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07-6403 GO Improvement Bonds 2007-Aro GILMORE & BELL, P.C. Draft — June 4, 2007 Document No. K108302\Bond Resolution2 (2007-A) 'REGISTERED BONDS BOOK -ENTRY ONLY RESOLUTION NO. 07-6403 OF CITY OF SALINA, KANSAS ADOPTED JUNE 11, 2007 $6,545,000 GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2007-A SERIES 2007-A Z LU RESOLUTION TABLE OF CONTENTS Page Title................................:....................................................:............................... 1 Recitals................................................................................................................ 1 ARTICLE I o U DEFINITIONS Section 101. Definitions of Words and Terms......................................................................... 1 ARTICLE II DETAILS OF THE BONDS Section 201. Authorization of the Bonds................................................................................. 4 Section 202. Description of the Bonds.................................................................................... 4 Section 203. Designation of Paying Agent and Bond Registrar .............................................. 5 Section 204. Method and Place of Payment of the Bonds ....................................................... 5 Section 205. Method of Execution and Authentication of the Bonds ...................................... 6 Section 206. Registration, Transfer and Exchange of Bonds ................................................... 6 Section 207. Surrender and Cancellation of Bonds................................................................. 7 Section 208. Mutilated, Lost, Stolen or Destroyed Bonds ....................................................... 7 Section 209. Temporary Bonds................................................................................................ 7 Section 210. Delivery of the Bonds......................................................................................... 8 Section 211. Book -Entry Bonds; Securities Depository.......................................................... 8 Section 212. Payments Due on Saturdays, Sundays and Holidays ............................................ 8 ARTICLE III REDEMPTION OF THE BONDS 301. Optional Redemption.......................................................................................... 9 302. Selection of Bonds to be Redeemed......:............:............................................... 10 303. Notice of Redemption......................................................................................... 11 304. Effect of Call for Redemption............................................................................. 11 ARTICLE IV ESTABLISHMENT OF FUNDS AND ACCOUNTS Section 401. " Creation of Funds and Accounts......................................................................... 12 H 1 1 1 Section 402. Administration of Funds and Accounts............................................................... 11 APPLICATION OF BOND PROCEEDS Section 501. . Disposition of Bond Proceeds............................................................................. 12 Section 502. Withdrawals from the Improvement Fund.......................................................... 12 Section 503. Surplus in the Improvement Fund....................................................................... 12 Section 504. Substitution of Improvements................................................................................. 12 l ARTICLE VI PAYMENT OF THE BONDS Section 601. Application of Moneys in the Principal and Interest Account ............................ 13 Section 602. Transfer of Funds to Paying Agent..................................................................... 13 Section 603. Surplus in Principal and Interest Account........................................................... 13 ARTICLE VII DEPOSITS AND INVESTMENT OF FUNDS Section701. Deposits.............................................................................................................. 13 Section702. Investments......................................................................................................... 13 Section 703. Deposits into and Application of Moneys in the Rebate Fund .............................. 14 ARTICLE VIII DEFAULT AND REMEDIES 801. Remedies............................................................:.............................................:.. 14 802. Limitation on Rights of Bondowners.................................................................. 15 803. Remedies Cumulative......................................................................................... 15 ARTICLE IX -AMENDMENTS Section901. Amendments....................................................................................................... 15 Section 902. Written Evidence of Amendments...................................................................... 16 in LO z a Lu M r 1 ARTICLE X DEFEASANCE Section1001. Defeasance..................................................................................................... ARTICLE XI anc 16 17 17 17 18 18 18 18 CONTINUING DISCLOSURE REQUIREMENTS Section 1101. Disclosure Requirements.................................................................................... ARTICLE XII MISCELLANEOUS PROVISIONS Section 1201. Preliminary Official Statement and Official Statement ...................................... Section 1202. Tax Covenants...................................................................................................... Section1203. Severability......................................................................................................... Section 1204. Further Authority................................................................................................ Section1205. Governing Law................................................................................................... Section 1206. Effective Date..................................................................................................... EXHIBIT A — BOND FORM EXHIBIT B — CONTINUING DISCLOSURE INSTRUCTIONS anc 16 17 17 17 18 18 18 18 Z w CU N U 11 1 RESOLUTION NO. 07-6403 A RESOLUTION PRESCRIBING THE FORM AND DETAILS OF AND AUTHORIZING THE DELIVERY OF $6,545,000 PRINCIPAL AMOUNT OF GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS, SERIES 2007-A, OF THE CITY OF SALINA, KANSAS, PREVIOUSLY AUTHORIZED BY ORDINANCE NO. 07-10390 OF THE CITY; AND MAKING CERTAIN COVENANTS WITH RESPECT THERETO. WHEREAS, the City has adopted the Ordinance authorizing the issuance of the Bonds; and WHEREAS, the Ordinance authorized the governing body of the City to adopt a resolution prescribing certain details and conditions and to make certain covenants with respect to the issuance of the Bonds; WHEREAS, pursuant to K.S.A. 10-101 et seq., K.S.A. 12-685 et seq., and K.S.A. 12-6a01 et seq., as amended and supplemented, and all other applicable provisions of the laws of the state of Kansas, the governing body of the City has .caused the following improvements to be undertaken in the City (such improvements to be referred to as the "Improvements"): Resolution Number Project Name Amount 02-5811; 06-6237 North Ohio Overpass $2,240,000 04-6086; 06-6235 North Broadway Blvd 2,257,959 06-6243 Magnolia Hills Subdivision 790,029 06-1588 Piercy Addition 147,901 06-6233 Golden Eagle 312,675 06-6252 Eagle Med 27,599 06-6264 Quail Meadows, Phase II 494,675 06-6280 West Grand Water extension 201,950 06-6282 ILakeside Addition 72,232 TOTAL=1 $6,545,000 NOW, THEREFORE, BE IT RESOLVED BY THE GOVERNING BODY OF THE CITY OF INA, KANSAS, AS FOLLOWS: ARTICI F T DEFINITIONS Section 101. Definitions of Words and Terms. "Act" means the Constitution and statutes of the State of Kansas including, but not limited to, K.S.A. 0-101 et seq., K.S.A. 12-685 et seq., K.S.A. 12-6a01 et seq., all as amended and supplemented. "Authorized Costs" means the amount of expenditure for an Improvement which has been duly uthorized to be paid by the City by a resolution or ordinance of the City, less (1) the amount of any notes or onds of the City which are currently outstanding and available to pay such Authorized Costs, and (2) any Z a w co ro 0 U 1 uthorized Costs which have been previously paid by the City or by any eligible source of funds unless such nounts are entitled to be reimbursed under State and federal law. "Authorized Investments" means investments authorized by K.S.A. 10-131, as amended from time to or as otherwise permitted under the laws of the State. "Bond and Interest Fund" means the Bond and Interest Fund of the City for its general obligation "Bond Counsel" means the firm of Gilmore & Bell, P.C., or any other attorney or firm of attorneys expertise in matters relating to the issuance of obligations by states and their political subdivisions is illy recognized and acceptable to the City. "Bondowner" shall have the same meaning as the term Owner. "Bond Registrar" means the Treasurer of the State, Topeka, Kansas, and its successors and assigns. "Bonds" means the City's General Obligation Internal Improvement Bonds, Series 2007-A Bonds in aggregate principal amount of $6,545,000 and dated June 15, 2007. "Business Day" means a day other than a Saturday, Sunday or any day designated as a holiday by the Congress of the United States or by the Legislature of the State and on which the Paying Agent is scheduled in the normal course of its operations to be open to the public for conduct of its operations. "Cede & Co." means Cede & Co., as nominee name of The Depository Trust Company, New York, York. "City" means the City of Salina, Kansas. "City Clerk" means the duly appointed and acting City Clerk of the City or, in the City Clerk's , the duly appointed and/or elected Deputy or Acting City Clerk of the City. "Code" means the Internal Revenue Code of 1986, as amended, and the applicable regulations J or promulgated thereunder of the United States Department of the Treasury. "Continuing'Disclosure Instructions" means the Continuing Disclosure Instructions dated May 6, 996 and attached as an exhibit to Resolution No. 96-5007 of the City (pertaining to General Obligation nternal Improvement Bonds, Series 1996-A of the City), as from time to time amended and a copy of which s attached hereto as Exhibit B. "Costs of Issuance" shall mean all costs of issuing the Bonds, including all publication, printing, igning and mailing expenses but not limited to, registration fees, all fees and expenses of legal counsel, and ny expenses incurred in connection with receiving ratings on the Bonds, any financial advisory fees and all related expenses. "Federal Tax Certificate" means the Federal Tax Certificate executed by the City in connection with issuance of the Bonds (dated the date of issuance of the Bonds) relating to certain matters within the ie of Section 148 of the Code, as the same may be amended or supplemented in accordance with its -2- 1 ,`Improvement Fund" means the Improvement Fund for Salina, Kansas, General Obligation Internal Improvement Bonds, Series 2007-A, created herein and any Substitute Improvements. "Improvements" means the improvements described in the recitals hereto, or any Substitute Improvements. "Interest Payment Dates" means April 1 and October 1 of each year, commencing April 1, 2008, and ing on the maturity date of the Bonds, or such other time as the Bonds are paid. "Mayor" means the duly elected and acting Mayor of the City or, in the Mayor's absence, the duly appointed and/or elected Mayor or acting Mayor of the City. "Ordinance" means Ordinance No. 07-10390 of the City authorizing the issuance of the Bonds. "Original Purchaser" means [Purchaser Name], [Purchaser City, State]. "Outstanding" means as of a particular date, all Bonds heretofore issued, authenticated and delivered under the provisions of this Resolution, except: (a) Bonds cancelled by the Paying Agent or delivered to the Paying Agent for cancellation pursuant to this Resolution; (b) Bonds for the payment or redemption of which monies or investments have been deposited in accordance with this Resolution; and (c) Bonds in exchange for or in lieu of which other Bonds have been authenticated and delivered pursuant to this Resolution. "Owner" or "Registered Owner" when used with respect to any Bond means the person in whose such Bond is registered on the registration books of the City as maintained by the Bond Registrar. "Participants" means those financial institutions for whom the Securities Depository effects book - transfers and pledges of securities deposited with the Securities Depository, as such listing of ipants exists at the time of such reference. igns. "Paying Agent" means the State Treasurer of Kansas, Topeka, Kansas, and any successors and "Principal and Interest Account" means the Principal and Interest Account for Salina, Kansas, Obligation Internal Improvement Bonds, Series 2007-A, created in the City's Bond and Interest "Principal Payment Dates" means October 1 . of the years as set forth in Section 202 of this lution, or until such time as the aggregate principal amount of the Bonds has been paid or provision is for the payment of the Bonds. "Purchase Price" means 100% of the principal amount of the Bonds plus a bid **[premium of $� [discount.of $ . ]** plus accrued interest to the date of delivery. -3- "Rebate Fund" means the Rebate Fund for Salina, Kansas, General Obligation Internal Improvement Bonds, Series 2007-A, created herein. "Record Dates" means the fifteenth day of each month preceding the Interest Payment Dates of each Z year the Bonds are Outstanding. a w "Replacement Bonds" means Bonds issued to the beneficial owners of the Bonds in accordance with c, Section 211 (b) hereof. a 0 "Representation Letter" shall mean any Representation Letter from the City and the Paying Agent to the Securities Depository with respect to the Bonds. "Resolution" means this resolution relating to the Bonds. "Securities Depository" means, initially, The Depository Trust Company, New York, New York, and its successors and assigns. "State" means the state of Kansas. "Substitute Improvements" means the substitute or additional improvements of the City as authorized by Section 504 of this Resolution. "Treasurer" means the duly appointed and acting Treasurer of the City or, in the Treasurer's absence, duly appointed Deputy or acting Treasurer of the City. ARTICLE II DETAILS OF THE BONDS Section 201. Authorization of the Bonds. The Bonds have been issued pursuant to the Ordinance for the purpose of providing funds to pay the Authorized Costs of the Improvements. Section 202. Description of the Bonds. The Bonds shall consist of fully registered bonds in the denomination of $5,000 or any integral multiple thereof, shall be dated June 15, 2007, shall be numbered in such manner as the Bond Registrar shall determine, shall be in substantially the form set forth in Exhibit A to this Resolution. All of the Bonds shall become due on the Principal Payment Dates and shall bear interest from the date thereof as follows: -4- 1 Z a w R M N itl 1 1 SERIAL BONDS MATURITY PRINCIPAL OCTOBER 1 AMOUNT 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 TERM BOND INTEREST RATE Interest on the Bonds at the rates stated above (computed on the basis of a 360 -day year of twelve 0 -day months) from the date thereof or from the most recent Interest Payment Date to which interest has een paid or duly provided for, shall be payable on the Interest Payment Dates to the Owners whose names ppear on the books maintained by the Bond Registrar at the close of business on the Record Dates. - Section 203. Designation of Paying Agent and Bond Re ig strar: The State Treasurer of Kansas, )peka, Kansas, is hereby designated as the Paying Agent and Bond Registrar for the Bonds. The Mayor and e City Clerk are hereby authorized and empowered to execute on behalf of the City an agreement with the and Registrar and Paying Agent for the Bonds. Section 204. Method and Place of Payment of the Bonds.' The principal of, premium, if any, and -st'on the Bonds shall be payable in any coin or currency which, on the respective dates of payment, is tender for the payment of debts due the United States of America. The principal of and any premium on the Bonds shall be paid to the Registered Owner of each Bond ion presentation of the Bond at the maturity or redemption date to the Paying Agent for