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07-10381 Issue IRB KASAPCL\402326.02\ORDIN ORDINANCE NO. 07-10381 OF THE CITY OF SALINA, KANSAS AUTHORIZING THE ISSUANCE OF INDUSTRIAL REVENUE REFUNDING BONDS NOT EXCEEDING $3,005,000 SERIES 2007 (KASA INDUSTRIAL CONTROLS, INC.) GILMORE & BELL, P.C. March 14, 2007 19 (Published in the Salina Journal, March,o(p , 2007) ORDINANCE NO. 07-10381 AN ORDINANCE AUTHORIZING THE CITY OF SALINA,- KANSAS TO ISSUE ITS N INDUSTRIAL REVENUE REFUNDING BONDS, SERIES 2007 (KASA INDUSTRIAL z w CONTROLS, INC.) IN THE AGGREGATE PRINCIPAL AMOUNT NOT EXCEEDING $3,005,000 FOR THE PURPOSE OF REFUNDING CERTAIN OF THE CITY'S a OUTSTANDING INDUSTRIAL REVENUE BONDS; AUTHORIZING EXECUTION OF ' a SUPPLEMENTAL TRUST INDENTURE NO. 1 BETWEEN THE CITY AND SUNFLOWER BANK, N.A., SALINA, KANSAS, AS TRUSTEE; AUTHORIZING THE CITY TO CONTINUE TO LEASE SUCH IMPROVEMENTS TO KASA INDUSTRIAL CONTROLS, INC. AND AUTHORIZING EXECUTION OF SUPPLEMENTAL LEASE NO. 1 BETWEEN THE CITY AND KASA INDUSTRIAL CONTROLS, INC.; AUTHORIZING EXECUTION OF A TAX COMPLIANCE AGREEMENT BETWEEN THE CITY, KASA INDUSTRIAL CONTROLS, INC. AND SUNFLOWER BANK, N.A.; APPROVING THE FORM OF A GUARANTY AGREEMENT BETWEEN THE TENANT AND SUNFLOWER BANK, N.A., AS TRUSTEE; AND AUTHORIZING THE EXECUTION OF A BOND PURCHASE AGREEMENT FOR THE BONDS AMONG THE CITY, KASA INDUSTRIAL CONTROLS, INC. AND M & I BROKERAGE SERVICES, INC., AS PURCHASER OF THE BONDS. WHEREAS, the City of Salina, Kansas is authorized by K.S.A. 12-1740 et seq., as amended (the "Act"), to acquire, construct, improve and equip certain facilities (as defined in the Act) for commercial, industrial and manufacturing purposes, and to enter into leases and lease -purchase agreements with any person, firm or corporation for said facilities, and to issue revenue bonds for the purpose of paying the cost of any such facilities and to issue revenue bonds for the purpose of refunding such bonds; and WHEREAS, pursuant to Ordinance No. 02-10084 adopted June 17, 2002 (the "Original Ordinance") and a Trust Indenture dated as of June 15, 2002 between the City and Sunflower Bank, N.A. (the "Original Indenture") the City has previously issued its Industrial Revenue Bonds, 2002 (KASA Industrial Controls, Inc.) dated June 15, 2002 (the "Original Bonds"), in the original principal amount of $3,500,000, of which $2,945,000 remains outstanding, for the purposes of acquiring, remodeling and further equipping an existing industrial facility (the "Original Project"); and WHEREAS, the Original Project was leased to KASA Industrial Controls, Inc., a Kansas corporation (the "Tenant"), pursuant to the provisions of a certain Lease dated as of June 15, 2002 between the City and the Tenant (the "Original Lease"); WHEREAS, in order to gain certain financial advantages presently available, the Tenant desires that the City issue its Industrial Revenue Refunding Bonds, Series 2007 (KASA Industrial Controls, Inc.) in the aggregate principal amount of not to exceed $3,005,000 (the "Series 2007 Bonds") for the purpose of providing funds to refund the Original Bonds in advance of their stated maturities, by providing for the early redemption thereof as more fully provided in the Supplemental Indenture hereinafter authorized; and WHEREAS, the City further finds and determines that it is necessary and desirable in connection with the issuance of said Series 2007 Bonds to execute and deliver Supplemental Trust Indenture No. 1 dated as of March 15, 2007, (the "Supplemental Indenture"), with Sunflower Bank, N.A., as Trustee (the "Trustee"), for the purpose of issuing and securing the Series 2007 Bonds as provided in the Original Indenture and in the Supplemental Indenture, and to enter into Supplemental Lease No. 1 dated as of March 15, 2007 (the "Supplemental Lease"), with the Tenant pursuant to which the City shall cause the Project to continue to be leased to the Tenant in consideration of payments of Basic Rent, Additional Rent and other charges as provided in the Original Lease and in the Supplemental Lease. NOW, THEREFORE, BE IT ORDAINED BY THE GOVERNING BODY OF THE CITY OF ' SALINA, KANSAS AS FOLLOWS: Section 1. Definition of Terms. All terms and phrases not otherwise defined herein shall have the respective meanings set forth in the Original Indenture, the Supplemental Indenture, the Original Lease and the Supplemental Lease referred to herein. Section 2. Authority to Cause the Original Bonds to be Redeemed. The City is hereby authorized to cause the Original Bonds to be redeemed on April 1, 2007, in accordance with the provisions of the Original Indenture, and the City hereby ratifies and confirms the notice of such redemption heretofore given in accordance with the provisions of the Original Indenture. PCI.\402326.02\OR DIN Section 3. Authorization of and Security for the Bonds. The Series 2007 Bonds are hereby authorized and directed to be issued. They shall be designated "City of Salina, Kansas Industrial Revenue Refunding Bonds, Series 2007 (KASA Industrial Controls, Inc.)" and shall be issued in the aggregate principal amount not exceeding $3,005,000 for the purpose of providing funds to refund the Original Bonds. The Series 2007 Bonds shall be in such principal amount, shall be dated and bear interest, shall mature and be payable at such times, shall be in such forms, shall be subject to redemption and payment prior to the maturity thereof, and w shall be issued in the manner prescribed and subject to the provisions, covenants and agreements set forth in the A Supplemental Indenture. The Series 2007 Bonds shall be special limited obligations of the City payable solely