TC Ord. No. 1999-01 Authorizing the issuance of the Town of Avon Sales Tax Revenue Refunding BondsORDINANCE NO. 99-01
SERIES OF 1999 '
AN ORDINANCE AUTHORIZING THE ISSUANCE OF TOWN
OF AVON, COLORADO, SALES TAX REVENUE REFUNDING
BONDS, SERIES 1999; 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 alien on the Pledged
Revenues Pita parity with the lien of the 1999 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 the 1994 Ordinance and
continued in the 1994B Ordinance and this Ordinance.
Bond Insurer: MBIA Insurance Corporation or its successors.
Bond Insurance Policy: the Financial Guaranty Insurance Policy issued by the Bond
Insurer guaranteeing the payment of principal of and interest on the 1999 Bonds.
Bond Reserve Insurance Policy: 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 Ratings Group, A.M. Best & Company, or their successors.
Bonds: the Outstanding 1999 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 Bond Insurer are not required or authorized to be closed
and on which the New York Stock Exchange is not closed.
hC ar : 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.
Continuing Disclosure Certificate: the Continuing Disclosure Certificate executed
by the Town in connection with the 1999 Bonds which constitutes an undertaking pursuant to Rule
15c2 -12 promulgated by the U.S. Securities and Exchange Commission.
Debt Service Fund: the Town's existing Debt Service Fund created and maintained
for accounting purposes.
Escrow Account: the Escrow Account for the Refunding established with the Escrow .
Escrow Aereement: the Escrow Agreement dated as of January 15, 1999 between
the Town and the Escrow Bank relating to the Refunding.
Escrow Bank: The Bank of Cherry Creek, N.A., or its successors or assigns.
Financial Guaranty Agreement: the Financial Guaranty Agreement between the
Town and the Bond Insurer.
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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.
Maritime Administration, or the U.S. Department of Housing and Urban
Development; or .
(c) evidences of ownership interests in obligations described in
paragraphs (a) or (b) above.
Insurance Egydng Agent: State Street Bank and Trust Company, N.A., or its
successors under the Bond Insurance Policy.
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.
1994 Bonds: the Town's Sales Tax Revenue Bonds, Series 1994.
1994B Bonds: the Town's Sales Tax Revenue Bonds, Series 1994B.
1994 Ordinance: Ordinance No. 94-7, Series of 1994 of the Town.
1994B Ordinance: Ordinance 94-18, Series of 1994 of the Town.
1999 Bonds: the'Town's Sales Tax Revenue Refunding Bonds, Series 1999 issued
pursuant to this Ordinance.
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Ordinance: this Ordinance of the Town, which provides for the issuance and delivery
of the 1999 Bonds.
Outstanding: as of any date of calculation, all Bonds theretofore executed, issued and
delivered by the Town except:
(1) Bonds theretofore canceled by the Town, Registrar or Paying Agent,
or surrendered to the Town, Registrar or Paying Agent for cancellation;
(2) Bonds in lieu of or in substitution for which other 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 Bonds are duly
held by the lawful registered owners thereof; or
(3) Bonds deemed to have been paid as provided in Section 21 hereof.
Owner or registered owner: the registered owner of any 1999 Bond as shown on the
registration books kept by the Registrar.
Pang Agent: The Bank of Cherry Creek, N.A., Denver, Colorado, being the agent
for the Town for the payment of the 1999 Bonds and interest thereon, or its successors and assigns.
Permitted Investment: any investment or deposit to the extent permitted by the
Charter and Ordinances of the Town.
: 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.
I_9ll:
(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 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;
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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 to the Bonds 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) imposed by the Town or the State or other
political subdivison thereof which replace or supersede the Pledged Sales Tax, regardless of whether
such tax or taxes or fees are imposed by the Town or the State or other political subdivision thereof.
For this purpose, retail sales fees which result in a credit under the Sales Tax Ordinances shall not
be deemed to replace or supersede the Pledged Sales Tax.
Emlimjn= Official Statement: the Preliminary official Statement dated January 14,
1999 relating to the issuance and sale of the Bonds.
Purchase Contract: the Bond Purchase Agreement between the Town and the
Purchaser dated January 26, 1999.
rP: Hanifen, Imhoff Inc.
Rebate Account: the account by that name created by the 1994 Ordinance and
continued by the 1994B Ordinance and this Ordinance.
Refunded Bonds: the Outstanding 1994 Bonds and the Outstanding 1994B Bonds.
Refunded Bond Requirements: the principal of and interest on the Refunded Bonds
as the same become due through and including September 15, 2004.
Refunding: the refunding and defeasance of the Refunded Bonds with the proceeds
of the 1999 Bonds.
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Registrar: The Bank of Cherry Creek, N.A." Denver, Colorado, being the agent for
the Town for the registration, transfer and exchange of the 1999 Bonds, or its successors.
Registrar Agreement: the Registrar Agreement between the Town and the Registrar
dated as of January 15, 1999.
RKcgular Record Date: the last day of the calendar month next preceding each interest
payment date for the 1999 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 the 1994 Ordinance and
continued by the 1994B Ordinance and this Ordinance.
Reserve Account Requirement: an amount equal to 10% of the principal amount of
the Outstanding Bonds plus an amount equal to all investment earnings on the Reserve Account;
provided that the Reserve Account Requirement shall not exceed the Maximum Annual Debt Service
Requirement.
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.
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.
: 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.
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trust powers.
Trust Bank: a Commercial Bank which is authorized to exercise and is exercising
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 14.6 of the Charter authorizes the Town Council to issue refimding
bonds without an election.
D. The Town imposes a Sales Tax pursuant to Section 13.1 of the Charter and
the Sales Tax Ordinances.
E. Except for the payment of the 1994 Bonds and the 1994B Bonds, the Town
has never pledged the Sales Tax to the payment of any bonds or for any purpose. Simultaneously
with the issuance of the 1999 Bonds, the Refunded Bonds will be refunded and defeased. The
Pledged Sales Tax may now be pledged lawfully and irrevocably for the payment of the 1999 Bonds.
