal representative, containing written instructions as to the details of the transfer of such Bonds, along with the social security number or tax identification number and the address of such transferee. No transfer of any Bond shall be effective until entered on the registration records. In all cases of the transfer of a Bond, the Registrar shall enter the transfer of ownership in the registration records and shall authenticate and deliver in the name of the transferee or transferees a new fully registered Bond in the denomination of $5,000, of the same maturity, number, and interest rate, all in accordance with the provisions of this ordinance. The Registrar may impose reasonable charges in connection with transfers of -13- Bonds, which charges (as well as any tax or other governmental charge required to be paid with respect to such transfer) shall be paid by the registered owner requesting such transfer. The Registrar shall not be required to transfer any Bonds: (1) during a period beginning at the opening of business 15 days before the day of mailing by the Registrar of a notice of prior redemption of Bonds and ending at the close of business on the day of such mailing, or (2) with respect to a particular Bond, after the mailing of notice calling such Bond for prior redemption. New Bonds delivered upon any transfer shall be valid special obligations of the Town, evidencing the same obligation as the Bonds surrendered, shall be secured by this ordinance, and shall be entitled to all of the security and benefits hereof to the same extent as the Bonds surrendered. Except as otherwise herein provided with respect to record dates for the payment of interest, the Town, the Paying Agent and the Registrar may deem and treat the registered owner of any Bond as the absolute owner thereof for all purposes (whether or not such Bond shall be overdue), and any notice to the contrary shall not be binding upon the Town, the Paying Agent or the Registrar. Section 7. Destruction of Bonds. Whenever any outstanding Bond shall be delivered to the Registrar for cancellation pursuant to this ordinance and upon payment of the principal amount and interest represented thereby, or whenever any outstanding Bond shall be delivered to the Registrar for transfer pursuant to the provisions hereof, such Bond shall be cancelled by the Registrar and counterparts of a certificate evidencing such cancellation shall be furnished by the Registrar to the Town. Section 8. Lost Bonds. Any Bond that is lost, stolen, destroyed, or mutilated may be replaced or paid by the Registrar upon receipt of such evidence, information or indemnity relating thereto as the Registrar and the Town may reasonably require, and upon payment of all costs and expenses in connection therewith. Section 9. Disposition of Bond Proceeds. A. The proceeds of the Bonds shall be applied in the following manner: (1) First, there shall be deposited in a special account hereby created with the Construction Bank and designated as the "Town of Avon, Colorado, Local Improvement -14- District No. 1992-1 Local Assessment Bonds, Series 1992 Construction Account" (the "Construction Account"), such proceeds of the bonds as are necessary (together with other legally available moneys of the Town deposited therein) to pay the costs of the improvements, including costs incidental thereto. (2) Second, there shall be deposited in the Bond Fund created in this ordinance all accrued interest received on the sale of the bonds and $ as capitalized interest through , 199. (3) Third, there shall be retained by the Town an amount sufficient to pay the cost of the issuance of the bonds. B. After completion of the improvements or after adequate provision is therefor made, any unexpended balance of the proceeds of the bonds shall be deposited in the Bond Fund. C. Neither the Underwriter nor any subsequent owners of the Bonds shall be responsible for the application or disposal by the Town or any of its officers of the funds derived from the sale thereof. In the event that all of the proceeds of the Bonds are not required to pay such costs, any remaining Bond proceeds shall be deposited to the Bond Fund hereinafter created, and used for the purpose of paying the principal of and interest on the Bonds. Proceeds of the Bonds may be temporarily deposited or invested, pending such use, in deposits or investments which are lawful for the Town. Section 10. Bond Fund: Additional Security. Remedies. A. The Bonds and the interest thereon shall be payable solely (except as herein provided) from a special fund hereby established and designated as the "Local Improvement District No. 1992-1 Bond Fund" (the 'Bond Fund"). From the proceeds of the Bonds there shall be deposited to the Bond Fund the accrued interest, if any, paid as part of the purchase price of the Bonds and the capitalized interest, and such amounts shall be used solely for the purpose of paying interest on the Bonds. There shall also be deposited into the Bond Fund any proceeds of the Bonds remaining after the cost of the improvements has been paid in full, and all moneys received from the assessments levied against property within the District specially benefited by the improvements. The Town hereby covenants to take all actions necessary or appropriate for the levying and collection of the assessments and -15- all