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TC Ord. No. 1985-01ORDINANCE NO. g 5 _ 1 AN ORDINANCE AUTHORIZING THE -ISSUANCE AND SALE OF $2,745,000 OF THE TOWN OF AVON, COLORADO FLOATING/ FIXED RATE INDUSTRIAL DEVELOPMENT REFUNDING REVENUE BONDS (DILLON REAL ESTATE CO., INC. PROJECT) FOR THE PURPOSE OF MAKING A LOAN TO PROVIDE FUNDS TO DILLON REAL ESTATE CO., INC. FOR THE PERMANENT FINANCING OF COSTS OF A PROJECT WITHIN THE MEANING OF THE COUNTY AND MUNICIPALITY REVENUE BOND ACT, AS AMENDED, AND AUTHORIZING THE EXECUTION'AND DELIVERY OF A LOAN AGREEMENT PERTAINING TO THE PROJECT, A TRUST INDENTURE SECURING THE PAYMENT OF THE BONDS, A REFUNDING AGREEMENT RELATING TO SUCH BONDS AND THE TOWN'S OUTSTANDING BONDS, A BOND PURCHASE AGREEMENT PERTAINING TO THE SALE OF THE BONDS, AND SUCH OTHER DOCUMENTS AND INSTRUMENTS AS ARE NECESSARY OR DESIRABLE IN CONNECTION WITH THE ISSUANCE AND SALE OF SUCH BONDS. WHEREAS, the Town of Avon, Colorado, a municipal corporation and political subdivision of the State of Colorado,-is authorized and empowered, by virtue of the laws of the State of Colorado, including without limitation the Act, as hereinafter defined, to (a) issue its revenue bonds for the purpose of defraying the cost of acquiring, constructing, improving and equipping a commercial facility which constitutes a "project" within the meaning of the Act, (b) enter into a loan agreement and thereby provide for revenues sufficient to pay the principal of and interest and any premium on such revenue bonds, (c) refund the series 1980 Bonds (as hereinafter defined) (d) secure such revenue bonds by a trust indenture, as provided herein, (e) enter into a bond purchase agreement to provide for the terms and conditions for the sale of such revenue bonds, and (f) pass this ordinance to authorize the execution and delivery of the Purchase Agreement the Agreement, Indenture and the Refunding Agreement (all as hereinafter defined) as well as such other documents and instruments as are necessary or desirable to effect the issuance and sale of the Refunding Bonds (as hereinafter defined); NOW, THEREFORE, BE IT ORDAINED BY THE TOWN COUNCIL OF THE TOWN OF AVON, COLORADO: Section 1. Definitions. In addition to the words and terms defined elsewhere in this Ordinance, including without limitation the form of Refunding Bond attached hereto as Exhibit A, unless the context or use clearly indicates another meaning or intent: "Act" means The County and Municipality Revenue Bond Act, Part I of Article 3 of Title 29, Colorado Revised Statutes. N "Administrative and Expense Fund" means the Administrative and Expense Fund created in Section 5.01 of the Indenture. "Agreement" means the Loan Agreement, dated as of even date with the Indenture, between the Issuer and the Company, as amended or supplemented from time to time. "Authorized Official" means the Mayor or Town Clerk of the Issuer. ture. "Bond Fund" means the Bond Fund created in Section 5.04 of the Inden- "Bond Legislation" means this ordinance providing for the issuance of the Bonds and approving the Agreement, the Indenture, the Refunding Agreement and related matters. "Bonds" means the Refunding Bonds. "Clerk" means the Town Clerk of the Issuer. "Code" means the Internal Revenue Code of 1954, as amended. Refer- ences to the Code and Sections thereof include relevant applicable regulations and proposed regulations thereunder and any successor provisions to those Sec- tions, regulations or proposed regulations. "Company" means Dillon Real Estate Co., Inc.,-- a corporation duly organized and existing under the laws of the State of Kansas and qualified'to transact business in the State, and its lawful successors and assigns, to the extent permitted by the Agreement. "Guarantor" means The Kroger Co., a corporation duly organized and existing under the laws of the State of Ohio and qualified to do business in the State and its lawful successors and assigns, to the extent permitted by the Guaranty. "Guaranty" means the Guaranty Agreement, dated as of February 15, 1985, from the Guarantor to the Trustee, as amended or supplemented from time to time. "Holder" or "Holder of a Bond" means the person in whose name a Bond is registered on the Bond Register for which provision is made in Section 3.06 of the Indenture. "Indenture" means the Trust Indenture, dated as of February 15, 1985, between the Issuer and the Trustee, as amended or supplemented from time to time. °Interest Payment Date" means each date set forth as-such in the Indenture and in the form of Refunding Bond attached as Exhibit A to this Bond Legislation and the Indenture. "Issuer" means the Town of Avon, Colorado, a,municipal corporation and political subdivision of the State. -2 • i "Legislative Authority" means the Town Council of the Issuer. "Letter of Credit" means the irrevocable letter of credit issued by the Letter of Credit Bank contemporaneously with the issuance of the Project Bonds, any renewal thereof or any Alternate Letter of Credit (as defined in the Agreement). "Letter of Credit Agreement" means the Reimbursement Agreement dated as of February 15, 1985 between the Letter of Credit Bank and the Company. "Letter of Credit Bank" means The Bank of Nova Scotia, and any successors as Letter of Credit Bank under the Letter of Credit Agreement as from time to time approved by the Trustee in accordance with Section 3.7 of the Agreement. "Letter of Credit Fund" means the Letter of Credit Fund created in Section 5.04 of the Indenture. "Loan" means the loan by the Issuer to the Company of the proceeds received from the sale of the Bonds. "Loan Payments" means the amounts required to be paid by the Company in repayment of the Loan pursuant to Section 4.1 of the Agreement and the Notes. "Notes" means the Refunding Note. "Original Purchaser" means Thornton, Farish & Gauntt, Inc., Montgomery, Alabama. "Person" or words importing persons mean firms, associations, part- nerships (including without limitation, general and limited partnerships). joint ventures, societies, estates, trusts, corporations, public or govern- mental bodies, other legal entities and natural persons-:- "Project" means, collectively, the real estate at the time comprising the Project Site, and the real and personal property at the time comprising the Project Facilities, each as defined in the