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97-5218 Auth Note IssueGILMORE & BELL Draft - November 18, 1997 Document No. K I 0345904\Res I RESOLUTION NO. 97- 5218 OF THE CITY OF SALINA, KANSAS $4,090,000 GENERAL OBLIGATION MUNICIPAL TEMPORARY NOTES (STREET AND SUBDIVISION PROJECTS) SERIES 1997-3 t Ca 001 Ulna INDEX PAGE Section1. Definitions.............................................................................................. 1 Section 2. Authorization of and Security for the Notes .......................................... 3 Section 3. Description of the Notes, Designation of Paying Agent and Note Registrar................................................................................ 3 Section 4. Optional Redemption............................................................................. 3 Section 5. Method and Place of Payment of Principal of and Interest onthe Notes.......................................................................................... 4 Section 6. Execution, Authentication and Delivery of the Notes ........................... 5 Section 7. Registration, Transfer and Exchange of Notes ...................................... 6 Section 8. Persons Deemed Owners of Notes......................................................... 7 Section 9. Mutilated, Lost, Stolen or Destroyed Notes ........................................... 7 Section 10. Cancellation and Destruction of Notes Upon Payment ......................... 7 Section 11. Book -Entry Notes; Securities Depository .............................................. 7 Section 12. Form of Notes........................................................................................ 8 Section 13. Disposition of Note Proceeds and Other Funds ..................................... 8 Section 14. Transfer of Funds to Paying Agent and the Note Registrar ................... 9 Section 15. Tax Covenants........................................................................................ 9 Section16. Defeasance............................................................................................. 10 Section17. Severability............................................................................................ 10 Section 18. Further Authority .................. :................................................................ 10 Section19. Effective Date......................................................................................... 11 Exhibit A C—Idale saliva RESOLUTION NO. 97- 5218 A RESOLUTION AUTHORIZING AND DIRECTING THE ISSUANCE, SALE AND DELIVERY OF $4;090,000 PRINCIPAL AMOUNT OF GENERAL OBLIGATION MUNICIPAL TEMPORARY NOTES (STREET AND SUBDIVISION PROJECTS), SERIES 1997-3 OF THE CITY OF SALINA, KANSAS FOR THE PURPOSE OF PROVIDING FUNDS TO PAY THE COST OF VARIOUS STREET IMPROVEMENTS IN THE CITY; PRESCRIBING THE FORM AND DETAILS OF SAID NOTES. WHEREAS, pursuant to K.S.A. 10-101 et sea.K.S.A. 12-685 et seg. and K.S.A. 12-6a01 et seq., all as amended, and all other provisions of the laws of the State of Kansas applicable thereto, by proceedings duly had and other actions duly and legally taken, the City of Salina, Kansas (the "City"), is . proceeding with the construction of certain street and utility improvements in the City (the "Project") as further described as follows: 1. Woodland Hills Addition 2. Cedar Creek Addition 3. Eastborough Drainage 4. Riffle Addition 5. Golden Eagle Estates 6. North Ohio Street 7. South Ninth Street, Phase II, and WHEREAS, the cost of the Project is to be paid in whole or in part by the issuance of general obligation bonds of the City in the manner provided by law, and WHEREAS, pursuant to engineering plans and estimates, construction contracts and actions duly taken in connection with the Project, it has been determined that the cost of the Project will not be less than $4,090,000, and WHEREAS, it is necessary for the City to provide cash funds to the obligations incurred in acquiring and constructing the Project prior to the completion of the Project and the issuance of the bonds of the City, and it is desirable and to the interest of the City that such funds be raised by the issuance of temporary notes of the City, said temporary notes to be issued by the City under and pursuant to the provisions of K.S.A. 10-123. NOW, THEREFORE, BE IT RESOLVED BY THE GOVERNING BODY OF THE CITY OF SALINA, KANSAS, AS FOLLOWS: Section 1. Definitions. In addition to the words and terms otherwise defined herein, unless the context shall clearly indicate some other meaning, the words and terms defined in this Section shall for all purposes of this Resolution have the respective meanings specified in this Section, to wit: "Cede & Co." means Cede & Co., as nominee name of The Depository Trust Company, New York, New York. "City" means Salina, Kansas. "Interest Payment Date" means the Stated Maturity of an installment of interest on the Notes. G,,M mQo- W "Maturity" with respect to any Note means the date on which the principal of such Note becomes due and payable as therein or herein provided. "Noteholder" and "Holder" mean a Person in whose name a Note is registered in the Note Register. "Note Register" means the register and all accompanying records kept by the Note Registrar evidencing the registration, transfer and exchange of Notes. "Note Registrar" means the Treasurer of the City when acting