interest and penalties in connection therewith, and for the enforcement of the assessment liens, in accordance with applicable Town ordinances and other applicable law, for the purpose of paying the principal of and interest on the Bonds. All moneys received from the assessments shall be deposited, immediately upon receipt by the Town, to the Bond Fund, and shall be applied to the payment of the principal of and interest on the Bonds until such principal and interest is paid in full. Any assessments remaining after the Bonds are paid in full, shall be deposited in the Surplus and Deficiency Fund (created by Section 15.4 of the Charter), except to the extent the Town reimburses itself pursuant to paragraph D of this Section. Moneys in the Bond Fund may be temporarily deposited or invested, pending such use, in deposits or investments which are lawful for the Town, and any income from such deposits or investments shall be retained in the Bond Fund. B. Pursuant to Section 15.3 of the Town Charter and in consideration of general benefits conferred upon the Town at large from the construction or installation of improvements in the District, the Town covenants to levy general (ad valorem) property taxes on all taxable property in the Town, or to transfer other legally available moneys of the Town for the purpose of advancing money to maintain current payments of interest and equal annual payments of the principal amount of said Bonds or for any prior redemption premium appertaining to such Bonds. Notwithstanding the foregoing, such levy or transfer shall not exceed 15 mills or an amount which would result from the levy of 15 mills in any one year in the aggregate for all special improvement districts heretofore or hereafter created by the Town, such tax proceeds or other moneys to be deposited in a special fund designated "Local Improvement District No. 1992-1 Security Fund" which shall be used solely for paying principal of and interest on the Bonds whenever there is a deficiency in the Bond Fund to meet the payment of the outstanding Bonds and interest due thereon, as the same come due; provided that such payment shall occur after the payments required by paragraphs C and D of this Section. C. The Bonds are and shall continue to be additionally secured and their payment shall be supplemented by the Surplus and Deficiency Fund, together with bonds of other special or local improvement districts, said fund consisting of moneys remaining to the credit of special or local improvement districts the bonds of which have been paid in full, both -16- principal and interest; and whenever there is a deficiency in the Bond Fund to meet the payment of outstanding Bonds and interest due thereon, as the same become due, the deficiency shall be paid out of the Surplus and Deficiency Fund. D. Whenever three-fourths of the Bonds have been paid and cancelled and for any reason the remaining assessments are not paid in time to pay the remaining Bonds, and there is not sufficient money in the Surplus and Deficiency Fund, then the Town shall pay the Bonds when due and reimburse itself by collecting the unpaid assessments due the District. If and to the extent that the Town Charter may hereafter be amended so that the Surplus and Deficiency Fund is not required to be applied as security for the Bonds, the Surplus and Deficiency Fund will not constitute security for the Bonds; and by the acceptance of any Bond any owner thereof consents to such amendment and in such event waives any security provided by the Surplus and Deficiency Fund. E. The Town hereby covenants for the benefit of each registered owner of the Bonds that except for the cost to be paid by other than special assessments, the total cost of the improvements in the District shall be apportioned, levied and assessed against such land in the District by ordinance to be hereafter adopted. Should any tract be divided, upon sale of a part thereof or by formal subdivision, or otherwise, after a special assessment thereon has been levied and made payable in installments and before the collection of all the installments, the unpaid special assessment and lien therefor shall thereupon become divided ratably according to area or such other method as provided in Chapter 12.08 of the Avon Municipal Code (the "Local Improvement Ordinance"). Any registered owner of any Bond shall have the right and power for the equal benefit and protection of all registered owners similarly situated: 1. By mandamus or other suit, action, or proceeding at law or in equity to enforce his rights against the Town, the Council, or any of the officers, agents or employees of the Town, and to require and compel the Town, the Council, or any of the officers, agents, or employees of the Town to perform and carry out its or their duties, obligations, or other commitments under this ordinance and under the Town's covenants and agreements with the registered owners of the Bonds contained in this ordinance; -17- 2. By action at law or by suit in equity to require the Town and the Council to account as if it or they were the trustees of an express trust; 3. By action at law or by suit in equity to have appointed a receiver, which receiver may take possession of any accounts and may collect, receive, and apply all revenues or other moneys pledged for the payment of the Bonds in the same manner