Agreement, together comprising a commercial facility to' be used as a retail supermarket. ."Project Purposes" means acquiring and constructing real and personal property comprising a commercial facility to be used as a retail supermarket and related purposes, or any other use which may be permitted under the Agreement. "Purchase Agreement" means the Bond Purchase Agreement; dated the date of passage of this Bond Legislation, among the Issuer, the Company, the Guarantor and the Original Purchaser. -3- "Refunding Account account by Section 5.01 of Account Payment. "Refunding Account the Series 1980 Bonds as of Original Purchaser. " means the trust fund created as a separate the Indenture for the deposit of the Refunding Payment" means an amount equal to the principal of the date of delivery of the Refunding Bonds to the "Refunding Agreement" means the Refunding Agreement by and among the Issuer, the Company and the Trustee, pursuant to which the moneys, including the earnings from any investment thereof, in the Refunding Account will be invested and applied. "Refunding Bonds" means the $2,745,000 Floating/Fixed Rate Industrial Development Refunding Revenue Bonds (Dillon Real Estate Co., Inc. Project) of the Issuer authorized in Section 3 hereof and Section 2.02 of the Indenture. "Refunding Note" means the nonnegotiable promissory note of the Com- pany, dated-as of even date with the Refunding Bonds initially issued, in the form attached to the Agreement as Exhibit A and in the principal amount of. $2,745,000 evidencing the obligation of the Company to make Loan Payments. "Revenues" means (a) the Loan Payments, (b) all other moneys received or to be received by the Issuer or the Trustee in respect of repayment of the Loan, including without limitation, moneys and investments in the Bond Fund but excluding any moneys in the Letter of Credit Fund and investment proceeds of such moneys, (c) any moneys and investments in the Administrative and Expense Fund, and (d) all income and profit from the investment of the foregoing moneys. "Series 1980 Bonds" means the Issuers Industrial Development Revenue Bonds (City Market, Inc. Project), Series 1980, dated September 1, 1980, issued in the aggregate principal amount of $2,800,000. "State" means the State of Colorado. "Supplemental Indenture" means any indenture supplemental to the Indenture entered into between the Issuer and the Trustee in accordance with Article VIII of the Indenture. "Thornton" shall mean Thornton, Farish & Gauntt, Inc., Montgomery, Alabama and its successors and assigns. "Trustee" means The Central Trust Company, N.A., Cincinnati, Ohio, until a successor Trustee shall have become such pursuant to the applicable provisions of the Indenture, and thereafter "Trustee" shall mean the successor Trustee. The captions and headings in this Bond Legislation are solely for convenience of reference and do not define, limit or describe the scope or intent of any provisions or Sections of this Bond Legislation. -4- Section 2. Determinations by Legislative Authority. This Legisla- tive Authority determines that: (i) the Project is a "project" within the meaning of the Act and is consistent with and in furtherance of the public purposes of the Act; (ii) the refunding of the Series 1980 Bonds and the provision of permanent financing of the costs of the Project will require the issuance, sale and delivery of the Refunding Bonds in the principal amount of $2,745,000; and (iii) following reasonable-. notice, and prior to adoption of this Bond Legislation, a public hearing was held with respect to the issuance of the Refunding Bonds, as required by Section 103(k) of the Code. Section 3. Authorization of Refunding Bonds. This Legislative Authority determines it to be necessary to,'and the Issuer shall, issue, sell and deliver, as provided and authorized herein and in the Indenture and pursuant to the authority of the Act, $2,745,000 principal amount of Refunding Bonds for the purpose of making a loan to assist the Company in the financing of costs of the Project for the Project Purposes. The Refunding Bonds shall be designated "Floating/Fixed Rate Industrial Development Refunding Revenue Bonds (Dillon Real Estate Co., Inc. Project)". Section 4. Terms and Provisions of Refunding Bonds. (a) Generally. The Refunding Bonds (i) shall be issued, unless a Supplemental Indenture shall have been executed and delivered pursuant to Section 8.02(h) of the Indenture, only in fully registered form, substantially as set forth in Exhibit A to this Bond Legislation and the Indenture; (ii) shall be exchangeable for Refunding Bonds of authorized denominations, as provided in the Indenture; (iii) shall be numbered in such manner as deter- mined by the Trustee as to distinguish each Refunding Bond from any other Refunding Bond; (iv) shall prior to the Conversion Date be in the denomina- tions of $50,000 and any integral multiple of $5,000 in excess of $50,000 and on or after the Conversion Date shall be in the denominations of $5,000 and any integral multiple thereof; (v) shall be subject to optional and mandatory redemption in the amounts, upon the conditions, and at the times and prices set forth in the Indenture; and (vi) shall be dated as of the date of delivery to the Original Purchaser. Each Refunding Bond shall bear interest, in accordance with the Indenture, from the most recent date to which interest has been paid or duly provided for or, if no interest has been paid or duly provided for, from its date. (b) Interest Rate and Principal Maturities. The form of the Refunding Bond attached to this Bond Legislation is incorporated herein by reference and made a part hereof as fully as if set forth in full herein. The Refunding Bonds shall bear interest at the rate or rates set forth in Exhibit A attached to this Bond Legislation and provided for in the Indenture, payable on each Interest Payment Date and shall mature on February 15, 2015. Principal of and interest and any premium on the Refunding Bonds shall be payable as provided in the Indenture, in each instance, without deduction for the services of any paying agent. Prior to the Conversion Date (as defined in Exhibit A attached hereto), the principal of.and interest on the Refunding Bonds is secured by the Letter of Credit. -5- 9 9 (c) Execution. The Refunding Bonds shall be signed