in the capacity as registrar and transfer agent for the registration, transfer and exchange of Notes, and any successors thereto. "Notes" means $4,090,000 original principal amount of General Obligation Municipal Temporary Notes (Street and Subdivision Projects), Series 1997-3, authorized according to the terms provided in this Resolution. "Outstanding" when used with respect to Notes means, as of the date of determination, all Notes theretofore executed, authenticated and delivered under this Resolution, except: (i) Notes theretofore cancelled by the Note Registrar or delivered to the Note Registrar for cancellation; (ii) Notes that have been defeased by the deposit of funds or qualified securities with the Paying Agent or other qualified party in compliance with this Resolution; and (iii) Notes in exchange for or in lieu of which other Notes have been authenticated and delivered pursuant to this Resolution. "Participants" means those financial institutions for whom the Securities Depository effects book - entry transfers and pledges of securities deposited with the Securities Depository, as such listing of Participants exists at the time of such reference. "Paying Agent" means the Treasurer of the City when acting in the capacity as paying agent for the payment of the principal of, premium, if any, and interest on the Notes and any successors thereto. "Person" means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization or government or any agency or political subdivision thereof. "Project" means the construction of certain street and utility improvements in the City as set forth in the recitals of this Resolution. "Registration Date" means the effective date of registration of a Note as evidenced by the Note Registrar in the Certificate of Authentication appearing on the Note. "Regular Record Date" for the interest payable on any Interest Payment Date means the 15th day (whether or not a business day) of the calendar month next preceding such Interest Payment Date. "Replacement Notes" means Notes issued to the beneficial owners of the Notes in accordance with Section I I (b) hereof. -2- c��rasiaasai��a "Representation Letter" shall mean the Representation Letter from the City and the Paying Agent to the Securities Depository with respect to the Notes. "Resolution" "this Resolution" "hereof' "herein" "hereto" and similar terms shall refer to this Resolution of the City authorizing the Notes, as originally executed or as it may be supplemented or amended from time to time. "Securities Depository" means, initially, The Depository Trust Company, New York, New York, and its successors and assigns. "Special Record Date" for the payment of any Defaulted Interest, as defined in Section 5, means a date fixed by the Note Registrar pursuant to Section 5. "Stated Maturity" when used with respect to any Note or any installment of interest thereon means the date specified in Section 3 of this Resolution as the fixed date on which the principal of such Note or such installment of interest is due and payable. Section 2. Authorization of and Security for the Notes. For the purpose of providing funds for the Project, there shall be issued and are hereby authorized and directed to be issued the General Obligation Municipal Temporary Notes (Street and Subdivision Projects), Series 1997-3, of the City in the principal amount of $4,090,000. The sale of the Notes to , at a purchase price of % of the principal amount of the Notes plus accrued interest is authorized and approved. The Notes shall be general obligations of the City, payable as to both principal and interest in part from special assessments levied upon the property benefited by certain improvements, from general obligation bonds, or from both and, if not so paid, from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the City. The balance of the principal of and interest on the Notes is payable from general obligation bonds and, if not so paid, from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the City. The full faith, credit and resources of the City are hereby irrevocably pledged for the payment of the Notes and the interest thereon as the same become due. Section 3. Description of the Notes, Designation of Paving Agent and Note Re isg tray. The Notes shall consist of fully registered Notes, without coupons, transferable to subsequent owners only in the Note Register maintained by the Note Registrar as hereinafter provided. Each Note shall be in the denomination of $100,000 or any integral multiple of $10,000 in excess thereof, not exceeding the principal amount of the Notes, as specified by the Holder of such Note. The Notes shall be numbered in a manner determined by the Note Registrar. The Notes shall be dated as of December 1, 1997 and shall mature on March 1, 1999, and shall bear interest at the rate of % per annum payable only at maturity or upon earlier redemption. The City Treasurer of Salina, Kansas, is hereby designated as the Paying Agent and as the Note Registrar for the Notes. Section 4. Optional Redemption. The Notes shall be subject to redemption prior to maturity at the principal amount thereof plus accrued interest thereon to the date of redemption from the proceeds of general obligation bonds issued to permanently finance the Project or from other available funds of the -3- C-11daled $1111 City. The City covenants that such general