cancellation. The terest payable on the Bonds on any Interest Payment Date shall be paid by check or draft mailed by the tying Agent to the Registered Owner of each Bond at the Registered Owner's address as it appears on the gistration books of the City maintained by the Bond Registrar or at such other address provided in writing the Bond Registrar at the Record Dates. -5- z a LU M N 0 U Payment of principal of, premium, if any, or interest on a Bond may be made by such other method of transferring funds as may be requested by the Owner of the Bond, provided that the Paying Agent shall first receive a written request from such Owner (i) specifying the method and route for transferring funds and (ii) providing for the Paying Agent to be reimbursed by the Owner for all expenses incurred in such fund The Paying Agent shall keep in its offices a record of payment of principal of, premium, if any, and interest on all Bonds. Section 205. Method of Execution and Authentication of the Bonds. The Bonds shall be executed for and on behalf of the City by the manual or facsimile signature of the Mayor, attested by the manual or facsimile signature of the City Clerk and the seal of the City shall be affixed thereto or imprinted on the Bonds. The Bonds shall be registered in the office of the City Clerk, and evidenced by the manual or facsimile signature of the City Clerk with the seal of the City affixed to or imprinted on the Bonds. The Bonds shall also be registered in the office of the State 'Treasurer, evidenced by the manual or facsimile signature of the State Treasurer with the seal of the State Treasurer affixed to or imprinted 'on the Bonds. In the event that any of the officers shall cease to hold such offices before the Bonds are issued and delivered, the Bonds may be issued and transferred to other Owners as though the officers had not ceased to hold office, and such signatures appearing on the Bonds shall be valid and sufficient for all purposes as if they had remained in office until such issuance or transfer. The Bonds shall not be valid obligations under the provisions of this Resolution until the Certificate of Authentication appearing on each bond is executed by the Bond Registrar or a duly authorized representative of the Bond Registrar. It is not necessary that the same representative of the Bond Registrar execute the certificate of authentication on all of the Bonds. Section 206. Registration, Transfer and Exchange of Bonds. As long as the Bonds remain ling, the City shall cause the Bond Registrar to keep the books for the registration and transfer of the Bonds. Upon presentation of the necessary documents the Bond Registrar shall transfer or exchange any s) for new Bond(s) in an authorized denomination of the same maturity and for the same aggregate )al amount as the Bond(s) which was presented for transfer or exchange. All Bonds presented for transfer or exchange shall be accompanied by a written instrument or, truments of transfer or authorization for exchange, in a form and with guarantee of signature satisfactory the Bond Registrar, duly executed by the Registered Owner thereof or by the Registered Owner's duly .horized agent. In addition, all Bonds presented for transfer or exchange shall be surrendered to the Bond for cancellation. Prior to delivery of the new Bond(s) to the transferee, the Bond Registrar shall register the same in registration books kept by the Bond Registrar for such purpose and shall authenticate each Bond. The City shall pay the fees of the Bond Registrar for registration and transfer of the Bonds and the of printing a reasonable supply of registered bond blanks. Any additional costs or fees that might be 'red in the secondary market, other than fees of the Bond Registrar, are the responsibility of the Owners. Z a W The City and the Bond Registrar shall not be required to issue, register, transfer or exchange any Bonds during a period beginning on the day following the Record Date preceding any Interest Payment Date and ending at the close of business on the Interest Payment Date or'any Bonds which have been called for redemption in accordance with Article III of this Resolution. New Bonds delivered upon any transfer or exchange shall be valid obligations of the City, evidencing the same debt as the Bonds surrendered, shall be secured by the Resolution and shall be entitled to all of the security and benefits hereof to the same extent as the Bonds surrendered. The City, Bond Registrar and Paying Agent may deem and treat the person in whose name any Bond is registered as the absolute Owner thereof, whether such Bond shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal of, redemption premium, if any, and interest on such Bond and for all other purposes, and neither the City, Bond Registrar and Paying Agent shall be affected by any notice to the contrary. Section 207. Surrender and Cancellation of Bonds. Whenever any Outstanding Bonds are delivered the Bond Registrar for cancellation such Bond shall be canceled by the Bond Registrar upon payment of ie principal amount of the Bond and interest thereon or replacement pursuant to the Resolution, and the anceled Bond shall be returned to the City. Section 208. Mutilated, Lost, Stolen or Destroyed Bonds. In the event Bond is mutilated, lost, stolen or destroyed, the City may execute and the Bond Registrar may authenticate a new Bond of the same date, maturity, denomination and interest rate, as the mutilated, lost, stolen or destroyed Bond; provided, that in the case of any mutilated Bond, such mutilated Bond shall first be surrendered to the City or the Bond Registrar, and, in the case of any lost, stolen or destroyed Bond there shall be first furnished to the Bond Registrar and the City evidence of such loss, theft or destruction satisfactory to them, together with an indemnity satisfactory to the City and the Bond Registrar. In the event any such Bond shall have matured, instead of issuing a duplicate Bond, the City and Bond Registrar may pay the same without surrender thereof. The City and Bond Registrar may charge to the Registered Owner of such Bond their reasonable fees and expenses in connection with replacing any Bond or Bonds mutilated, stolen, lost or destroyed. 11 Section 209. Temporary Bonds. Until definitive Bonds are prepared, the City may execute, in the same manner as is provided in the Resolution and upon the request of the City, the Bond Registrar shall authenticate and deliver, in lieu of definitive Bonds but subject to the same provisions, limitations and conditions as the definitive Bonds, one or more temporary Bonds substantially of the tenor of the definitive Bonds in lieu of which such temporary Bond or Bonds are issued, in denominations authorized herein, authorized by the City and with such omissions, insertions and variations as may be appropriate to temporary Bonds. The City at its own expense shall prepare and execute and, upon the surrender of such temporary Bonds for exchange and upon the cancellation of such surrendered temporary Bonds, the Bond. Registrar shall authenticate and, without charge to the Owner thereof, deliver in exchange therefor definitive Bonds of the same aggregate principal amount and maturity as the temporary Bonds surrendered. If the City shall authorize the issuance of temporary Bonds in more than one denomination, the gistered Owner of any temporary Bond or Bonds may, at such Registered Owner's option, surrender the ne to the Bond Registrar in exchange for another temporary Bond or Bonds of like aggregate principal count and maturity of any other authorized denomination or denominations, and thereupon the City shall -cute and the Bond Registrar shall authenticate and, upon payment of any applicable taxes, fees and urges, shall deliver a temporary Bond or Bonds of like aggregate principal amount and maturity in such ier authorized denomination or denominations as shall be requested by such Owner. -7- 1 1 u All temporary Bonds surrendered in exchange either for another temporary Bond or Bonds or for a definitive Bond or Bonds shall be canceled by the Bond Registrar. Section 210. Delivery of the Bonds. The Mayor and City Clerk are hereby authorized and directed to cause the Bonds to be registered in