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TC Ord. No. 1994-18 Authorizing the issuance of the sales tax revenue bondsORDINANCE NO. 94-18 SERIES OF 1994 AN ORDINANCE AUTHORIZING THE ISSUANCE OF THE TOWN OF AVON, COLORADO, SALES TAX REVENUE BONDS, SERIES 1994B; PROVIDING THE FORM, TERMS AND CONDITIONS OF THE BONDS, THE MANNER AND TERMS OF ISSUANCE, THE MANNER OF EXECUTION, THE METHOD OF PAYMENT AND THE SECURITY THEREFOR; PLEDGING SALES TAX REVENUES OF THE TOWN FOR THE PAYMENT OF THE BONDS; PROVIDING CERTAIN COVENANTS AND OTHER DETAILS AND MAKING OTHER PROVISIONS CONCERNING THE BONDS AND THE SALES TAX REVENUES; RATIFYING ACTION PREVIOUSLY TAKEN AND APPERTAINING THERETO; AND REPEALING ALL ORDINANCES IN CONFLICT HEREWITH. NOW, THEREFORE, BE IT ORDAINED BY THE TOWN COUNCIL OF THE TOWN OF AVON, COLORADO: Section 1. Definitions. Terms used in this Ordinance shall have the meanings specified in this section for all purposes of this Ordinance and of any ordinance amendatory hereof, supplemental hereto or relating hereto, and of any instrument or document appertaining hereto, except where the context by clear implication otherwise requires. All definitions include the singular and plural and include all genders. Certain terms are parenthetically defined elsewhere herein. Additional Bonds: the one or more series of bonds or other securities or obligations authorized to be issued by the Town pursuant to Section 18 hereof and having a lien on the Pledged Revenues on a parity with the lien of the 1994B Bonds. Average Annual Debt Service: the sum of principal and interest requirements on the Bonds to be paid during each Fiscal Year for the period beginning with the Fiscal Year in which such computation is being made and ending with the last Fiscal Year in which any Bond becomes due, divided by the number of Fiscal Years (including portions thereof) during the period beginning with the Fiscal Year in which such computation is being made and ending with the last Fiscal Year in which any Bond becomes due. Bond Account: the account by that name created by Section 15 of the 1994A Bond Ordinance and continued in Section 15 hereof. Bond Reserve Insurance Policv: any insurance policy, surety bond, irrevocable letter of credit or similar instrument deposited in or credited to the Reserve Account in lieu of or in partial substitution for moneys on deposit therein. The issuer providing any such Bond Reserve Insurance Policy shall be an issuer which then is rated in the highest rating category by Moody's Investors Service, Inc., Standard & Poor's Corporation, A.M. Best & Company, or their successors. Bonds: the Outstanding 1994A Bonds, 1994B Bonds and any Additional Bonds. Business Day: a day on which banks located in the cities in which the principal offices of each of the Paying Agent and the Registrar are not required or authorized to be closed and on which the New York Stock Exchange is not closed. Charter: the home rule Charter of the Town, including all amendments thereto prior to the date hereof. Commercial Bank: any depository for public funds permitted by the laws of the State for political subdivisions of the State which has a capital and surplus of $10,000,000 or more, and which is located within the United States. Debt Service Fund: the Town's existing Debt Service Fund created and maintained for accounting purposes. Fiscal Year: the twelve months commencing on the first day of January of any calendar year and ending on the thirty-first day of December of such calendar year or such other twelve month period as may from time to time be designated by the Town Council as the Fiscal Year of the Town. Governmental Obligations: any of the following which are noncallable and which at the time of investment are legal investments under the laws of the State for the moneys proposed to be invested therein: (a) direct general obligations of, or obligations the payment of principal of and interest on which are unconditionally guaranteed by, the United States of America; (b) bonds, debentures, notes, or other evidences of indebtedness issued by the Export-Import Bank of the United States, the Federal Financing Bank, the Farmers Home Administration, the General Services Administration, the U.S. -2- Maritime Administration, or the U.S. Department of Housing and Urban Development; or (c) evidences of ownership interests in obligations described in paragraph (a) or (b) above. Letter of Representations: the Letter of Representations between the Town and The Depository Trust Company. Maximum Annual Debt Service Requirement: the maximum amount of all required payments of principal and interest on the Bonds which will become due in any Fiscal Year. 1994A Bond Ordinance: Ordinance No. 94-7, Series of 1994 of the Town authorizing the issuance and delivery of the 1994A Bonds. 1994A Bonds: the Town's Sales Tax Revenue Bonds, Series 1994, previously issued pursuant to the 1994A Bond Ordinance. 1994B Bonds: the Town's Sales Tax Revenue Bonds, Series 1994B issued pursuant to this Ordinance. Ordinance: this Ordinance of the Town, which provides for the issuance and delivery of the 1994B Bonds. Outstandine: as of any date of calculation, all 1994B Bonds theretofore executed, issued and delivered by the Town except: (1) 1994B Bonds theretofore cancelled by the Town, Registrar or Paying Agent, or surrendered to the Town, Registrar or Paying Agent for cancellation; (2) 1994B Bonds in lieu of or in substitution for which other 1994B Bonds shall have been executed, issued and delivered by the Town and authenticated by the Registrar unless proof satisfactory to the Registrar is presented that any such 1994B Bonds are duly held by the lawful registered owners thereof; or (3) 1994B Bonds deemed to have been paid as provided in Section 21 hereof. Owner or registered owner: the registered owner of any 1994B Bond as shown on the registration books kept by the Registrar. -3- Paving Agent: Colorado National Bank, Denver, Colorado, being the agent for the Town for the payment of the 1994B Bonds and interest thereon, or its successors and assigns. Permitted Investment: any investment or deposit permitted by the Charter and Ordinances of the Town. Person: any individual, firm, partnership, corporation, company, association, joint- stock association or body politic; and the term includes any trustee, receiver, assignee or other similar representative thereof. Pledged Revenues: (i) the revenues derived from the Pledged Sales Tax; (ii) any additional taxes (other than a general ad valorem tax), funds or revenues which the Town hereafter pledges to the payment of Bonds; (iii) proceeds of the 1994B Bonds or other legally available moneys deposited into and held in the Bond Account and the Reserve Account; and (iv) interest or investment income on the Bond Account and the Reserve Account; all to the extent that such moneys are at any time required by Section 15 hereof to be deposited into and held in the Bond Account and the Reserve Account. Pledged Sales Tax: the proceeds of the Town's current 4.0% Sales Tax. "Pledged Sales Tax" does not include incremental sales taxes which are or may be pledged to the payment of the Bonds pursuant to an urban renewal plan as defined in §31-25-103(a), C.R.S. or a plan of development as defined in §31-25-802 (6.4) C.R.S. "Pledged Sales Tax" does not include amounts withheld by retailers and vendors to cover their expenses in collecting and remitting the Pledged Sales Tax, and Pledged Sales Tax does not include amounts collected by the Town and subsequently determined, pursuant to the applicable Sales Tax Ordinances, to be subject to valid claims for refunds. "Pledged Sales Tax" does not include the proceeds of any increase in the Sales Tax which may be approved in the future, unless such increase is expressly pledged by the Town. "Pledged Sales Tax" does include the proceeds derived by the Town from any legally available tax or taxes or fees (other than a general ad valorem tax) which replace or supersede the Pledged Sales Tax, -4- regardless of whether such tax or taxes or fees are imposed by the Town or the State or other political subdivision thereof. Principal Operations Office: means the principal operations office of the Registrar and Paying Agent, currently located at First Trust National Association, St. Paul, Minnesota. Project: the acquisition of land for a public works garage and maintenance facility to be acquired with a portion of the proceeds of the 1994B Bonds and any other public improvement or equipment which the Town is legally authorized to acquire, construct or finance with the proceeds of the 1994B Bonds. Purchasers: Coughlin & Company Inc. Rebate Account: the account by that name created by Section 15 hereof. Registrar: Colorado National Bank, Denver, Colorado, being the agent for the Town for the registration, transfer and exchange of the 1994B Bonds, or its successors. Re isg trar Agreement: the Registrar Agreement between the Town and the Registrar dated as of September 15, 1994. Regular Record Date: the fifteenth day of the calendar month next preceding each interest payment date for the 1994B Bonds (other than a special interest payment date hereafter fixed for the payment of defaulted interest). Reserve Account: the account by that name created by Section 15 of the 1994A Bond Ordinance and continued by Section 15 hereof. Reserve Account Requirement: an amount equal to one-half of Average Annual Debt Service. Sales Tax: the 4.0% tax upon the sale and use of goods and services which is currently being levied by the Town pursuant to the Sales Tax Ordinances and any future or amended tax levied by the Town as a sales and use tax and pledged by the Town Council to the payment of the Bonds. Sales Tax Ordinances: the ordinances adopted by the Town Council of the Town for the purpose of adopting and enforcing the Sales Tax and which are in effect on the date of this Ordinance and as later amended or supplemented. -5- Special Record Date: a special date fixed to determine the names and addresses of registered owners for purposes of paying interest on a special interest payment date for the payment of defaulted interest, all as further provided in Section 6 hereof. State: the State of Colorado. Tax Code: the Internal Revenue Code of 1986, as amended to the date of delivery of the Bonds, and any regulations promulgated thereunder. Town: the Town of Avon, Colorado. Town Council: the Town Council of the Town or any successor in functions thereto. Trust Bank: a Commercial Bank which is authorized to exercise and is exercising trust powers. Section 2. Recitals. A. The Town is a municipal corporation duly organized and existing under the Town's Charter adopted pursuant to Article XX of the Constitution of the State of Colorado. B. Section 14.5 of the Charter permits the Town to issue securities made payable out of the proceeds of any sales and/or use taxes. C. Section 14.3 of the Charter requires that bonds or other evidence of indebtedness payable from the proceeds of any municipal taxes be approved at a general or special election. D. Article X, Section 20 of the Colorado Constitution requires voter approval in advance for the creation of any multiple-fiscal year direct or indirect debt or to other financial obligation. E. At the election held on November 2, 1993, the Town's electors approved the following question: SHALL THE TOWN OF AVON DEBT BE INCREASED BY AN AMOUNT NOT TO EXCEED $1,700,000, WITH A REPAYMENT COST NOT TO EXCEED $3,966,650 FOR THE PURPOSE OF ACQUIRING LAND FOR A PUBLIC WORKS GARAGE AND MAINTENANCE FACILITY; SUCH DEBT TO BE EVIDENCED BY THE ISSUANCE OF BONDS OR BONDS ISSUED TO REFUND SUCH BONDS PAYABLE FROM SUCH TOWN TAXES OR OTHER REVENUES AS THE TOWN COUNCIL MAY DETERMINE, WITHOUT ANY INCREASE IN THE CURRENT RATE OF ANY SUCH TAXES; SUCH BONDS -6- TO BE SOLD IN ONE SERIES OR MORE IN AN AGGREGATE AMOUNT NOT TO EXCEED THE MAXIMUM AUTHORIZED PRINCIPAL AMOUNT AND REPAYMENT COSTS, ON TERMS AND CONDITIONS AS THE TOWN COUNCIL MAY DETERMINE, INCLUDING PROVISIONS FOR THE REDEMPTION OF THE BONDS PRIOR TO MATURITY WITH OR WITHOUT PAYMENT OF A PREMIUM; AND SHALL THE PROCEEDS OF SUCH BONDS AND THE REVENUES FROM SUCH TAXES AND ANY EARNINGS FROM THE INVESTMENT OF SUCH PROCEEDS AND REVENUES BE COLLECTED AND SPENT WITHOUT LIMITATION OR CONDITION, AND WITHOUT LIMITING THE COLLECTION OR SPENDING OF ANY OTHER REVENUES OR FUNDS BY THE TOWN UNDER ARTICLE X, SECTION 20 OF THE COLORADO CONSTITUTION OR ANY OTHER LAW? F. The Town imposes a Sales Tax pursuant to Section 13.1 of the Charter and the Sales Tax Ordinances. G. The Town has previously issued the 1994A Bonds and has pledged the Pledged Sales Tax to the payment of the 1994A Bonds. H. Except for the 1994A Bonds, the Town has never pledged the Sales Tax to the payment of any bonds or for any purpose. The Pledged Sales Tax may now be pledged lawfully and irrevocably for the payment of the 1994B Bonds. 