by the Mayor and attested by the Clerk (provided that one of such signatures may be a facsi- mile) and impressed or imprinted with the corporate seal of the Issuer (pro- vided that a facsimile of such seal may be used). Section 5. ,Sale of Refunding Bonds. The Refunding Bonds are sold and awarded to the Original Purchaser, in accordance with the Purchase Agreement, at the purchase price stated in paragraph 1 of the Purchase Agreement; provided, however, that the Issuer has not confirmed, and makes no representation about and assumes no responsibility for, the accuracy or completeness of any information contained in a Limited Offering Memorandum, a copy of which has been provided to the Legislative Authority. The Authorized Official is sary arrangements with the Original procedure and conditions for the Original Purchaser and to take all authentication and delivery to the under the terms of this Bond Le, Agreement. authorized and directed to make the neces- Purchaser to establish the date, location, delivery of the Refunding Bonds to the steps necessary to effect due execution, Original Purchaser of the Refunding-Bonds, gislation, the Indenture and the Purchase it is determined by this Legislative Authority that the price for and the terms of the Refunding Bonds and the sale thereof, all as provided in this Bond Legislation and the Indenture, are in the best interests of the Issuer and are in compliance with all legal requirements. Section 6. Allocation of Proceeds of Refunding Bonds. The proceeds from the sale of the Refunding Bonds (including without limitation, any accrued interest thereon) shall be allocated, deposited and credited as follows: (i) to the Bond Fund created by the Indenture, any accrued interest paid by the Original Purchaser; and (ii) to the Refunding Account created by the Indenture. the Refunding Account Payment; and (iii) to the Administrative and Expense Fund created by the Indenture, the balance of the proceeds of the Refunding Bonds. Section 7. Security for the Bonds. To the extent provided in, and except as otherwise permitted under the Indenture, the Bonds shall be special, limited obligations of the Issuer and shall be equally and ratably payable solely from the Revenues and shall be secured by an assignment of the Revenues and by the Indenture and prior to the Conversion Date, from moneys drawn on the Letter of Credit. The Bonds also shall be secured by the Notes given by the Company to the Trustee pursuant to the Agreement. In addition, pursuant to the Guaranty, the'Guarantor has guaranteed the payment of the principal of and premium, if any, and interest on the Refunding Bonds. -6- Anything in the Bond Legislation, the Bonds or the Indenture to the contrary notwithstanding, the Refunding Bonds and the interest thereon do not constitute a debt or indebtedness of the Issuer, within the meaning of any constitutional, statutory or home rule charter provision or limitation, and do not constitute or give rise to a pecuniary liability of the Issuer or a charge against its general credit or taxing powers. Section 8. Federal Tax Election. This Legislative Authority elects to have the limitation on capital expenditures specified in Section 103(b)(6)(D) of the Code applied to the Refunding Bonds. The execution and filing by the Authorized Official with the internal Revenue Service of a statement regarding that election, as provided in the Code and the applicable rules and regulations of the Internal Revenue Service, is authorized, directed and approved. Section 9. Covenants and Agreements of Issuer. In addition to the other covenants and agreements of the Issuer in this Bond Legislation and the Indenture, the Issuer covenants and agrees that: (a) Arbitrage Provisions and Issuer Information.Return. The Issuer will restrict the use of the proceeds of the Refunding Bonds in the manner and to the extent, if any, which may be necessary so that the Refunding Bonds will not constitute arbitrage bonds under Section 103(c) of the Code, after taking into account reasonable expectations at the time of the delivery of and pay- ment for the Refunding Bonds. To those ends, the Authorized Official and any other officer having responsibility for issuing the Refunding Bonds is authorized and directed, alone or in conjunction with any other officer, employee or agent of or consultant to the Issuer, or with the Company or any officer, employee or agent of or consultant to the Company, to give: (i) an appropriate certificate of the Issuer, for in- clusion in the transcript of proceedings for the Refunding Bonds, setting forth, the reasonable expectations of the Issuer regarding the amount and use of the proceeds of the Refunding Bonds and the facts, estimates and circumstances on which those expectations are based, that certificate to be premised on the reasonable expectations and the facts, estimates and circumstances on which those expectations are based, as provided by the Company, all as of the date of delivery of and payment for the Refunding Bonds; and (ii) the statement setting forth the information re- quired by Section 103(1) of the Code, which shall be based on the relevant information provided by the Company. (b) Transcript of Proceedings. The Clerk, or other appropriate officer of the Issuer, shall furnish to the Original Purchaser a true tran- script of proceedings, certified by the Clerk or other officer, of (i) all proceedings had with reference to the issuance of the Refunding Bonds and (ii) -7- 0 any other information from the records appropriate to determine the regularity Refunding Bonds. of the Issuer which may be necessary or and validity of the issuance of the Section 10. Indenture. Agreement. Purchase Agreement and Refunding Agreement. To provide for the issuance and sale of the Refunding Bonds and the consummation of the transactions contemplated therein, the Mayor and the Clerk are authorized and directed, for and in the name and on behalf of the Issuer, to execute, and attest, respectively, and deliver, the Indenture, the Agreement, the Refunding Agreement and the Purchase Agreement in substantially the forms submitted to this Legislative Authority. Those instruments are approved with changes therein not inconsistent with this Bond Legislation and not substantially adverse to the Issuer and which are permitted by the Act and