obligation bonds will not be issued or such available funds will not be used to redeem the Notes prior to September 1, 1998. At the option of the City, Notes may be called for redemption and payment prior to maturity in whole or in part (selection of Notes to be designated by the Bond Registrar in such equitable manner as it may determine but in no event shall a Note remain Outstanding after a redemption in a principal amount of less than $100,000) on September 1, 1998, or on any date thereafter, at the redemption price of 100% (expressed as a percentage of the principal amount), plus accrued interest thereon to the date of redemption. The Notes shall be redeemed in such equitable manner as the Note Registrar may determine. Unless waived by any Owner of Notes to be redeemed, if the City shall call any Notes for redemption and payment prior to the maturity thereof, the City shall give written notice of its intention to call and pay said Notes on a specified date, the same being described by maturity, said notice to be mailed by United States first class mail addressed to the Owners of said Notes, to the Treasurer of the State, to the original purchaser of the Notes and to the Paying Agent, each of said notices to be mailed not less than 30 days prior to the date fixed for redemption. The City shall also give such additional notice as may be required by State law in effect as of the date of such notice. All official notices of redemption shall be dated and shall state (1) the redemption date, (2) the redemption price, (3) if less than all Outstanding Notes are to be redeemed, the identification (and, in the case of partial redemption, the respective principal amounts) of the Notes to be redeemed, (4) that on the redemption date the redemption price will become due and payable upon each such Note or portion thereof called for redemption, and that interest thereon shall cease to accrue from and after said date, and (5) the place where such Notes are to be surrendered for payment of the redemption price, which place of payment shall be the principal office of the Paying Agent. Prior to any redemption date, the City shall deposit with the Paying Agent an amount of money sufficient to pay the redemption price of all the Notes or portions of Notes which are to be redeemed on that date. Upon surrender of such Notes for redemption in accordance with said notice, such Notes shall be paid by the Paying Agent at the redemption price. Installments of interest due on or prior to the redemption date shall be payable as herein provided for payment of interest. Upon surrender for any partial redemption of any Note, there shall be prepared for the Registered Owner a new Note or Notes of the same maturity in the amount of the unpaid principal. All Notes which have been redeemed shall be cancelled and destroyed by the Paying Agent and shall not be reissued. Whenever any Note is called for redemption and payment as provided in this Section, all interest on such Note shall cease from and after the date for which such call is made, provided funds are available for its payment at the price hereinbefore specified. For so long as the Securities Depository is effecting book -entry transfers of the Notes, the Note Registrar shall provide the notices specified in this Section to the Securities Depository. It is expected that the Securities Depository shall, in turn, notify its Participants and that the Participants, in turn, will notify or cause to be notified the beneficial owners. Any failure on the part of the Securities Depository or a Participant, or failure on the part of a nominee of a beneficial owner of a Note (having been mailed notice from the Note Registrar, the Securities Depository, a Participant or otherwise) to notify the beneficial owner of the Note so affected, shall not affect the validity of the redemption of such Note. Section 5. Method and Place of Payment of Principal of and Interest on the Notes. The principal of, premium, if any, and interest (computed on the basis of a 360 -day year of twelve 30 -day months) on the Notes shall be payable in such coin or currency of the United States of America as at the time of -4- conmueaim�saima payment is legal tender for the payment of public and private debts. Payment of the interest on each Note shall be made by the Paying Agent on each Interest Payment Date to the Person appearing as the Holder thereof in the Note Register at the close of business on the Regular Record Date next preceding said Interest Payment Date, by check or draft mailed to such Holder at the Holder's address as it appears in the Note Register. The principal of and redemption premium, if any, each Note shall be payable to the Holder thereof upon the presentation of such Note for payment and cancellation at its Maturity at the principal office of the Paying Agent. Notwithstanding any of the foregoing provisions of this Section to the contrary, any interest on the Notes which is payable, but is not punctually paid on any Interest Payment Date (herein called "Defaulted Interest"), shall be payable to the persons in whose names the Notes are registered at the close of business on a Special Record Date. The Special Record Date shall be fixed in the following manner: (1) The City shall notify the Note Registrar in writing of the amount of Defaulted Interest proposed to be paid on the Notes and the date