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TC Ord. No. 1996-04 General obligation refunding bonds of the Town of AvonORDINANCE NO. 96- 4 AN ORDIN-UNCE CONCERNINIG GENERAL OBLIGATION REFI, I)iING BONDS OF THE TOAN OF .AVON, COLOR-ADO (THE "TOWN").; AUTHORIZING THE ISSDA'NCE AND SALE OF THE TOWN'S GENERAL OBLIGA`T'ION REFUNDING BONDS IN THE AGGREGATE PRINCIPAL AMOUNT OF $4,555,000 FOR THE PURPOSES OF REFUNDING A PORTION OF THE TOWN'S EXISTING GENERAL OBLIGATION DEBT; PROVIDING RETAILS CONCER'N'ING THE BONDS, THEIR FORAM, THEIR SALE AND FUNDS RELATING THERETO. PROVIDING FOR THE LEVY OF GENERAL AD VALOREM TAXES TO PAY THE PRINCIPAL OF AND INTEREST ON THE BONDS; RATIFYING ACTION HERETOFORE TAKEN AND RELATING TO SUCH BONDS; PROVIDING OTHER M1ATTERS RELATING THERETO; AND REPEALING ALL ORDINANCES IN CONFLICT HEREWITH. WHEREAS, the Town of Avon, Eagle County, Colorado (the "Town") is a municipal corporation duly organized and existing under the laws of the State of Colorado and in particular under the provisions of Article XX of the Constitution of the State of Colorado and the Home Rule Charter of the Town (the "Charter "); and WHEREAS, Section 14.3 of the Charter provides, in pertinent part: "Section 14.3 General Obligation Bonds. (a) No bonds or other evidence of indebtedness payable in whole or in part from the proceeds of general property taxes and/or sales taxes and/or other municipal taxes, or to which the full faith and credit of the Town is pledged, shall be issued, except in pursuance of an ordinance adopted and approved by two- thirds (2/3) vote of the entire Council, or until the questions of their issuance shall, at a general or special election, be submitted to a vote of the electors and approved by a majority of those voting on the question. (b) The Council shall determine which of the aforementioned methods of approval of such securities shall be utilized subject to the limitations of subsection 14.3(C) below. (c) Pursuant to subsection (a) above, the Council may, without voter approval, issue such securities in amounts not to exceed a total cumulative outstanding bonded indebtedness of the town in the amount of $5,000,000.00. =J ; and ; and (e) The pr-m-isions of this Section shall not apply to Short -Tern3 N Rtes, Revenue Bonds, refunding Bonds, nor Special or Local Improvement District Bonds, which are provided for else %There in this Charter. WHEREAS, Section 14.7 of the Charter further provides: "Section 14.71 Limitation of Indebtedness. The aggregate amount of bonds or other evidences of indebtedness of the Town shall not exceed twenty -five percent (25 %) of the assessed valuation of the taxable property within the Town as shown by the last preceding assessment for Town purposes; or the sum of S15,000,000, whichever amount shall be greater provided, however, in determining the amount of indebtedness, there shall not be included within the computation: (a) Bonds or other evidences of indebtedness, outstanding or authorized to be issued for the acquisition, extension or improvement of a municipal water- works system or municipal storm sewer, sanitary sewer, combined storm and sanitary sewers, or sewage disposal systems; (b) Short-term notes; (c) Special or local improvement securities; (d) Securities payable from the revenues of an income- producing system, utility, project, or other capital improvements or from Town sales or use taxes. (e) Long term installment contracts other than real property acquisitions, rentals and leaseholds pursuant to Section 14.9." WHEREAS, Section 14.6 of the Charter provides, in pertinent part: (a) The Council may authorize, by ordinance, without an election, issuance of refunding bonds or other like, securities for the purpose refunding and providing for the payment of the outstanding bonds or other like securities of the town as the same mature, or in advance of maturity, by means of an escrow or otherwise. -2- WHEREAS, the assessed valuation of the taxable property %;-main �e To,. -n as of the first day of January. 1 996 is S65.703,5 10 and L!I a limitation on indebtedness pursuant to Section 14.7 is S 15,000,000; and WTIEREAS, the Council has d` ermined_ and does hereby declare, that the proposal "Proposal") (the submitted bey I- lanafen. Imhoff Inc. (the '"Purchaser "), prior to the final passage of this ordinance, for the purchase of the bonds (the "Bonds ") and registered "B " interest certificates (the "Registered Coupons ") evidencing additional interest thereon herein authorized is to the best advantage of the Town; and WHEREAS, the Town has previously issued its General Obligation Bonds, Series 1987 in the aggregate principal amount of $2,040,000 (the "1987 Bonds") of which $1,535,000 remains outstanding and bear interest at the rates set forth below, payable semiannually on June 1 and December 1 of each year, and the outstanding principal amount matures annually on December 1 in each of the years and amounts as follows: 1�1a — Principal Interest Rate Per Anne 1996 $ 95,000 7.30% 19% 100,000 7.40 2001 485,000 7.75 2006 855,000 7.875 and i WHEREAS,,the Town has previously issued its General Obligation Refunding and Improvement Bonds, Series 1990 in the aggregate principal amount of $3,020,000 (the "1990 Bonds ") of which $3,020,000 remains outstanding and bears interest at the rates set forth below, payable semiannually on June I and December I of each year, and the outstanding principal amount matures annually on December l in each of the years and amounts as follows: -3- ; and Interest Maturitu Principal Rate Per :annum 1998 5100.000 TIM 1999 105,000 7.2 2000 115.000 7.3 2001 120,000 7.4 2002 130.000 7.5 2003 145.000 7.6 2004 150,000 7.7 2010 2.155.000 8.0 WHEREAS, all of the outstanding 1987 Bonds are subject to redemption at the option of the Town on June 1, 1996, at a price equal to 100.5% of the outstanding principal amount plus accrued interest to the redemption date; and WHEREAS; the 1990 Bonds maturing on and after December 1, 1999 are subject to redemption prior to their maturity, at the option of the Town, in whole or in part, on December 1, 1998 or on any date thereafter, at the redemption prices set forth below (expressed as a percentage of the principal amount of each Bond or portion thereof so redeemed), plus accrued interest to the redemption date: Redemption Dates (inclusive) Redemption Price December 1, 1998 through November 30, 2000 101% December 1, 2000 and thereafter 1000/0 and WHEREAS, the Town is not delinquent in the payment of any principal or interest on any of the 1987 Bonds or the 1990 Bonds (collectively, the "Refunded Bonds "); and WHEREAS, the Council has detennined, and does hereby determine, that the interest of the Town and the public interest and necessity require the paying and discharging of all of the principal, interest, and redemption premium on the Refunded Bonds as such come due or are called for prior redemption, and the issuance of bonds therefore pursuant to Section 14.6 of the Charter and the payment of related costs (the "Refunding Project "); and WHEREAS, by undertaking the Refunding Project, the Town will reduce the principal and interest payable in particular years and effect other economies; and -4- WHEREAS, pursuant to Article X, Section 204) of the Colorado Constitution, refunding bonds may be issued without an election if issued at a lower interest rate than the refunded bonds;and WHEREAS, the Council has found and determined', and does hereby find and determine, that the net effective interest rate on the Bonds is less than the net effective interest rate of the Refunded Bonds: and WHEREAS, the Council has determined, and does hereby declare: A. The Refunding Project serves a valid governmental purpose and is necessary, expedient and in the best interests of the Town; and B. The Bonds shall be issued for the Refunding Project in the aggregate principal amount of $4,555,000; and C. All action preliminary to the authorization of the issuance of the Bonds has been taken. NOW, THEREFORE, BE IT ORDAINED BY THE TOWN COUNCIL OF THE TOWN OF AVON, COLORADO: Section 1. Authority for this Ordinance. This ordinance is adopted by virtue of the Town's powers as a home nude municipality organized and operating pursuant to Article XX of the State Constitution and the Charter thereunder and pursuant to their provisions. Pursuant to Article XX of the State Constitution and the Charter, all statutes of the State which might otherwise apply in connection with the Refunding Project or the Bonds are hereby'superseded. Section 2. Terms of Bond Sale. The Purchaser's offer to purchase the Bonds and Registered Coupons as provided in the Proposal described in the sixth preamble to this ordinance is hereby formally accepted; and the Bonds shall be sold and delivered to the Purchaser in accordance therewith. Section 3. Authorization. For the purpose of providing funds to defray the costs of the Refunding Project (including costs of issuance of the Bonds), the Council, on behalf of the Town and upon the credit thereof, shall issue its "Town of Avon, Colorado, General Obligation Refunding Bonds, Series 1996" in the aggregate principal amount of $4,555,000. -5- i 4 R t 1 Section 4. Bond Details. The Bonds shall be issued in fully registered form initially registered in the name of Cede and Co_ as nominee for The Depository Trust Company. New York, New York, as securities depository for the Bonds. in denominations of $5,000 and integral multiples thereof (provided that no Bond may be in a denomination which exceeds the principal coming due on any maturity date and no individual Bond may be issued for more than one maturity). The Bonds shall be numbered in such manner as shall be determined by Colorado National Bank, in Denver, Colorado, the registrar and paying agent for the Bonds, or any successor registrar and paying agent (the "Registrar" or the "Paying Agent "). The Bonds shall be dated April 1. 