1. The Town has received a proposal from the Purchasers for the purchase of the 1994B Bonds for the purpose of defraying in whole or in part the costs of the Project. J. There have been presented to the Council the proposed forms of the Letter of Representations and the Registrar Agreement. K. The Town Council desires to cause the 1994B Bonds to be issued, to authorize and direct the application of the proceeds thereof as set forth herein, and to provide security for the payment thereof, all in the manner hereinafter set forth. Section 3. Ratification. All actions heretofore taken (not inconsistent with the provisions of this Ordinance) by the Town Council and other officers of the Town in the imposition and collection of the Sales Tax, the Project, and selling and issuing the 1994B Bonds for those purposes are ratified, approved and confirmed. -7- Section 4. Authorization of Project. The Project hereby is authorized at a cost of not exceeding $1,700,000 (excluding costs to be paid from sources other than the proceeds of the 1994B Bonds). Section 5. Authorization of the 1994B Bonds. There hereby are authorized to be issued fully registered sales and use tax revenue securities of the Town, to be designated "Town of Avon, Colorado, Sales Tax Revenue Bonds, Series 1994B" in the aggregate principal amount of $1,700,000, to be payable and collectible, both as to principal and interest, from the Pledged Revenues. Section 6. 1994B Bond Details. The 1994B Bonds shall be issued in fully registered form (i.e., registered as to both principal and interest) initially registered in the name of Cede & Co. as nominee for The Depository Trust Company, shall be dated as of September 15, 1994, shall be issued in the denomination of $5,000 or any integral multiple thereof (provided that no 1994B Bond may be in a denomination which exceeds the principal coming due on any maturity date, and no individual 1994B Bond will be issued for more than one maturity) and shall be numbered in such manner as the Registrar may determine. The 1994B Bonds shall bear interest from their dated date until maturity at the rates per annum shown in a resolution to be adopted by the Council in connection with the sale of the Bonds to the Purchaser, payable semiannually on March 15 and September 15 in each year, commencing on March 15, 1995, except that any 1994B Bond which is reissued upon transfer, exchange or other replacement shall bear interest from the most recent interest payment date to which interest has been paid or duly provided for, or if no interest has been paid, from the date of the 1994B Bonds. The maximum net effective interest rate on the Bonds shall not exceed 8.00%. The 1994B Bonds shall mature on the dates and in the amounts hereinafter designated, as follows: -8- Maturity Date Principal (September 15) Amount 1995 $50,000 1996 50,000 1997 55,000 1998 55,000 1999 60,000 2000 60,000 2001 65,000 2002 70,000 2003 70,000 2004 75,000 2010 565,000 2014 525,000 The principal of and premium, if any, on any 1994B Bond shall be payable to the registered owner thereof as shown on the registration records kept by the Registrar at the Principal Operations Office, upon maturity thereof and upon presentation and surrender at the Principal Operations Office of the Paying Agent. If any 1994B Bond shall not be paid upon such presentation and surrender at or after maturity, it shall continue to draw interest at the same interest rate borne by said 1994B Bond until the principal thereof is paid in full. Payment of interest on any 1994B Bond shall be made by check or draft mailed by the Paying Agent from the Principal Operations Office, 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 the address shown on the registration records kept by the Registrar at the close of business on the Regular Record Date for such interest payment 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 Regular Record Date and shall be payable to the person who is the registered owner thereof at the close of business on a Special Record Date for the payment of any such defaulted interest. Such Special Record Date and the date fixed for payment of the defaulted interest shall be fixed by the Registrar whenever moneys become available for payment of the defaulted interest. Notice of the Special Record Date and the date fixed for payment of the defaulted interest shall be given to the registered owners of the 1994B Bonds not less than ten days prior to the Special Record Date by -9- first-class mail to each such registered owner as shown on the Registrar's registration records on a date selected by the Registrar, stating the date of the Special Record Date and the date fixed for the payment of such defaulted interest. The Paying Agent may make payments of interest on any 1994B Bond by such alternative means as may be mutually agreed to between the owner of such 1994B Bond and the Paying Agent (provided, however, that the Town shall not be required to make funds available to the Paying Agent prior to the interest payment dates stated in this Section). 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 Registrar. Section 7. Prior Redemption. A. 1994B Bonds maturing on or before September 15, 2004, are not subject to prior redemption. 1994B Bonds maturing on September 15, 2005 and thereafter, shall be subject to prior redemption, at the option of the Town, in whole, or in part, in integral multiples of $5,000, from such maturities as are selected by the Town, and if less than all of the Bonds of a maturity are to be redeemed, by lot within a maturity in such manner as the Registrar may determine, on September 15, 2004, or on any date thereafter, at a redemption price equal to the principal amount so redeemed plus accrued interest to the redemption date. B. 1994B Bonds maturing September 15, 2010 and September 15, 2014 are subject to mandatory sinking fund redemption at a price equal to the principal amount thereof plus accrued interest to the redemption date. Such 1994B Bonds subject to mandatory sinking fund redemption shall be selected by lot in such manner as the Registrar shall determine (giving proportionate weight to the 1994B Bonds in denominations larger than $5,000). As and for a sinking fund for the redemption of the 1994B Bonds maturing on September 15, 2010, the Town will deposit in the Bond Account a sum together with other moneys available in the Bond Account is sufficient to redeem (after credit as provided below) the following principal amounts of the 1994B Bonds maturing on September 15, 2010: -10- Principal Date Amount 2005 $ 80,000 2006 85,000 2007 90,000 2008 95,000 2009 105,000 The remaining $110,000 of the 1994B Bonds maturing on September 15, 2010 shall be paid upon presentation and surrender at maturity unless redeemed pursuant to optional redemption prior to maturity. As and for a sinking fund for the redemption of the 1994B Bonds maturing on September 15, 2014, the Town will deposit in the Bond Account a sum together with other moneys available in the Bond Account is sufficient to redeem (after credit as provided below) the following principal amounts of the 1994B Bonds maturing on September 15, 2014: Principal Date Amount 2011 $120,000 2012 125,000 2013 135,000 The remaining $145,000 of the 1994B Bonds maturing on September 15, 2014 shall be paid upon presentation and surrender at maturity unless redeemed pursuant to optional redemption prior to maturity. On or before the thirtieth day prior to each such sinking fund payment date, the Registrar shall proceed to call the 1994B Bonds indicated above (or any 1994B Bond or Bonds issued to replace such 1994B Bonds) for redemption from such sinking fund on the next September 15, and give notice of such call without further instruction or notice from the Town. At its option, to be exercised on or before the sixtieth day next preceding any sinking fund redemption date, the Town may (a) deliver to the Registrar for cancellation 1994B Bonds subject to mandatory sinking fund redemption on such date in an aggregate principal amount desired or (b) receive a credit in respect of its sinking fund redemption obligation for any 1994B Bonds subject to mandatory sinking fund redemption on such date, which prior to said date have been redeemed (other wise than through the operation of the sinking fund) and cancelled by the Registrar and not theretofore applied as a credit against any sinking fund redemption obligation. Each 1994B Bond so delivered or previously redeemed will be credited by the Registrar at the principal amount thereof on the obligation of the Town on such sinking fund redemption date and the principal amount of 1994B Bonds to be redeemed by operation of such sinking fund on such date will be accordingly reduced. The Town will on or before the sixtieth day next preceding each sinking fund redemption date furnish the Registrar with its certificate indicating whether or not and to what extent the provisions of (a) and (b) of the preceding sentence are to be availed with respect to such sinking fund payment. Failure of the Town to deliver such certificate shall not affect the Registrar's duty to give notice of sinking fund redemption as provided in this paragraph B. C. In the case of 1994B Bonds of a denomination larger than $5,000, a portion of such 1994B Bond ($5,000 or any integral multiple thereof) may be redeemed, in which case the Registrar shall, without charge to the owner of such 1994B Bond, authenticate and issue a replacement 1994B Bond or Bonds for the unredeemed portion thereof. D. Except as provided in paragraph B of this Section, the Town shall (unless waived by the Registrar) give written instructions concerning any prior redemption to the Registrar at least 60 days prior to such redemption date. Notice of redemption shall be given by the Registrar in the name of the Town, by sending a copy of such notice by certified, first-class postage prepaid mail, not more than 60 nor less than 30 days prior to the redemption date, to the Purchaser, and to each registered owner of any 1994B Bond, all or a portion of which is called for prior redemption, at his address as it last appears on the registration records kept by the Registrar. Failure to give such notice by mailing to the registered owner of any 1994B Bond or to the Purchaser of any defect therein, shall not affect the validity of the proceedings for the redemption of any other 1994B Bonds. Such notice shall identify the 1994B Bonds or portions thereof to be redeemed (if less than all are to be redeemed) and the date fixed for redemption, and shall further state that on such redemption date the principal amount thereof and the designated premium thereon, if any, will become due and payable at the Paying Agent, and that from and after such date interest will cease to accrue. Accrued interest to the redemption date will be paid by check or draft mailed to the -12- registered owner (or by alternative means if so agreed to by the Paying Agent and the registered owner). Notice having been given in the manner hereinabove provided, the 1994B Bond or Bonds so called for redemption shall become due and payable on the redemption date so designated; and upon presentation and surrender thereof at the Paying Agent, the Town will pay the principal of and premium, if any, on 1994B Bond or Bonds so called for redemption. Section 8. Special Obligations. All of the 1994B Bonds, together with the interest accruing thereon shall be payable and collectible solely out of the Pledged Revenues, which are hereby irrevocably so pledged; the owner or owners of the 1994B Bonds may not look to any general or other fund for the payment of principal and interest on the 1994B Bonds, except the designated special funds pledged therefor; and the 1994B Bonds shall not constitute an indebtedness nor a debt within the meaning of any applicable charter, constitutional or statutory provision or limitation; nor shall they be considered or held to be general obligations of the Town. Section 9. Form of 1994B Bonds and Registration Panel. The 1994B Bonds and the registration panel shall be substantially as follows (provided that any portion of the 1994B Bond text may, with appropriate references, be printed on the back of the 1994B Bonds), with such omissions, insertions, endorsements, and variations as to any recitals of fact or other provisions as may be required by the circumstances, be required or permitted by this Ordinance, or be consistent with this Ordinance and necessary or appropriate to conform to the rules and requirements of any governmental authority or any usage or requirement of law with respect thereto: -13- (Form of Bond) * Insert only if bonds are delivered pursuant to Section 12 of this Ordinance. * *Insert only if bonds are delivered to The Depository Trust Company pursuant to Section 13 of this Ordinance. UNITED STATES OF AMERICA STATE OF COLORADO COUNTY OF EAGLE TOWN OF AVON, COLORADO SALES TAX REVENUE BOND SERIES 1994B NO. R- INTEREST RATE MATURITY DATE DATED DATE CUSIP September 15, 1994 REGISTERED OWNER: **CEDE & CO.