of the proposed payment, which proposed payment date shall be at least 30 days after receipt by the Note Registrar of such notice from the City; (2) at the same time the City shall deposit with the Paying Agent an amount of money equal to the aggregate amount to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Paying Agent for such deposit prior to the date of the proposed payment; and (3) thereupon, the Note Registrar shall fix a special Record Date for the payment of such Defaulted Interest which shall not be more than 15 nor less than 10 days prior to the date of the proposed payment. The Note Registrar shall promptly notify the City of such Special Record Date and, in the name and at the expense of the City, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, first class postage prepaid, to the Holder of each Note at the Holder's address as it appears in the Note Register, not less than 10 days prior to such Special Record Date. Notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor having been mailed as aforesaid, such Defaulted Interest shall be paid to the Persons in whose names the Notes are registered at the close of business on such Special Record Date. Subject to the foregoing provisions of this Section, each Note delivered under this Resolution upon transfer of or in exchange for or in lieu of any other Note shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Note. Section 6. Execution, Authentication and Delivery of the Notes. The Notes shall be executed on behalf of the City by the manual or facsimile signature of its Mayor and attested by the manual or facsimile signature of its City Clerk, and shall have the seal of the City affixed thereto or imprinted thereon. In the event any officer whose signature or facsimile thereof appears on any Note shall cease to be such officer before the delivery of such Note, such signature or facsimile thereof shall nevertheless be valid and sufficient for all purposes, the same as if such person had remained in office until delivery. Any Note may be executed by such persons as at the actual time of the execution of such Note shall be the proper officers to sign such Note although at the original date of such Note such persons may not have been such officers. The Notes shall have endorsed thereon a Certificate of Authentication substantially in the form hereinafter set forth and which shall have the date of registration inserted and shall be manually executed by the Note Registrar. The Notes shall be countersigned by the manual or facsimile signature of the City Clerk and the seal of the City shall be affixed or imprinted adjacent thereto. -5- CanwlitlalM kh, City of its intent to pay Defaulted Interest and ending at the close of business on the date fixed for the payment of Defaulted Interest pursuant to this Resolution. Section 8. Persons Deemed Owners of Notes. The Person in whose name any Note shall be registered shall be deemed and regarded by the City, the Note Registrar and the Paying Agent as the absolute owner thereof, whether such Note shall be overdue or not, for the purpose of receiving payment therefor or on account thereof and for all purposes, and neither the City, the Note Registrar nor the Paying Agent shall be affected by notice to the contrary. Payment of or on account of the principal of and interest on any Note shall be made only to or upon the order of the Holder thereof or his legal representative. All such payments shall be valid and effectual to satisfy and discharge the liability upon such Note, including the interest thereon, to the extent of the sum or sums so paid. Section 9. Mutilated, Lost, Stolen or Destroyed Notes. In the event any Note shall become mutilated, or be lost, stolen or destroyed, the City shall, if necessary, execute and the Note Registrar shall authenticate and shall deliver a new Note of like date and tenor as the Note mutilated, lost, stolen or destroyed; provided that, in the case of any mutilated Note, such mutilated Note shall first be surrendered to the Note Registrar, and in the case of any lost, stolen or destroyed Note, if the requirements of K.S.A. 84-8-405 are met and if an indemnity note and affidavit of loss are provided to the Note Registrar and the City at the expense of the Holder. Such indemnity note and affidavit of loss must be sufficient, in the judgment of the Note Registrar and the City, to protect the Note Registrar and the City from any loss which either of them might suffer if the Note is replaced. In the event any such Note shall have matured, instead of issuing a substitute Note the City may pay or authorize the payment of the same without surrender thereof. Upon the issuance of any substitute Note, the City and the Note Registrar may require the payment of an amount sufficient to reimburse the City and the Note Registrar for any tax or other governmental charge that may be imposed in relation thereto and any other reasonable fees and expenses incurred in connection therewith. The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, lost, stolen or destroyed Notes. Section 10. Cancellation and Destruction of Notes Upon Payment. All Notes surrendered for payment, transfer or exchange shall be delivered to the Note Registrar and, if not already cancelled, the Note Registrar shall cancel such Notes and record such cancellation in the Note Register. Thereafter, such cancelled