the offices of the City Clerk and the State Treasurer as provided by law, and, when duly executed and registered, to cause the Bonds to be delivered to the Original Purchaser, upon receipt by the City of the Purchase Price. Section 211. Book -Entry Bonds; Securities Depository. (a) The Bonds 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 Bonds, except in the event the Bond Registrar issues Replacement Bonds as provided in subsection (b) hereof. It is anticipated that during the term of the Bonds, 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 Bonds to the Participants until and unless the Bond Registrar authenticates and delivers Replacement Bonds 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 Exchange Act of 1934, as amended, or (C) that the continuation of a book -entry system to the exclusion of any Bonds being issued to any Owner other than Cede & Co. is no longer in the best interests of the beneficial owners of the Bonds, or (2) if the Bond Registrar receives written notice from Participants having interests in not less than 50% of the Bonds 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 Bonds being issued to any Owner other than Cede & Co. is no longer in the best interests of the beneficial owners of the Bonds, then the Bond Registrar shall notify the Owners of such determination or such notice and of the availability of certificates to Owners requesting the same, and the Bond Registrar shall register in the name of and authenticate and deliver Replacement Bonds 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 Bond Registrar, may select a successor securities depository in accordance with Section 211(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 Bond. Upon the issuance `of Replacement Bonds, 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 Bond Registrar, to the extent applicable with respect to such Replacement Bonds. If the Securities Depository resigns and the City, the Bond Registrar or Owners are unable to locate a qualified successor of the Securities Depository in accordance with Section 211(c) hereof, then the Bond Registrar shall authenticate and cause delivery of Replacement Bonds to Owners, as provided herein. The Bond Registrar may rely on information from the Securities Depository and its Participants as to the names of the beneficial owners of the Bonds. The cost of printing, registration, authentication and delivery of Replacement Bonds shall be paid for by the City. (c) In the event the Securities Depository resigns, is unable to properly discharge its ionsibilities, or is no longer qualified to act as a securities depository and registered clearing agency under Securities Exchange Act of 1934, as amended, the City may appoint a successor Securities Depository -8- provided the Bond Registrar receives written evidence satisfactory to the Bond 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 Exchange Act of 1934, as amended, or other applicable statute or regulation that operates a securities t2 depository upon reasonable and customary terms. The Bond Registrar upon its receipt of a Bond or Bonds Z for cancellation shall cause the delivery of Bonds to the successor Securities Depository in appropriate W denominations and form as provided herein. c (d) The execution and delivery of any required Representation Letter to the Securities Depository by an authorized officer of the City is hereby authorized. N C O U Section 212. Payments Due on Saturdays, Sundays and Holidays. In any case where the Principal Payment Date, the Interest Payment Date or the redemption date is not a Business Day, then payment of principal, interest or redemption price need not be made on such date(s) but may be made on the next succeeding Business Day with the same force and effect as if made on such date(s), and no interest shall accrue for the period after such date(s). ARTICLE III REDEMPTION OF THE BONDS Section 301. Optional and Mandatory Redemption of Bonds. (a) Optional Redemption. At the option of the City, Bonds maturing on or after October 1, 2017, will be subject to redemption prior to maturity at the option of, the City on October 1, 2016, and thereafter, in whole or in part at any time, in such principal amounts for such maturities as shall be determined by the City at the redemption price of 100% (expressed as a percentage of the principal amount), plus accrued interest thereon to the date of redemption. **[(b) Mandatory Redemption. The Term Bonds maturing in the year 2021 shall be subject to mandatory redemption and payment prior to Stated Maturity pursuant to the mandatory redemption requirements of this Section at a Redemption Price equal to 100% of the principal amount thereof plus accrued interest to the Redemption Date. The taxes levied in Article IV hereof which are to be deposited into the Debt Service Fund shall.be sufficient to redeem, and the City shall redeem on October 1 in each year, the following principal amounts of such Term Bonds: Principal Year Amount Final Maturity At its option, to be exercised on or before the 45th day next preceding any mandatory redemption the City may: (a) deliver to the Paying Agent for cancellation Term Bonds subject to mandatory In 1 z IL W a m 0 N U i redemption on said mandatory redemption date, in any aggregate principal amount desired; or (b) furnish the Paying Agent funds, together with appropriate instructions, for the purpose of purchasing any Term Bonds subject to mandatory redemption on said mandatory redemption date from any Registered Owner thereof whereupon the Paying Agent shall use its best efforts to expend such funds for such purpose to such extent as may be practical; or (c) receive a credit with respect to the mandatory redemption obligation of the City under this Section for any Term Bonds subject to mandatory redemption on said mandatory redemption date, which prior to such date have been redeemed (other than through the operation of the requirements of this Section) and cancelled by the Paying Agent and not theretofore applied as a credit against any redemption obligation under this Section. Each Term Bond so delivered or previously purchased or redeemed shall be credited at 100% of the principal amount thereof on the obligation of the City to redeem Term Bonds of the same Stated Maturity on such redemption date, and any excess of such amount shall be credited on future mandatory redemption obligations for Term Bonds of the same Stated Maturity in chronological order, and the principal amount of Term Bonds of the same Stated Maturity to be redeemed by operation of the requirements of this Section shall be accordingly reduced. If the City intends to exercise any option granted by the provisions of clauses (a), (b) or (c) above, the City will, on or before the 45th day next preceding each mandatory redemption date, furnish the Paying Agent a written certificate indicating to what extent the provisions of said clauses (a), (b) and (c) are to be complied with with respect to such mandatory redemption payment, and in the event that the provisions of clause (a) are to be complied with, such certificate shall be accompanied by the Term Bond certificates to be cancelled.]" Section 302. Selection of Bonds to be Redeemed. The Bonds shall be redeemed only in the principal amount of $5,000 or any integral multiple thereof. Bonds of less than a full maturity to be redeemed and paid prior to maturity shall be selected in such manner as the Bond Registrar acting on behalf of the City shall determine. In the case of a partial redemption of Bonds when Bonds of denominations greater than $5,000 are then Outstanding, then for all purposes in connection with such redemption each $5,000 of face value shall be treated as though it were a separate Bond of the denomination of $5,000. If it is determined that one or more, but not all, of the $5,000 units of face value represented by any Bond is selected for redemption, then upon notice of intention to redeem such $5,000 unit or units, the Owner or the Owner's duly authorized agent shall forthwith present and surrender such Bond to the Bond Registrar: (i) for payment of the redemption price (including the redemption, if any, and interest to the date fixed for redemption) of the $5,000 unit or units of face value called for redemption; and (ii) for exchange, without charge to the Owner thereof, for a new Bond(s) of the aggregate principal amount of the unredeemed portion of the principal amount of such Bond. If the Owner of any Bond of a denomination greater than $5,000 shall fail to present such Bond as aforesaid, such Bond shall, nevertheless, become due and payable on the redemption date to the extent of the amount called for redemption. Section 303. Notice of Redemption. In the event the City desires to call the Bonds for optional redemption prior to maturity, written notice of such intent shall be provided in accordance with K.S.A. 10-129, as amended. Unless waived by any Owner of Bonds to be redeemed, if the City shall call any Bonds for redemption and payment prior to the maturity thereof, the City or the Bond Registrar and Paying Agent on behalf of the City shall give written notice of its intention to call and pay said Bonds 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 Bonds, such notice to be mailed not less than 30 days prior to the date fixed for redemption. The City and Bond Registrar shall also give such additional notice as may be required by State law in effect as of the date of such notice. -10- N z W r N U 1 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 Bonds are to be redeemed, the identification (and, in the case of partial redemption, the respective principal amounts) of the Bonds to be redeemed, (4) that on the redemption date the redemption price will become due and payable upon each such Bond 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 Bonds are to be surrendered for payment of the redemption price, which place of payment shall be the principal office of the Paying Agent. On or 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 Bonds or portions of Bonds which are to be redeemed on that date. Upon surrender of such Bonds for redemption in accordance with said notice, such Bonds 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 Bond, there shall be prepared for the Registered Owner a new Bond or Bonds of the same maturity in the amount of the unpaid principal. All Bonds which have been redeemed shall be cancelled and destroyed by the Paying Agent and shall not be reissued. . For so long as the Securities Depository is effecting book -entry transfers of the Bonds, the Bond 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 Bond (having been mailed notice from the Bond Registrar, the Securities Depository, a Participant or otherwise) to notify the beneficial owner of the Bond so affected, shall not affect the validity of the redemption of such Bond. Section 304. Effect of Call for Redemption. Whenever any Bond is called for redemption and payment as provided in this Article, all interest on such Bond shall cease from and after the date for which such call is made, provided funds are available for its payment at the price specified above. ARTICLE IV ESTABLISHMENT OF FUNDS AND ACCOUNTS Section 401. Creation of Funds and Accounts. Simultaneously with the issuance of the Bonds, there be created within the Treasury of the City the following funds and accounts: (a) Improvement Fund for Salina, Kansas, General Obligation Internal Improvement Bonds, Series 2007-A; and (b) Principal and Interest Account for Salina, Kansas, General Obligation Internal Improvement Bonds, Series 2007-A; and (c) Rebate Fund for Salina, Kansas, General Obligation Internal Improvement Bonds, Series 2007-A. Section 402. Administration of Funds and Accounts. The funds and accounts established herein hall be administered in accordance with the provisions of the Resolution so long as the Bonds are -11- 1 i� 1 N Z a Uj 0 N U ARTICLE V APPLICATION OF BOND PROCEEDS Section 501. Disposition of Bond Proceeds. The proceeds of the Bonds, upon issuance and delivery thereof, shall be deposited as follows: (a) In the Principal and Interest Account, a sum equal to the accrued interest and any premium paid on the Bonds. (b) The balance of the proceeds of the Bonds shall be deposited into the Improvement Fund. If (a) any portion of the Bond proceeds will be used to pay principal of any temporary notes previously issued by the City to finance the Improvements or other City improvements (the "Refunded Notes"), and (b) any proceeds of such Refunded Notes (including sale proceeds and investment earnings on such proceeds) remain unspent, then there may be transferred to the Improvement Fund all such unspent proceeds. Section 502. Withdrawals from the Improvement Fund. The Treasurer shall make withdrawals from the Improvement Fund solely for the purpose of paying the Authorized Costs of the Improvements, including the retirement of any principal of, premium, if any, and interest on any previously issued temporary financing therefor and paying the Costs of Issuance for the Bonds. Section 503. Surplus in the Improvement Fund. All moneys remaining in the Improvement Fund after the completion of the Improvements, shall be transferred immediately to the Principal and Interest Account and applied to the next installment of principal and/or interest due on the Bonds. Section 504. Substitution of Improvements. If the City is prevented, hindered or delayed from proceeding with the acquisition or construction of the improvements listed on Exhibit B or if the City has moneys remaining in the Improvement Fund after the completion of such improvements, the City may elect to substitute or add other improvements pursuant to this Section (the "Substitute Improvement") provided the following conditions are met: (1) the Substitute Improvement and the issuance of general obligation bonds to pay the cost of the Substitute Improvement has been duly authorized by the governing body of the City in accordance with the laws of the State, (2) a resolution or ordinance authorizing the use of the proceeds of the Bonds to pay the Authorized Costs of the Substitute Improvement has been duly adopted by the governing body of the City, (3) the Attorney General of the State has approved the amendment to the transcript of proceedings for the Bonds to include the Substitute Improvements and (4) the City has received an opinion of Bond Counsel to the effect that the use of the proceeds of the Bonds to pay the Authorized Cost of the Substitute Improvement will not adversely affect the tax-exempt status of the Bonds under State or federal law and the Substitute Improvement has been duly authorized pursuant to this Section and the laws of the State. RIPA 1 1 1 I.h [yMI1TL1 PAYMENT OF THE BONDS Section 601. Application of Moneys in the Principal and Interest Account. All amounts paid and credited to the Principal and Interest Account shall be expended and used by the City for the sole purpose of paying the principal of, premium, if any, and interest on the Bonds as and when the same become due and paying the usual and customary fees and expenses of the Paying Agent. Section 602. Transfer of Funds to Pang Agent. The Treasurer is hereby authorized and directed to withdraw from the Principal and Interest Account and forward to the Paying Agent sums sufficient to pay both principal of and premium, if any, and interest on the Bonds as and when the same become due, and also to pay the charges made by the Paying Agent for acting in such capacity in the payment of principal and interest on the Bonds, and said charges shall be forwarded to the Paying Agent over and above the amount of the principal of, premium, if any, and interest on the Bonds. If, through the lapse of time, or otherwise, the Owners of Bonds shall no longer be entitled to enforce payment of their obligations, it shall be the duty of the Paying Agent forthwith to return said funds to the City to be used for any purpose not prohibited by law. All moneys deposited with the Paying Agent shall be deemed to be deposited in accordance with and subject to all of the provisions contained in the Resolution. Section 603. Surplus in Principal and Interest Account. Any moneys or investments remaining in the Principal and Interest Account after the retirement of the indebtedness for which the Bonds were issued shall be transferred and paid into the Bond and Interest Fund of the City. ARTIC'.I.F. V11 