1996 and shall bear "A" interest payable to the registered owners of the Bonds from their date to maturity at the rates per annum shown below, payable semiannually on June 1 and December 1 in each year, commencing June 1, 1996, except that Bonds which are reissued upon transfer, exchange or other replacement shall bear interest from the most recent interest payment date to which interest has been paid, or if no interest has been paid, from the date of the Bonds. The Bonds shall mature serially on December 1, in each of the years and amounts set forth below: Maturity Interest Date Principal Rate (December 1) Amount Per Annum) 1998 $290,000 4.100% 1999 335,000 4.200 2000 350,000 4.300 2001 370,000 4.450 2002 385,000 4.600 2003 405,000 4.750 2004 420,000 4.875 2005 440,000 5.000 2006 465,000 5.000 2007 490,000 5.100 2008 515,000 5.200 2009 90,000 5.300 n In addition to the "A " interest rates, the Bonds shall bear additional interest evidenced by Registered Coupons (as defined in Section 5 herein) at the Registered Coupon interest rates per annum shown, payable on the dates indicated below-. Interest Accrual Payment Registered Coupon Amount Period Dates Interest Rate ]1,rlaturine April 16, 1996 to May 31, 199.6 .tune 1, 1996 37.76% $215,000 June 1, 1996 to November 30, 1996 December 1, 1996 9.440 215,000 December 1, 1996 to May 31, 1997 June 1, 1997 7.684 175,000 June 1, 1997 to November 30, 1997 December 1, 1997 7.684 175,000 December 1, 1997 to May 31, 1998 June 1, 1998 1.756 40,000 The principal -of and premium, if any, on any Bond and the interest represented by the Registered Coupons shall be payable to the registered Owner thereof as shown on the registration records kept by the Registrar upon maturity or prior redemption thereof and upon presentation and surrender at the at the principal operations office of the Paying Agent, currently located at First Trust National Association, St. Paul, Minnesota. If any Bond shall not be paid upon such presentation and surrender at or after maturity, it shall continue to bear interest at its stated interest rate until the principal thereof is paid in full. Payment of interest on any Bond (excluding interest represented by Registered Coupons) shall be made to the registered owner thereof by check or draft mailed by the Paying Agent, on or before each interest payment date (or, if such interest payment date is not a business day, on the next succeeding business day), to the registered owner thereof at his or her address as it last appears on the registration records kept by the Registrar on the close of business on the fifteenth day (whether or not a business day) of the calendar month next preceding an interest payment date (the "Record Date "); but any such interest not so timely paid shall cease to be payable to the person who is the registered owner thereof at the close of business on the Record Date and shall be payable to the person who is the registered owner thereof at the close of business on a Special Record Date for the payment of any such defaulted interest. Such Special Record Date shall -7- be fixed by the Registrar wrlienever moneys become available for payment of the defaulted interest. and notice of the Special Rercord Date shall be given to the registered ovmers of the 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 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 (excluding interest represented by Registered Coupons) on any Bond by such alternative means as may be mutually agreed to by the registered owner of such 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 date specified in the Registrar and Paying Agent Agreement dated as of April 1. 1996 between the Town and the Registrar (the "Registrar Agreement ")). All such payments shall be made in lawful money of the United States of America, without deduction for the services of the Registrar or Paying Agent. Section 5. Registered ou ons. At the time of initial delivery of the Bonds to the Purchaser, the Bonds shall be accompanied by Registered "B" Interest Certificates (the ' Registered Coupons ") evidencing a portion of the interest on the Bonds and shall be registered as provided in Section 12 hereof. The Registered Coupons shall be in fully registered form (i.e., registered as to payment of the supplemental interest) provided that no Registered Coupon shall be issued for more than one due date. The Registered Coupons shall be numbered in such manner as the Registrar shall determine. Each Registered Coupon shall entitle the registered owner thereof to receive payment of a portion of the interest payable with respect to the Bonds as described in Section 4 hereof_ The Registered Coupons may be owned, transferred and presented for payment separately from the Bonds. References in this Ordinance to the Bonds shall be deemed to include the Registered Coupons where the context so requires, but except as specifically provided herein or in the Registered Coupons, no provision of this Ordinance relating to the Bonds shall be deemed to affect the rights of the owners of Registered Coupons to receive payments as provided in Section 4 hereof. Section 6. A. Prior Redemption. The Bonds maturing on or before December 1, 2006 shall not be subject to redemption prior to their respective maturities. The Bonds maturing on and after December 1, 2007 are subject to redemption prior to their maturity, at the option of the IF-39 Town, in whole or in part, in integral multiples of Sa.OW. and if less than all of the Bends are to be redeemed. by maturity or maturities selected by the T o ,-in and by lot w -ithin a maturity as the Paying Agent shall determine (giving; proportionate weight to Bonds in denominations larger than $5,000). on December 1. 2006 or on any date thereafter, upon payment of the principal amount of each Bond or portion thereof so redeemed_ plus accrued interest to the redemption date. B. Partial Redemi2tion_ In the case of a Board of a denomination larger than $5,000, a portion of such Bond ($5.000 or integral multiples thereof) may be redeemed, in which case the Registrar shall, without charge to the registered owner of such Bond, authenticate and issue a replacement Bond or Bonds for the unredeemed portion thereof C. Notice. The Town shall give written instructions of any optional prior redemption pursuant to Subsection A of this Section to the Registrar at least sixty days prior to such redemption date (provided that the Registrar may waive the right to receive such instructions more than thirty days prior to such redemption date). Notice of any optional prior redemption shall be given by the Registrar in the name of the Town by sending a copy of such notice by first -class mail, postage prepaid, not more than sixty days and not less than thirty days prior to the redemption date, to the registered owner of any Bond all or a portion of which is called for prior redemption at his or her address as it last appears on the registration records kept by the Registrar. Failure to give such notice by mail 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 premium, 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 hereinabove provided, the Bond or Bonds so called for redemption shall become due, and payable on the redemption date so designated; and upon presentation thereof at the principal office of the Paying Agent, the Town will pay the Bond or Bonds so called for redemption. No further interest shall accrue on the principal of any In Bond (or portion thereof) called for redemption from and after the redemption date. provided sufficient funds are on deposit with the Paying Agent on the redemption date. Section 7. Execution and Authentication_ The Bonds shall be executed in the name of the Town by the manual or facsimile signature of the Mayor. shall be sealed with the manual or facsimile impression of the seal of the Town, and shall be attested by the manual or facsimile signature of the Town Clerk. The Registered Coupons accompanying the Bonds shall be executed in the name of the Town by the manual or facsimile signature of the Mayor and sealed with the manual or facsimile imps. -ssion of the seal of the Town. Bonds or Registered Coupons bearing the manual or facsimile signatures of the officers in office at the time of the signing thereof shall be the valid and binding obligations of the Town, notwithstanding that before the delivery of the Bonds or Registered Coupons or belbre the reissuance of the Bonds or Registered Coupons upon transfer or exchange, any or all of the persons whose signatures appear on the Bonds or Registered Coupons 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 and the Registered Coupons, adopt as and for their respective signatures the facsimiles thereof appearing on the Bonds. 