Notes shall be delivered to the City. Section 11. Book -Entry Notes; Securities De2ository. (a) The Notes shall initially be registered to Cede & Co., the nominee for the Securities Depository, and no beneficial owner will receive certificates representing their respective interests in the Notes, except in the event the Note Registrar issues Replacement Notes as provided in subsection (b) hereof. It is anticipated that during the term of the Notes, the Securities Depository will make book -entry transfers among its Participants and receive and transmit payment of principal of, premium, if any, and interest on, the Notes to the Participants until and unless the Note Registrar authenticates and delivers ReplacementNotes to the beneficial owners as described in subsection (b). (b) (1) If the City determines (A) that the Securities Depository is unable to properly discharge its responsibilities, or (B) that the Securities Depository is no longer qualified to act as a securities depository and registered clearing agency under the Securities and Exchange Act of 1934, as amended, or (C) that the continuation of a book -entry system to the exclusion of any Notes being issued to any owner other than Cede & Co. is no longer in the best interests of the beneficial owners of the Notes, or (2) if the -7- Cons &Im Safina Note Registrar receives written notice from Participants having interests in not less than 50% of the Notes Outstanding, as shown on the records of the Securities Depository (and certified to such effect by the Securities Depository), that the continuation of a book -entry system to the exclusion of any Notes being issued to any owner other than Cede & Co. is no longer in the best interests of the beneficial owners of the Notes, then the Note Registrar shall notify the owners of such determination or such notice and of the availability of certificates to owners requesting the same, and the Note Registrar shall register in the name of and authenticate and deliver Replacement Notes to the beneficial owners or their nominees in principal amounts representing the interest of each, making such adjustments as it may find necessary or appropriate as to accrued interest and previous calls for redemption; provided, that in the case of a determination under (1)(A) or (1)(B) of this subsection (b), the City, with the consent of the Note Registrar, may select a successor securities depository in accordance with Section 11(c) hereof to effect book -entry transfers. In such event, all references to the Securities Depository herein shall relate to the period of time when the Securities Depository has possession of at least one Note. Upon the issuance of Replacement Notes, all references herein to obligations imposed upon or to be performed by the Securities Depository shall be deemed to be imposed upon and performed by the Note Registrar, to the extent applicable with respect to such Replacement Notes. If the Securities Depository resigns and the City, the Note Registrar or owners are unable to locate a qualified successor of the Securities Depository in accordance with Section 11(c) hereof, then the Note Registrar shall authenticate and cause delivery of Replacement Notes to owners, as provided herein. The Note Registrar may rely on information from the Securities Depository and its Participants as to the names of the beneficial owners of the Notes. The cost of printing, registration, authentication and delivery of Replacement Notes shall be paid for by the City. (c) In the event the Securities Depository resigns, is unable to properly discharge its responsibilities, or is no longer qualified to act as a securities depository and registered clearing agency under the Securities and Exchange Act of 1934, as amended, the City may appoint a successor Securities Depository provided the Note Registrar receives written evidence satisfactory to the Note Registrar with respect to the ability of the successor Securities Depository to discharge its responsibilities. Any such successor Securities Depository shall be a securities depository which is a registered clearing agency under the Securities and Exchange Act of 1934, as amended, or other applicable statute or regulation that operates a securities depository upon reasonable and customary terms. The Note Registrar upon its receipt of a Note or Notes for cancellation shall cause the delivery of Notes to the successor Securities Depository in appropriate denominations and form as provided herein. (d) The execution and delivery of any required Representation Letter to the Securities Depository by an authorized officer of the City is hereby authorized. Section 12. Form of Notes. The Notes and the Note Registrar's Certificate of Authentication to be endorsed thereon shall be in substantially the form attached hereto as Exhibit A. The Notes may have endorsed thereon such legends or text as may be necessary or appropriate to conform to any applicable rules and regulations of any governmental authority or any custom, usage or requirement of law with respect thereto. Section 13. Disposition of Note Proceeds and Other Funds. All accrued interest and premium, if any, received from the sale of the Notes shall be deposited in the Principal and Interest Account for General Obligation Municipal Temporary Notes (Street and Subdivision Projects), Series 1997-3 (the "Principal and Interest