** PRINCIPAL AMOUNT: The Town of Avon, in the County of Eagle and State of Colorado (the "Town"), for value received, promises to pay to the registered owner specified above, or registered assigns, solely from the special funds provided therefor, the principal amount specified above, on the maturity date specified above (unless called for earlier redemption), and to pay from said sources interest thereon on March 15 and September 15 of each year, commencing on March 15, 1995, at the interest rate per annum specified above, until the principal sum is paid or payment has been provided therefor. This bond will bear interest from the most recent interest payment date to which interest has been paid or provided for, or, if no interest has been paid, from the date of this bond. The principal of this bond is payable upon presentation and surrender hereof to Principal Operations Office of the Town's registrar and paying agent (the "Registrar" or the "Paying Agent"), initially Colorado National Bank, in Denver, Colorado, currently located at First Trust National Association, St. Paul, Minnesota. Interest on this bond will be paid on or before each interest payment date (or, if such interest -14- payment date is not a business day, on or before the next succeeding business day), by check or draft mailed to the person in whose name this bond is registered (the "registered owner") in the registration records of the Town maintained by the Registrar at the Principal Operations Office and at the address appearing thereon at the close of business on the fifteenth day of the calendar month next preceding such interest payment date (the "Regular Record Date"). Any such interest not so timely paid or duly provided for shall cease to be payable to the person who is the registered owner hereof at the close of business on the Regular Record Date and shall be payable to the person who is the registered owner hereof at the close of business on a Special Record Date for the payment of any defaulted interest. Such Special Record Date shall be fixed by the Registrar whenever moneys become available for payment of the defaulted interest, and notice of the Special Record Date shall be given to the registered owners of the bonds of the series of which this is one (the "1994B Bonds") not less than ten days prior to the Special 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 of the Town authorizing the issuance of the 1994B Bonds (the "Bond Ordinance"). 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 Registrar. The 1994B Bonds maturing on September 15, 2005 and thereafter are subject to prior redemption, at the option of the Town, in whole, or in part, in integral multiples of $5,000, from such maturities as are selected by the Town, and if less than all of the 1994B Bonds of a maturity are to be redeemed, by lot within a maturity in such manner as the Registrar may determine, on September 15, 2004, or on any date thereafter, at a redemption price equal the principal so redeemed plus accrued interest to the redemption date. Bonds of the series of which this bond is a part maturing on September 15, 2010 and September 15, 2014 are subject to mandatory sinking fund redemption in the manner provided in the Bond Ordinance at a price equal to the principal amount thereof plus accrued interest to the redemption date. Bonds subject to mandatory sinking fund redemption shall be selected for mandatory sinking fund redemption by lot in such manner as the Registrar shall determine (giving proportionate weight to Bonds in denominations larger than $5,000). On or before the thirtieth day prior to each such sinking fund payment date, the Registrar will proceed to call the 1994B Bonds -15- subject to mandatory sinking fund redemption (or any Bond or Bonds issued to replace such Bonds) for redemption on the next September 15, and give notice of such call. The Town is entitled to certain credits against its sinking fund redemption obligation in the manner and upon the conditions provided in the Bond Ordinance. In the case of redemption of Bonds of a denomination larger than $5,000, a portion of such Bond ($5,000 or any integral multiple thereof) may be redeemed, in which case the Registrar shall, without charge to the owner of such Bond, authenticate and issue a replacement Bond or Bonds for the unredeemed portion thereof. Redemption shall be made upon not more than 60 days' and not less than 30 days' mailed notice to the original purchasers and to each registered owner of Bonds to be redeemed as shown on the registration records kept by the Registrar, in the manner and upon the conditions provided in the Bond Ordinance. The 1994B Bonds are issuable only as fully registered Bonds in denominations of $5,000 or any integral multiples thereof and are exchangeable for fully registered Bonds of the same maturity and series in equal aggregate principal amounts and in authorized denominations at the aforesaid office of the Registrar, but only in the manner, subject to the limitations and conditions, and upon payment of the charges provided in the Bond Ordinance. **The 1994B Bonds are not transferable or exchangeable, except as set forth in the Bond Ordinance. Upon any partial prior redemption of this Bond, Cede & Co. in its discretion may request the Bond Registrar to authenticate a new Bond or make an appropriate notation on this Bond indicating the date and amount of prepayment, except in the case of final maturity, in which case this Bond must be presented to the Bond Registrar prior to final payment.** *This Bond is fully transferable by the registered owner hereof in person or by his duly authorized attorney on the registration records kept by the Registrar upon surrender of this Bond together with a duly executed written instrument of transfer satisfactory to the Registrar. Upon such transfer a new fully registered bond of authorized denomination or denominations of the same series, aggregate principal amount and maturity will be issued to the transferee in exchange for this bond, subject to such terms and conditions and on payment of the charges as set forth in the Bond Ordinance.* -16- The Town and the Registrar and Paying Agent may deem and treat the person in whose name this Bond is registered as the absolute owner hereof for the purpose of making payment and for all other purposes, except to the extent otherwise provided hereinabove and in the Bond Ordinance with respect to Regular and Special Record Dates for the payment of interest. *The Registrar will not be required to transfer or exchange (i) any Bond or portion thereof during a period beginning at the opening of business 15 days before the day of the mailing by the Registrar of notice of prior redemption and ending at the close of business on the day of such mailing, or (ii) any Bond or portion thereof after the mailing of notice calling such Bond or any portion thereof for prior redemption, except the unredeemed portion of Bonds being redeemed in part•* The 1994B Bonds are authorized for the purpose of defraying wholly or in part the costs of the Project (as defined in the Bond Ordinance), for the payment of costs and expenses incidental thereto and to the issuance of the 1994B Bonds, and for funding a reserve for the 1994B Bonds, all under the authority of and in full conformity with the Constitution of the State of Colorado and the Town Charter and pursuant to the Bond Ordinance duly adopted, published and made a law of the Town, all prior to the issuance of this bond. The 1994B Bonds do not constitute a debt or an indebtedness of the Town within the meaning of any applicable charter, constitutional or statutory provision or limitation, shall not be considered or held to be a general obligation of the Town, and are payable from, and constitute a pledge of and an irrevocable lien (but not an exclusive lien) on, all of the proceeds to be derived by the Town from the Pledged Sales Tax (as defined in the Bond Ordinance) and from certain taxes which hereafter may be imposed by the Town in addition thereto or in substitution therefor, any taxes, funds or revenues which the Town hereafter pledges to the payment of the 1994B Bonds, certain other moneys held in the Bond Account and the Reserve Account (as both such accounts are defined in the Bond Ordinance), and investment income on certain accounts, all to the extent that such moneys are at any time required to be deposited into and held in the Bond Account, and the Reserve Account as provided in the Bond Ordinance, subject to certain exceptions and exclusions as provided in the Bond Ordinance (the "Pledged Revenues"). -17- The 1994B Bonds constitute a pledge of, and an irrevocable first lien (but not an exclusively first lien) on all of the Pledged Revenues, on a parity with the lien thereon of the Town's outstanding Sales Tax Revenue Bonds, Series 1994. The 1994B Bonds are equitably and ratably secured by a lien on the Pledged Revenues. Payment of the principal of and interest on this bond shall be made from, and as security for such payment there are irrevocably (and exclusively) pledged, pursuant to the Bond Ordinance, moneys deposited and to be deposited in a special account of the Town (the "Bond Account") into which account the Town has covenanted under the Bond Ordinance to pay from the Pledged Revenues a sum sufficient, together with other moneys available in the Bond Account therefor, to pay when due the principal of and interest on the 1994B Bonds and any Additional Bonds (each as defined in the Bond Ordinance). In addition, there is irrevocably and exclusively pledged to the payment of the 1994B Bonds and any Additional Bonds a reserve account (the "Reserve Account") which will be maintained as provided in the Bond Ordinance. Except as otherwise specified in the Bond Ordinance, this bond is entitled to the benefits of the Bond Ordinance equally and ratably both as to principal (and redemption price) and interest with all other Bonds issued and to be issued under the Bond Ordinance, to which reference is made for a description of the rights of the owners of the 1994B Bonds and the rights and obligations of the Town. This bond is payable from the Pledged Revenues, and the owner hereof may not look to any general or other fund of the Town for the payment of the principal of and interest on this bond except the Pledged Revenues. Reference is made to the Bond Ordinance for the provisions, among others, with respect to the custody and application of the proceeds of the 1994B Bonds, the receipt and disposition of the Pledged Revenues, the nature and extent of the security, the terms and conditions under which