DEPOSITS AND INVESTMENT OF FUNDS Section 701. Deposits. Cash moneys in each of the funds and accounts created by this Resolution shall be deposited in a bank or banks or federal or state chartered savings and loan association(s), as permitted by Kansas law, and all such deposits shall be adequately secured by the bank or banks or savings and loan associations holding such deposits in accordance with State law. Section 702. Investments. Moneys held in the funds and accounts herein created by this Resolution in conjunction with the Iissuance of the Bonds may be invested by the City in Authorized Investments, or in other investments allowed by State law in the amounts and maturing at such times as shall reasonably provide for moneys to be available when required in said accounts or funds; provided, however, that no such investment shall be made for a period extending longer than to the date when the moneys invested may be needed for the purpose for which the fund or account was created. All interest on any Authorized Investment held in any fund or account shall (except amounts required to be deposited into the Rebate Fund in accordance with the Arbitrage Instructions) accrue to and become a part of such fund or account. In determining the amount held in any fund or account under the provisions of the Resolution, Authorized Investments shall be valued at their principal par value or at their then market value, whichever is lower. -13- 1 D 1 Section 703. Deposits into and Application of Moneys in the Rebate Fund. (a) There shall be deposited in the Rebate Fund such amounts as are required to be deposited therein pursuant to the Federal Tax Certificate. Subject to the payment provisions provided in subsection (b) below, all money in the Rebate Fund shall be held in trust, to the extent required to pay arbitrage rebate to the United States, and neither the City nor the Owner of any Bond shall have any rights in or claim to such money. All amounts in the Rebate Fund shall be governed by this Section and by the Federal Tax Certificate (the provisions of which are incorporated herein by reference). (b) Pursuant to the Federal Tax Certificate, the City shall pay rebate installments and the final rebate payments to the United States. Any moneys remaining in the Rebate Fund after redemption and payment of all of the Bonds and payment and satisfaction of any rebate amounts, or provision made therefor, shall be withdrawn and released to the City to be used for any purpose not prohibited by law. (c) Notwithstanding any other provision of the Resolution, including in particular this Article, the obligation to pay rebatable arbitrage to the United States and to comply with all other requirements of this Section, the preceding Section and the Federal Tax Certificate shall survive the defeasance or payment in full of the Bonds. ARTICLE VIII DEFAULT AND REMEDIES Section 801. Remedies. The provisions of the Resolution, including the covenants and agreements contained and the provisions of the Federal Tax Certificate incorporated herein by reference, shall .rte a contract between the City and the Owners of the Bonds. The Owner or Owners of any of the at the time Outstanding shall have the right for the equal benefit and protection of all Owners of similarly situated: (a) by mandamus or other suit, action or proceedings at law or in equity to enforce the rights of such Owner or Owners against the City and its officers, agents and employees, and to require and compel duties and obligations required by the provisions of the Resolution or by the Constitution and laws of the State; (b) by suit, action or other proceedings in equity or at law to require the City, its officers, agents and employees to account as if they were the trustees of an express trust; and (c) by suit, action or other proceedings in equity or at law to enjoin any acts or things which may be unlawful or in violation of the rights of the Owners of the Bonds. Section 802. Limitation on Rights of Bondowners. The covenants and agreements of the City ontained in this Resolution, the Federal Tax Certificate, and in the Bonds shall be for the equal benefit, rotection, and security of the Owners of any or all of the Bonds, all of which Bonds shall be of equal rank nd without preference or priority of one Bond over any other Bond in the application of the funds herein ledged to the payment of the principal of and the interest on the Bonds, or otherwise, except as to rate of Merest, date of maturity and right of prior redemption as provided in the Resolution. No one or more tondowners secured hereby shall have any right in any manner whatever by his or their action to affect, isturb or prejudice the security granted and provided for herein, or to enforce any right hereunder, except in -14- N z CL W ca 0 N U u 1 the manner herein provided, and all proceedings at law or in equity shall be instituted, had and maintained for the equal benefit of all Owners of such Outstanding Bonds. Section 803. Remedies Cumulative. No remedy conferred herein upon the Bondowners is intended �to be exclusive of any other remedy, but each such remedy shall be cumulative and in addition to every other remedy and may be exercised without exhausting and without regard to any other remedy conferred herein. No waiver of any default or breach of duty or contract by the Owner of any Bond shall extend to or affect any subsequent default or breach of duty or contract or, shall impair any rights or remedies thereon. No delay or omission of any Bondowner to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver of any such default or acquiescence therein. Every substantive right and every remedy conferred upon the Owners of the Bonds by .the Resolution may be enforced and exercised from time to time and as often as may be deemed expedient. In case any suit, action or proceedings taken by any Bondowner on account of any default or to enforce any right or exercise any remedy shall have been discontinued or abandoned for any reason, or shall have been determined adversely to such Bondowner, then, and in every such case, the City and the Owners of the Bonds shall be restored to their former positions and rights hereunder, respectively, and all rights, remedies, powers and duties of the Bondowners shall continue as if no such suit, action or other proceedings had been brought or taken. ARTICLE IX AMENDMENTS Section 901. Amendments. Except as set forth herein, the provisions of the Bonds and the provisions of the Resolution may be modified or amended at any time by the City with the written consent of the Owners of not less than seventy-five per cent (75%) in aggregate principal amount of the Bonds herein authorized at the time Outstanding; provided, however, that no such modification or amendment shall permit or be construed as permitting: (a) the extension of the maturity of the principal of any of the Bonds, or the extension of the maturity of any interest on any of the Bonds,, or (b) a reduction in the principal amount of any of the Bonds or the rate of interest thereon, or (c) a reduction in the aggregate principal amount of the Bonds; the consent of 100% of the Owners of which is required for any such amendment or modification. The City -may from time to time, without the consent of or notice to any of the Owners, provide for amendment to the Bonds or the Resolution, for any one or more of the following purposes: (a) To cure any ambiguity or formal defect or omission in the Resolution or to make any other change not prejudicial to the Owners; (b) To grant to or confer upon the Owners any additional rights, remedies, powers or authority that may lawfully be granted to or conferred upon the Owners; (c) To more precisely identify the Improvements or provide for Substitute Improvements; or (d) To conform the Resolution to the Code or future applicable federal law concerning tax-exempt obligations. The Continuing Disclosure Instructions are exempt from the provisions of this Section and are bject to amendment and modification only as provided therein. The Federal Tax Ceretificate is exempt )m the provisions of this Section and is subject to amendment and modification only as provided therein. -15- Z W CU CO L� u Section 