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 or Registered Coupons. No Bond or Registered Coupon shall be valid or obligatory for any purpose unless the certificate of authentication, substantially in the form hereinafter provided, has been duly manually executed by the Registrar. The Registrar's certificate of authentication shall be deemed to have been duly executed by it if manually signed by an authorized representative of the Registrar, but it shall not be necessary that the same representative sign the certificate of authentication on all of the Bonds or Registered Coupons issued hereunder. By authenticating any of the Bonds or Registered Coupons initially delivered pursuant to this ordinance, the Registrar shall be deemed to have assented to the provisions of this ordinance. Section 8. Registration Transfer and Exchange of Bonds and Re6stered Col Mons. A. Records for the registration and transfer of the Bonds and Registered Coupons shall be kept by the Registrar. Upon the surrender for transfer of any Bond or Registered Coupon at the -10- Registrar. with a written instrument of transfer satisfactory° to the Registrar duly executed by the registered owner or his duly authorized attorney. the Registrar shall enter such transfer in the registration records and shall authenticate and deliver in the name of the transferee or transferees a new Bond or Bonds of a like aggregate principal amount and of the same maturity, or a new Registered Coupon or Registered Coupons of a like aggregate amount and of the same due date, as the case may be, 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 same maturity of other authorized denominations. Registered Coupons may be exchanged at the Registrar for an equal aggregate amount of Registered Coupon interest as provided in Section 4 hereof and of the same due date. The Registrar shall authenticate and deliver a Bond or Bonds or Registered Coupon or Registered Coupons 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 exchanges or transfers of Bonds or Registered Coupons, which charges (as well as any tax or other governmental charge required to be paid with respect to such transfer) shall be paid by the registered owner requesting such exchange or transfer. B. The Registrar shall not be required to transfer or exchange (i) all or any portion of any Bond subject to prior redemption during the period beginning at the opening of business fifteen days before the mailing of notice calling any Bonds or portions thereof for prior redemption and ending at the close of business on the date of such mailing, or (ii) all or any portion of any Bond after the mailing of notice calling such Bond or any portion thereof for prior redemption. C. Except as herein provided with respect to Record Dates and Special Record Dates for the payment of interest, the person in whose name any Bond or Registered Coupon 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; and payment of either principal or interest on any Bond shall be made only to upon the written order of the registered owner thereof or his legal representative, but such registration may be changed 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. -11- D. if any Bond or Registered Coupon shall be lost, stolen, destroyed or mutilated, the Registrar may, upon receipt of 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 or a replacement Registered Coupon or Registered Coupons of like aggregate amount and of the same due date, 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 that the Paying Agent pay such Bond or Registered Coupon in lieu of replacement. E. The officers of the Town are authorized to deliver to the Registrar fully executed but unauthenticated Bonds and ' Registered Coupons in such quantities as may be convenient to be held in the custody of the Registrar pending use as herein provided. F. Whenever any Bond or Registered Coupon shall be surrendered to the Paying Agent upon payment thereof, or to the Registrar for transfer, exchange or replacement as provided herein, such Bond or Registered Coupon 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 9. Negotiability: General Obligation. Subject to the registration provisions hereof, the Bonds and Registered Coupons shall be fully negotiable and shall have all the qualities of negotiable paper, and the registered owner or owners thereof shall possess all rights enjoyed by the holders of negotiable instruments under the provisions of the Uniform Commercial Code. The Bonds and Registered Coupons shall constitute the general obligations of the Town and the full faith and credit of the Town shall be, and hereby is, pledged to the payment thereof. Section 10. Book Entry. A. Notwithstanding any contrary provision of this Ordinance, the Bonds initially shall be evidenced by one.Bond for each series and maturity in denominations equal to the aggregate principal amount of the Bonds of such series and maturity and the Registered Coupons initially shall be evidenced by one Registered Coupon for each payment date for which Registered Coupons come due. Such initially delivered Bonds and Registered Coupons shall be registered in the name of "Cede & Co." as nominee for DTC, the Depository for the Bonds -12- and the Registered Coupons. The Bonds and Registered Coupons may not thereafter be transferr,•d or exchanged except. (I) to any successor of DTC or its nominee. which successor must be both a "clearing corporation" as defined in Section 4- 8- 102(3), Colorado Revised Statutes and a qualified and registered "clearing agency" under Section 17A of the Securities Exchange Act of 1934, as amended; or (2) upon the resignation of DTC or a successor or new depository under clause (1) or this clause (2) of this paragraph A. or a determination by the Council that DTC 'or such successor or new Depository is no longer able to carry out its functions, and the designation by the Council of another Depository acceptable to the Council and to the Depository then holding the Bonds, which new Depository must be both a "clearing corporation" as defined in Section 4 -8- 102(3), Colorado Revised Statutes and a qualified and registered "clearing agency" under Section 17A of the Securities Exchange Act of 1934, as amended, to carry out the functions of DTC or such successor new depository; or (3) upon the resignation of DTC or a successor or new Depository under clause (1) or clause (2) of this paragraph A, or a determination of the Council that DTC of such successor or Depository is no longer able to carry out its functions, and the failure by the Council, after reasonable investigation, to locate another Depository under clause (2) to carry out such Depository functions. B. In the case of a transfer to a successor of DTC or its nominee as referred to in clause (1) 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 and a new Registered Coupon for each payment date of the Registered Coupons 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 for the Bonds and Registered Coupons as provided in clause (3) of paragraph A hereof, and upon receipt of the outstanding Bonds and Registered Coupons by the Registrar, together with written instructions for transfer satisfactory to the Registrar, new Bonds shall be issued in -13- denominations of 55,000 or any integral multiple thereof and Registered Coupons shall be issued in authorized amounts, as provided in and subject to the limitations of Section 4 hereof, registered in the manes 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 and Registered Coupons within a period of less than 60 days from the date of receipt of such written transfer instructions. C. The Council and the Registrar shall be entitled to treat the registered owner of any Bond or Registered Coupon, as the case may be, as the absolute owner thereof for all purposes hereof and any applicable laws, notwithstanding any notice to the contrary recei%led by any or all of them and the Council and the Registrar shall have no responsibility for transmitting payments or notices to the Beneficial Owners of the Bonds and the Registered Coupons held by DTC or any successor or new Depository named pursuant to paragraph A hereof. D. The Council and the Registrar shall endeavor to cooperate with DTC 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. E. Upon any partial redemption of any maturity of the Bonds, Cede & Co. (or its successor) in its discretion may request the Town to issue and authenticate a new Bond or shall make an appropriate notation on the Bond indicating the date and amount of prepayment except in the case of final maturity, in which case the Bond must be presented to the Registrar prior to payment. The records of the Paying Agent shall govern in the case of any dispute as to the amount of any partial prepayment made to Cede & Co. (or its successor). Section 11. Form of Bonds. Registered Coupons. Certificates and Registration Panel. The Bonds, Registered Coupons, Registrar's certificate of authentication, form of assignment and legal opinion certificate shall be in substantially the following forms (provided that any portion of the text of the Bonds may, with appropriate references, be printed on the back of the Bonds): -14 (Formes of Bond) Insert only if Bonds are delivered pursuant to Section 10(A)(3) of the Bond Ordinance. ** Insert only if Bonds are initially delivered to The Depository Trust Company Pursuant to the Bond Ordinance. UNITED STATES OF AMERICA STATE OF COLORADO COUNTY OF EAGLE TOWN OF AVON, COLORADO GENERAL OBLIGATION REFUNDING BOND SERIES 1996 No. R- INTEREST RATE MATURITY DATE DATED-AS OF CUSIP December 1, April 1, 1996 REGISTERED OWNER: *CEDE & CO.