additional bonds payable from the Pledged Revenues may be issued, the rights, duties and obligations of the Town, and the rights of the owners of the 1994B Bonds; and by the acceptance of this bond the owner hereof assents to all provisions of the Bond Ordinance. The principal of and the interest on this bond shall be paid, and this bond is transferable, free from and without regard to any equities between the Town and the original or any intermediate owner hereof or any setoffs or cross-claims. -18- This bond must be registered in the name of the owner as to both principal and interest on the registration records kept by the Registrar at the Principal Operations Office in conformity with the provisions stated herein and endorsed herein and subject to the terms and conditions set forth in the Bond Ordinance. No transfer of this bond shall be valid unless made on the registration records maintained at the principal office of the Registrar by the registered owner or his attorney duly authorized in writing. It is further certified and recited that all the requirements of law have been fully complied with by the proper Town officers in the issuance of this bond. This bond shall not be valid or obligatory for any purpose until the Registrar shall have manually signed the certificate of authentication herein. IN TESTIMONY WHEREOF, the Town Council of the Town of Avon has caused this bond to be signed and executed in its name with a manual or facsimile signature of the Mayor of the Town, and to be signed, executed and attested with a manual or facsimile signature of the Town Clerk, with a manual or facsimile impression of the seal of the Town affixed hereto, all as of the date specified above. (Manual or Facsimile Signature) Mayor (MANUAL OR FACSIMILE SEAL) Attest: (Manual or Facsimile Signature) Town Clerk (End of Form of Bond) -19- (Form of Registrar's Certificate of Authentication) This is one of the 1994B Bonds 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. COLORADO NATIONAL BANK, as Registrar Date of Authentication By: and Registration: Authorized Officer or Employee (End of Form of Registrar's Certificate of Authentication) -20- **(Form of Prepayment Panel) The following installments of principal (or portion thereof) of this bond have been prepaid in accordance with the terms of the Bond Ordinance authorizing the issuance of this bond. Signature of Date of Principal Authorized Prepayment Prepaid Representative of the Depository (End of Form of Prepayment Panel)** -21- * (Form of Assignment) For value received, the undersigned hereby sells, assigns and transfers unto the within bond and hereby irrevocably constitutes and appoints attorney, to transfer the same on the records of the Registrar, with full power of substitution in the premises. Dated: Signature Guaranteed by a member of the Medallion Signature Program: Address of transferee: Social Security or other tax identification number of transferee: NOTE: The signature to this Assignment must correspond with the name as written on the face of the within bond in every particular, without alteration or enlargement or any change whatsoever. EXCHANGE OR TRANSFER FEES MAY BE CHARGED (End of Form of Assignment) * -22- Section 10. Negotiability. Subject to the registration provisions hereof, the 1994B Bonds shall be fully negotiable and shall have all the qualities of negotiable paper, and the owner or owners thereof shall possess all rights enjoyed by the holders or owners of negotiable instruments under the provisions of the Uniform Commercial Code-Investment Securities. The principal of and interest on the 1994B Bonds shall be paid, and the 1994B Bonds shall be transferable, free from and without regard to any equities between the Town and the original or any intermediate owner of any 1994B Bonds or any setoffs or cross-claims. Section 11. Execution. The 1994B Bonds shall be executed in the name and on behalf of the Town by the signature of the Mayor, shall be sealed with a manual or facsimile impression of the seal of the Town and attested by the signature of the Town Clerk. Each 1994B Bond shall be authenticated by the manual signature of an authorized officer or employee of the Registrar as hereinafter provided. The signatures of the Mayor and the Town Clerk may be by manual or facsimile signature. The 1994B Bonds bearing the manual or facsimile signatures of the officers in office at the time of the authorization thereof shall be the valid and binding obligations of the Town (subject to the requirement of authentication by the Registrar as hereinafter provided), notwithstanding that before the delivery thereof and payment therefor or before the issuance of the 1994B Bonds upon transfer or exchange, any or all of the persons whose manual or facsimile signatures appear thereon shall have ceased to fill their respective offices. The Mayor and the Town Clerk shall, by the execution of a signature certificate pertaining to the 1994B Bonds, adopt as and for their respective signatures any facsimiles thereof appearing on the 1994B Bonds. At the time of the execution of the signature certificate, the Mayor and the Town Clerk may each adopt as and for his or her facsimile signature the facsimile signature of his or her predecessor in office in the event that such facsimile signature appears upon any of the 1994B Bonds. No 1994B Bond shall be valid or obligatory for any purpose unless the certificate of authentication, substantially in the form hereinafter provided, has been duly manually executed by the Registrar. The Registrar's certificate of authentication shall be deemed to have been duly executed by the Registrar if manually signed by an authorized officer or employee of the Registrar, but it shall not be necessary that the same officer or employee sign the certificate of authentication on all of the 1994B Bonds issued hereunder. By authenticating any of the 1994B Bonds initially -23- delivered pursuant to this Ordinance, the Registrar shall be deemed to have assented to the provisions of this Ordinance. Section 12. Registration. Transfer and Exchange. A. Except as provided in Section 13, records for the registration and transfer of the 1994B Bonds shall be kept by the Registrar, which is hereby appointed by the Town as registrar (i.e., transfer agent) for the 1994B Bonds. Upon the surrender for transfer of any 1994B Bond at the Registrar, duly endorsed for transfer or accompanied by an assignment duly executed by the registered owner or his attorney duly authorized in writing, the Registrar shall enter such transfer on the registration records and shall authenticate and deliver in the name of the transferee or transferees a new 1994B Bond or Bonds of the same series, of a like aggregate principal amount and of the same maturity, bearing a number or numbers not previously assigned. 1994B Bonds may be exchanged at the Registrar for an equal aggregate principal amount of 1994B Bonds of the series and the same maturity of other authorized denominations. The Registrar shall authenticate and deliver a 1994B Bond or Bonds which the registered owner making the exchange is entitled to receive, bearing a number or numbers not previously assigned. The Registrar may impose reasonable charges in connection with such exchanges and transfers of 1994B Bonds, which charges (as well as any tax or other governmental charge required to be paid with respect to such exchange or transfer) shall be paid by the registered owner requesting such exchange or transfer. B. Except as provided in Section 13, the Registrar shall not be required to transfer or exchange (1) any 1994B Bond or portion thereof during a period beginning at the opening of business 15 days before the day of the mailing of notice of prior redemption as herein provided and ending at the close of business on the day of such mailing, or (2) any 1994B Bond or portion thereof after the mailing of notice calling such 1994B Bond or any portion thereof for prior redemption, except for the unredeemed portion of the 1994B Bonds being redeemed in part. C. The person in whose name any 1994B Bond shall be registered on the registration records kept by the Registrar shall be deemed and regarded as the absolute owner thereof for the purpose of making payment thereof and for all other purposes; except as may be otherwise provided in Section 6 hereof with respect to payment of interest; and, subject to such exception, payment of or on account of either principal or interest on any 1994B Bond shall be made only to -24- or upon the written order of the registered owner thereof or his legal representative, but such registration may be changed upon transfer of such 1994B Bond in the manner and subject to the conditions and limitations provided herein. All such payments shall be valid and effectual to discharge the liability upon such 1994B Bond to the extent of the sum or sums so paid. D. If any 1994B Bond shall be lost, stolen, destroyed or mutilated, the Registrar shall, upon receipt of such evidence, information or indemnity relating thereto as it and the Town may reasonably require, authenticate and deliver a replacement 1994B Bond or Bonds of a like aggregate principal amount and of the same maturity, bearing a number or numbers not previously assigned. If such lost, stolen, destroyed, or mutilated 1994B Bond shall have matured or is about to become due and payable, the Registrar may direct the Paying Agent to pay such 1994B Bond in lieu of replacement. E. The officers of the Town are authorized to deliver to the Registrar fully executed but unauthenticated 1994B Bonds in such quantities as may be convenient to be held in custody by the Registrar pending use as herein provided. F. Whenever any 1994B Bond shall be surrendered to the Paying Agent upon payment thereof, or to the Registrar for transfer, exchange or replacement as provided herein, such 1994B Bond shall be promptly cancelled by the Paying Agent or Registrar, and counterparts of a certificate of such cancellation shall be furnished by the Paying Agent or Registrar to the Town. Section 13. Book Entry. A. Notwithstanding any contrary provision of this Ordinance, the Bonds shall initially be evidenced by one Bond for each maturity in which the Bonds mature in denominations equal to the aggregate principal amount of the Bonds maturing for that maturity. Such initially delivered Bonds shall be registered in the name of "Cede & Co." as nominee for The Depository Trust Company, the securities depository for the Bonds. The Bonds may not thereafter be transferred or exchanged except: (1) to any successor of The Depository Trust Company or its nominee, which successor must be both a "clearing corporation" as defined in Section 4-8-102(3), Colorado Revised Statutes and a qualified and registered -25- "clearing agency" under Section 17A of the Securities Exchange Act of 1934, as amended; or (2) upon the resignation of The Depository Trust Company or a successor or new depository under clause (1) or this clause (2) of this paragraph (a), or a determination by the Council that The Depository Trust Company or such successor or new depository is no longer able to carry out its functions, and the designation by the Council of another depository institution acceptable to the Council and to the depository then holding the Bonds, which new depository institution must be both a "clearing corporation" as defined in Section 4-8-102(3), Colorado Revised Statutes and a qualified and registered "clearing agency" under Section 17A of the Securities Exchange Act of 1934, as amended, to carry out the functions of The Depository Trust Company or such successor new depository; or (3) upon the resignation of The Depository Trust Company or a successor or new depository under clause (1) or clause (2) of this paragraph (a), or a determination of the Council that The Depository Trust Company or such successor or new depository is no longer able to carry out its functions, and the failure by the Council, after reasonable investigation, to locate another qualified depository institution under clause (2) to carry out such depository functions. B. In the case of a transfer to a successor of The Depository Trust Company or its nominee