F. The Town Council has determined and hereby declares that it is in the Town's
best interest to refund and defense the Refimded Bonds.
G. The Town has received a proposal from the Purchaser for the purchase of the
1999 Bonds for the purpose of defraying in whole or in part the costs of the Refimding.
H. There have been presented to the Town Council the proposed forms of the
following documents: the Purchase Contract; the Escrow Agreement; the Financial Guaranty
Agreement; the Continuing Disclosure Certificate; the Preliminary Official Statement; the Letter of
Representations; and the Registrar Agreement.
I. The Town Council desires to cause the 1999 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 connection with
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the imposition and collection of the Sales Tax, the Refunding, and selling and issuing the 1999
Bonds for those purposes are ratified, approved and confirmed.
Section 4. Authorization of Refunding. The Refunding is hereby authorized.
Section 5. Authorization of the 1999 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 Refunding Bonds, Series 1999" in the aggregate principal
amount of $5,580,000, to be payable and collectible, both as to principal and interest, from the
Pledged Revenues.
Section 6. 1999 Bond Details. The 1999 Bonds shall be issued in fully registered
form (, 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 January 15, 1999, shall be issued
in the denomination of $5,000 or any integral multiple thereof (provided that no 1999 Bond may be
in a denomination which exceeds the principal coming due on any maturity date, and no individual
1999 Bond will be issued for more than one maturity) and shall be numbered in such manner as the
Registrar may determine. The 1999 Bonds shall bear interest from their dated date until maturity
at the rates per annum shown below, payable semiannually on March 15 and September 15 in each
year, commencing on September 15, 1999, except that any 1999 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 1999 Bonds. The 1999 Bonds shall bear interest at'the rates designated below and shall
mature on September 15 in each of the years and in the amounts designated below, as follows:
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Maturity
Date
Principal
Amount
Interest Rate
(Per Annum)
1999
$370,000
3.25%
2000
275,000
3.40
2001
280,000
3.50
2002
295,000
3.60
2003
295,000
3.70
2004
305,000
3.80
2005
320,000
3.90
2006
330,000
4.00
2007
340,000
4.05
2008
350,000
4.10
2009
370,000
4.20
2014
2,050,000
4.55
The principal of and premium, if any, on any 1999 Bond shall be payable to the
registered owner thereof as shown on the registration records kept by the Registrar, upon maturity
thereof and upon presentation and surrender at the Paying Agent. If any 1999 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 1999 Bond until the principal thereof is paid in full. Payment of
interest on any 1999 Bond shall be made by check or draft mailed by the Paying Agent, on or before
each interest payment date (or, if such interest payment date is not a business day, on or before the
next succeeding business day), to the registered owner thereof at 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 1999 Bonds not less than ten days prior to the Special Record Date by first -
class mail to each such registered owner as shown on the Registrar's registration records on a date
W
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 1999
Bond by such alternative means as may be mutually agreed to between the owner of such 1999 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. 1999 Bonds maturing on or before September 15, 2009, are not subject to
prior redemption. 1999 Bonds maturing on and after September 15, 2010 shall be subject to prior
redemption, at the option of the Town, in whole, or in part, in integral multiples of $5,000, and if less
than all of the Bonds of said maturity are to be redeemed, by lot within said maturity in such manner
as the Registrar may determine, on September 15, 2009, or on any date thereafter, at a redemption
price equal to the principal amount so redeemed plus accrued interest to the redemption date. There
shall be no optional prior redemption of 1999 Bonds unless all amounts owing to the Bond Insurer
under the Financial Guaranty Agreement or any other document have been paid in full.
B. 1999 Bonds maturing 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 1999 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. 1999
Bonds in denominations larger than $5,000).
As and for a sinking fund for the redemption of the 1999 Bonds maturing on
September 15, 2014, the Town will deposit in the Bond Account a sum which together with other
moneys available in the Bond Account is sufficient to redeem (after, credit as provided below) the
following principal amounts of the 1999 Bonds maturing on September 15, 2014:
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Principal
Pate mount
September 15, 2010
$380,000
September 15, 2011
395,000
September 15, 2012
405,000
September 15, 2013
425,000
The remaining $445,000 of the 1999 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 f ind.payment date, the
Registrar shall proceed to call the 1999 Bonds indicated above (or any 1999 Bond or Bonds issued
to replace such 1999 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 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 Bonds subject to
mandatory sinking fund redemption on such date, which prior to said date have been redeemed
(otherwise than through the operation of the sinking fund) and canceled by the Registrar and not
theretofore applied as a credit against any sinking fund redemption obligation. Each 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
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 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.
D. The Town shall (unless waived by the Registrar) give written instructions
concerning any optional 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 first -class postage prepaid mail, not more than 60 nor less than 30 days prior
to the redemption date, to each registered owner of any 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 Bond or any defect therein,
shall not affect the validity of the proceedings for the redemption of any other Bonds. ,
Such notice shall identify the 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
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 heremabove provided, the 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 Bond or Bonds so called for redemption.
Section 8. Special Oblig lions. All of the 1999 Bonds, together with the interest
accruing thereon and any payments due to the Bond Insurer under the Financial Guaranty
Agreement, shall be payable and collectible solely out of the Pledged Revenues, which are hereby
irrevocably so pledged; the owner or owners of the 1999 Bonds may not look to any general or other
fund for the payment of principal and interest on the 1999 Bonds or payments under the Financial
Guaranty Agreement, except the designated special funds pledged therefor; and the 1999 Bonds and
the Financial Guaranty Agreement shall not constitute an indebtedness nor a debt within the meaning
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of any applicable charter, constitutional or statutory provision or limitation; nor shall they be
considered or held to be general obligations of the Town.
panel shall be substantially as follows (provided that any portion of the Bond text may, with
appropriate references, be printed on the back of the 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:
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(Form of Bond)
Unless this Bond is presented by an authorized representative of The Depository Trust Company,
a New York corporation ( "DTC "), to the Town or its agent for registration of transfer, exchange, or
payment, and any Bond issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein.