as the Town itself might do; 4. By action at law or by suit in equity to enjoin any acts or things which might be unlawful or might be in violation of the rights of the registered owners of the Bonds; and 5. To bring suit upon the Bonds. F. The Town be, and it hereby is, authorized, empowered and directed, and it shall be its duty, to levy, receive, collect and enforce the payment of all assessments to be made and levied for said improvements, and all installments thereof, all interest thereon, and all penalties accrued, in the same manner and at the same time or times as prescribed by the Local Improvement Ordinance, the Creation Ordinance, and this ordinance, and to pay and disburse said payments, the installments thereof, the interest thereon, and penalties thereto, to any person or persons lawfully entitled thereto. G. The officers of the Town be, and they hereby are, authorized, empowered and directed, and it shall be their duty, to receive and collect at the time and in the manner heretofore specified, all assessments, the installments thereof, the interest thereon, and the penalties accrued, levied to defray a portion of the total cost of the designated improvements, in said District, and to pay and disburse such payments to the person or persons lawfully entitled to receive the same, in accordance with the laws of the State of Colorado, with the Charter, with the Local Improvement Ordinance, and with all the ordinances and resolutions of said Town heretofore or to be hereafter adopted. All moneys received from such assessments shall be placed in the Bond Fund, and said moneys shall be used as soon as they are available for the purpose of paying the principal of and interest on the special assessment bonds hereinafter authorized, and for no other purpose whatsoever, and as security for such payment said fund is hereby exclusively pledged. -18- H. So long as any of the Bonds remain outstanding, the Town will keep or cause to be kept true and accurate books of records and accounts showing full and true entries covering the collection and disposition of the special assessments as well as any delinquencies in the collection thereof, covering deposits and disbursements in each of the special accounts herein designated, covering the redemption of the Bonds, both principal and interest, and covering disbursements to defray the cost of the improvements, including, without limitation, incidental expenses; and the Town will permit an inspection and examination of all books and accounts at all reasonable times by a representative of the original purchaser of the Bonds. In addition, said Town at least once a year will cause at its regular annual audit, an audit to be made relating to said books and accounts by an accountant to be employed by the Town at its own expense. Section 11. Prior Redemption, Refunding. Whenever considered advisable by the Town Manager, he may, and whenever funds may be held to the credit of the District exceeding the amount of interest on the unpaid principal becoming due on and prior to one year next after the last interest payment date, he shall call for prior redemption at any time a suitable number of Bonds in regular numerical order. The Town Manager shall give written instructions concerning any prior redemption of Bonds to the Registrar at least 60 days prior to the redemption date. Notice of redemption shall be given by the Registrar by mailing a copy of the notice by first class mail (postage prepaid), not more than sixty (60) nor less than thirty (30) days prior to the date fixed for redemption, to the registered owner of each Bond to be redeemed at the address shown on the registration records maintained by the Registrar and by publication once in a newspaper of general circulation in the Town; provided however, that failure to give such notice by mailing to any registered owner, or any defect therein, shall not affect the validity of any proceeding for the redemption of other Bonds as to which no such failure or defect exists. The notice shall specify by number the Bonds so called (if less than all outstanding Bonds are called). The principal amount so redeemed will be payable upon presentation and surrender of the Bond at the principal office of the Paying Agent, and accrued interest to the redemption date will be paid by check or draft mailed to the registered owner (or by alternative means if so agreed by the registered -19- owner and the Paying Agent). On the redemption date specified in the redemption notice, interest on the Bonds so called shall cease. Nothing herein shall preclude the Town from refunding all or any portion of the Bonds or from exercising its right to redeem Bonds prior to maturity in connection therewith. Section 12. Defeasance. When all principal and interest in connection with the Bonds have been duly paid, all obligations hereunder shall thereby be discharged and the Bonds shall no longer be deemed to be outstanding within the meaning of this Ordinance. There shall be deemed to be such due payment of the Bonds or any portion thereof when the Town has placed in escrow and in trust with a commercial bank located within or without the State of Colorado, and exercising trust powers, an amount sufficient (including the known minimum yield from noncallable federal securities in which such amount may be initially invested) to