as referred to in clause (1) of paragraph (a) hereof or designation of a new depository pursuant to clause (2) of paragraph (a) hereof, upon receipt of the Outstanding Bonds by the Bond Registrar, together with written instructions for transfer satisfactory to the Bond Registrar, a new Bond for each maturity of the Bonds then Outstanding shall be issued to such successor or new depository, as the case may be, or its nominee, as is specified in such written transfer instructions. In the case of a resignation or determination under clause (3) of paragraph (a) hereof and the failure after reasonable investigation to locate another qualified depository institution for the Bonds as provided in clause (3) of paragraph (a) hereof, and upon receipt of the Outstanding Bonds by the Bond Registrar, together with written instructions for transfer satisfactory to the Bond Registrar, new Bonds shall be issued in the denominations of $5,000 or any integral multiple thereof, as provided -26- in and subject to the limitations of Section 12 hereof, registered in the names of such persons, and in such authorized denominations as are requested in such written transfer instructions; however, the Bond Registrar shall not be required to deliver such new Bonds within a period of less than 60 days from the date of receipt of such written transfer instructions. C. The Council, the Bond Registrar and the Paying Agent shall be entitled to treat the registered owner of any Bond as the absolute owner thereof for all purposes hereof and any applicable laws, notwithstanding any notice to the contrary received by any or all of them and the Council, the Bond Registrar and the Paying Agent shall have no responsibility for transmitting payments to the beneficial owners of the Bonds held by The Depository Trust Company or any successor or new depository named pursuant to paragraph (a) hereof. D. The Council, the Bond Registrar and the Paying Agent shall endeavor to cooperate with The Depository Trust Company or any successor or new depository named pursuant to clause (1) or (2) of paragraph (a) hereof in effectuating payment of the principal amount of the Bonds upon maturity or prior redemption by arranging for payment in such a manner that funds representing such payments are available to the depository on the date they are due. Section 14. Delivery of 1994B Bonds and Disposition of Proceeds. When the 1994B Bonds have been duly executed by appropriate Town officers and authenticated by the Registrar, the Town shall cause the 1994B Bonds to be delivered to the Purchasers on receipt of the agreed purchase price. The 1994B Bonds shall be delivered in such denominations as the Purchaser shall direct (but subject to the provisions of Sections 12 and 13 hereof); and the Registrar shall initially register the 1994B Bonds in such name or names as the Purchaser shall direct. The proceeds of the 1994B Bonds, including without limitation the accrued interest thereon, shall be deposited promptly by the Town and shall be accounted for in the following manner and are hereby pledged therefor, but the Purchasers of the 1994B Bonds or any subsequent Owner in no manner shall be responsible for the application or disposal by the Town or any of its officers of any of the funds derived from the sale: (i) All accrued interest, if any, received in respect of the 1994B Bonds shall be credited to the Bond Account to be applied to the payment of the 1994B Bonds. -27- (ii) All remaining proceeds of the 1994B Bonds shall be credited to any fund or account of the Town as determined by the Town Manager and used by the Town, together with any other available moneys therefor, to pay the costs of the Project, including costs incidental to the issuance of the 1994B Bonds. After payment of all costs of the Project, or after adequate provisions therefor is made, any unexpended balance of the proceeds of the 1994B Bonds shall be deposited in the Bond Account and applied to the payment of the principal of and interest on the 1994B Bonds. Section 15. Use of Pledged Revenues. So long as any Bonds shall be Outstanding, either as to principal or interest, the Pledged Revenues shall, upon receipt by the Town, be applied as follows: A. Bond Account. First, there shall be credited from the Pledged Revenues to a special account of the Town's Debt Service Fund created in Section 15 of the 1994A Bond Ordinance and hereby continued, known as the "Town of Avon, Sales Tax Bond Account," the following amounts: 1. Interest Payments. Monthly, and concurrently with amounts required to be transferred for payment of the 1994A Bonds, commencing on the first day of the first month following the date of delivery of the 1994B Bonds, an amount in equal monthly installments necessary, together with any other moneys from time to time available therefor from whatever source, and monthly thereafter, commencing on each interest payment date, one-sixth of the amount necessary, together with any other moneys from time to time available therefor and on deposit therein from whatever source, to pay the next maturing installment of interest on the Bonds then Outstanding. 2. Principal Payments. Monthly, and concurrently with amounts required to be transferred for payment of the 1994A Bonds, commencing on the first day of the first month following the date of delivery of the 1994B Bonds, an amount in equal monthly installments necessary, together with any other moneys from time to time available therefor from whatever source, to pay the next installment of principal of the Bonds coming due at maturity, and monthly thereafter, commencing on each principal payment date, one-twelfth of the amount necessary, -28- together with any other moneys from time to time available therefor and on deposit therein from whatever source, to pay the next installment of principal of the Bonds coming due at maturity, or pursuant to §7 hereof, if any. If prior to any interest payment date or principal payment date there has been accumulated in the Bond Account the entire amount necessary to pay the next maturing installment of interest or principal, or both, the payment required in subparagraph (1) or (2) (whichever is applicable) of this paragraph, may be appropriately reduced; but the required monthly amounts again shall be so credited to such account commencing on such interest payment date or principal payment date. The moneys in the Bond Account shall be used only to pay the principal of, prior redemption premium if any, and interest on the Bonds as the same becomes due. B. Reserve Account. Second, except as hereinafter provided and concurrently with amounts required to be transferred for payment of the 1994A Bonds, from any remaining Pledged Revenued there shall be credited monthly to a special account of the Town's Debt Service Fund created in Section 15 of the 1994A Bond Ordinance and hereby continued, known as the "Town of Avon Sales Tax Revenue Bonds Reserve Account" an amount, if any, which is necessary to maintain the Reserve Account as a continuing reserve in an amount not less than the Reserve Account Requirement or to pay the issuer of any Bond Reserve Insurance Policy any amounts owing to such issuer under the terms of the Bond Reserve Insurance Policy. In determining the amounts required to be deposited as provided above, the Town shall receive credit for any investment earnings on the deposit in the Reserve Account. Investment earnings on deposits in the Reserve Account shall remain in the Reserve Account if the amount on deposit in the Reserve Account does not equal the Reserve Account Requirement. No credit need be made to the Reserve Account so long as the moneys and/or a Bond Reserve Insurance Policy therein equal the Reserve Account Requirement (regardless of the source of such accumulations). The Reserve Account Requirement shall be accumulated and maintained as a continuing reserve to be used, except as provided in subsections C and E of this Section and Section 21 hereof, only to prevent deficiencies in the payment of the principal of and the interest on the Bonds resulting from the failure to credit to the Bond Account sufficient funds to pay said principal and interest as the same accrue or to pay the issuer of any Bond Reserve Insurance Policy any amounts owing to such issuer under the terms of -29- the Bond Reserve Insurance Policy. The Reserve Account Requirement shall be calculated upon (i) any principal payment, whether at stated maturity or upon redemption, (ii) the issuance of Additional Bonds, or (iii) the defeasance of all or a portion of the Bonds. In lieu of all or a portion of the moneys required to be deposited in the Reserve Account by this Ordinance, the Town may at any time or from time to time deposit a Bond Reserve Insurance Policy in the Reserve Account in full or partial satisfaction of the Reserve Account Requirement. Any such Bond Reserve Insurance Policy shall be payable on any date on which moneys will be required to be withdrawn from the Reserve Account as provided herein. Upon deposit of any Bond Reserve Insurance Policy in the Reserve Account, the Town may transfer moneys equal to the amount payable under the Bond Reserve Insurance Policy from the Reserve Account and apply such moneys to any lawful purpose. If the tax covenant contained in Section 20(K) of this Ordinance does not permit the use of proceeds of any series of Bonds for a full funding of the Reserve Account in the amount of the Reserve Account Requirement, the maximum amount of proceeds of such series of Bonds which may be deposited to the Reserve Account pursuant to Section 20(K) shall be deposited to the Reserve Account upon the issuance of such series of Bonds and Pledged Revenues shall be deposited to the Reserve Account monthly so that not later than twelve calendar months after the date of issuance of such series of Bonds the amount on deposit in the Reserve Account shall equal the Reserve Account Requirement. C. Termination Upon Deposits to Maturity or Redemption Date. No payment need be made into the Bond Account, the Reserve Account, or both, if the amount in the Bond Account and the amount in the Reserve Account total a sum at least equal to the entire amount of the Outstanding Bonds, both as to principal and interest to their respective maturities, or to any redemption date on which the Town shall have exercised its option to redeem the Bonds then Outstanding and thereafter maturing, including any prior redemption premiums then due, and both accrued and not accrued, in which case moneys in the Bond Account and Reserve Account in an amount at least equal to such principal and interest requirements shall be used solely to pay such as the same accrue, and any moneys in excess thereof in the two Accounts may be withdrawn and used for any lawful purpose. -30- D. Defraying Delinquencies in Bond and Reserve Accounts. If on any required monthly payment date the Town shall for any reason fail to pay into the Bond Account the full amount above stipulated, then an amount shall be paid into the Bond Account on such date from the Reserve Account equal to the difference between the amount paid and the full amount so stipulated. Any cash on deposit in the Reserve Account shall be transferred to the Bond Account to cover such a deficiency prior to the transfer of funds drawn under the Bond Reserve Insurance Policy. After such a draw any available Pledged Revenues, after the payments required by paragraph A of this Section, shall be used first to repay the issuer of the Bond Reserve Insurance Policy to reinstate the Bond Reserve Insurance Policy and then to replenish cash in the Reserve Account. The cash so used shall be replaced in the Reserve Account from the first Pledged Revenues received that are not required to be otherwise applied by this Section, but excluding any payments required for any subordinate obligations; provided, however, that an amount equal to the amount withdrawn from the Reserve Account shall be deposited by the Town in the Reserve Account no later than twelve months from the date of such withdrawal. If at any time the Town shall for any reason fail to pay into the Reserve Account the full amount above stipulated from the Pledged