shall be approved by the officers executing the Indenture, the Agreement, the Refunding Agreement and the Purchase Agreement; provided, that the approval of those changes by those officers, and their character as not being substantially adverse to the Issuer, shall be evidenced conclusively by their execution of those instruments. Section 11. Other Documents. The Mayor- and the Clerk, as may be appropriate or requested by the original Purchaser, are authorized and directed to execute any certifications, financing statements, assignments and instruments which are necessary or appropriate to perfect the assignments set forth in the Indenture and to consummate the transactions contemplated in this Bond Legislation, the Indenture, the Agreement, the Refunding Agreement and the Purchase Agreement. Section 12. Irrepealable. After the Refunding Bonds are issued, this Ordinance shall constitute an irrevocable contract between the Issuer and the holders of the Refunding Bonds, and shall be.and remain irrepealable until the Refunding Bonds, including both principal and interest, shall be fully paid, cancelled and discharged. Section 13. Compliance with Open Meeting Requirements. It is hereby found and determined that all formal actions of this Legislative Authority concerning and relating to the passage of this Ordinance were taken in an open meeting of this Legislative Authority, and that all deliberations of this Legislative Authority.and of any of its committees that resulted in such for- mal actions, were in meetings open to the public, in compliance with all legal requirements, including Section 5.6 of the Town Charter. Section 14. Ratification. All action heretofore taken by the Issuer and by the officers thereof not inconsistent herewith directed toward the financing of the Project and the issuance and sale of the Refunding Bonds is hereby ratified, approved and confirmed. Section 15. Repealer. All acts, orders, resolutions, ordinances, or parts thereof, taken by the Issuer and in conflict with this Ordinance are hereby repealed, except that this repealer shall not be construed so as to revive any act, order, resolution, ordinance, or part thereof, heretofore repealed. -8- Section 16. Severability. If any paragraph, clause, or provision of this Ordinance, except'Section 7 hereof, is judicially adjudged invalid or unenforceable, such judgment shall not affect, impair or invalidate the remaining paragraphs, clauses or provisions of this Ordinance, it being the intention that the various provisions hereof are severable. Section 17. Limitation of Actions. Pursuant to Section 29-3-122 of the Act, no action shall be brought questioning the legality of the Indenture, the Refunding Agreement, the Agreement or the Bonds, or any other contract or proceeding executed in connection with the Project on and after thirty days from the effective date of this Ordinance: Section 18. Facsimile Signatures. Pursuant to the Uniform Facsimile Signature of Public Officials Act, part 1 of Article .55 of Title 11, Colorado Revised Statutes, as amended, the Mayor and the Clerk may file with the Colorado Secretary of State their manual signatures certified by them under oath. Section 19. Effective Date. This Ordinance and all the provisions herein contained shall take effect seven days after the date of final passage. INTRODUCED, READ BY TITLE, APPROVED ON FIRST READING AND ORDERED PUBLISHED ONCE IN FULL AND ORDERED SET FOR A PUBLIC BEARING ON MARCH 12, 1985 this 26th day of February, 1985. TOWN OF AVON, COLORADO • ; A t Town -9- yor t READ, ADOPTED ON SECOND READING this 12th day of March, 1985. TOWN OF AVON, COLORADO *mYor (Seal) Attes Tow Clerk -10- i • EXHIBIT A [BOND FORM] REGISTERED NO. [FORM OF FACE OF BOND] United States of America REGISTERED State of Colorado Town of Avon Floating/Fixed Rate Industrial Development Refunding Revenue Bond (Dillon Real Estate Co., Inc. Project) AS OF THE INTEREST RATE ON THIS BOND'HAS BEEN CONVERTED TO THE FIXED RATE OF PERCENT ( PER ANNUM. THE CENTRAL TRUST COMPANY, N.A., as Trustee By Authorized Officer Interest Rate: As described on the reverse side hereof Maturity Date: February 1, 2015 Dated as of : The TOWN OF AVON, COLORADO (the "Issuer") a municipal corporation and political subdivision of the State of Colorado (the "State"), for value received, promises to pay to' or registered assigns, but solely from the sources and in the manner referred to 4erein, the principal amount of DOLLARS -2- on the aforesaid Maturity Date, unless this Bond is called for earlier re- demption, and to pay from those sources interest thereon at the applicable interest rate on-each Interest Payment Date, as defined on the reverse side hereof until the principal amount is paid or duly provided for. This Bond will bear interest from the most recent date to which interest has been paid or duly provided for or, if no interest has been paid or duly provided for, from its date. The principal of and any premium on this Bond are payable upon presentation and surrender hereof at the principal corporate trust office of the trustee, presently The Central Trust Company, N.A. (the"Trustee"). Interest is payable on each Interest Payment Date by check or draft mailed to the person in'whose name this Bond (or one or more predecessor bonds) is registered (the "Holder") at the close of business on the Regular Record Date applicable to that Interest Payment Date (the "Regular Record Date") on the registration books for this issue maintained by The Central Trust Company, N.A. as Registrar at the address appearing therein. The Regular Record Date shall (i) during the Variable Rate Period, as hereinafter defined, be the seventh day immediately preceding each Variable Period Interest Payment Date, as hereinafter defined, and (ii) during the Fixed Rate Period, be the fifteenth day preceding each Fixed Period Interest Payment Date, as herein- after defined (or if such date is not a Business Day, the immediately pre- ceding Business Day)., Any interest which is not timely paid or duly provided for shall cease to be payable to the Holder hereof (or of one or more pre- decessor bonds) as of the Regular Record Date, and shall be payable to the Holder hereof (or of one or more predecessor bonds) at the close of business on a Special Record Date to be fixed by the Trustee for the payment of