UNITED STATES OF AMERICA
STATE OF COLORADO COUNTY OF EAGLE
TOWN OF AVON, COLORADO
SALES TAX REVENUE REFUNDING BOND
SERIES 1999
NO. R- $
REGISTERED OWNER:
PRINCIPAL AMOUNT:
MATURITY DATE
September 15,
Cede & Co.
DATED DATE CUSIP
January 15, 1999
DOLLARS
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 September 15, 1999, 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. This bond bears
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interest, matures, is payable, is subject to redemption and is transferable and exchangeable as
provided in the Ordinance of the Town authorizing the issuance of the 1999 Bonds (the 'Bond
Ordinance'). To the extent not defined herein, terms used in this bond shall have the same meanings
as set forth in the Bond Ordinance.
The 1999 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 first lien (but not an exclusive first lien) on, all of the proceeds to be
derived by the Town from the Pledged Revenues. The 1999 Bonds are equitably and ratably secured
by such lien on the Pledged Revenues. 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 1999 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 1999 Bonds, the events of default and
remedies, the circumstances under which any 1999 Bond is no longer Outstanding, the ability to
amend the Bond Ordinance; and by the acceptance of this bond the owner hereof assents to all
provisions of the Bond Ordinance. The principal of, premium, if any, 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.
The Bonds of which this bond is one are all of like date, tenor, and effect except as
to number, principal amount, interest rate, date of maturity, and optional prior redemption and are
issued by the Town Council of the Town of Avon, in the County of Eagle and State of Colorado, for
the purpose of refunding certain bonds of the Town under the authority of and in full conformity
with the Town's home rule charter, the Constitution and laws of the State of Colorado, and pursuant
to the duly adopted Bond Ordinance.
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It is further recited, certified and warranted that all the requirements of law have been
fully complied with by the proper Town officers in the issuance of this bond.
For purposes of Section 265(b)(3)(B) of the Tax Code, the Town has designated the
1999 Bonds as a Qualified Tax- Exempt Obligation.
This bond shall not be valid or become obligatory for any purpose or be entitled to
any security or benefit under the Bond Ordinance until the Registrar shall have duly 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)
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(Form of Registrar's Certificate of Authentication)
This is one of the 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.
Date of Authentication
and Registration:
THE BANK OF CHERRY CREEK, N.A.,
as Registrar
By:
Authorized Officer or Employee
(End of Form of Registrar's Certificate of Authentication)
SWA
(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
Preoavment Preida' Representative of the Depository
(End of Form of Prepayment Panel)
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(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:
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)
SST
STATEMENT OF INSURANCE
MBIA Insurance Corporation (the "Insurer ") has issued a policy containing the
following provisions, such policy being on file at The Bank of Cherry Creek, N.A., in Denver,
Colorado.
The Insurer, in consideration of the payment of the premium and subject to the terms
of this policy, hereby unconditionally and irrevocably guarantees to any owner, as hereinafter
defined, of the following described obligations, the full and complete payment required to be made
by or on behalf of the Issuer to The Bank of Cherry Creek, N.A. or its successor (the "Paying
Agent ") of an amount equal to (i) the principal of (either at the stated maturity or by any
advancement of maturity pursuant to a mandatory sinking fimd payment) and interest on, the
Obligations (as that term is defined below) as such payments shall become due but shall not be so
paid (except that in the event of any acceleration of the due date of such principal by reason of
mandatory or optional redemption or acceleration resulting from default or otherwise, other than any
advancement of maturity pursuant to a mandatory sinking fund payment, the payments guaranteed
hereby shall be made in such amounts and at such times as such payments of principal would have
been due had there not been any such acceleration); and (ii) the reimbursement of any such payment
which is subsequently recovered from any owner pursuant to a final judgment by a court of
competent jurisdiction that such payment constitutes an avoidable preference to such owner within
the meaning of any applicable bankruptcy law. The amounts referred to in clauses (i) and (ii) of the
preceding sentence shall be referred to herein collectively as the "Insured Amounts." "Obligations"
shall mean:
$5,580,000
Town of Avon, Colorado
Sales Tax Revenue Refunding Bonds, Series 1999
Upon receipt of telephonic or telegraphic notice, such notice subsequently confirmed
in writing by registered or certified mail, or upon receipt of written notice by registered or certified
mail, by the Insurer from the Paying Agent or any owner of an Obligation the payment of any
Insured Amount for which is then due, that such required payment has not been made, the Insurer
on the due date of such payment or within one business day after receipt of notice of such
nonpayment, whichever is later, will make a deposit of funds, in an account with State Street Bank
and Trust Company, N.A., in New York, New York, or its successor, sufficient for the payment of
any such Insured Amounts which are then due. Upon presentment and surrender of such Obligations
or presentment of such other proof of ownership of the Obligations, together with any appropriate
instruments of assignment to evidence the assignment of the Insured Amounts due on the
Obligations as are paid by the Insurer, and appropriate instruments to effect the appointment of the
Insurer as agent for such owners of the Obligations in any legal proceeding related to payment of
Insured Amounts, such instruments being in a form satisfactory to State Street Bank and Trust
Company, N.A., State Street Bank and Trust Company, N.A. shall disburse to such owners or the
Paying Agent payment of the Insured Amounts due on such Obligations, less any amount held by
the Paying Agent for the payment of such Insured Amounts and legally available therefor. This
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policy does not insure against loss of any prepayment premium which may at any time be payable
with respect to any Obligation.
As used herein, the term "owner" shall mean the registered owner of any Obligation
as indicated in the records maintained by the Paying Agent, the Issuer, or any designee of the Issuer
for such purpose. The term owner shall not include the Issuer or any party whose agreement with
the Issuer constitutes the underlying security for the Obligations.