* PRINCIPAL AMOUNT: DOLLARS On the faith, credit and behalf of the Town of Avon, Colorado (the "Town), the Town Council of the Town (the "Council') hereby acknowledges the Town indebted and promises to pay to the Registered Owner specified above, or registered assigns, the Principal Amount specified above, on the Maturity Date.specified above (unless called for earlier redemption) and to pay interest thereon on June 1 and December 1 in each year commencing June 1, 1996, at the Interest Rate per annum specified above, until the Principal Amount is paid or payment has been provided therefor. This bond will bear interest payable to the Registered Owner at the Interest Rate specified above from the most recent interest payment date to which interest has been paid, or, if no interest has been paid, from the date of this bond. The principal of this bond is payable upon presentation and surrender hereof at the at the principal office of the Town's paying agent or its successor (the "Paying Agent "), presently Colorado National Bank, currently located at First Trust National Association, St. Paul, Minnesota. If this bond shall not be paid upon such presentation and surrender, it shall continue to bear interest at the Interest Rate specified above until the principal hereof is paid in full. -15- Interest payable to the registered owner of this bond wall be paid on each interest payment date tor, if such interest payment date' is not a business day. on the next succeeding business day), by check or draft mailed by the Paying Agent to the person in whose name this bond is registered (the "registered o%rnner ") on the registration records of the Toi,%m maintained by the Registrar. Qr any successor registrar (tfie °Registrar "). currently being Colorado rational Bank (the principal operations office of which is currently located at First Trust National Association, St. Paul, Minnesota) and at the address as it last appears thereon at the close of business on the fifteenth day (whether or not a business day) of the calendar month next preceding such interest payment date (the "Record Date "). Any such interest not so timely paid shall cease-to be payable to the person who is the registered owner hereof at the close of business on the Record Date and shall be payable to the person who is the registered owner hereof at the close of business on a Special Record Date, as defined in the ordinance adopted by the Council on March 12, 1996 authorizing this bond (the "Bond Ordinance "), for the payment of any defaulted interest. Such Special Record Date shall be fixed by the Paying Agent whenever moneys become available for payment of the defaulted interest, and notice of the Special Record Date shall be given to the registered owners of the bonds of the series of which this is one (the "Bonds ") not less than ten days prior to the Special Record Date. The Paying Agent may make payments of interest on this bond by such alternative means as may be mutually agreed to by the registered owner hereof and the Paying Agent. All such payments shall be made in lawful money of the United States of America without deduction for the services of the Registrar or Paying Agent. The Bonds bear additional interest evidenced by Registered Coupons which may be owned, transferred and presented for payment separately from the Bonds, all as provided in the Bond Ordinance. The Bonds are issued in fully registered form in denominations of $5,000 and integral multiples thereof (provided that no Bond may be in a denomination which exceeds the principal coming due on the maturity date). *Upon surrender of this bond at the principal office of the Registrar with a written instrument of transfer satisfactory to the Registrar duly executed by the registered owner or his duly authorized attorney, this bond may be exchanged for an equal aggregate -16- principal amount of Bonds of the same maturity of other authorized denominations, subject to the terms, conditions and charges as set forth in the Bond Ordinance.* The Bonds maturing on or before December 1. 2006 are not subject to redemption prior to maturity. The Bonds maturing on and after December 1, 2007 are subject to prior redemption at the option of the Tov&m, in whole, or in part, in integral multiples of $5.000. by maturity or maturities selected by the Town and by lot within a maturity as the Paying Agent shall determine (giving proportionate weight to Bonds in denominations larger than $5,000), on December 1, 2006 or on any, date thereafter, upon payment of the principal amount of each Bond or portion thereof so redeemed, plus accrued interest to the redemption date. *In the case of a Bond of a denomination larger than $5,000, a portion of such Bond ($5,000 or integral multiples thereof) may be redeemed, in which case the Registrar shall, without charge to the registered owner of such Bond, authenticate and issue a replacement Bond or Bonds for the unredeemed portion thereof. Redemption shall be made upon not more than 60 days° and not less than 30 days' prior mailed notice to each registered owner as shown on the registration records kept by the Registrar in the manner and upon the conditions provided in the Bond Ordinance.* *This bond is fully transferable on the registration records kept by the Registrar upon surrender of this bond together with a written instrument of transfer satisfactory to the Registrar duly executed by the registered owner hereof or his duly authorized attorney. Upon such transfer a new fully registered bond of authorized denomination or denominations of the same aggregate principal amount and maturity will be issued to the transferee in exchange for this bond, subject to the terms, conditions and charges as set forth in the Bond Ordinance.* Except as otherwise provided herein and in the Bond Ordinance with respect to Record Dates and Special Record Dates for the payment of interest, the Town, the Registrar and the Paying Agent may deem and treat the person in whose name this bond is registered as the absolute owner hereof for the purpose of making payment and for all other purposes. *The Registrar will not be required to transfer or exchange (i) all or any portion of any Bond subject to prior redemption during the period beginning at the opening of business fifteen days before the mailing of notice calling any Bonds or portions thereof for prior redemption and sire ending at the close of business on the day of such mailing, or (ii) all or any portion of any Bond after the mailing of notice calling such Bond or any portion thereof for prior redemption.* Ordinance. ** * *The Bonds are not transferable or exchangeable, except as set forth in the Bond * *Upon any partial prior redemption of this Bond. Cede &: Co. in its discretion may request the Registrar to authenticate a new Bond or make an appropriate notation on this bond indicating the date and amount of prepayment, except in the case of final maturity, in which case this bond must be presented to the Registrar prior to final payment. ** The Bonds are issued by the Town, upon its behalf and upon the credit thereof, for the purposes of defraying wholly or in part the costs of the Refunding Project (as defined in the Bond Ordinance), including certain costs.associated with the issuance of the Bonds, all under the authority of and in full conformity with the Charter of the Town and the Constitution and laws of the State of Colorado; and pursuant to the Bond Ordinance duly adopted by the Council and made a law of the Town prior to the issuance of this bond. FOR PURPOSES OF SECTION 265(b)(3)(B) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, THE TOWN HAS DESIGNATED THIS BOND AS A QUALIFIED TAX - EXEMPT OBLIGATION. It is hereby certified, recited and warranted that all the requirements of law have been complied with by the proper officers of the Town in the issuance of this bond; that the total indebtedness of the Town, including that of this bond, does not exceed any limit of indebtedness prescribed by the Charter of the Town or the Constitution or laws of the State of Colorado; and that provision has been made for the levy and collection of annual taxes sufficient to pay the interest on and the principal of this bond when the same become due. The frill faith and credit of the Town are hereby irrevocably pledged for the punctual payment of the principal of and the interest on this bond. This bond shall not be valid or obligatory for any purpose until the Registrar shall have manually signed the certificate of authentication hereon. IN TESTIMONY WHEREOF, the Town has caused this bond to be signed and executed on its behalf by the manual or facsimile signature of its Mayor, has caused a manual or -18- facsimile impression of the seal of the To,.