that overdue interest. Notice of the Special Record Date shall be mailed to Holders not less then ten days prior thereto. "Business Day" shall be a day of the year on which banks located in New York City are not required or authorized to remain closed and on which The New York Stock Exchange is not closed. The principal of and interest and any premium on this Bond are payable in lawful money of the United States of America, without deduction for the services of the paying agent. REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THE BOND SET FORTH ON THE REVERSE SIDE. THOSE PROVISIONS SHALL HAVE THE SAME EFFECT FOR ALL PURPOSES AS IF SET FORTH HERE. It is certified and recited that there have been performed and have happened in regular and due form, as required by law, all acts and conditions necessary to be done or performed by the Issuer or to have happened (i) prece- dent to and in the issuing of the Bonds in order to make them legal, valid and binding special, limited obligations of the Issuer, and (-ii) precedent to and in the execution and delivery of the Indenture and the Agreement; that payment in full for the Bonds has been received; and that the Bonds do not exceed or violate any constitutional or-statutory limitation. • 0 -3- Date of (FORM OF Registra- CERTIFICATE tion and OF AUTHENTI- Authenti- CATION) cation: This Bond is one of the Bonds described in the with- in mentioned Indenture. Registrable by: The Central Trust Company, N.A. Payable at: The Central Trust Company, N.A IN WITNESS OF THE ABOVE, the Town of Avon, Colorado has caused this Bond to be executed in the name of the Issuer in their official capa- cities by. the signatures of the Mayor and the Town Clerk, and the seal of the Issuer to be affixed hereto, as of the date shown above. By Authorized Signer (Seal) REVERSE SIDE OF BOND TOWN OF AVON, COLORADO Mayor Town Clerk This Bond is one of a duly authorized issue of Floating/Fixed Rate Industrial Development Refunding Revenue Bonds (Dillon Real Estate Co., Inc. Project) (the "Refunding Bonds" or the "Bonds"), issuable under the Indenture described below, aggregating in principal amount $2,745,000 and issued for the purpose of providing funds to refund the outstanding $2,800,000 principal amount of Town of Avon, Colorado Industrial Development Revenue Bonds (City Market, Inc. Project) Series 1980, dated September 1, 1980 (the "Series 1980 Bonds") and thereby provide permanent financing of the costs financed with the Series 1980 Bonds. The proceeds of the Refunding Bonds will be loaned to Dillon Real Estate Co., Inc. (the "Company") pursuant to a Loan Agreement duly made and entered into between the Issuer and the Company, dated as of February 15, 1985 (the "Agreement"). The Series 1980 Bonds were issued for the purpose of making a loan to assist the Company in the financing of costs of acquiring, constructing, improving, renovating and equipping real and personal property comprising a commercial facility (the "Project") within the boundaries of the Issuer owned by the Company, pursuant to a Loan Agreement dated as of September 1, 1980 between and among The Town of Avon, Colorado and City Market, Inc. and Dillon Real Estate Co., Inc., in order to promote the public health, welfare, safety, convenience and prosperity and to promote and develop trade and other economic activity by inducing commercial and business enterprises to locate, remain and expand in the Issuer and the State in order a ! -4- to mitigate the serious threat of extensive unemployment and to secure and maintain a balanced and stable economy for the Issuer and the State. The Refunding Bonds are issued or to be issued under and are to be equally and ratably secured and entitled to the protection given by the Trust indenture (the "Indenture").dated as of February 15,.1985, between the Issuer and the above-named Trustee. The term "Trustee" as used herein refers to said Trustee or any successor Trustee appointed pursuant to the Indenture. The Indenture is on file in the offices of the Issuer and the Trustee, and reference is hereby made to the Indenture for a more complete description of the provisions, among others, with respect to the nature and extent of the security, the rights, duties and obligations of the Issuer, the Trustee and the holders of the Refunding Bonds, and the terms and conditions upon which the Refunding Bonds are issued and secured, to all of the provisions of which Indenture, each holder, by the acceptance hereof, assents. Pursuant to the Agreement, and as evidenced and to be evidenced by the promissory note delivered thereunder (the "Refunding Note"), the Company is obligated to make payments in the amounts and at the times therein required to pay the principal of and interest and any premium on the Refunding Bonds (the "Bond service charges"). By the Indenture, the Issuer has assigned its right, title and interest in and to the Agreement to the Trustee as security for the payment of the Bond service charges. The Refunding Bonds are issued pursuant to and in compliance with the Constitution and laws of said State, particularly the County and Municipality Development Revenue Bond Act, part 1 of Article 3 of Title 29, Colorado Revised Statutes, as amended and an ordinance duly adopted by the Town Council of the Issuer. The Refunding Bonds are special, limited obligations of the Issuer, and the Bond service charges are payable solely from moneys paid by the Company pursuant to the Agreement and the Refunding Note, Bond proceeds to the extent available for such purpose and any other moneys constituting "Revenues" as defined in the Indenture, and are not otherwise an obligation of the Issuer. The Bonds and the payment of Bond service charges do not constitute a debt or indebtedness of the Issuer within the meaning of any constitutional, statutory or home rule charter provision or limitation and do not give rise-to a pecuniary liability of the Issuer nor a charge against its general credit or taxing powers. The payment of Bond service charges on the Refunding Bonds has been guaranteed by The Kroger Co. (the "Guarantor") pursuant to a Guaranty Agree- ment between the Guarantor and the Trustee, dated as of February 15, 1985. In addition, during the Variable Rate Period, payment of Bond service charges is secured by an irrevocable letter of credit (the "Letter of Credit") issued by a commercial bank, initially The Bank of Nova Scotia (the "Letter of Credit Bank"). During the period from the date of issuance and delivery of the Refunding Bonds to and including the earlier of (i) the day preceding the Conversion Date, as hereinafter defined, or (ii) the date when all Bond service charges on the Refunding Bonds shall have 'been paid in full or 0 0 -5- provision shall have been made for the payment thereof in.accordance with the Indenture (the "Variable Rate Period"), the interest rate on the Refunding Bonds shall be at the Variable Rate, as described below. Interest on the Refunding Bonds during the Variable Rate Period shall be computed on the basis of a 365 or 366-day year, as applicable, for the number of days actually elapsed, payable on the first day of each February, May, August and November during the Variable Rate Period and on the conversion Date (the "Variable Period Interest Payment Dates"). Except as otherwise provided herein, during the Variable Rate Period the Refunding Bonds shall bear interest at the Variable Rate. The Variable Rate initially shall be the rate which is equal to 55% of the "Prime Rate" or "Base Rate" as announced by The Central Trust Company, N.A., from time to time; provided that if prior to the Conversion Date the Remarketing Agent is unable to remarket any Refunding Bond at par at such rate, all outstanding Refunding Bonds'shall bear interest at a percentage of the "Prime Rate" or "Base Rate" as announced by The Central Trust Company, N.A., from time to time, as determined and certified by the Remarketing Agent pursuant to Section 6.19 of the Indenture; provided further, that the Variable Rate may be adjusted on each Interest Payment Date, as hereinafter defined, in accordance with Section 6.19 of the Indenture upon certification by.the Remarketing Agent. The adjusted Variable Rate shall not be less than 54% or greater than 75% of such "Prime Rate" or "Base Rate," provided, however, that in no event shall the Variable Rate exceed fifteen percent (15%) per annum. The Refunding Bonds have been issued subject to the provision that the interest rate on the Refunding Bonds may be fixed until maturity at the Fixed Rate, as hereinafter defined, upon the exercise by the Company of its option to convert the Refunding Bonds to the Fixed Rate. The Company may exercise its option to convert the interest rate on the Refunding Bonds to the Fixed Rate as provided in the Indenture by giving the notice required by the Indenture to the Trustee, among other parties. Such notice shall specify (i) the date on which the Refunding Bonds will cease to bear interest at the Variable Rate and will thereafter bear interest at the Fixed Rate (the. "Conversion Date"), and (ii) the date as of which the Fixed Rate was or shall be computed (the "Computation Date"). Upon receipt of such written notice from the Company, the Trustee shall mail, at least 15 Business Days prior to the Conversion Date, by first class mail, postage prepaid, to the registered owner of each outstanding Refunding Bond at the address shown on the registration books maintained by the Trustee the notice required by the Indenture stating at least the following: (A) that the interest rate on the -Refunding Bonds will be at the Fixed Rate commencing with the Conversion Date, (B) the Conversion Date, (C) the Computation Date'and the Fixed Rate, if then established, or the procedures to be followed to inform such owners of the Refunding Bonds of the Fixed Rate after the Computation Date, (D) that interest will be paid on the Refunding Bonds on the Fixed Period Interest Payment.Dates after the conversion Date, (E) that after the Conversion Date the holders or owners of the Refunding Bonds will no longer have the right to require redemption of Refunding Bonds by the Issuer as described herein and (F) that after the Conversion Date the Refunding Bonds will no longer be secured by the Letter of Credit. -6- During the period commencing on the Conversion Date to and including the date when all Bond service charges on the Refunding Bonds shall have been paid in full or provision shall have been made for the payment thereof in accordance with the Indenture (the "Fixed Rate Period"), the interest rate on the Refunding Bonds shall be at the Fixed Rate. Interest on the Refunding Bonds during the Fixed Rate Period shall be computed on the basis of a 360-day year, consisting of twelve, thirty-day months, and shall be payable on the February 15 or August 15 immediately following the Conversion Date and on each February 15 and August 15 thereafter (the "Fixed Period Interest Payment Dates") until all Bond service charges on the Refunding Bonds shall have been paid in full or provision shall have been made for the payment thereof in accordance with the Indenture. The Fixed Rate shall be the minimum rate of interest which is necessary to remarket the Refunding Bonds in a secondary market transaction on the Conversion Date at par, as certified by the Remarketing Agent to the Trustee not later than the fifth Business Day preceding the Conversion Date (the "Fixed Rate") and shall not exceed the rate of fifteen per centum (15%) per annum. The Variable Period Interest Payment Dates and the Fixed Period Interest Payment Dates together constitute the "Interest Payment Dates". On the Conversion Date, or as soon thereafter as practicable, the Trustee shall complete the statement on the face of this Bond, or any Bond issued in exchange herefor, as to the Fixed Rate. The Refunding Bonds are issuable, at all times, as fully registered Bonds in the denominations of $50,000 and any integral multiple of $5,000 in excess of $50,000. During the Fixed Rate Period, the Refunding Bonds are also issuable in the denominations of $5,000 and any integral multiple of $5,000. This Bond is transferable by the, registered holder hereof in person or by his attorney duly authorized in writing-at the principal corporate trust office of the Trustee as Bond Registrar, upon presentation hereof to the . Trustee, all subject to the terms and conditions provided in the Indenture. During the Variable Rate Period, the Refunding Bonds shall be subject to redemption prior to stated maturity by the Issuer, at the direction of the Company, as a whole at any time or in part on any Variable Period