Any service of process on the Insurer may be made to the Insurer at its offices located
at 113 King Street, Armonk, New York 10504.
This policy is non - cancelable for any reason. The premium on this policy is not
refundable for any reason including the payment prior to maturity of the Obligations.
MBIA INSURANCE CORPORATION
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Section 10. Negotiability. Subject to the registration provisions hereof, the 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 Bonds shall be paid, and the Bonds shall be transferable, free from and without regard to any
equities between the Town and the original or any intermediate owner of any Bonds or any setoffs
or cross - claims.
Section 11. Execution. The 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 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 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
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 Bonds, adopt as and for their
respective signatures any facsimiles thereof appearing on the 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 Bonds.
No 1999 Bond shall be valid or obligatory for any purpose or be entitled to any
benefit or security under this Ordinance unless the certificate of authentication, substantially in the
form provided above, 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 Bonds issued hereunder. By
d *4
authenticating any of the Bonds initially 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 Bonds shall be kept by the Registrar, which is hereby appointed by the Town as registrar (L&,
transfer agent) for the Bonds. Upon the surrender for transfer of any 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 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. Bonds may be exchanged at the Registrar for an equal
aggregate principal amount of Bonds of the series and the same maturity of other authorized
denominations. The Registrar shall authenticate and deliver a 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 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 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 Bond or portion thereof after
the mailing of notice calling such Bond or any portion thereof for prior redemption, except for the
unredeemed portion of the Bonds being redeemed in part.
C. The person in whose name any 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 Bond shall be made only to or upon the written
IMM
order of the registered owner thereof or his legal representative, but such registration may be
changed upon transfer of such 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
Bond to the extent of the sum or sums so paid.
D. If any 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 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 Bond shall have matured or is about to become due and
payable, the Registrar may direct the Paying Agent to pay such Bond in lieu of replacement.
E. The officers of the Town are authorized to deliver to the Registrar fully
executed but unauthenticated Bonds in such quantities as may be convenient to be held in custody
by the Registrar pending use as herein provided.
F. Whenever any Bond shall be surrendered to the Paying Agent upon payment
thereof, or to the Registrar for transfer, exchange or replacement as provided herein, such Bond shall
be promptly canceled 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 Engy.
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(5), Colorado Revised Statutes and a qualified and registered
"clearing agency" under Section 17A of the Securities Exchange Act of 1934, as
amended; or
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(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 Town 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 Town Council of another depository institution acceptable to the
Town 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(5),
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 or 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 Town 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 Town 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
Registrar, together with written instructions for transfer satisfactory to the 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 Registrar,
together with written instructions for transfer satisfactory to the Registrar, new Bonds shall be issued
in the denominations of $5,000 or any integral multiple thereof, as provided in and subject to the
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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 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 Town 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 Town 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 Town 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.
been duly executed by appropriate Town officers and authenticated by the Registrar, the Town shall
cause the Bonds to be delivered to the Purchaser on receipt of the agreed purchase price. The 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 Bonds in such name or
names as the Purchaser shall direct.
The proceeds of the 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 Purchaser of the 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 of the Bonds:
(i) All accrued interest, if any, received in respect of the Bonds shall
be credited to the Bond Account to be applied to the payment of the Bonds.
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(ii) An amount, together with other available funds of the Town,
sufficient to establish any initial cash balance remaining uninvested and to buy
Governmental Obligations to effect the Refunding shall be deposited to the Escrow
Account.
(iii) All remaining proceeds of the Bonds shall be used, together
with any other available moneys therefor, to pay a portion of the premiums for the
Bond Insurance Policy and the Bond Reserve Insurance Policy and costs incidental
to the issuance of the Bonds. After payment of all such costs, any unexpended
balance of the proceeds of the Bonds shall be deposited in the Bond Account and
applied to the payment of the principal of and interest on the 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 by the 1994 Ordinance and continued by
the 1994B Ordinance and this Ordinance and known as the "Town of Avon, Sales Tax Bond
Account" the following amounts:
1. Interest &= ents. Monthly, commencing on the first day of the first
month following the date of delivery of the 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 interest due on the Bonds, 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 from whatever source, to pay the next maturing installment of
interest on the Bonds then Outstanding.
2. Principal Payments. Monthly, commencing on the first day of the first
month following the date of delivery of the 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,
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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, 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, from any remaining
Pledged Revenues there shall be credited monthly to a special account of the Town's Debt Service
Fund created by the 1994 Ordinance and continued by the 1994B Ordinance and this Ordinance and
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 deposits in the Reserve Account. Investment eamings 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 the Bond Reserve Insurance Policy. The Reserve Account Requirement shall be calculated upon
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(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 (but only with the prior
written consent of the Bond Insurer if the provider is other than the Bond Insurer) 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.
All cash and investments in the Reserve Account shall be transferred to the Bond
Account for payment of principal and interest on the Bonds before any drawing may be made on any
Bond Reserve Insurance Policy credited to the Reserve Account in lieu of cash. Payment of any
amounts owing to the provider of a Bond Reserve Insurance Policy shall be made prior to
replenishment of any such cash amounts. Draws on all Bond Reserve Insurance Policies on which
there is available coverage shall be made on a pro -rata basis (calculated by reference to the coverage
then available thereunder) after applying all available cash and investments in the Reserve Account.
Payment of amounts owing to the providers of Bond Reserve Insurance Policies shall be made on
a pro -rata basis prior to replenishment of any cash drawn from the Reserve Account.
The Town shall notify the Paying Agent and the provider of any Bond Reserve
Insurance Policy of the necessity for a claim upon the Bond Reserve Insurance Policy at least three
Business Days prior to each date upon which interest or principal is due on the Bonds. The Paying
Agent shall give notice to Bond Insurer of any failure of the Town to make timely payment in full
of any deposit required to be made under the Registrar Agreement. The Paying Agent shall maintain
records as to the amount available to be drawn under each Bond Reserve Insurance Policy.