Account") held by the City Treasurer for the retirement of the Notes. The remaining balance of the proceeds derived from the sale of the Notes shall be deposited in a fund (the "Series 1997-3 Project Fund") held by the City Treasurer and shall be used solely for the -8- C11111 d1* purpose of paying the costs of the Project (including the retirement of the principal of and any interest on any previously issued temporary financing therefor) and the costs of issuing the Notes. Any moneys remaining in the Series 1997-3 Project Fund after the completion of the Project will be deposited in the Principal and Interest Account and used to pay the next maturing principal of and interest on the Notes. Section 14. Transfer of Funds to Paving Agent and the Note Registrar. The City Treasurer is hereby authorized and directed to withdraw from the funds received in payment of the taxes and from the Principal and Interest Account of the City and forward to the Paying Agent sums sufficient to pay the principal of and interest on the Notes as and when the same become due and to pay the charges of the Paying Agent for acting as paying agent in the payment of principal and interest. In addition, the City Treasurer is hereby authorized and directed to withdraw from the Principal and Interest Account and forward to the Note Registrar sums sufficient to pay the charges of the Note Registrar for acting as note registrar. Sums sufficient to pay said charges shall be forwarded to the Paying Agent and Note Registrar over and above the amount of the principal of and interest on the Notes. Section 15. Tax Covenants. (a) The City covenants and agrees that (1) it will comply with all applicable provisions of the Internal Revenue Code of 1986, as amended (the "Code"), including Sections 103 and 141 through 150, necessary to maintain the exclusion from gross income for federal income tax purposes of the interest on the Notes and (2) it will not take any action, or fail to take any action, if any such action or failure to take action would adversely affect the exclusion from gross income of the interest on the Notes. The City will, in addition, adopt such other ordinances or resolutions and take such other actions as may be necessary to comply with the Code and with all other applicable future laws, regulations, published rulings and judicial decisions, in order to ensure that the interest on the Notes will remain excluded from federal gross income, to the extent any such actions can be taken by the City. (b) The City covenants and agrees that (1) it will comply with all requirements of Section 148 of the Code to the extent applicable to the Notes, (2) it will use the proceeds of the Notes as soon as practicable and with all reasonable dispatch for the purposes for which the Notes are issued and (3) it will not invest or directly or indirectly use or permit the use of any proceeds of the Notes or any other funds of the City in any manner, or take or omit to take any action, that would cause the Notes to be "arbitrage bonds" within the meaning of Section 148(a) of the Code. (c) The City covenants and agrees that it will pay or provide for the payment from time to time of all amounts required to be rebated to the United States pursuant to Section 148(f) of the Code and any Treasury Regulations applicable to the Notes from time to time. This covenant shall survive payment in full or defeasance of the Notes. The City specifically covenants to comply with the Arbitrage Instructions attached as Exhibit A to the Arbitrage Certificate. Notwithstanding anything to the contrary contained herein, the Arbitrage Instructions may be amended or replaced if, in the opinion of counsel nationally recognized on the subject of municipal notes, such amendment or replacement will not adversely affect the exclusion from gross income for federal income tax purposes of interest on the Notes. (d) The City hereby designates $4,090,000 of the Notes as "qualified tax-exempt obligations" as defined in Section 265(b)(3) of the Code; the remaining balance of the notes (the refunding portion) is deemed designated under Section 265(b)(3)(D)(ii) of the Code. In addition, the City hereby represents that: "&Z ClIdItId Selina (1) the aggregate face amount of all tax-exempt obligations (other than private activity bonds which are not "qualified 501(c)(3) bonds") which will be issued by the City (and all subordinate entities thereof) during calendar year 1997 is not reasonably expected to exceed $10,000,000; and (2) the City (including all subordinate entities thereof) will not issue an aggregate principal amount of obligations designated by the City to be "qualified tax-exempt obligations" during the calendar year in which the Notes are issued, including the Notes, in excess of $10,000,000, without first obtaining an opinion of Bond Counsel that the designation of the Notes as "qualified tax-exempt obligations" will not be adversely affected. The Mayor is hereby authorized to take such other action as may be necessary to make effective the designation in this subsection (d). (e) The foregoing covenants shall remain in full force and effect notwithstanding the defeasance of the Notes pursuant to Section 15 of this Resolution until the final maturity date of all Notes Outstanding. Section 16. Defeasance. When all of the Notes shall have been paid and discharged, then the requirements