Revenues, the difference between the amount paid and the amount so stipulated shall in a like manner be paid therein from the first Pledged Revenues thereafter received not required to be applied otherwise by this section, but excluding any payments required for any subordinate obligations. The moneys in the Bond Account and in the Reserve Account shall be used solely for the purpose of paying the principal and any redemption premium of and the interest on the Bonds, except that moneys in the Reserve Account shall be used to pay the issuer of any Bond Reserve Insurance Policy any amounts owing to such issuer under the terms of the Bond Reserve Insurance Policy; provided, however, that any moneys at any time in excess of the Reserve Account Requirement calculated with respect to the Bonds in the Reserve Account may be withdrawn therefrom and used for any lawful purpose; and provided, further, that any moneys in the Bond Account and in the Reserve Account in excess of accrued and unaccrued principal and interest requirements to the respective maturities of the Outstanding Bonds may be used as provided in Paragraphs G and H of this section. E. Rebate Account. Third, there shall be deposited in a special account of the Town's Debt Service Fund hereby created and to be known as the "Town of Avon 1994B Sales Tax -31- Revenue Bonds Rebate Account" amounts required by Section 148(f) of the Tax Code to be held until such time as any required rebate payment is made. Amounts in the Rebate Account shall be used for the purpose of making the payments to the United States required by Section 148(f) of the Tax Code. Any amounts in excess of those required to be on deposit therein by Section 148(f) of the Tax Code shall be withdrawn therefrom and deposited into the Bond Account. Funds in the Rebate Account shall not be subject to the lien created by this Ordinance to the extent such amounts are required to be paid to the United States Treasury. F. Interest on Bond Reserve Insurance Policy Draws. After the payments required by A, B and E of this Section, the Pledged Revenues shall be used to pay interest on amounts advanced under any Bond Reserve Insurance Policy. G. Payment for Subordinate Obligations. After the payments required by Paragraphs A, B, E, and F of this Section, the Pledged Revenues shall be used by the Town for the payment of interest on and principal of any obligations secured by Pledged Revenues subordinate to the lien of the 1994 Bonds, hereafter authorized to be issued, including reasonable reserves therefor. H. Use of Remaining Revenues. After making the payments required to be made by this Section, any remaining Pledged Revenues may be used for any lawful purpose. Nothing in this Ordinance shall prevent the Town from making refunds of amounts collected by the Town and subsequently determined, pursuant to the applicable Sales Tax Ordinances, to be subject to valid claims for refunds. Section 16. General Administration of Accounts. The accounts designated in Sections 14 and 15 hereof shall be administered as follows subject to the limitations stated in Section 20(K) hereof: A. Budget and Appropriation of Accounts. The sums provided to make the payments specified in Section 15 hereof are hereby appropriated for said purposes, and said amounts for each year shall be included in the annual budget and the appropriation ordinance or measures to be adopted or passed by the Town Council in each year respectively while any of the 1994B Bonds, either as to principal or interest, are Outstanding and unpaid. No provision of any constitution, statute, charter, ordinance, resolution, or other order or measure enacted after the issuance of the -32- 1994B Bonds shall in any manner be construed as limiting or impairing the obligation of the Town to keep and perform the covenants contained in this Ordinance so long as any of the 1994B Bonds remain Outstanding and unpaid. Nothing herein shall prohibit the Town Council, at its sole option, from appropriating and applying other funds of the Town legally available for such purpose to the Bond Account or Reserve Account for the purpose of providing for the payment of the principal of, interest on or any premiums due with respect to the 1994B Bonds. B. Places and Times of Deposits. Each of the special accounts created in Section 15 hereof shall be maintained as a book account kept separate and apart from all other accounts or funds of the Town as trust accounts solely for the purposes herein designated therefor. For purposes of investment of moneys, nothing herein prevents the commingling of moneys accounted for in any two or more such book accounts pertaining to the Pledged Revenues or to such accounts and any other funds of the Town to be established under this Ordinance. Moneys in any such book account shall be continuously secured to the fullest extent required by the laws of the State for the securing of public accounts. Each periodic payment shall be credited to the proper book account not later than the date therefor herein designated, except that when any such date shall be a Saturday, a Sunday or a legal holiday, then such payment shall be made on or before the next preceding business day. C. Investment of Accounts. Any moneys in any account established by Section 15 of this Ordinance may be invested or reinvested in any Permitted Investment. Securities or obligations purchased as such an investment shall either be subject to redemption at any time at face value by the holder thereof at the option of such holder, or shall mature at such time or times as shall most nearly coincide with the expected need for moneys from the account in question. Securities or obligations so purchased as an investment of moneys in any such account shall be deemed at all times to be a part of the applicable account. The Town shall present for redemption or sale on the prevailing market any securities or obligations so purchased as an investment of moneys in a given account whenever it shall be necessary to do so in order to provide moneys to meet any required payment or transfer from such account. The Town shall have no obligation to make any investment or reinvestment hereunder, unless any moneys on hand and accounted for in any one account exceed $5,000 and at least $5,000 therein will not be needed for a period of not less -33- than 60 days. In such event the Town shall invest or reinvest not less than substantially all of the amount which will not be needed during such 60 day period, except for any moneys on deposit in an interest bearing account in a Commercial Bank, without regard to whether such moneys are evidenced by a certificate of deposit or otherwise, pursuant to this Section 16(C) and Section 16(E) hereof, but the Town is not required to invest, or so to invest in such a manner, any moneys accounted for hereunder if any such investment would contravene the covenant concerning arbitrage in Section 20(K) hereof. D. No Liability for Losses Incurred in Performing Terms of Ordinance. Neither the Town nor any officer of the Town shall be liable or responsible for any loss resulting from any investment or reinvestment made in accordance with this Ordinance. E. Character of Funds. The moneys in any fund or account herein authorized shall consist of lawful money of the United States or investments permitted by Section 16(C) hereof or both such money and such investments. Moneys deposited in a demand or time deposit account in or evidenced by a certificate of deposit of a Commercial Bank pursuant to Section 16(C) hereof, appropriately secured according to the laws of the State, shall be deemed lawful money of the United States. Section 17. Lien on Pledged Revenues. The 1994B Bonds constitute a pledge of, and an irrevocable first lien (but not an exclusively first lien) on all of the Pledged Revenues on a parity with the lien thereon of the 1994A Bonds. The 1994B Bonds are equitably and ratably secured by a lien on the Pledged Revenues. Section 18. Additional Bonds. A. Limitations Upon Issuance of Additional Bonds. Nothing in this Ordinance shall be construed in such a manner as to prevent the issuance by the Town of Additional Bonds payable from and constituting a lien upon the Pledged Revenues on a parity with the lien of the 1994B Bonds. Such Additional Bonds may be payable solely from Pledged Revenues or they may be payable from Pledged Revenues and another revenue or fund of the Town ("Additional Pledged Revenues"). Regardless of whether payable solely from Pledged Revenues or from Pledged Revenues and Additional Pledged Revenues, such bonds or other obligations may be issued only if for the Fiscal Year immediately preceding the issuance of any Additional Bonds, the amount of -34- Pledged Sales Tax Revenues in such Fiscal Year equalled or exceeded 150% of the Maximum Annual Debt Service Requirement on the Bonds (including the Additional Bonds proposed to be issued). For the purpose of satisfying the aforementioned 150% test, any tax, now existing or hereafter imposed, which legally becomes a part of the Pledged Sales Tax Revenues during the Fiscal Year preceding the issuance of Additional Bonds, or any tax which is to legally become a part of the Pledged Sales Tax Revenues immediately prior to the issuance of Additional Bonds, or any increase in the rate of any tax which is a part of the Pledged Sales Tax Revenues which increase is imposed during the Fiscal Year preceding the issuance of Additional Bonds or any such increase which is to be imposed immediately prior to the issuance of Additional Bonds can be considered for its estimated effect on the amount of the Pledged Sales Tax Revenues as if such tax or increase had been in effect for the Fiscal Year immediately preceding the issuance of such Additional Bonds. Any tax which is no longer in effect at the time of issuance of the Additional Bonds shall not be considered for purposes of satisfying such tests. If the ordinance authorizing a series of Additional Bonds will pledge Additional Pledged Revenues to such Bonds, the estimated effect of the amount of such Additional Pledged Revenues may be considered as if such revenues had been received for the last Fiscal Year immediately preceding the issuance of such Additional Bonds. B. Certificate of Revenues. A written certification by an officer or employee of the Town that the requirements of Paragraph A of this section have been met shall be conclusively presumed to be accurate in determining the right of the Town to authorize, issue, sell and deliver said Additional Bonds on a parity with the 1994B Bonds herein authorized. C. Subordinate Obligations Permitted. Nothing in this Ordinance shall be construed in such a manner as to prevent the issuance by the Town of additional obligations payable from and constituting a lien upon the Pledged Revenues subordinate or junior to the lien of the 1994B Bonds. D. Superior Obligations Prohibited. Nothing in this Ordinance shall be construed so as to permit the Town to hereafter issue obligations payable from the Pledged Revenues having a lien thereon prior or superior to the 1994B Bonds. -35- Section 19. Refunding Obligations. A. Generally. If at any time after the 1994B Bonds, or any part thereof, shall have been issued and remain Outstanding, the Town shall find it desirable to refund any Outstanding obligations payable from the Pledged Revenues, said obligations, or any part thereof, may be refunded, subject to the provisions of Paragraph B of this Section, if (1) the obligations to be refunded, at the time of their required surrender for payment, shall then mature or shall then be callable for prior redemption at the Town's option upon proper call, or (2) the owners of the obligations to be refunded consent to such surrender and payment. B. Protection of Obligations Not Refunded. Any refunding obligations payable from the Pledged Revenues shall be issued with such details as the Town Council may provide, so long as there is no impairment of any contractual obligation imposed upon the Town by any proceedings authorizing the issuance of any unrefunded portion of obligations payable from the Pledged Revenues; but so long as any 1994B Bonds are Outstanding, refunding