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
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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 Unon 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.
D. Defia3dug 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 fast 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
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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 created by the 1994 Ordinance and continued by the 1994B Ordinance
and this Ordinance and known as the "Town of Avon Sales Tax 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. The Town may create separate subaccounts in the Rebate Account in connection
with the issuance of Additional Bonds.
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
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payment of the interest on and principal of any obligations secured by Pledged Revenues subordinate
to the lien of the Bonds and on a parity with or subordinate to the lien of the Financial Guaranty
Agreement 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 App-ropriation 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 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 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 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 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
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such book account shall be continuously secured to the fiillest 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
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. Permitted Investments in the Reserve Account shall be valued at fair market
value, which valuation shall be determined at least once every year, and shall have maturities of five
years or less.
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.
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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 Bonds constitute a pledge of, and an
irrevocable first lien (but not an exclusive first lien) on all of the Pledged Revenues. The Bonds are
equitably and ratably secured by a lien on the Pledged Revenues. The Financial Guaranty
Agreement constitutes a pledge of, and an irrevocable second lien, on all of 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 or
other obligations, payable from and constituting a lien upon the Pledged Revenues on a parity with
the lien of the 1999 Bonds (the "Additional Bonds "). Such Additional Bonds may be payable solely
from Pledged Revenues or they may be payable from Pledged Revenues and other revenues or funds
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 Pledged Sales Tax Revenues in such Fiscal Year equaled or
exceeded' 135% 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 135%
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
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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 the 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 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 Tien upon the Pledged Revenues subordinate or junior to the lien of the
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 Bonds.
Section 19. Refunding Obligations.
A. - Generally. If at any time after the 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 and the Bond Insurer, if the Bond Insurer insured such obligations,
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
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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 Bonds are Outstanding, refunding obligations payable from
the Pledged Revenues may be issued on a parity with the unrefimded Bonds only if-
1. Prior Consent. The Town first receives the consent of the owner or
owners of the unrefunded Bonds and the Bond Insurer, if the Bond Insurer insured such obligations;
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 Bonds that:
A. Use of 1999 Bond Proceeds. The Town will proceed with the Refunding
without delay and with due diligence.
B. Pavment of 1994 Bonds. The Town will promptly pay the principal of and
interest on every Bond issued hereunder and secured hereby on the dates and in the manner specified
herein and in said 1999 Bonds according to the true intent and meaning hereof. Such principal and
interest is payable solely from the Pledged Revenues.
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,
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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 35 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 or the Bond Insurer, 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 Bonds or the Bond Insurer (whichever is appropriate), as provided in Section 35 of this
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 town and limits or otherwise inhibits the amount
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
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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 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
fiords and accounts pledged hereunder and all the rights of every owner of any of the Bonds against
all claims and demands of all Persons whomsoever.
F. Conditions Precedent. Upon the issuance of any of the Bonds, all conditions,
acts and things required by the Constitution or laws of the United States, the Constitution 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 Bonds shall exist, have happened and have been performed,
and the 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 Bonds remain Outstanding, proper books of
record and account will be kept by the Town, separate and apart from all other records and accounts,
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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 revenues and expenditures of the
Pledged Revenues. The Town agrees to allow the owner of any of the 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 Bond Insurer and the Purchaser.
I. 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.
J. Other Liens. As of the date of issuance of the Bonds and after the Refimding,
there are no other 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 Bonds that it will not take any action or omit to take any action with respect to the Bonds, the
proceeds thereof, any other funds of the Town or any facilities refinanced with the proceeds of the
Bonds if such action or omission (i) would cause the interest on the Bonds to lose its exclusion from
gross income for federal income tax purposes under Section 103 of the Tax Code, (ii) would cause
interest on the 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 under Section 56 of the Tax Code
in calculating corporate alternative minimum taxable income, or (iii) would cause interest on the
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 1999 Bonds until the date on which all
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obligations of the Town in fulfilling the above covenant under the Tax Code and Colorado law have
been met.
The Town hereby designates the 1999 Bonds as "qualified tax- exempt obligations"
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 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 Bonds.
A 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 or ordinances 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. Promo Collections. The Town will cause the Pledged Revenues to be
collected promptly and accounted for in the accounts as herein provided.
O. 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.
Q. Continuing Disclosure Certificate. The Town will comply with the terns of
the Continuing Disclosure Certificate. Any failure by the Town to perform in accordance with this
Section 20.Q shall not constitute an "event of default" under Section 23 of this Ordinance, and the
rights and remedies provided by this Ordinance upon the occurrence of an "event of default" shall
not apply to any such failure. Unless otherwise required by law, no owner of a Bond shall be entitled
to damages for the Town's non - compliance with its obligations under this Section 20.Q ; however,
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the owners of the Bonds may enforce specific performance of the obligations contained in this
Section 20.Q by any judicial proceeding available.
Section 21. Defeasance. When the Bonds have been fully paid both as to principal
and interest, and all amounts due to the Bond Insurer under the Financial Guaranty Agreement have
been paid, all obligations hereunder shall be discharged and the 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 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 Bonds
as the same become due to maturity or a designated prior redemption date; and, if 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 Bonds of any maturity, the
Registrar shall, if requested by the Town, institute a system to preserve the identity of the individual
Bonds or portions thereof so defeased, regardless of changes in bond numbers attributable to
transfers and exchanges of 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 Bonds with
the opinion of bond counsel thereon, the procuring of bond insurance and the Bond Reserve
Insurance Policy, 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
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the exclusion of interest on the Bonds from gross income for federal income tax purposes and the
provision of continuing financial disclosure.