Interest Payment Date at a -redemption price of 100 percent of the principal amount thereof, plus accrued interest to the date fixed for redemption. After conversion of the interest rate on the Refunding Bonds to a Fixed Rate, the Refunding Bonds shall not be subject to optional redemption as provided under the immediately preceding paragraph, but shall be subject to optional redemption by the Issuer, to be exercised at the direction of the Company, in whole on any date, or in part on any.Interest Payment Date, on or after February 15 of the year which is the tenth anniversary of the year in which the conversion to a Fixed Rate occurred, at the redemption prices (expressed as percentages of the principal amount) set forth below, plus accrued interest to the redemption date: 0 0 -7- If redeemed (dates inclusive) Redemption Price February 15 of tenth year through February 14 of eleventh year 103% February 15 of eleventh year through February 14 of twelfth year 102-1/2% February 15 of twelfth year through February 14 of thirteenth year 102% February 15 of thirteenth year through February 14 of fourteenth year 101-1/2% February 15 of fourteenth year through February 14 of fifteenth year 101% February 15 of fifteenth year through February 14 of sixteenth year 100-1/2% February 1,5 of sixteenth year and thereafter 100% The Refunding Bonds are subject to extraordinary optional redemption prior to stated maturity in the event of exercise by the Company of its option to direct such redemption upon, occurrence of any of the events specified in Section 6.2 of the Agreement. If called for redemption upon the occurrence of such events, the Refunding Bonds shall be subject to redemption by the Issuer at any time in whole or on any interest payment date, in part, in the event of condemnation of a significant part of the Project, as provided in the Agreement, at a redemption price of 100 percent, of the principal amount thereof, plus accrued interest to the redemption date. Upon the occurrence of a Determination of Taxability, as defined in the Indenture, the Refunding Bonds are subject to mandatory redemption in whole by the Issuer from the proceeds of the Company paying advance Loan Payments pursuant to the Agreement at a redemption price equal to 100 percent of the outstanding principal amount thereof, plus interest accrued to the redemption date, at the earliest practicable date selected by the Trustee, after consultation with the Company, but in no event later than 180 days following the Trustees notification of the Determination of Taxability; provided, that if, the Determination of Taxability has occurred as a result of any event over which the Company had control, the redemption price also shall include a premium as provided in the Indenture. On or prior to the Conversion Date any Refunding Borid shall be redeemed by the Issuer in the principal amount of the face value thereof, on the demand of the holder thereof, on any Business Day which is at least seven (7) days from the date of delivery of the notice referred to below at a redemption price equal to the principal amount thereof plus accrued interest, if any, to the date of redemption, upon: (A) delivery to the Depositary at 0 • -8- its principal corporate trust office of a written notice in the form of notice attached hereto and (B) delivery of such Refunding Bond at the principal corporate trust office of the Depositary, as hereinafter identified, or its agent, at or prior to 10:00 a.m., New York City time, on the date for redemption specified in the aforesaid notice. On such redemption date, the owner of the Refunding Bond so delivered shall be paid from one or more of the following sources of payment, in the following order: (1) the proceeds of a remarketing of the Refunding Bond by the Remarketing Agent pursuant to the Remarketing Agreement; (2) moneys provided to the Depositary by the Company pursuant to the Agreement; (3) the moneys drawn on the Letter of Credit. The Depositary is initially The Central Trust Company, N.A.,'and any successor as Depositary under the Depositary Agreement, dated as of February 15, 1%85 (the "Depositary Agreement"), by and among the Company, the Trustee, the Depositary, the Remarketing Agent and the Letter of Credit Bank. By the acceptance of this Refunding Bond, the holder hereof agrees that if there are funds available for such purpose in any account within the Bond Purchase Fund established with the Depositary under the Depositary Agreement, then any Refunding Bond so tendered to the-Depositary or its agent in accordance with the preceding paragraph shall be, on the date specified in the notice of the Bondholder delivered to the Trustee, purchased and not redeemed at a purchase price equal to the principal amount thereof plus accrued interest, if any, to the date of purchase; provided; however, that'if the purchase date for any Refunding Bond is an interest payment date, the purchase price thereof shall be the principal amount thereof and interest on such Bond shall be paid to the registered holder of such Bond in the normal course. If the funds in such Bond Purchase Fund at 10:30 a.m., New York City time, on said purchase date are insufficient to pay the aforesaid purchase price of any Refunding Bond in full, the Company, pursuant to the terms of the Agreement, shall be obligated to furnish to the Trustee a sum equal to the difference-between the amount available for such purpose and the redemption price of such Refunding Bond. Except in the case of a redemption on demand of a Bondholder as set forth above, rights of redemption of the Refunding Bonds shall be exercised by first class mailed notice, specifying the Refunding Bonds or portions thereof to be called, the redemption price to be paid, the date fixed for redemption and the places where the amounts due upon such redemption are payable, and stating that-interest on the Refunding Bonds will cease to accrue'after such date of'redemption. If less than all the Refunding Bonds are called for redemption at one time, the selection of such Bonds (and portions of fully registered Bonds) to be redeemed shall be made by lot in such manner as the Trustee may determine. Prior to the Conversion Date, if portions of any Refunding Bonds are called for redemption which, after redemption of any such • s -9- Refunding Bond, would