%m, to be affixed hereon; and has caused this bond to be executed and attested with the manual or facsimile si_ nature of its Toi %-n Clerk; all as of the date specified above. (SEAL) (Manual or Facsimile Signature Mayor Attest: (Manual or Facsimile Signature,) Town Clerk (End of Form of-Bond) -19- (l=orna of Certificate of Authentication) This is one of the Bonds described in the Bond Ordinance. and this bond has been duly registered on the registration records kept by the undersigned as Registrar for the Bonds. Date of Authentication: COLORADO NATIONAL BANK By Authorized Representative (End of Form of Certificate of Authentication) -20- *(Form of Assagmnent) For value received, the undersigned hereby sells. assigns and transfers unto the within bond and all rights hereunder and hereby irrevocably constitutes and appoints to transfer the same on the records of the Registrar. uith full power of substitution in the premises. Dated: Signature Guaranteed: Dame and Address of Transferee: Social Security of 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)* -21- "(Forin of Prepayment Panel) The following installments of principal (or portion thereof) of this hound have been prepaid in accordance with the terms of the Ordinance authorizing the issuance of this bond. Signature of Date of Principal Authorized Representative Prepayment Prepaid of the Depository (End of Form of Prepayment Panel) MAY BE PRINTED ON THE BACK OF THE BOND AND THE FOLLOWING STATEMENT INSERTED -- REFERENCE IS HEREBY MADE TO THE FUR TIER PROVISIONS OF THIS BOND SET FORTH ON THE REVERSE HEREOF- SUCH PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH HERE. ** -22- (Form of Registered Coupon) United States of America State of Colorado County of Eagle Torn of Avon General Obligation Refunding Bond Series 1996 Registered "B " Interest Certificate REGISTERED COUPON NO. RELATED PRINCIPAL AMOUNT OF BONDS: REGISTERED COUPON INTEREST RATE: % INTEREST PAYABLE: $ INTEREST PAYMENT DATE: INTEREST START DATE: REGISTERED OWNER: Cede & Co.* On the Interest Payment Date specified above, the Town of Avon (the "Town "), Eagle County, State of Colorado, will pay to the Registered Owner specified above, or registered assigns, in lawful money of the United States of America, the Interest Payable shown above, being partial interest on the Related Principal Amount of Bonds referred to above at the Registered Coupon Interest Rate per annum identified above for the period from the Interest Start Date specified above to the Interest Payment Date specified above. Such payments will be made to the registered owner hereof upon presentation and surrender of this Registered Coupon at the at the principal office of the Town's paying agent or its successor (the "Paying Agent "), presently Colorado National Bank, currently located at First Trust National Association, St. Paul, Minnesota. This Registered Coupon may be transferred, exchanged, and reissued at the principal office of the Town's Registrar or its successor (the "Registrar "), presently Colorado National Bank, currently located at First Trust -23- National Association, St. Paul, Minne §bta_ all in accordance With the ordinance authorizing the issuance of the Bonds and Registered Coupons adapted b'y the Tox%m Council of the Towm on March 1996 (the "Bond Ordinance"), and the provisions of the Bond Ordinance are hereby incorporated herein by reference. This Registered Coupon shall not be valid or obligator- for any purpose until the Registrar shall have manually= signed the certificate of authentication hereon. (Manual or Facst -mile Signature) Mayor (MAINUAL OR FACSIMILE SEAL) (End of Form of Registered Coupon) -24- Date of authentication and registration: (Form of Registrar's Certificate of Authenntication for Re- istered Coupons) This is one of the Registered Coupons described in the within - mentioned Bond Ordinance, and this Registered Coupon has been duly registered on the registration books kept by the undersigned as Registrar for such Registered Coupons. COLORADO NATIONAL BANK, as Registrar By Authorized Officer or Employee (End of Form of Registrar's Certificate of Authentication) -25- (Form of Assignment for Registered Coupon) For value received, the undersigned hereby sells. assigns and transfers unto the vdthin Registered Coupon and does hereby irrevocably constitute and appoint _ attorney. to transfer the 4 )thin Registered Coupon on the books kept for registration ofthe witldaan Registered Coupon. with full ponder 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 Registered Coupon in every particular, without alteration or enlargement or any change whatsoever. EXCHANGE OR TRANSFER FEES MAY BE CHARGED (End of Form. of Assignment for Registered Coupon) -26- (Form of Legal Opinion Certificate) STATE OF COLORADO ) ) COUNTY OF EAGLE ) TOWN OF AVON ) SS. LEGAL OPINION CERTIFICATE The undersigned Town Clerk of the Town of Avon, Colorado (the "Town "), hereby certifies that the following legal opinion of Sherman & Howard L.L.C., attorneys at Law, Denver, Colorado: (Insert opinion text, including complimentary closing and " /s/ Sherman & Howard L.L.C. ") is a true, perfect and complete copy of a manually executed and dated copy thereof on file in the records of the Town; that manually executed and dated copies of the opinion were forwarded to a representative of the original purchaser for retention in its records; and that,the opinion was dated and issued as of the date of delivery of and payment for the Bonds of the series of which this bond is one. IN WITNESS WHEREOF, I have caused to be hereunto set my signature or a facsimile thereof. (Manual or Facsimile Signature) Town Clerk (End of Form of Legal Opinion Certificate) -27- Section 12. Bonds. When the Bonds and Registered Coupons have been duly executed and authenticated, they shall be delivered to the Purchaser at The Depository Trust Company on receipt of the agreed purchase price. The Registrar shall initially register the Bonds and the Registered Coupons in the name of "Cede & Co.. " as nominee of The Depository Trust Company as directed b;y the Purchaser. The funds realized from the sale of the Bonds shall be applied solely to defray the costs of the Refunding Project, to pay interest on the Bonds_ and to pay the costs of issuance of the Bonds as set forth in Section 13 hereof and for no other purposes whatsoever. Neither the Purchaser nor the registered owners 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 and Registered Coupons. Section 13. Disp2sition of Bond and Registered Coutwn Proceeds. The proceeds of the Bonds and Registered Coupons (net of the Purchasers discount) including without limitation the accrued interest on the Bonds, shall be deposited promptly by the Town and shall be accounted for in the following manner and are hereby pledged therefor: (a) Accrued interest received in respect of the Bonds shall be applied to the payment of the first installment of interest on the Bonds. (b) There shall be credited to the "Town of Avon, Colorado, General Obligation Refunding Bonds, Series 1996 Escrow Account" (the "Escrow Account") which is hereby created, an amount which shall be sufficient, together with any other money available therefor, to establish any initial cash balance remaining uninvested and to buy the federal securities designated in the Escrow Agreement dated as of April 1, 1996 between the Town and Colorado National Bank, in Denver, Colorado (the "Escrow Bank ") for purchase by the Town and credit to the Escrow Account with the Escrow Bank pursuant to the Escrow Agreement. (c) The remainder of the proceeds (net of Purchaser's discount) shall be used by the Town to defray the costs of the Refunding Project (including the payment of the costs of issuance of the Bonds). Section 14. PL ment of Principal and Interest: Ad Valorem Tax Covenant. The interest to become due on the Bonds through and including December 1, 1996 shall be paid from the general fund of the Town or from any funds of the Town available for that purpose. There shall be -28- levied on all taxable property in the Tov-m at the tame and in the manner provided by in addition to all other taxes. direct annual taxes sufficient to reimburse said funds or funds and to pass the principal of. or premium, if zany, and the interest (including interest evidenced by the Registered Coupons) accruing on the Bonds promptly as the same shall became due. Except to the extent applied for any reimbursement of other Town funds advanced to pay interest on the Bonds as provided above, such taxes, when collected, shall be applied solely for the purpose of the payment of the principal, interest (including interest evidenced by the Registered Coupons), and any prior redemption premium on the Bonds, as the same respectively mature or come due, and for no other purpose whatever until the indebtedness so contracted under this ordinance shall have been fully paid, satisfied and discharged. Nothing herein shall be construed so as to prevent the Town from applying sales tax revenues or any other funds legally available for that purpose to the payment of such interest or principal as the same respectively mature; and upon such payments being made, the levy or levies herein provided may to that extent be diminished. Said direct annual taxes levied to pay said principal, premium, if any, and interest shall be in addition to any and all other taxes levied to effect the purposes of the Town. The sums herein provided to pay the interest on the Bonds and to discharge the principal thereof