from the Trust Estate under the Original Indenture, as augmented and supplemented under the Supplemental oIndenture. The Series 2007 Bonds shall not be general obligations of or constitute a pledge of the faith and credit of the City within the meaning of any constitutional or statutory provision and shall not be payable in any manner from tax revenues. Section 4. Authorization of Supplemental Indenture. The City is hereby authorized to enter into the Supplemental Indenture dated as of March 15, 2007, between the City and Sunflower Bank, N.A., Salina, Kansas, as Trustee, under which the City shall pledge and assign to the Trustee, for the benefit of the owners of the Original Bonds, the Series 2007 Bonds, and any other Bonds issued and secured as provided in the Original Indenture, the Trust Estate augmented thereby, all upon the terms and conditions set forth in the Original Indenture and in the Supplemental Indenture. Section 5. Authorization of Supplemental Lease. The City shall continue to lease the Project to the Tenant pursuant to and in accordance with the provisions of the Original Lease, as amended and supplemented by the Supplemental Lease. Section 6. Approval of Form of Guaranty Agreement. The form of Guaranty Agreement, dated as of March 15, 2007, pursuant to which the guarantor named therein guarantees to the Trustee, for the benefit of the owners of the Series 2007 Bonds, the full and prompt payment of the Series 2007 Bonds and interest thereon, is hereby approved. Section 7. Authorization of the Tax Compliance Agreement. The Issuer is authorized to enter into the Tax Compliance Agreement with the Tenant and the Trustee in the form approve in this ordinance. Section 8. Authorization of Bond Purchase Agreement. The Series 2007 Bonds shall be sold and delivered to M & I Brokerage Services Inc., Kansas City, Missouri, upon the terms and subject to the provisions of a Bond Purchase Agreement to be entered into among the City, the Tenant and M & 1 Brokerage Services Inc., as Original Purchaser. Section 9. Approval of Preliminary Official Statement and Official Statement. The Preliminary Official Statement, in form as submitted to and reviewed by the governing body today, and the Official Statement, in substantially the form of the Preliminary Official Statement, and the public distribution of the same by the Original Purchaser is hereby approved. The City has not participated in the preparation of the Preliminary Official Statement or the Official Statement and has not verified the accuracy of the information therein, other than information respecting the City. Accordingly, such approvals do not constitute approval by the City of such information or a representation by the City as to the completeness or accuracy of the information contained therein. Section 10. Execution of Bonds and Agreements. The Mayor of the City or person authorized by the City to act for the Mayor in the Mayor's absence is hereby authorized and directed to execute the Series 2007 Bonds and deliver same to the Trustee for authentication for and on behalf of and as the act and deed of the City in the manner provided in the Original Indenture and the Supplemental Indenture. The Mayor or other authorized signatory is hereby further authorized and directed to execute and deliver the Supplemental Indenture, the Supplemental Lease and the Bond Purchase Agreement for and on behalf of and as the act and deed of the City in substantially the forms presented today, with such minor corrections or amendments thereto as the Mayor or other authorized signatory shall approve, which approval shall be evidenced by his or her execution thereof, and such other documents, certificates and instruments as may be necessary or desirable to carry out and comply with the purposes and intent of this Ordinance. The City Clerk or the Deputy City Clerk ' of the City is hereby authorized and directed to attest the execution of the Series 2007 Bonds, the Supplemental Indenture, the Supplemental Lease and the Bond Purchase Agreement and such other documents, certificates and instruments as may be necessary or desirable to carry out and comply with the intent of this Ordinance. Section 11. Election Under Section 144(a)(4) of the Internal Revenue Code. The City hereby is that Section 144(a)(4) of the Internal Revenue Code of 1986, as amended, shall apply to the Series 2007 ids, and the Mayor and City Clerk are hereby authorized and directed to file evidence of such election with Secretary of the Treasury of the United States or his or her delegate, and to take such other action as may be essary to make effective such election. Section 12. Further Authority. The City shall, and the officers, agents and employees of the City are authorized and directed to take such action, expend such funds and execute such other documents, 2 1 1 �I certificates and instruments as may be necessary or desirable to carry out and comply with the provisions of this Ordinance and to carry out, comply with and perform the duties of the City with respect to the Series 2007 Bonds, the Original Indenture, Original Lease, the Supplemental Indenture and the Supplemental Lease as necessary to carry out and effect the issuance of the Series 2007 Bonds. Section 13. Effective Date. This Ordinance shall take effect and be in full force from and after its w passage by the governing body, signature by the Mayor and publication once in the official City newspaper. PASSED by the governing body of the City of Salina, Kansas this 26°i day of March, 2007. N SIGNED by the Mayor of the City of Salina, Kansas this 26h day of March, 2007. U (Seal) Mayor Attest: c City Clerk