leave remaining a face value of principal outstanding of such Refunding Bond less than $50,000, then the entire principal amount of any such Refunding Bond shall be redeemed. If Bonds or portions thereof are duly called for redemption and if on such redemption date moneys for the redemption thereof, together with interest thereon to the redemption date, shall be held by the paying agents so as to be available therefor, then from and after such redemption date such Refunding Bonds or portions thereof shall cease to bear interest, and those Refunding Bonds and portions of Refunding Bonds shall no longer be protected by, and shall not be deemed to be outstanding under, the Indenture. Except as provided in the Indenture, the holders or registered owners of the Refunding Bonds are not entitled to enforce the provisions of the Indenture, the Agreement or the Refunding Note or to institute, appear in or defend any suit, action or proceeding to enforce any provisions thereof or to take any action with respect to any Event of Default under the Indenture. The Indenture permits certain amendments or supplements to the Agree- ment, the Indenture and the Refunding Note not prejudicial to the Bondholders to be made with the consent of the Trustee but without the consent of or notice to the Bondholders, and other amendments or supplements thereto (with certain exceptions as provided in the Indenture) to be made with the consent of the holders of not less than 66-2/3% in aggregate principal amount of the Refunding Bonds at the time outstanding. If an Event of Default, as defined in the Indenture, shall occur the principal of Refunding Bonds then outstanding may be declared due and payable in the manner and with the effect provided by the Indenture, but subject to waiver of such event of default or rescission of such declaration as provided in the Indenture. The Refunding Bonds shall not constitute the personal obligation, either jointly or severally, of the members of the Town Council of the Issuer or any other officers of the Issuer. This Refunding Bond shall not be entitled to any security or benefit under the Indenture or become valid or obligatory for any purpose until the certificate of authentication hereon shall have been signed,by the Trustee. _10- [FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION] This Bond is one of the Bonds described in the within-mentioned Indenture. By THE CENTRAL TRUST COMPANY, N.A., Trustee By Authenticating Agent Authorized Officer [FORM OF ASSIGNMENT] For value received, the undersigned hereby sells, assigns and trans- fers unto the within-Bond and does hereby irrevocably constitute and appoint attorney to trans- fer the said Bond on the books kept for registration of the within Bond, with full power of substitution in the premises. Dated: In the presence of: i -11- [FORM OF BONDHOLDER'S ELECTION NOTICE] Date: The Central Trust Company, N.A., 201 E. Fifth Street Cincinnati, Ohio 45202 Attention: Corporate"Trust Department as Depositary under a Depositary Agreement dated as of February 15, 1985 relating to an issue of $2,745,000 aggregate principal amount of Town of Avon, Colorado Floating/ Fixed Rate , Industrial Development Refunding Revenue Bonds (Dillon Real Estate Co., Inc. Project) Gentlemen: Pursuant to the provisions of the Indenture, demand for redemption of the Bond described below in the principal amount of its face value is hereby made: 1. The Bond is one of the Town of Avon, Colorado Floating/Fixed Rate Industrial Development Refunding Revenue Bonds (Dillon Real Estate Co., Inc. Project), numbered , the principal amount of which is $ and the Bond has been duly endorsed in blank for transfer (together, in the event that the date for redemption occurs after the'Regular Record Date (as defined in the Bond) on the next succeeding Interest Payment Date, with related due bills in form satisfactory to the Remarketing Agent (as defined in the Indenture)). 2. The date on which the Bond shall be redeemed (a Business Day, as defined in the Bond, not prior to the seventh calendar day immediately following the date of delivery of this Notice) shall be 3. The name of the registered owner or owners of the Bond is and the address or addresses of such owner or owners is r 9 -12- 4. The person or persons to whom or to whose order the proceeds of the redemption or purchase of the Bond are to be paid, and the address or addresses of such payee or payees is I (we) hereby undertake to deliver such Bond to the-Depositary at the above address in Cincinnati, Ohio no later,-than 10:00 a.m. New York City time on the Business Day set forth in paragraph 2 above. Name and signature of holder or holder's duly authorized attorney-in-fact: Name Signatures 0 9 STATE OF COLORADO ) COUNTY OF EAGLE ) SS TOWN OF AVON } NOTICE IS HEREBY GIVEN OF A PUBLIC HEARING BEFORE THE TOWN COUNCIL OF THE TOEN OF AVON, COLORADO, AT 7:30 P.M. ON THE 12TH DAY OF MARCH, 1985 AT THE MUNICIPAL BUILDING, 400 BENCHMARK ROAD, AVON, COLORADO FOR THE PURPOSE OF CONSIDERING THE ADOPTION OF ORDINANCE NO. 85-1, SERIES OF 1985: AN ORDINANCE AUTHORIZING THE ISSUANCE AND SALE OF $2,745,000 OF THE TOWN OF AVON, COLORADO FLOATING/FIXED RATE INDUSTRIAL DEVELOPMENT REFUNDING REVENUE BONDS(DILLON REAL ESTATE CO., INC. PROJECT) FOR THE PURPOSE OF MAKING A LOAN TO PROVIDE FUNDS TO DILLON REAL ESTATE CO., INC. FOR THE PERMANENT FINANCING OF COSTS OF A PROJECT WITHIN THE MEANING OF THE COUNTY AND MUNICIPALITY REVENUE BOND ACT, AS AMENDED, AND AUTHORIZING THE EXECUTION AND DELIVERY OF A LOAN AGREEMENT PERTAINING TO THE PROJECT, A TRUST INDENTURE SECURING THE PAYMENT OF THE BONDS, A REFUNDING AGREEMENT RELATING TO SUCK BONDS AND THE TOWN'S OUTSTANDING BONDS, A BOND PURCHASE AGREEMENT PERTAINING TO THE SALE OF THE BONDS, AND SUCH OTHER DOCUMENTS AND INSTRUMENTS AS ARE NECESSARY OR DESIRABLE IN CONNECTION WITH THE ISSUANCE AND SALE OF SUCH BONDS. 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 given and passed by order of the Town Council of the Town of Avon, Colorado. Dated this 27TH day of February, 1985. TOti VON, COLOP-AD B F• C atricia J Doyle, Town Clerk POSTED AT THE FOLLOWING PUBLIC PLACES WITHIN THE TOWN OF AVON ON FEBRUARY 27TH , 1985. THE MAIN ENTRANCE OF THE POST OFFICE THE MAIN ENTRANCE TO CITY MARKET, THE PESTER GAS STATION; AND THE MUNICIPAL BUILDING IN THE MAIN LOBBY