902. Written Evidence of Amendments. Every amendment or modification of a provision of the Bonds or of the Resolution to which the written consent of the Owners is given as above provided shall be expressed in a resolution of the City amending or supplementing the provisions of the Resolution and shall be deemed to be a part of the Resolution. It shall not be necessary to note on any of the Outstanding Bonds any reference to such amendment or modification, if any. A certified copy of every such amendatory or supplemental resolution, if any, and a certified copy of the Resolution shall always be kept on file in the Office of the City Clerk and shall be made available for inspection by the Owners of any Bond or prospective purchaser or Owners of any Bond authorized by the Resolution, and upon payment of the reasonable cost of preparing the same, a certified copy of any such amendatory or supplemental resolution or of the Resolution will be sent by the City Clerk to any such Owner or prospective Owner. ARTICLE X DEFEASANCE Section 1001. Defeasance. When all or any part of the Bonds and interest thereon shall have been id and discharged, then the requirements contained herein and the pledge of revenues made hereunder and all ier rights granted hereby shall cease and determine. Bonds shall be deemed to have been paid and discharged thin the meaning of the Resolution if there shall have been deposited with the Paying Agent or a bank located the State and having full trust powers, at or prior to the maturity or redemption date of the Bonds, in trust for d irrevocably appropriated thereto, moneys and/or direct obligations of, or obligations the principal of and erest on which are guaranteed by, the United States of America, or other investments allowed by State law rich, together with the interest to be earned on such investments, will be sufficient for the payment of the incipal of the Bonds, the redemption premium thereon, if any there be, and interest accrued to the date of iturity or redemption, as the case may be, or if default in such payment shall have accrued on such date, then the date of the tender of such payments, provided always that if any such Bonds shall be redeemed prior to maturity thereof, the City shall have elected to redeem such Bonds and either notice of such redemption all have been given or the City shall have given irrevocable instructions, or shall have provided for an escrow ent to give irrevocable instructions to the Bond Registrar to give such notice of redemption in compliance th this Resolution. Any moneys which at any time shall be deposited with the Paying Agent or said bank in State by or on behalf of the City, for the purpose of paying and discharging any of the Bonds shall be and hereby assigned, transferred and set over to the Paying Agent or such bank in the State in trust for the ;pective Owners of the Bonds, and such moneys shall be and are hereby irrevocably appropriated to the yment and discharge thereof. All moneys deposited with the Paying Agent or said bank in the State shall be emed to be deposited in accordance with and subject to all of the provisions contained in the Resolution. ARTICLE XI CONTINUING DISCLOSURE REQUIREMENTS Section 1101. Disclosure Requirements. The City hereby elects that the Continuing Disclosure :ructions shall apply to the Bonds. The City hereby covenants with the Original Purchaser and the ieficial Owners (as defined in the Continuing Disclosure Instructions) to provide and disseminate such )rmation as is required by Rule 15c2-12 (as defined in the Continuing Disclosure Instructions) and as further forth in the Continuing Disclosure Instructions. Such covenant shall be for the benefit of and enforceable by Original Purchaser and such Beneficial Owners. In the event the City fails to comply in a timely manner S['2 z EL W W U) 1 n with its covenants contained in the preceding sentences, the Original Purchaser and/or any such Beneficial Owner may make demand for such compliance by written notice to the City. In the event the City does not remedy such noncompliance within 10 days of receipt of such written notice, the Original Purchaser or any such Beneficial Owner may in its discretion, without notice or demand, proceed to enforce compliance by a suit or suits in equity for the specific performance of such covenant or agreement contained in the preceding section or for the enforcement of.any other appropriate legal or equitable remedy as the Original Purchaser and/or any such Beneficial Owner shall deem effectual to protect and enforce any of the duties of the City under such preceding section, but such noncompliance shall not constitute a default or event of default under this Resolution. ARTICLE XII MISCELLANEOUS PROVISIONS Section 1201. Preliminary Official Statement and Official Statement. The City hereby approves the form and content of the Preliminary Official Statement prepared in the initial offering and sale of the Bonds. The Preliminary Official Statement is "deemed final" by the City except for the omission of certain information as provided in Securities and Exchange Commission Rule 15c2-12. The City hereby approves the form and content of any addenda, supplement, or amendment thereto utilized to prepare a final Official Statement. The Official Statement is "deemed final" by the City in accordance with the provisions of Securities and Exchange Commission Rule 15c2-12. The use of such Official Statement in the reoffering of the Bonds by the Original Purchaser is hereby approved and authorized. The proper officials of the City are hereby authorized to execute and deliver a certificate pertaining to such Official Statement as prescribed therein, dated as of the date of payment for and delivery of the Bonds. Section 1202. 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 Bonds 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 Bonds. 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 Bonds 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 Bonds,. (2) it will use the proceeds of the Bonds as soon as practicable and with all reasonable dispatch for the purposes for which the Bonds are issued and (3) it will not invest or directly or indirectly use or permit the use of any proceeds of the Bonds or any other funds of the City in any manner, or take or omit to take any action, that would cause the Bonds 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 Bonds from time to time. This covenant shall survive payment in full or defeasance of the Bonds. The City specifically covenants to comply with the Federal Tax Certificate. -17- Z W M a FJ 1 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 bonds, such amendment or replacement will not adversely affect the exclusion from gross income for federal income tax purposes of interest on the Bonds. (d) The foregoing covenants shall remain in full force and effect notwithstanding the defeasance of the Bonds pursuant to Section 17 of this Resolution until the final maturity date of all Bonds Outstanding. Section 1203. Severability. In case any one or more of the provisions of the Resolution or of the Bonds issued hereunder shall for any reason be held to be illegal or invalid, such illegality or invalidity shall not affect any other provision of the Resolution, or of the Bonds appertaining thereto, but the Resolution and the Bonds shall be construed and enforced as if such illegal or invalid provision had not been contained herein. In case any covenant, stipulation, obligation or agreement contained in the Bonds or in the Resolution shall for any reason be held to be in violation of law, then such covenant, stipulation, obligation or agreement shall be deemed to be the covenant, stipulation, obligation or agreement of the City to the full extent permitted by law. Section 1204. Further Authority. The Mayor, City Clerk and other officials of the City are 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. Section 1205. Governing Law. The Resolution and the Bonds shall be governed exclusively by and construed in accordance with the applicable laws of the State. Section 1206. Effective Date. This Resolution shall take effect and be in full force from and after its adoption by the governing body of the