and premium, if any, for each year shall be included in the annual budget to be adopted and passed by the Council in each year respectively. The Bonds shall constitute the general obligations of the Town and the full faith and credit of the Town are hereby irrevocably pledged for the punctual payment of the principal of and interest on the Bonds. The foregoing provisions of this ordinance are hereby declared to be the certificate of the Council to the Board of County Commissioners (the 'Board ") of Eagle County (the "County ") showing the aggregate amount of taxes to be levied for the purposes aforesaid by the Board from time to time, as required by law, for the purpose of paying the principal of, premium, if any, and interest on the Bonds as the same shall hereafter become due. Section 15. Tax Levy. It shall be the duty of the Council annually at the time and in the manner provided by law for levying other taxes, if such action shall be necessary to effectuate the provisions of this ordinance, to ratify and carry out the provisions hereof with reference to the levy and collection of taxes; and the Council shall require the officers of the Town to levy, extend and collect such taxes in the manner provided by law for the purpose of payment of the principal of, -29- ®M premium, if any. and interest on the Bonds. Such taxes_ ,xhen collected. shall be kept for and applied only to the payment of the principal. interest and any prior redemption prerniurn on the Bands as herein specified. Section 16. Maintenance of Escrow Account. The Escrow Account shall be maintained in an amount, at i:he time of the initial credits therein and as all times subsequently 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 to pay the principal, interest and premium, if any. on the Refunded Bonds as the same become due on or before prior redemption (the "Refunded Bond Requirements"). 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 deposited in the Bond Fund. Section 17. Insufficiency of Escrow Account. If for any reason the amount in the Escrow Account shall at any time be insufficient for the purpose of Section 16 hereof pertaining thereto, the Town shall forthwith from the first moneys available therefor deposit in such account such additional moneys as shall be necessary to permit the payment in full of the Refunded Bond Requirements as herein provided. Section 18. Payment and Redemption of Refunded Bonds: Notice. The Council has elected and is hereby obligated to exercise its option to redeem: (a) on June 1, 1996, the 1987 Bonds maturing on and after December 1, 1996; and (b) on December 1, 1998 the 1990 Bonds mattering on and after December 1, I999_ The Town hereby authorizes and directs the Escrow Bank to give notice of refunding, defeasance and redemption of the Refunded Bonds, in the name and on behalf of the Town. The notice shall be given forthwith upon the issuance of the Bonds and again not more than 60 nor less than 30 days prior to each redemption date by mailing notice of the prior redemption first - class, postage prepaid mail to each registered owner of any Refunded Bond to'be redeemed at his address as it last appears on the registration records of the registrar for each Refunded Bond, with respect to the 1990 Bonds, to Bank One, Colorado, N.A. (as successor to -30- Affiliated rational Bank), as paying agent for the 1994 Bonds and. % %ith respect to the 1987 Bonds, to Norwest Bank-, Colorado (successor to United Bank Denver). as-paying agent_ Section 19. Posen of Notice. The notice so to be given foath%vith upon the issuance of the Bonds shall be in substantially the following form: -31- (Foram of Notice) NOTICE OF REFUNDING, DEFERS ANCE AND REDEMPTION TOWN OF AVON. COLOR -ADO CUSIP NOS_ NOTICE IS HEREBY GIVEN that the Toum of Avon, Eagle County. Colorado (the "Town") has caused to be deposited in escrow with Colorado National Bank, in Denver. Colorado, refunding bond proceeds and other moneys which have been invested (except for a small initial cash balance remaining, uninvested) in certificates of indebtedness, notes, bonds and similar securities which are direct obligations of,, or obligations the principal and interest of which are unconditionally guaranteed by, the United States of America to refund. pay, redeem and discharge the principal and interest and redemption premium in connection with its outstanding General Obligation Bonds. Series 1987 (the "1987 Bonds ") and its General Obligation Refunding and Improvement Bonds, Series 1990 (the "1990 Bonds ") (collectively, the "Refunded Bonds ") as such become due on and after June 1996 or are called for redemption prior to maturity on June 1, 1996 and December 1, 1998, respectively. The 1987 Bonds maturing on and after December 1, ,1996 will be called for redemption on June 1, 1996. On such date, the principal of such 1987 Bonds, and a redemption premium of .5% thereof plus accrued interest to the date of redemption will become due and payable at the paying agent, Norwest Bank Colorado, National Association (formerly known as United Bank of Denver) in Denver, Colorado and thereafter interest on the 1987 Bonds will cease to accrue. The 1990 Bonds maturing on and after December 1, 1999 will be called for redemption on December 1, 1998. On such date, the principal of such 1990 Bonds and a redemption premium of 1.00% thereof plus accrued interest to the date of redemption will become due and payable at the paying agent, Bank One, Colorado, N-A., (formerly known as Affiliated Denver National Bank) in Denver, Colorado and thereafter interest on the 1990 Bonds will cease to accrue. According to a report of Van Schooneveld and Co., Inc., certified public accountants in Englewood, Colorado, the escrow, including the known minimum yield from such investments -32- and any temporary reinvestments and the initial cash balance remainin_ uninvested. is fully sufficient at the time of the deposit and at all tinges subsequently to pay the principal, interest and premium, if any, on the 1987 Bonds and the 1990 Bonds as such become due on or after June 1. 1996 or are called for redemption on June 1, 1996 and December 1. 1998, respectively. In compliance with the Comprehensive National Energy Policy Pict of 1992 (H.R. 776), and the Interest and Dividend Cornphance Act of 1983, the Paying Agent is required to withhold 31 % from payments of principal to individuals who fail to furnish valid Taxpayers Identification Numbers. A completed form W -9 should be presented with your bond. The CUSIP numbers have been assigned to this issue by Standard '& Pooes Corporation and are included solely for the convenience of the bondholders. The Town shall not be responsible for the 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 , 1996. TOWN OF AVON, COLORADO is Town Clerk (End of Form of Notice) -33- Seetion 20- Covenants % %itln Bondhold; r. A. Tht To►vn coveanarnts for the ben-eiit Of the registered oa%aners that it %%ill not take any action or orrnit to take any action voth respect to the Bonds or Registered Coupoti.►s. the proceeds of the Bonds. ann other fiannds of the To-xkm or the facilities financed with the proceeds of the Bonds if such action or omission W would cause the interest on the Bonds, including interest evidenced by the Registered Coupons, to base its exclusion from gross income for federal income tai: purposes under Section 103 of the Internal Revenue Code of 1986, as in effect on the date of deliven, of the Bonds (the "Code "). (Ii) would cause the interest on the Bonds, including interest evidenced by the Registered Coupons, to lose its exclusion from gross income for federal income tax purposes under Section 55(b)(2) of the Code, except to the extent such interest is required to be included in the adjusted current earnings adjustments applicable to corporations under Section 56 of the Code in calculating corporate alternative minimum taxable income, or (iii) would cause interest on the Bonds, including, interest evidenced by the Registered Coupons, to lose the 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 Bonds until the date on which all obligations of the Town in fulfilling the above covenant under the Code and State law have been met. B.. The Town fiuthher covenants for the benefit of the Purchaser and the registered owners of the Bonds,and Registered Coupons that the Town will annually prepare or cause to be prepared a budget and an audit report, and will annually file or cause to be filed with the appropriate agency of the State of Colorado a copy of its adopted budget, its appropriation ordinance and its audit report, all in accordance with the then applicable laws of the State of Colorado. C. The Town hereby determines that neither the Town nor any entity subordinate thereto reasonably anticipates issuing more than $10,000,000 face amount of bonds or any other similar obligations during calendar year 1996. For the purpose of Section 265(b)(3)(B) of the Code, the Town hereby designates the Bonds as qualified tax- exempt obligations_ Section 21. Investment of Funds. Any moneys in any fund or account. other than the Escrow Account, necessitated by this ordinance may be deposited, invested or reinvested in any manner permitted by law. Such deposits or investments shall either be subject to redemption at any -34- time at face value