meet all requirements of principal and interest on the Bonds or such portion thereof as the same become due to their final maturities or upon designated prior redemption dates. The federal securities shall become due at or prior to the respective times on which the proceeds thereof shall be needed, in accordance with a schedule established and agreed upon between the Town and such bank at the time of the creation of the escrow, or the federal securities shall be subject to redemption at the option of the holders thereof to assure such availability as so needed to meet such schedule. Section 13. Tax Covenant. A. The Town covenants for the benefit of the owners of the Bonds that it will not take any action or omit to take any action with respect to the Bonds, the proceeds thereof, any other funds of the Town, or any improvement financed with the proceeds of the Bonds if such action or omission (i) would cause the interest on the Bonds to lose its exclusion from gross income for federal income tax purposes under the Code, (ii) would cause interest o- the Bonds to lose its exclusion from alternative minimum taxable income as defined in Section 55(b)(2) of the Code except to the extent such interest is required to be included in the adjusted current earnings adjustment applicable to corporations under Section 56 of the Code in calculating corporate alternative minimum taxable income, or (iii) would cause interest on the Bonds to lose its exclusion from the State taxable income or State -20- alternative minimum taxable income under present State law. The foregoing covenant shall remain in full force and effect notwithstanding the payment in full or defeasance of the Bonds until the date on which all obligations of the Town in fulfilling the above covenant under the Code and State law have been met. For purposes of Section 265(b)(3)(B) of the Code, the Town hereby designates the Bonds as qualified tax-exempt obligations. Section 14. Approval of Official Statement. The Council hereby approves the Preliminary Official Statement dated . 1992, concerning the Bonds, in the form presented at this meeting, and authorizes the preparation of a final Official Statement for delivery at or prior to the date of delivery of the Bonds. Copies of the Preliminary Official Statement and final Official Statement are hereby authorized to be distributed by the Underwriter to all interested persons in connection with the sale of the Bonds. Section 15. Ratification; Direction to Effectuate. All proceedings and other actions heretofore taken or adopted by or on behalf of the Town in connection with the District, the improvements, the levy of assessments in connection therewith, or the issuance of special assessment bonds, and not inconsistent with this ordinance, are hereby ratified, approved and confirmed. The appropriate officers and agents of the Town are hereby authorized and directed to take all other actions necessary or appropriate to effectuate the provisions of this ordinance, including but not limited to the execution of a Paying Agent and Registrar Agreement, the Bond Purchase Agreement, the Construction Agreement and such certificates and affidavits as may be reasonably required by the Underwriter or otherwise appropriate. Section 16. Severabilitv. If any one or more sections or parts of this ordinance shall be adjudged unenforceable or invalid, such judgment shall not affect, impair, or invalidate the remaining provisions of this ordinance, it being the intention that the various provisions here 'f are severable. Section 17. Repealer. All acts, orders, resolutions, ordinances, or parts thereof, that are inconsistent or in conflict herewith are hereby repealed only to the extent of such inconsistency or conflict. -21- Section 18. Ordinance Irrepealable. After the Bonds are issued, this Ordinance shall be and remain irrepealable until the Bonds and the interest thereon shall have been fully paid, satisfied, and discharged. Section 19. Statutes Superseded. Pursuant to Article XX of the Colorado Constitution and the Charter of the Town, all statutes of the State of Colorado which might otherwise apply in connection with the District, the improvements, the levy of assessments in connection therewith, or the issuance of special assessment bonds, and which are in conflict with the provisions of this ordinance, are hereby superseded. Section 20. Limitations on Review of Proceedings. Pursuant to Section 15.5 of the Town Charter, no action or proceeding, at law or in equity, to review any acts or proceedings or to question the validity or enjoin the performance of the issue or collection of the Bonds, or the levy or collection of assessments or for any other relief against any acts or proceedings done or had pursuant to the Town Charter relating to the District, shall be maintained unless commenced within thirty (30) days after the performance of the act or the effective date of the resolution or ordinance complained of, or else be thereafter perpetually barred. Section 21. Effective Date. The effective date of this ordinance shall be seven days after public notice following its final passage. INTRODUCED, PASSED ON FIRST READING, AND ORDERED PUBLISHED THIS 2 4 th DAY OF MARCH, 1992. (SEAL) Mayor ATTESTED: T *n Cler ADOPTED AND APPROVED THIS DAY OF MARCH, 1992. (SEAL) Mayor -22- ATTESTED: Town Clerk -23-