The form, terms and provisions of the Purchase Contract, the Escrow Agreement, the
Financial Guaranty Agreement, the Continuing Disclosure Certificate, the Registrar Agreement and
the Letter of Representations hereby are approved, and the Town shall enter into and perform its
obligations thereunder in substantially the forms of such 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. The Preliminary Official Statement hereby is
approved and the officers of the Town are authorized and directed to participate in the preparation
of, and to execute and deliver, a final official statement for the Bonds. The execution of the final
official statement by the Finance Director shall be conclusively deemed to evidence the Town's
approval of the form and contents thereof.
The Town Council hereby accepts the Purchase Contract as submitted by the
Purchaser, and hereby authorizes the sale of the Bonds to the Purchaser at a price of $5,526,797.30
(consisting of par less underwriter's discount of $41,845.70 and original issue discount of
$11,357.00) ,plus accrued interest of $25,843.10, and otherwise upon the terms, conditions and
provisions as set forth in the Purchase Contract. The Town Council hereby determines that the sale
of the Bonds as provided herein and in the Purchase Contract is to the best advantage of the Town.
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 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
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
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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 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 Bond Insurer so
long as the Bond Insurer is not in default of its payment obligations under the Bond Insurance Policy
or, during such default by the Bond Insurer, by the owners of not less than 25% in aggregate
principal amount of the Bonds then Outstanding.
E. BaWg3 tcv. If the Town files a petition in bankruptcy under Title H of the
United States Code, as amended.
Section 24. Remedies. Upon the happening and continuance of any event of
default as provided in Section 23 hereof, the Bond Insurer or 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. Notwithstanding the
foregoing, so long as the Bond Insurer is not in default in its payment obligations under the Bond
Insurance Policy or the Bond Reserve Insurance Policy, the Bond Insurer shall direct the
enforcement of any remedy hereunder without the consent of the owners of the Bonds. All
proceedings shall be maintained for the benefit of the Bond Insurer so long as it is not in default in
its payment obligations under the Bond Insurance Policy or the Bond Reserve Insurance Policy, and,
during such default by the Bond Insurer, thereafter for the equal benefit of all owners. The failure
of the Bond Insurer or 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 Bond Insurer or owners of Bonds and the exercise of any right by any owner shall
not be deemed a waiver of any other right.
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
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proper acts on behalf of and for the owners of the Bonds to protect and preserve the security created
for the payment of the Bonds and to insure the payment of the principal of and interest on said Bonds
promptly as the same become due. Proceeds derived from the Pledged Revenues, so long as any of
the 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 Bond Insurer so long as it is not in default of its payment
obligations under the Bond Insurance Policy or, during such a default by the Bond Insurer, the owner
or owners of not less than 25% in aggregate principal amount of the 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 Paying 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 the Bond Insurer and each owner of any Outstanding 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 (L&, 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. The Town shall provide written notice to the Bond Insurer
of the resignation or dismissal of the Registrar or Paying Agent and the appointment of a successor.
Section 27. Exercise of Option. The Council has elected and does hereby declare
its intent to exercise on the behalf and in the name of the City its option to redeem on December 1,
2004, all of the then outstanding Refunded Bonds. The Council is hereby obligated so to exercise
such option, which option shall be deemed to have been exercised when notice is duly given and
completed forthwith after the issuance of the Bonds as herein provided.
MAP,
Section 28:' Maintenance of Escrow Account. The Escrow Account shall be
maintained at all times subsequent to the initial deposit of moneys therein in an amount at least
sufficient, together with the known minimum yield to be derived from the initial investment and any
temporary reinvestment of the deposits therein or any part thereof in Federal Securities (as defined
therein), to pay the Refunded Bond Requirements as the same became due.
Section 29. Use of Escrow Account. Moneys shall be withdrawn by the Escrow
Bank from the Escrow Account in sufficient amounts and at such times to permit the payment
without default of the Refunded Bond Requirements. Any moneys remaining in the Escrow Account
after provision shall have been made for the redemption in full of the Refunded Bonds shall be
applied to any lawful purpose of the Town as the Town Council may hereafter determine.
Section 30. Notice of Defeasance. The Town hereby authorizes and directs the
registrar for the 1994 Bonds and the 1994B Bonds to give the notice of defeasance of the Refunded
Bonds, in the name of and on behalf of the Town and the bond registrar forthwith upon issuance of
the 1999 Bonds and again prior to the redemption date for the 1994 Bonds and the 1994B Bonds in
the time and manner required by the ordinances authorizing the issuance of the 1994 Bonds and
1994B Bonds.
Section 31. Manner of Giving Notice. The notice of defeasance shall be given by
mailing a copy of the notice by certified, first -class mail (postage prepaid) to Coughlin 8t Company,
Inc., as the original purchaser of the 1994 Bonds and the 1994B Bonds, and to the registered owners
of the Refunded Bonds at the addresses shown on the registration records of the registrar for the
Refunded Bonds, all as provided in the 1994 Ordinance and the 1994B Ordinance.
Section 32. Form of Notice. The notice of defeasance so to be given forthwith
shall be in substantially the following form:
nj!
(Form of Notice)
NOTICE OF DEFEASANCE OF
TOWN OF AVON, COLORADO
SALES TAX REVENUE BONDS, SERIES 1994
AND SALES TAX REVENUE BONDS, SERIES 1994B
CUSIP NOS.
NOTICE IS HEREBY GIVEN that the Town of Avon, Colorado (the "Town ") has
caused to be deposited in escrow with The Bank of Cherry Creek, N.A. in Denver, Colorado
refunding bond proceeds and other funds which have been invested (except for an initial cash
balance- remaining uninvested) in bills, notes, bonds and similar securities which are non - callable
direct obligations of the United States of America, to refund, pay and discharge the principal of and
interest on the Town's outstanding Sales Tax Revenue Bonds, Series 1994 and the Town's
outstanding Sales Tax Revenue Bonds, Series 1994B (collectively, the "Refunded Bonds ") as the
same become due through and including prior redemption thereof.