by the holder thereof at the option of such holder, or shall mature at such time or tunes as shall most nearly coincide %krith the expected need for moneys from the find or account in question. Such deposits or investments of moneys! in any such fund or account shall be deemed at all times to be a part of the applicable fund or account. Except to the extent otherv%lise provided in this Ordinance, the income or losses accruing on such deposits or investments in any such fund or account shall be deemed to be part of the applicable fund or account. Section 22. Successor Fie i� strar or Paying Agent. if the Registrar or Paying Agent initially appointed hereunder shall resign. or if the Town shall reasonably determine to remove the Registrar or Paying Agent because the Registrar or Paying Agent is incapable of fulfilling its duties hereunder, the Town may, upon notice mailed to each registered owzier of Bonds at the address last shown on the registration records, appoint a successor Registrar or Paying Agent. No resignation or removal of the Registrar or Paying Agent may take effect until a successor is appointed by the Town. Every such successor Paying Agent shall be the Town or a bank or trust company having a shareholders' equity (e.g., capital stock, surplus and undivided profits), however denominated, not less than $10,000,000. Section 23. pefeasance. When the principal, interest and premium, if any, due in connection with any Bond have been duly paid, all obligations hereunder with respect to such Bond shall be discharged, and such Bond shall no longer be deemed to be outstanding for any purpose of this ordinance. Payment of such Bond or any portion thereof shall be deemed made when the Town has placed in escrow with a commercial bank exercising trust powers, an amount sufficient (including the known minimum yield from Federal Securities in which such amount may be wholly or in part initially invested) to meet all requirements of principal, interest and any prior redemption premium on such Bond as the same becomes due to maturity or to any redemption date as of which the Town shall have exercised or obligated itself to exercise its prior redemption option and have given irrevocable instructions to the Registrar to give notice of redemption to the holder of any such Bond. The Federal Securities shall become due or be callable at the option of the holder 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 bank at the time of creation of the escrow. Federal Securities within the meaning of this section shall include only direct obligations of, or obligations -35- the principal of and interest on mvhi+ch are uncondii'lonally guaranty by. the United States. and which are not callable prior to their scheduled maturities bN° the issuer thereof. or interest in sash obligations. In the event that there is a defeacance of only part of the Bonds, the Paying Agent shall, if requested by the Toi,.m. 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 Paying Agent shall be entitled to reasonable compensation and reimbursement of expenses from the To%Nm in connection with such system. Section 24. Delegation of Powers. The officers of the Town are hereby authorized and directed to take all action necessary or appropriate to effectuate the provisions of this ordinance. including; without limiting the generality of foregoing, the execution of the Purchaser's proposal, the execution, printing and distribution of the Official Statement relating to the Bonds and Registered Coupons, the printing of the Bonds (including the opinion of bond counsel thereon) and Registered Coupons in such quantities as may be convenient, the entering into and execution of the Registrar and Paying Agent ,agreement and the Escrow Agreement, the execution of such certificates as may be required by the Purchaser relating to the execution of the Bonds and Registered Coupons, the tenure and identity of the Town officials, the delivery of the Bonds and Registered Coupons and receipt of the purchase price and the absence of litigation, pending or threatened, if in accordance with the facts, affecting the validity thereof and the absence and existence of factors affecting the exclusion of interest on the Bonds from gross income for federal income tax purposes. Section 25. Supplemental Ordinances. The Town may, without the consent of or notice, to the registered owners, adopt one or more ordinances supplemental hereto, which supplemental ordinances shall thereafter form a part hereof, for any one or more of the following purposes: (a) To cure any ambiguity, or to cure, correct or supplement any formal defect or omission or inconsistent provision contained in this ordinance, to make any provision necessary or desirable due to a change in law, to make any provisions with respect to matters arising under this ordinance, or to make any provisions for any other purposes if, in each case, such -36- provisions are necessary or desirable and do not adversel %, aGtect the interests of the o-vkmers of the Bonds and Registered. Coupons; (b) To pledge additional revenues. properties or collateral as security for the Bonds and Registered Coupons: (c) To grant or confer upon the Paying Agent for the benefit of the registered owners of the Bonds and Registered Coupons any additional rights, remedies, power or authorities that may lawfully be granted to or conferred upon the registered owners; or (d) To qualify this ordinance wader the Trust Indenture Act of 1939. Section 26. Ratification. All action heretofore taken (not inconsistent with the provisions of this ordinance) by the Council, the officers of the Town and otherwise taken by the Town directed toward the Refunding Project and the sale and delivery of the Bonds and Registered Coupons for such purpose hereby is ratified, approved and confirmed, including, without limitation, the distribution of the Prelirnninary Official Statement and the execution and distribution of the Official Statement. Section 27. A =val of Letter of Representations_ Proposal. Escrow-Agreement and Registrar and Paving Argent Agreement. The forms, terms and provisions of the Letter of Representations to The Depository Trust Company (the "Letter of Representations"), the Proposal, the Escrow Agreement and the Registrar and Paying Agent Agreement hereby are approved and the Town shall enter into and perform its obligations under the Proposal, the Escrow Agreement and the Registrar and Paying Agent Agreement in substantially the forms of such documents presented to the Council at this meeting, with only such changes therein as are approved by the Mayor and the Town Manager, and the Mayor is hereby authorized and directed to execute and deliver the Letter of Representations, the Proposal, the Escrow Agreement and the Registrar and Paying Agent Agreement and the Clerk is hereby authorized and directed to affix the Town seal to the Proposal, the Escrow Agreement and the Registrar and Paying Agent Agreement and to -attest the Proposal, the Escrow Agreement and the Registrar and Paying Agent Agreement. Section 28. Official Statement. The distribution and use of the Preliminary Official Statement dated March 4, 1996 by the Purchaser is in all respects hereby ratified, approved and confirmed. The Purchaser is authorized to prepare or cause to be prepared, and the Mayor and -37- the To%-.m Manager are authorized and directed to approve. on behalf of the Tovm, a final Official Statement for use in connection with the offering and sale of the bonds. The execution of a final Official Statement by the Mayor and the To% -.m Manager shall be conclusively deemed to evidence the approval of the form and contents thereof by the To ,-pan. Section 29. Continuing Disclosure Undertaking . A. This section constitutes the written undertaking of the Towm for the benefit of bondholders; such, written undertaking is required in order to allow; the underLwiter of the Bonds to comply Uith Rule 15c2-12 promulgated by the Securities and Exchange Commission (the "SEC ") under the Securities Exchange Act of 1934, as amended, (17 CFR Part 240, § 240.15c2- 12)(the "Rule "). B. For purposes of this Section, the following definitions shall apply: I . "Annual Financial Information" means the financial information and operating data with respect to the Town of the type set forth in the Official Statement, delivered at least annually to each Repository pursuant to subparagraph (C ) hereof, including Audited Financial Statements and financial information and operating data relating to the Towns property tax revenues, outstanding debt and budget information. 2. "Audited Financial Statements" means the Town's annual financial statements, prepared in accordance with generally accepted accounting principles as in effect from time to time, audited by a firm of certified public accountants. 3. "Event Information" means the information delivered pursuant to subparagraph (E) of this Section. 4. "NRMSIR" means each nationally recognized municipal securities information repository ( "NRMSIR ") recognized by the SEC from time to time pursuant to the Rule. Such NRMSIRs currently include: (1) Kenny Information Systems, 65 Broadway - 16th Floor, New York, New York 10006 -2503, Attn: Kenny Repository Service, telephone (212) 770 -4595, fax: (212) 797 -7994; (2) Thompson Financial Services, Attn: Municipal Disclosure, 395 Hudson Street, New York, New York 10014 -3669, telephone: (212) 807 -3814, fax: (212) 989 -9282; (3) Bloomberg Municipal Repositories, P. O. Box 840, Princeton, New Jersey 08452- -38- 0840. telephone: (609) 279 - 32011. fax: (609) 279 - 5962, (4) Moody's NIR. NISIR, Public Finance Information Venter. 