obligations payable from the Pledged Revenues may be issued on a parity with the unrefunded Bonds only if: Prior Consent. The Town first receives the consent of the owner or owners of the unrefunded Bonds; or 2. Requirements Not Increased. The refunding obligations do not increase by more than $25,000, for any Fiscal Year prior to and including the last maturity date of any unrefunded Bonds, the aggregate principal and interest requirements evidenced by such refunding obligations and by any Outstanding Bonds not refunded, and the lien of any refunding parity obligations on the Pledged Revenues is not raised to a higher priority than the lien thereon of any obligations thereby refunded; or 3. Earnings Test. The refunding obligations are issued in compliance with Paragraphs A and B of Section 18 hereof. Section 20. Protective Covenants. The Town hereby additionally covenants and agrees with each and every owner of the 1994B Bonds that: A. Use of 1994B Bond Proceeds. The Town will proceed with the acquisition of the Project without delay and with due diligence. -36- B. Payment of 1994B Bonds. The Town will promptly pay the principal of and interest on every 1994B Bond issued hereunder and secured hereby on the dates and in the manner specified herein and in said 1994B Bonds according to the true intent and meaning hereof. Such principal and interest is payable solely from the Pledged Revenues. C. Amendment of Certain Ordinances: Duty to Impose Sales Tax. Impairment of Contract. The Sales Tax Ordinances are in full force and effect and have not been repealed or amended. The Town will not repeal or amend said Sales Tax Ordinances in any manner which would diminish the proceeds of the Sales Tax by an amount which would materially adversely affect the rights of the owners of the Bonds. The Town agrees that any law, ordinance or resolution of the Town in any manner affecting the Pledged Revenues or the Bonds, or otherwise appertaining thereto, shall not be repealed or otherwise directly or indirectly modified in such manner as to materially adversely affect any Bonds Outstanding, unless the required consent is obtained, all as provided in Section 29 of this Ordinance. Notwithstanding any other provision of this Section or this Ordinance, the Town shall retain the right to make changes, without any consent of Bond owners, in the Sales Tax Ordinances, or any ordinance supplemental thereto or in substitution therefor, concerning the use of proceeds of the Pledged Sales Tax remaining after the current requirements of all ordinances authorizing bonds or other securities payable from the Pledged Sales Tax, or any portion thereof, have been met; or concerning changes in applicability, exemptions, administration, collection, or enforcement of the Sales Tax, if such changes do not materially adversely affect the security for the Bonds; but the Town shall not reduce the current rate of the Pledged Sales Tax without the consent of the owners of 66 percent in aggregate principal amount of the then Outstanding 1994B Bonds, as provided in Section 29 of this Ordinance. The foregoing covenants are subject to compliance by the Town with orders of courts of competent jurisdiction concerning the validity, constitutionality or collection of such tax revenues, any legislation of the United States or the State or any regulation or other action taken by the federal government, any State agency or any political subdivision of the State pursuant to such legislation, in the exercise of the police power thereof for the public welfare, which legislation, regulation or action applies to the Town as a Colorado home rule city and limits or otherwise inhibits the amount -37- of such tax revenues due to the Town. All of the Pledged Revenues resulting from the imposition and collection of the Sales Tax shall be subject to the payment of the principal of, interest on, and redemption premium, if any, of all securities payable from the Pledged Revenues, including reserves therefor, as provided herein or in any instrument supplemental or amendatory hereof. D. Defense of Legality of Pledged Revenues. There is not pending or threatened any suit, action or proceeding against or affecting the Town before or by any court, arbitrator, administrative agency or other governmental authority which affects the validity or legality of this Ordinance, or the Sales Tax Ordinances or the imposition and collection of the Sales Tax, any of the Town's obligations under this Ordinance or any of the transactions contemplated by this Ordinance or the Sales Tax Ordinances. The Town shall, to the extent permitted by law, defend the validity and legality of this Ordinance, the Sales Tax and the Sales Tax Ordinances against all claims, suits and proceedings which would diminish or impair the Pledged Revenues. Furthermore, the Town shall amend from time to time the provisions of any ordinance or resolution of the Town, as necessary to prevent impairment of the Pledged Revenues as required to meet the principal of, interest on, and prior redemption premium, if any, of the 1994B Bonds when due. E. Further Assurances. At any and all times the Town shall, so far as it may be authorized by law, pass, make, do, execute, acknowledge, deliver and file or record all and every such further instruments, acts, deeds, conveyances, assignments, transfers, other documents and assurances as may be necessary or desirable for the better assuring, conveying, granting, assigning and confirming all and singular the rights, the Pledged Revenues and other funds and accounts hereby pledged or assigned, or intended so to be, or which the Town may hereafter become bound to pledge or to assign, or as may be reasonable and required to carry out the purposes of this Ordinance. The Town, acting by and through its officers, or otherwise, shall at all times, to the extent permitted by law, defend, preserve and protect the pledge of said Pledged Revenues and other funds and accounts pledged hereunder and all the rights of every owner of any of the 1994B Bonds against all claims and demands of all Persons whomsoever. F. Conditions Precedent. Upon the issuance of any of the 1994B Bonds, all conditions, acts and things required by the Constitution or laws of the United States, the Constitution -38- or laws of the State, the Charter or this Ordinance, to exist, to have happened, and to have been performed precedent to or in the issuance of the 1994B Bonds shall exist, have happened and have been performed, and the 1994B Bonds, together with all other obligations of the Town, shall not contravene any debt or other limitation prescribed by the Constitution or laws of the United States, the Constitution or laws of the State or the Charter. G. Records. So long as any of the 1994B Bonds remain Outstanding, proper books of record and account will be kept by the Town, separate and apart from all other records and accounts, showing complete and correct entries of all transactions relating to the Pledged Revenues and the accounts created or continued by this Ordinance. H. Audits. The Town further agrees that it will, within 140 days following the close of each fiscal year, cause an audit of such books and accounts to be made by a certified public accountant, who is not an employee of the Town, showing the Pledged Revenues. The Town agrees to allow the owner of any of the 1994B Bonds to review and copy such audits and reports, at the Town's offices, at his request. Copies of such audits and reports will be furnished to the Purchaser. 1. Performing Duties. The Town will faithfully and punctually perform all duties with respect to the Pledged Revenues required by the Charter and the Constitution and laws of the State and the ordinances and resolutions of the Town, including but not limited to the proper collection and enforcement of the Sales Taxes and the segregation of the Pledged Revenues and their application to the respective accounts herein designated. Other Liens. As of the date of issuance of the 1994B Bonds, there are no liens or encumbrances of any nature whatsoever on or against any of the Pledged Revenues. K. Tax Covenant. The Town covenants for the benefit of the Registered Owners of the 1994B Bonds that it will not take any action or omit to take any action with respect to the 1994B Bonds, the proceeds thereof, any other funds of the Town or any facilities financed with the proceeds of the 1994B Bonds if such action or omission (i) would cause the interest on the 1994B Bonds to lose its exclusion from gross income for federal income tax purposes under Section 103 of the Tax Code, (ii) would cause interest on the 1994B Bonds to lose its exclusion from alternative minimum taxable income as defined in Section 55(b)(2) of the Tax Code except to the extent such interest is required to be included in adjusted current earnings adjustment applicable to corporations -39- under Section 56 of the Tax Code in calculating corporate alternative minimum taxable income, or (iii) would cause interest on the 1994B Bonds to lose its exclusion from Colorado taxable income or Colorado alternative minimum taxable income under present Colorado law. The foregoing covenant shall remain in full force and effect notwithstanding the payment in full or defeasance of the 1994B Bonds until the date on which all obligations of the Town in fulfilling the above covenant under the Tax Code and Colorado law have been met. The Town hereby designates the 1994B Bonds as a qualified tax-exempt obligation for purposes of Section 265(b)(3)(B) of the Tax Code. L. Town's Existence. The Town will maintain its corporate identity and existence so long as any of the 1994B Bonds remain Outstanding, unless another political subdivision by operation of law succeeds to the duties, privileges, powers, liabilities, disabilities, immunities and rights of the Town and is obligated by law to receive and distribute the Pledged Revenues in place of the Town, without materially adversely affecting the privileges and rights of any owner of any Outstanding 1994B Bonds. M. Performance of Duties. The Town will faithfully and punctually perform or cause to be performed all duties with respect to the Pledged Revenues required by the laws of the State and the resolutions of the Town, including without limitation the proper segregation of the Pledged Revenues as set forth in Section 15 hereof and their application to the respective accounts as herein provided. N. Prompt Collections. The Town will cause the Pledged Revenues to be collected promptly and accounted for in the accounts as herein provided. 