The 1994 Bonds and the 1994B Bonds maturing on and after September 15, 2005 will
be redeemed on September 15, 2004 upon payment of principal and accrued interest to the
redemption date. Interest on the Refunded Bonds will cease to accrue from and after such
redemption date.
According to a report pertaining to such escrow of Van Schooneveld & Co., Inc.,
Denver, Colorado, certified public accountants, the escrow, including the known minimum yield
from such investments and the initial cash balance remaining uninvested, is fully sufficient at the
time of the deposit and at all times subsequent, to pay the debt service requirements of the Refunded
Bonds on their respective maturity and prior redemption dates.
In accordance with the Comprehensive Energy Policy Act of 1992 (HR 776), the
paying agent is required to withhold 31 % from payments of principal to individuals who fail to
furnish valid Taxpayer Identification Numbers. A completed form W -9 should be presented with
your Refunded Bond.
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The above- referenced CUSIP numbers were assigned to these issues by Standard &
Poor's Corporation and are intended solely for bondholders' convenience. Neither the paying agent
nor the Town shall be responsible for selection or use of the CUSIP numbers, nor is any
representation made as to their correctness on the Refunded Bonds or as indicated in any redemption
notice.
DATED
TOWN OF AVON, COLORADO
By:
Finance Director
(End of Form of Notice)
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Section 33. , 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.
Section 34. Repeal . 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 35. Amendment. After any ofthe 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 Bonds
(but followed by notice to the Bond Insurer), 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 Bonds or the
Bond Insurer;
or collateral;
(2) to subject to the lien of this Ordinance additional revenues, properties
(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
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(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 Bond Insurer, unless the Bond Insurer is in default under the terms
of the Bond Insurance Policy or the Bond Reserve Insurance Policy, in which case this Ordinance
may be amended or supplemented with the written consent of the owners of 66% in aggregate
principal amount of the Bonds Outstanding at the time of the adoption of such amendatory or
supplemental ordinance; provided, however, that, without the written consent of the Bond Insurer
and the owners of all of the Bonds adversely affected thereby, no such Ordinance shall have,the
effect of permitting:
Ordinance; or
(1) An extension of the maturity of any Bond authorized by this
(2) A reduction in the principal amount of any Bond, the rate of interest
thereon, or the prior redemption premium thereon, if any; 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 Bonds required for consent to
such amendatory or supplemental ordinance; or
(5) The establishment of priorities as between 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 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 1999 Bonds.
Section 36. Notice to Bond Insurer. Any notice required by this Ordinance or the
Escrow Agreement to be given to any party also shall be given to the Bond Insurer. Any notice
herein required to be given to the Bond Insurer shall be in writing and sent by registered or certified
mail to the Bond Insurer, 113 King Street, Armonk, New York 10504, Attention: Insured Portfolio
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Management, or to such other address of which the Bond Insurer shall notify the Town in writing.
The Town shall provide the Bond Insurer with the following information:
(a) Budget for each year and annual audited financial statements, within
200 days after the end of its Fiscal Year.
(b) , Official statement or similar disclosure document, if any, prepared in
connection with the issuance of Additional Bonds.
(c) All notices required to be delivered to the registered owners of the
1999 Bonds.
Section 37. Payments under the Policy.
A. In the event that, on the second Business Day, and again on the Business Day,
prior to any payment date on the Bonds, the Paying Agent has not received sufficient moneys to pay
all principal of and interest on the Bonds then due, the Paying Agent shall immediately notify the
Bond Insurer or its designee on the same Business Day by telephone or telegraph, confirmed in
writing by registered or certified mail, of the amount of the deficiency.
B. If the deficiency is made up in whole or in part prior to or on the payment
date, the Paying Agent shall so notify the Bond Insurer or its designee.
C. In addition, if the Paying Agent has notice that any registered owner has been
required to disgorge payments of principal or interest on the Bonds to a trustee in bankruptcy or
creditors or others pursuant to a final judgment by a court of competent jurisdiction that such
payment constitutes an avoidable preference to such registered owner within the meaning of any
applicable bankruptcy laws, then the Paying Agent shall notify the Bond Insurer or its designee of
such fact by telephone or telegraph, confirmed in writing by registered or certified mail.
D. The Paying Agent is hereby irrevocably designated, appointed, directed and
authorized to act as attorney -in -fact for registered owners of the Bonds as follows:
1. If and to the extent there is a deficiency in amounts required to pay
interest on the Bonds, the Paying Agent shall (a) execute and deliver to the Insurance Paying Agent,
in form satisfactory to the Insurance Paying Agent, an instrument appointing the Bond Insurer as
agent for such registered owners in any legal proceeding related to the payment of such interest and
an assignment to the Bond Insurer of the claims for interest to which such deficiency relates and
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which are paid by the Bond Insurer, (b) receive as designee of the respective registered owners (and
not as Paying Agent) in accordance with the tenor of the Bond Insurance Policy payment from the
Insurance Paying Agent with respect to the claims for interest so assigned, and (c) disburse the same
to such respective registered owners; and
2. If and to the extent of a deficiency in amounts required to pay principal
of the Bonds, the Paying Agent shall (a) execute and deliver to the Insurance Paying Agent in form
satisfactory to the Insurance Paying Agent an instrument appointing the Bond Insurer as agent for
such registered owner in any legal proceeding relating to the payment of such principal and an
assignment to the Bond Insurer of any of the Bonds surrendered to the Insurance Paying Agent of
so much of the principal amount thereof as has not previously been paid or for which moneys are
not held by the Paying Agent and available for such payment (but such assignment shall be delivered
only if payment from the Insurance Paying Agent is received), (b) receive as designee of the
respective registered owners (and not as Paying Agent) in accordance with the tenor of the Bond
Insurance Policy payment therefor from the Insurance Paying Agent, and (c) disburse the same to
such registered owners.