contained in this Resolution and all other rights granted hereby shall terminate. Notes shall be deemed to have been paid and discharged within the meaning of this Resolution if there shall have been deposited with the Paying Agent or with a bank located in the State of Kansas and having full trust powers, at or prior to the Stated Maturity of said Notes, in trust for and irrevocably appropriated thereto, moneys and/or direct obligations of, or obligations the principal of and interest on which are guaranteed by, the United States of America, or in evidences of ownership of such obligations, which, together with the interest to be earned on any such obligations, will be sufficient for the payment of the principal of said Notes and interest accrued to the Stated Maturity, or if default in such payment shall have occurred on such date, then to the date of the tender of such payments. Any moneys and obligations which at any time shall be deposited with said Paying Agent or bank or on behalf of the City, for the purpose of paying and discharging any of the Notes, shall be and are hereby assigned, transferred and set over to such Paying Agent or bank in trust for the respective Holders of the Notes, and such moneys shall be and are hereby irrevocably appropriated to the payment and discharge thereof. All moneys deposited with said Paying Agent or bank shall be deemed to be deposited in accordance with and subject to all of the provisions contained in this Resolution. Section 17. Severability. If any one or more of the covenants or agreements provided in this Resolution (including the exhibits hereto) on the part of the City should be contrary to law, then such covenant or covenants or agreement or agreements shall be deemed severable from the remaining covenants and agreements, and shall in no way affect the validity of the other provisions of this Resolution or of said exhibits. It shall not be necessary for said exhibits to be published in the official City newspaper, but all such exhibits shall be on file in the office of the City Clerk and shall be available for inspection by any interested party. Section 18. Further Authority. The Mayor, City Clerk, City Treasurer and other City officials are hereby further authorized and directed to execute any and all documents and take such actions as they may deem necessary or advisable in order to carry out and perform the purposes of the Resolution to make alterations, changes or additions in the foregoing agreements, statements, instruments and other documents herein approved, authorized and confirmed which they may approve and the execution or taking of such action shall be conclusive evidence of such necessity or advisability. -10- Section 19. Effective Date. This Resolution shall take effect and be in full force from and after its passage by the governing body. PASSED by the governing body of the City of Salina, Kansas, this November 24, 1997. (SEAL) ATTEST: Clerk -11- Nfo(or C1111d810 Salina REGISTERED NUMBER EXHIBIT A EXCEPT AS OTHERWISE PROVIDED IN THE RESOLUTION (DESCRIBED HEREIN), THIS GLOBAL NOTE MAY BE TRANSFERRED, IN WHOLE BUT NOT IN PART, ONLY TO ANOTHER NOMINEE OF THE SECURITIES DEPOSITORY (DESCRIBED HEREIN) OR TO A SUCCESSOR SECURITIES DEPOSITORY OR TO A NOMINEE OF A SUCCESSOR SECURITIES DEPOSITORY. UNITED STATES OF AMERICA STATE OF KANSAS, CITY OF SALINA GENERAL OBLIGATION MUNICIPAL TEMPORARY NOTES (STREET AND SUBDIVISION PROJECTS) SERIES 1997-3 Interest Rate % Per Annum REGISTERED HOLDER: PRINCIPAL AMOUNT: Maturity Date March 1, 1999 CEDE & CO. Dated Date December 1, 1997 FOUR MILLION NINETY THOUSAND DOLLARS REGISTERED $4,090,000.00 CUSIP The City of Salina, State of Kansas (the "City"), for value received, hereby promises to pay to the Registered Holder identified above, or registered assigns, on the Maturity Date identified above or upon earlier redemption, the Principal Amount identified above and to pay interest thereon at the Interest Rate specified above from December 1, 1997, only on the Maturity Date identified above or upon earlier redemption. Both principal of and interest are payable upon presentation and surrender hereof at the office of the City Treasurer. This Note is one of a series of fully registered notes of the City designated "General Obligation Municipal Temporary Notes (Street and Subdivision Projects), Series 1997-3", aggregating the principal amount of $4,090,000 (the "Notes"), issued for the purpose of paying the cost of the construction of certain street and utility improvements in the City, under the authority of and in full compliance with the constitution and laws of the State of Kansas, including K.S.A. 10-101 et seq., K.S.A. 12-685 et seg. and 12-6a01 et seg., as amended, and pursuant to resolutions duly passed by the governing body of the City. The Notes are general obligations of the City, payable as to principal and interest in part from special assessments levied upon the property benefited by certain improvements, from general obligation bonds, or from both and, if not so paid, from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the City. The balance of the principal of and interest on the Notes is payable from general obligation bonds and, if not so paid, from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the City. A-1 Conmli0ale0�5alina At the option of the City, this Note may be called for redemption