99 Church Street, New Fork, New work 10007. telephone: (8100) 339 -6306, fax: (212) 553 -1460; (5) Disclosure_ inc., 5161 River Road. Bethesda, Maryland 20816 -1584. Attn: Document AcquisitionslMunicipal Securities, telephone: (301) 951 -1450. fax: (,01)71$ -2329; and (6) R.R. Dormelley Financial Municipal Securities Disclosure Archive, 559 Main Street, Hudson, Massachusetts 01749, telephone: (800) 580 -3670, fax: (508) 562 -1969. 5. "Official Statement" means the Official Statement delivered in connection with the original issue and sale of the Bonds. 6. "Repository" means (i) each NRMSIR and (ii) any SID. 7. "SID" means any State Information Depository operated or designated by the State that receives information from all issuers within the State. As of the date of this undertaking, no SID exists for the State. S. "MSRB" means the Municipal Securities Rulemaking Board. The current address of the MSRB is 1640 Icing Street, #300, Alexandria, Virginia 22314, Attn: The Interim CDI System, telephone: (202) 223 -9503. 9. "SEC" means the Securities and Exchange Commission. C. Commencing with the fiscal year ended December 31, 1996, and annually while the Bonds remain outstanding, the Town agrees to provide or cause to be provided annually to each Repository the Annual Financial Information. Such Annual ]Financial Information shall be provided to each Repository within 270 days of the end of the Tomes ,fiscal year. If not provided as a part of the Annual Financial Information, the Town's Audited Financial Statements will be provided to each Repository each year when they become available. D. The Town.-may provide Annual Financial Information and Audited Financial Information by specific reference to documents previously provided to each Repository or filed with the SEC; provided, however, that if the document so referenced is a final official statement within the meaning of the Rule, such final official statement must be available from the MSRB. -39- E. At any time the Bonds ase OutstarAding, the To Am shall provide, in a timei ' manner, to the MSRB or each NRMSIR and the SID, notice of any of the following events Nvith respect to the Bonds. if such event is material_ 1. Principal and interest Payment delinquencies, 2. Nonpayment related defaults; ;. Unscheduled draws on debt service reserves reflecting financial difficulties; 4. Unscheduled draws on credit enhancements reflecting financial difficulties; 5. Substitution of credit or liquidity providers, or their failure to perform; 6. Adverse tax opinions or events affecting the tax - exempt status of the Bonds; 7. Modifications to rights of Bondholders; 8. Bond calls; 9. Defeasances; 10. Release, substitution or sale of property securing repayment of the Bonds; and 11. Rating changes. F. At any time the Bonds are outstanding, the Town shall provide, in a timely manner, to the MSRB or each NRMSIR and the SID, notice of any failure of the Town to timely provide the Annual Financial Information as specified in subsection ( Q of this Section. G. The obligations of the Town hereunder shall be for the benefit of the holders of the Bonds, including the beneficial owners of the Bonds. Unless otherwise required by law, no set Bondholder shall be entitled to damages for the Towels non - compliance with its undertakings forth in this section; however, Bondholders may enforce specific performance of such undertakings judicial ��rg available. Breach of the obligations of the Town under this Section shall by any � proceeding E. At a¢aa time the Bonds are outstanding. the "Covm shall provide. in a timely manner, to the MSRB or each NRMSIR and the SID. notice of anv of the following events with respect to the Bonds. if such event is material: I _ Principal and interest payment delinquencies. 2. Nonpayment related defaults; 3. Unscheduled dra % %s on debt service reserves reflecting financial difficulties; 4. Unscheduled draws on credit enhancements reflecting financial difficulties; 5. Substitution of credit or liquidity providers. or their failure to perform; 6. Adverse tax opinions or events affecting the tax - exempt status of the Bonds; 7. Modifications to rights of Bondholders; 8. Bond calls; 9. Defeasances; 10. Release, substitution or sale of property securing repayment of the Bonds; and 11. Rating changes. F. At any time the Bonds are outstanding, the Town shall provide, in a timely manner, to the MSRB or each NRMSIR and the SID, notice of any failure of the Town to timely provide the Annual Financial Information as specified in subsection ( Q of this Section. G. The obligations of the Town hereunder shall be for the benefit of the holders of the Bonds, including the beneficial owners of the Bonds. Unless otherwise required by law, no Bondholder shall be entitled to damages for the Town's non - compliance with its undertakings set forth in this section; however, Bondholders may enforce specific performance of such undertakings by any judicial proceeding available. Breach of the obligations of the Town under this Section shall -40- not constitute an event of default %%ith respect to the Bonds or impose auny pccuniar ! liability upon the Town. H_ The Laidertaking contained in this Section shall be in effect from and after the issuance and delivery of the Bonds and shall extend to the earlier of (i) the date all principal and interest on the Bonds shall have been deemed paid pursuant to thin terms of this ordinance: (ii) the date that the Town shall no longer constitute an " "obligated person" within the meaning of the Rule: or (iii) the date on WhIlch those portions of the Rule `& -hick require this %%Titters undertaking are held to be invalid by a court of competent jurisdiction in a non - appealable action, have been repealed retroactively or otherwise do not apply to the Bonds. I. This Section may be amended from time to time without the consent of the holders of the Bonds in compliance with the Rule and any interpretive guidance related to the Rule. The Town shall provide notice of such amendment to each Repository. Section 30. Raealer. 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 revive any such by -law, order, resolution or ordinance, or part thereof, heretofore repealed. Section 31. Severability. If any section, subsection, paragraph, clause or other provision of this ordinance for any reason is invalid or unenforceable, the invalidity or unenforceability of such section, subsection, paragraph, clause or other provision shad not affect any of the remaining provisions of this ordinance. Section 32. Ordinance Irrepealable. After any of the Bonds and Registered Coupons are issued, this ordinance shall constitute an irrevocable contract between the Town and the registered owners of the Bonds and Registered Coupons and this ordinance shall be and shall remain irrepealable until the Bonds and Registered Coupons shall be fully paid, canceled and discharged, except as herein otherwise provided. Section 33. Notice of Hearing. The Council will hold a public hearing on the ordinance at a meeting of the Council to be held at the Town Hall, in the Town, on March 12, 1996, being not earlier than seven days after the first publication of the ordinance, at the hour of 7:30 p.m. -41- Section 314. Disposition of Ordinance. This ordinance., as adopted by the Council, shall be numbered and recorded by the Town Clergy: on the official cords of the Town. Section 35. Effmtim-e Date. This ordinance shall be in f dl force and effect seven (7) dabs after its publication by posting follom -ring final passage, adoption and approval. INTRODUCED, PASSED AND APPROVED ON FIRST READING on Febnmry 27, 1996. (SEAT.) 1996. (SEAL) FILIALLY PASSED, ADOPTED AND APPROVED, AS A1v1ENDED, on March 12, -42- STA'G'E OF COLORADO � COUNTY OF EAGLE } SS TOWN OF AVO NOTICE IS HEREBY G I1,TEN O F A PUBLIC HEARING BEFORE THE TOJIN COUNCIL OF THE TOi-N OF AVON, COLORADO AT 5:30 P . M . ON THE 12TH DAY OF MARCH, 1996, AT THE TOWN MUNICIPAL BUILDING FOR THE PURPOSE OF CONSIDERING THE ADOPTION OF ORDINANCE NO. 96 -4, SERIES OF 1996: AN ORDINANCE CONCERNING GENERAL OBLIGATION REFUNDING BONDS OF THE TOWN OF AVON, COLORADO (THE "TOWN ").; AUTHORIZING THE ISSUANCE AND SALE OF THE TOW'N'S GENERAL OBLIGATION REFUNDING BONDS IN THE AGGREGATE PRINCIPAL AMOUNT OF $4,555,000 FOR THE PURPOSES OF REFUNDING A PORTION OF THE TOWN'S EXISTING GENERAL OBLIGATION DEBT; PROVIDING DETAILS CONCERNING THE BONDS, 'THEIR FORM, THEIR SALES AND FUNDS RELATING THERETO; PROVIDING FOR THE LEVY OF GENERAL AD VALOREM TAXES TO PAY THE PRINCIPAL OF AND INTEREST ON THE BONDS; RATIFYING ACTION HERETOFORE TAKEN AND RELA`T'ING TO SUCH BONDS; PROVIDING OTHER MATTERS RELATING 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 29th day of February, 1996. 1 OF AVON, COLORADO Patty Neyha t, Town Clerk POSTED AT THE FOLLOWING PUBLIC PLACES WITHIN THE TOWN OF AVON ON FEBRUARY 29, 1996; WAL -MART IN THE LOBBY CITY MARKET IN THE MAIN LOBBY COASTAL MART, INC.; AND AVON MUNICIPAL BUILDING IN THE MAIN LOBBY