E. Payments with respect to claims for interest on and principal of Bonds
disbursed by the Paying Agent from proceeds of the Bond Insurance Policy shall not be considered
to discharge the obligation of the Town with respect to such Bonds, and the Bond Insurer shall
become the owner of such unpaid Bonds and claims for the interest in accordance with the tenor of
the assignment made to it under the provisions of this subsection or otherwise.
F. Irrespective of whether any such assignment is executed and delivered, the
Town and the Paying Agent hereby agree for the benefit of Bond Insurer that,
1. to the extent the Bond Insurer makes payments, directly or indirectly
(as by paying through the Paying Agent), on account of principal of or interest on the Bonds, the
Bond Insurer will be subrogated to the rights of such registered owners to receive the amount of such
principal and interest from the Town, with interest thereon as provided and solely from the sources
stated in this Ordinance and the Bonds; and
2. they will accordingly pay to the Bond Insurer the amount of such
principal and interest (including principal and interest recovered under subparagraph (ii) of the first
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paragraph of the Bond Insurance Policy, which principal and interest.shall be deemed past due and
not to have been paid), with interest thereon as provided in this Ordinance and the Bonds, but only
from the sources and in the manner provided herein for the payment of principal of and interest on
the Bonds to registered owners, and will otherwise treat the Bond Insurer as the owner of such rights
to the amount of such principal and interest.]
Section 38. Ordinance 1=pealable. After any of the Bonds herein authorized are
issued, this Ordinance shall constitute a contract between the Town and the owners of the Bonds,
and shall be and remain mq)ealable until the Bonds and interest thereon shall be fully paid, canceled
and discharged as herein provided.
Section 39. Disposition of Ordinance. This Ordinance, as adopted by the Town
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 -Ten,
and the Town Clerk, and by the certificate of publication.
Section 40. Effective Date. This ordinance shall be in full force and effect seven
days after public notice following final passage.
INTRODUCED, APPROVED ON FIRST READING, AND ORDERED POSTI✓D;
this 12th day of January, 1999, 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 26th day of January, 1999, at
5:30 p.m. in the Municipal Building of the Town of Avon, Colorado.
ST:
)V)—\
Town Clerk
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TOWN OF AVON, COLORADO
Ma
INTRODUCED, APPROVED ON SECOND READING, AND ORDERED
POSTED this 26th day of January, 1999.
A ST:
To Clerk
.APPROVED AS TO FORM:
Town Attorney
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TOWN OF AVON, COLORADO
Ma
STATE OF COLORADO )
COUNTY OF EAGLE ) SS.
TOWN OF AVON )
I, the Town Clerk of the Town of Avon, Colorado, do hereby certify:
1. That the foregoing pages are a true, perfect and complete copy of the
Ordinance adopted by the Town Council constituting the governing board of the Town of Avon (the
"Council'), had and taken at an open, regular meeting of the Council.held at the Town Hall, in Avon,
Colorado, on January 12, 1999, convening at the hour of 5: 319.m. as recorded in the regular book
of official records of the proceedings of said Town of Avon kept in my office.
2. That the Ordinance was read by title, duly moved and seconded and the
Ordinance was approved on first reading by a vote of 5 to 0 of the members of the Council at
the regular meeting of the Council held at the Town Hall, in Avon, Colorado, on January 12, 1999,
convening at the hour of 5: 39.m., as follows:
Those Voting Yes:
Debbie Buckley
Rick Cuny
Mac McDevitt
Bob McIlveen
Buz Reynolds
Those Voting No:
Those Abstaining:
Those Absent: Jim Benson
3. That the passage of the Ordinance on second reading was duly moved and
seconded, and the Ordinance was finally adopted at the meeting of January 26, 1999, by an
affirmative vote of a majority of the members of the Council as follows:
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Those Voting Yes:
Those Voting No:
Those Abstaining:
Debbie Buckle
Rick Cunt
Mac McDevitt
Bob :McIlveen
Buz Reynolds
Those Absent: Jim RPn c nn
5. The members of the Council were present at each of the meetings and voted
on the passage of such Ordinance as set forth above.
6. There are no bylaws, rules or regulations of the Council which might prohibit
the adoption of said Ordinance.
7. That on eTa : -.� 1999, and Jan. 29 , 1999 the full text of
the ordinance was posted at the office of the Town Clerk and in three public places in the Town. .
8. Notice of the meetings of January 12, 1999 and January 26, 1999, in the fors
attached hereto as Exhibit A was posted at the Town Hall, not less than 24 hours prior to each
meeting in accordance with law.
(SEAL)
WITNESS my hand and the seal of said
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affixed this J an 2 9_, 1999.
Tom Clerk
9
Iii, : 1I:1
Notice of the Meetings
of January 12, 1999 and January 26, 1999
STATE OF COLORADO )
COUNTY OF EAGLE ) SS
TOWN OF AVON 1
NOTICE IS HEREBY GIVEN OF A PUBLIC HEARING BEFORE THE TOWN COUNCIL
OF THE TOWN OF AVON, COLORADO AT 5:30 P.M. ON THE 26th DAY OF JANUARY
1999, AT THE TOWN MUNICIPAL BUILDING FOR THE PURPOSE OF CONSIDERING
THE ADOPTION OF ORDINANCE NO. 99-01 SERIES OF 1999:
AN ORDINANCE AUTHORIZING THE ISSUANCE OF TOWN OF AVON, COLORADO,,
SALES TAX REVENUE REFUNDING BONDS, SERIES 1999; 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 14' day of January, 1999.
TOV�NJOF AVON, COLORADO
Ids Nash
Town Clerk
POSTED AT THE FOLLOWING PUBLIC PLACES WITHIN THE TOWN OF AVON ON
JANUARY 15,1999:
AVON MUNICIPAL BUILDING IN THE MAIN LOBBY
AVON BEAVER CREEK TRANSIT BUS STOP AT AVON CENTER
AVON RECREATION CENTER
CITY MARKET IN THE MAIN LOBBY