and payment prior to maturity in whole or in part on September 1, 1998, or on any date thereafter at the redemption price of 100% (expressed as a percentage of the principal amount), plus accrued interest thereon to the date of redemption, as provided in the Resolution authorizing the issuance of the Notes (the "Resolution"). The Notes are being issued by means of a book-entry system with no physical distribution of bond certificatesto be made except as provided in the Resolution. One Note certificate with respect to each date on which the Notes are stated to mature, registered in the nominee name of the Securities Depository, is being issued and required to be deposited with the Securities Depository and immobilized in its custody. The book-entry system will evidence positions held in the Notes by the Securities Depository's participants, beneficial ownership of the Notes in authorized denominations being evidenced in the records of such participants. Transfers of ownership shall be effected on the records of the Securities Depository and its participants pursuant to rules and procedures established by the Securities Depository and its participants. The City, the Note Registrar and the Paying Agent will recognize the Securities Depository nominee, while the registered owner of this Note, as the owner of this Note for all purposes, including (i) payments of principal of, and redemption premium, if any, and interest on, this Note, (ii) notices and (iii) voting. Transfers of principal, interest and any redemption premium payments to participants of the Securities Depository, and transfers of principal, interest and any redemption premium payments to beneficial owners of the Notes by participants of the Securities Depository will be the responsibility of such participants and other nominees of such beneficial owners. The City, the Note Registrar and the Paying Agent will not be responsible or liable for such transfers of payments or for maintaining, supervising or reviewing the records maintained by the Securities Depository, the Securities Depository nominee, its participants or persons acting through such participants. While the Securities Depository nominee is the owner of this Note, notwithstanding the provision hereinabove contained, payments of principal of and interest on this Note shall be made in accordance with existing arrangements among the City, the Note Registrar and the Securities Depository. EXCEPT AS OTHERWISE PROVIDED IN THE RESOLUTION, THIS GLOBAL NOTE MAY BE TRANSFERRED, IN WHOLE BUT NOT IN PART, ONLY TO ANOTHER NOMINEE OF THE SECURITIES DEPOSITORY OR TO A SUCCESSOR SECURITIES DEPOSITORY OR TO A NOMINEE OF A SUCCESSOR SECURITIES DEPOSITORY. The Notes are issued in fully registered form in the denomination of $100,000 or any integral multiple OF $10,000 in excess thereof. This Note may be exchanged at the office of the Note Registrar for a like aggregate principal amount of Notes of the same maturity of other authorized denominations upon the terms provided in the Resolution. This Note is transferable, as provided in and subject to the conditions set forth in the Resolution This Note shall not be valid or become obligatory for any purpose or be entitled to any security o benefit under the Resolution until the Certificate of Authentication hereon shall have been dated an executed by the Note Registrar. It is hereby declared and certified that all acts, conditions and things required to be done and t exist precedent to and in the issuance of this Note have been done and performed and do exist in due an regular form and manner as required by the constitution and laws of the State of Kansas, and that th total indebtedness of the City, including this Note and the series of which it is one, does not exceed an constitutional or statutory limitation. A-2 co�wamiea�seima IN WITNESS WHEREOF, the governing body of the City of Salina, Kansas, has caused this Note to be signed by facsimile signature of its Mayor and attested by facsimile signature of its City Clerk, the City's corporate seal to be printed hereon and this Note to be dated December 1, 1997. CITY OF SALINA, KANSAS [SEAL] ATTEST: By (facsimile) Mayor (facsimile) City Clerk This Note shall not be negotiable unless and until countersigned below by the City Clerk following registration by the Treasurer of the State of Kansas. Registration Number 0322-085-120197-631 REGISTRATION DATE: (manual) City Clerk CERTIFICATE OF AUTHENTICATION This Note is one of the Notes described in the within mentioned Resolution. TREASURER OF THE CITY OF SALINA, KANSAS Note Registrar By _ Note Registrar and Paying Agent: TREASURER OF THE CITY OF SALINA, KANSAS A-3 conmli&a SA'l STATE OF KANSAS ) ) SS. COUNTY OF SALINE ) I, Judy D. Long, City Clerk of the City of Salina, Kansas, do hereby certify that this Note has been duly registered in my office according to law. Witness my hand and official seal this December 1, 1997. [SEAL] (facsimile) City Clerk (FORM OF STATE TREASURER'S CERTIFICATE) OFFICE OF THE STATE TREASURER OF KANSAS I, SALLY THOMPSON, Treasurer of the State of Kansas, do hereby certify that a transcript of the proceedings leading up to the issuance of this Note has been filed in my office and that this Note was registered in my office according to law this [SEAL] WITNESS my hand and official seal. A-5 Treasurer of the State of Kansas Assistant Treasurer