0. Surety Bonds. Each official of the Town having custody of the Pledged Revenues, or responsible for their handling, shall be fully bonded at all times, which bond shall be conditioned upon the proper application of such money. P. Prejudicial Contracts and Action Prohibited. No contract will be entered into, nor will any action be taken, by the Town by which the rights and privileges of any Owner are impaired or diminished. Section 21. Defeasance. When the 1994B Bonds have been fully paid both as to principal and interest have been paid, all obligations hereunder shall be discharged and the 1994B -40- Bonds shall no longer be deemed to be Outstanding for any purpose of this Ordinance, except as set forth in Section 20(K) hereof. Payment of any 1994B Bonds shall be deemed made when the Town has placed in escrow with a Trust Bank an amount sufficient (including the known minimum yield from Governmental Obligations) to meet all requirements of principal, interest, and any prior redemption premiums on such 1994B Bonds as the same become due to maturity or a designated prior redemption date; and, if 1994B Bonds are to be redeemed prior to maturity pursuant to Section 7(A) hereof, when the Town has given to the Registrar irrevocable written instructions to give notice of prior redemption in accordance with Section 7(D) hereof. The Governmental Obligations shall become due at or prior to the respective times on which the proceeds thereof shall be needed, in accordance with a schedule agreed upon between the Town and such Trust Bank at the time of creation of the escrow and shall not be callable prior to their scheduled maturities by the issuer thereof. In the event that there is a defeasance of only part of the 1994B Bonds of any maturity, the Registrar shall, if requested by the Town, institute a system to preserve the identity of the individual 1994B Bonds or portions thereof so defeased, regardless of changes in bond numbers attributable to transfers and exchanges of 1994B Bonds; and the Registrar shall be entitled to reasonable compensation and reimbursement of expenses from the Town in connection with such system. Section 22. Delegated Powers. The officers of the Town be, and they hereby are, authorized and directed to take all action necessary or appropriate to effectuate the provisions of this Ordinance, including, without limiting the generality of the foregoing, the printing of the 1994B Bonds with the opinion of bond counsel thereon, the procuring of bond insurance entering into and executing appropriate agreements with the Registrar and Paying Agent as to its services hereunder, and the execution of such certificates as may be required by the Purchaser, including, but not necessarily limited to, the absence and existence of factors affecting the exclusion of interest on the 1994B Bonds from gross income for federal income tax purposes. The form, terms and provisions of the Registrar Agreement and the Letter of Representations hereby are approved, and the Town shall enter into and perform its obligations under the Registrar Agreement and the Letter of Representations in substantially the forms of such -41- documents presented to the Town Council at this meeting, with only such changes therein as are required by the circumstances and are not inconsistent herewith; and the Mayor and Town Clerk are hereby authorized and directed to execute and deliver such documents as required hereby. Section 23. Events of Default. Each of the following events is hereby declared an "event of default:" A. Nonpayment of Principal. If payment of the principal of any of the 1994B Bonds in connection therewith, shall not be made when the same shall become due and payable at maturity or by proceedings for prior redemption; or B. Nonpayment of Interest. If payment of any installment of interest on the 1994B Bonds shall not be made when the same becomes due and payable; or C. Incapable to Perform. If the Town shall for any reason be rendered incapable of fulfilling its obligations hereunder; or D. Default of any Provision. If the Town shall default in the due and punctual performance of its covenants or conditions, agreements and provisions contained in the 1994B Bonds or in this Ordinance on its part to be performed, other than those delineated in Paragraphs A and B of this Section, and if such default shall continue for 60 days after written notice specifying such default and requiring the same to be remedied shall have been given to the Town by the owners of not less than 25% in aggregate principal amount of the 1994B Bonds then Outstanding. Section 24. Remedies. Upon the happening and continuance of any event of default as provided in Section 23 hereof, the owner or owners of not less than 25% in principal amount of the Outstanding Bonds, or a trustee therefor, may protect and enforce their rights hereunder by proper legal or equitable remedy deemed most effectual including mandamus, specific performance of any covenants, the appointment of a receiver (the consent of such appointment being hereby granted), injunctive relief, or requiring the Town Council to act as if it were the trustee of an express trust, or any combination of such remedies. All proceedings shall be maintained for the equal benefit of all owners. The failure of any owner to proceed does not relieve the Town or any person of any liability for failure to perform any duty hereunder. The foregoing rights are in addition to any other right available to the owners of Bonds and the exercise of any right by any owner shall not be deemed a waiver of any other right. -42- Section 25. Duties Upon Default. Upon the happening of any of the events of default as provided in Section 23 of this Ordinance, the Town, in addition, will do and perform all proper acts on behalf of and for the owners of the 1994B Bonds to protect and preserve the security created for the payment of the 1994B Bonds and to insure the payment of the principal of and interest on said 1994B Bonds promptly as the same become due. Proceeds derived from the Pledged Revenues, so long as any of the 1994B Bonds herein authorized, either as to principal or interest, are Outstanding and unpaid, shall be paid into the Bond Account and the Reserve Account, pursuant to the terms hereof and to the extent provided herein, and used for the purposes herein provided. In the event the Town fails or refuses to proceed as in this section provided, the owner or owners of not less than 25% in aggregate principal amount of the 1994B Bonds then Outstanding, after demand in writing, may proceed to protect and enforce the rights of such owners as hereinabove provided. Section 26. Replacement of Registrar or Paving Agent. If the Registrar or Paying Agent initially appointed hereunder shall resign, or if the Town shall reasonably determine that said Registrar or Paying Agent has become incapable of performing its duties hereunder, the Town may, upon notice mailed to each owner of any 1994B Bond at his address last shown on the registration records, appoint a successor Registrar or Paying Agent, or both. No resignation or dismissal of the Registrar or Paying Agent may take effect until a successor is appointed. Every such successor Registrar or Paying Agent shall be a bank or trust company having a shareowner's equity (e.g., capital, surplus, and undivided profits), however denominated, of not less than $10,000,000. It shall not be required that the same institution serve as both Registrar and Paying Agent hereunder, but the Town shall have the right to have the same institution serve as both Registrar and Paying Agent hereunder. Section 27. Severability. If any one or more sections, sentences, clauses or parts of this Ordinance shall for any reason be held invalid, such judgment shall not affect, impair, or invalidate the remaining provisions of this Ordinance, but shall be confined in its operation to the specific sections, sentences, clauses or parts of this Ordinance so held unconstitutional or invalid, and the inapplicability and invalidity of any section, sentence, clause or part of this Ordinance in any one or more instances shall not affect or prejudice in any way the applicability and validity of this Ordinance in any other instances. -43- Section 28. Re..pealer. All bylaws, orders, resolutions and ordinances, or parts thereof, inconsistent herewith are hereby repealed to the extent only of such inconsistency. This repealer shall not be construed to revise any bylaw, order, resolution or ordinance, or part thereof, heretofore repealed. Section 29. Amendment. After any of the 1994B Bonds have been issued, this Ordinance shall constitute a contract between the Town and the holders of the Bonds and shall be and remain irrepealable until the Bonds and the interest thereon have been fully paid, satisfied and discharged. A. The Town may, without the consent of, or notice to the owners of the 1994B Bonds, adopt such ordinances supplemental hereto (which supplemental amendments shall thereafter form a part hereof) for any one or more or all of the following purposes: (1) to cure any ambiguity, or to cure, correct or supplement any defect or omission or inconsistent provision contained in this Ordinance, or to make any provisions with respect to matters arising under this Ordinance or for any other purpose if such provisions are necessary or desirable and do not adversely affect the interests of the owners of the 1994B Bonds; (2) to subject to the lien of this Ordinance additional revenues, properties or collateral; (3) to grant or confer upon the Registrar for the benefit of the registered owners of the Bonds any additional rights, remedies, powers, or authority that may lawfully be granted to or conferred upon the registered owners of the Bonds; or (4) to qualify this Ordinance under the Trust Indenture Act of 1939. B. Exclusive of the amendatory ordinances permitted by Paragraph A of this Section, this Ordinance may be amended or supplemented by ordinance adopted by the Town Council in accordance with the law, without receipt by the Town of any additional consideration but with the written consent of the owners of 66% in aggregate principal amount of the 1994B Bonds Outstanding at the time of the adoption of such amendatory or supplemental ordinance; provided, however, that, without the written consent of the owners of all of the 1994B Bonds adversely affected thereby, no such Ordinance shall have the effect of permitting: -44- (1) An extension of the maturity of any 1994B Bond authorized by this Ordinance; or (2) A reduction in the principal amount of any 1994B Bond, the rate of interest thereon, or the prior redemption premium thereon; or (3) The creation of a lien upon or pledge of Pledged Revenues ranking prior to the lien or pledge created by this Ordinance; or (4) A reduction of the principal amount of 1994B Bonds required for consent to such amendatory or supplemental ordinance; or (5) The establishment of priorities as between 1994B Bonds issued and Outstanding under the provisions of this Ordinance; or (6) The modification of or otherwise affecting the rights of the owners of less than all of the 1994B Bonds then Outstanding. Copies of any waiver, modification or amendment to this Ordinance shall be delivered to any entity then maintaining a rating on the 1994B Bonds. Section 30. Ordinance Irrepealable. After any of the 1994B Bonds herein authorized are issued, this Ordinance shall constitute a contract between the Town and the owners of the 1994B Bonds, and shall be and remain irrepealable until the 1994B Bonds and interest thereon shall be fully paid, cancelled and discharged as herein provided. Section 31. Disposition of Ordinance. This Ordinance, as adopted by the Council, shall be numbered and recorded by the Town Clerk in the official records of the Town. The adoption and publication shall be authenticated by the signatures of the Mayor, or Mayor Pro Tem, and Town Clerk, and by the certificate of publication. Section 32. Effective Date. This ordinance shall be in full force and effect seven days after public notice following final passage. INTRODUCED, PASSED ON FIRST READING, APPROVED AND ORDERED POSTED, this 23rd day of August, 1994, and a public hearing on this ordinance shall be held at the regular meeting of the Town Council of the Town of Avon, Colorado on the 13th day of September, 1994, at 7:30 p.m. in the Municipal Building of the Town of Avon, Colorado. -45- TOWN OF AVON, COLORADO ATTEST: Patty Neyhart, T wn lerk Albert J. eynol ayor INTRODUCED, PASSED ON SECOND READING, APPROVED AND ORDERED POSTED this 13th day of September, 1994. APPROVED AS TO FORM: r John unn, Town Attorney TOWN OF AVON, COLORADO 12 Albert J. eyno ff Mayor -46- 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 13TH DAY OF SEPTEMBER, 1994, AT THE TOWN MUNICIPAL BUILDING FOR THE PURPOSE OF CONSIDERING THE ADOPTION OF ORDINANCE NO. 94-18, SERIES OF 1994: AN ORDINANCE AUTHORIZING THE ISSUANCE OF THE TOWN OF AVON, COLORADO, SALES TAX REVENUE BONDS, SERIES OF 1994B; PROVIDING THE FORM, TERMS AND CONDITIONS OF THE BONDS, THE MANNER AND TERMS OF ISSUANCE, THE MANNER OF EXECUTION, THE METHOD OF PAYMENT AND THE SECURITY THEREFOR; PLEDGING SALES TAX REVENUES OF THE TOWN FOR THE PAYMENT OF THE BONDS; PROVIDING CERTAIN COVENANTS AND OTHER DETAILS AND MAKING OTHER PROVISIONS CONCERNING THE BONDS AND THE SALES TAX REVENUES; RATIFYING ACTION PREVIOUSLY TAKEN AND APPERTAINING THERETO; AND REPEALING ALL ORDINANCES IN CONFLICT HEREWITH 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 25th day of August, 1994. TOWN OF AVON, COLORADO BY: atty Ne ha t Town Cle k POSTED AT THE FOLLOWING PUBLIC PLACES WITHIN THE TOWN OF AVON ON AUGUST 25, 1994; AVON POST OFFICE IN THE MAIN LOBBY CITY MARKET IN THE MAIN LOBBY COASTAL MART, INC.; AND AVON MUNICIPAL BUILDING IN THE MAIN LOBBY