City. -18- R 1 i ADOPTED by the governing body of the City of Salina, Kansas, this 11th day of June, 2007. ity Clerk Resolution S-1 a&e4n F- . Mayor u 1 EXHIBIT A (Form of Bond) EXCEPT AS OTHERWISE PROVIDED IN. THE RESOLUTION (DESCRIBED HEREIN), THIS GLOBAL BOND 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. REGISTERED REGISTERED NUMBER $ UNITED STATES OF AMERICA STATE OF KANSAS COUNTY OF SALINE CITY OF SALINA GENERAL OBLIGATION INTERNAL IMPROVEMENT BOND SERIES 2007-A Interest Maturity Dated CUSIP: Rate: _% Date: October 1, 20_ Date: June 15, 2007 REGISTERED OWNER: PRINCIPAL AMOUNT: KNOW ALL PERSONS BY THESE PRESENTS: That the City of Salina, in the County of Saline, State of Kansas (the "City"), for value received, hereby acknowledges itself to be indebted and promises to pay to the registered owner identified above, or registered assigns, as of the Record Dates as hereinafter provided on the Maturity Date identified above, the Principal Amount identified above, and in like manner to pay interest on such Principal Amount from the Dated Date shown above or from the most recent interest payment date to which interest has been paid or duly provided for at the rate of interest per annum set forth, above (computed on the basis of a 360 -day year of twelve 30 -day months), semiannually on April 1 and October 1 of each year, commencing April 1, 2008 (the "Interest Payment Dates"), until the Principal Amount is paid, unless this Bond shall have been previously called for redemption and payment as hereinafter set forth. The principal of, premium, if any, and interest on this Bond shall be payable by the State Treasurer of Kansas, Topeka, Kansas (the "Paying Agent" and "Bond Registrar"). The principal of and any premium on this Bond shall be payable to the registered owner hereof upon presentation of this Bond at the maturity or redemption date to the Paying Agent for payment and cancellation. The interest payable on this Bond shall be paid by the Paying Agent to the Registered Owner hereof at the address appearing on the registration books of the City maintained by the Bond Registrar or at such other address provided in writing by the Registered Owner to the Bond Registrar at the close of business on the fifteenth day of the month preceding the interest payment date (the "Record Date"). The principal, premium, if any, and interest on the Bonds shall be payable in any coin or currency which, on the respective dates of payment thereof, is legal tender for the payment of debts due the United States of America. The Bonds constitute general obligations of the City payable as to both principal and interest in part from special assessments levied upon the property benefited by the construction of certain improvements, and, if not so paid, from ad valorem taxes which may be levied A-1 L2 z a Lu M ca 6 U L 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 and interest on the Bonds is payable 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 irrevocably pledged for the payment of the principal of and interest on this Bond and the issue of which it is a part as the same respectively become due. This Bond is one of an authorized series of Bonds of the City designated "General Obligation Internal Improvement Bonds, Series 2007-A," in an aggregate principal amount of $6,545,000 (the "Bonds") issued for the purposes set forth in the Ordinance of the City authorizing the issuance of the Bonds and the Resolution of the City prescribing the form and details of the Bonds (jointly, the "Resolution"). The Bonds are issued by the authority of and in full compliance with the provisions, restrictions and limitations of the Constitution and laws of the state of Kansas, including, without limitation, K.S.A. 10-101 et seq., K.S.A. 12- 685 et seq., and K.S.A. 12-6a01 et seq., all as amended'and supplemented. At the option of the City, Bonds maturing on October 1, 2017, and thereafter may be called for redemption and payment prior to maturity on October 1, 2016 and thereafter, in whole or in part at any time (the maturities and principal amounts of Bonds of each maturity to be redeemed will be determined by the City) at the redemption price of 100% (expressed as a percentage of the principal amount), plus accrued interest thereon to the date of redemption. **[Bonds maturing on 1 in the year 20_ are subject to mandatory redemption and payment prior to maturity pursuant to the mandatory redemption requirements of the Bond Resolution on October 1, 20_ and on each October 1 thereafter prior to maturity, at a redemption price equal to 100% of the principal amount thereof, plus accrued interest thereon to the redemption date.]** Unless waived by any owner of the Bonds to be redeemed, if the City elects to call any Bonds for redemption and payment prior to maturity, the City or the Bond Registrar and Paying Agent on behalf of the City shall give written notice of its intention to call and pay such Bonds on a specified date, the same being described by maturity, such notice to be mailed by United States first class mail addressed to the Owners of the Bonds not less than 30 days prior to the date fixed for redemption. All Bonds so called for redemption and payment shall cease to bear interest from the date for which such call is made, provided funds are available for the payment of such Bonds at the price specified above. The Bonds are being issued by means of a book -entry system with no physical distribution of bond certificates to be made except as provided in the Resolution. One Bond certificate with respect to each date on which the Bonds 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 Bonds by the Securities Depository's participants, beneficial ownership of the Bonds 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 Bond Registrar and the Paying Agent will recognize the Securities Depository nominee, while the registered owner of this Bond, as the owner of this Bond for all purposes, including (i) payments of principal of, and redemption premium, if any, and interest on, this Bond, (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 Bonds by participants of the Securities Depository will be the responsibility of such participants and other nominees of such beneficial owners. The City, the Bond Registrar and the Paying Agent will not be A-2 1 i 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 Bond, notwithstanding the provision hereinabove contained, payments of principal of and interest on this Bond shall be made in accordance with existing arrangements among the -City, the Bond Registrar and the Securities Depository. EXCEPT AS OTHERWISE PROVIDED IN THE RESOLUTION, THIS GLOBAL BOND 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 Bonds are issued in fully registered form in the denomination of $5,000 or any integral multiple thereof. This Bond may be exchanged at the office of the Bond Registrar for a like aggregate principal amount of Bonds of the same maturity of other authorized denominations upon the terms provided in the Resolution. The City and the Bond Registrar may deem and treat the registered owner hereof as the absolute owner hereof for purposes of receiving payment of or on account of principal hereof and interest due hereon and for all other purposes and neither the City nor the Bond Registrar shall be affected by any notice to the contrary. This Bond is transferable by the registered owner hereof in person or by the registered owner's agent duly authorized in writing, at the office of the Bond Registrar, but only in the manner, subject to the limitations and upon payment of the charges provided in the Resolution and upon surrender and cancellation of this Bond. The City shall pay all costs incurred in connection with the issuance, payment and initial registration of the Bonds and the cost of a reasonable supply of bond blanks. The City and the Bond Registrar shall not be required to issue, register, transfer or exchange any Bonds during a period beginning on the day following the Record Date preceding any Interest Payment Date and ending at the close of business on the Interest Payment Date or Bonds which have been called for redemption in accordance with Article III of the Resolution. IT IS HEREBY DECLARED AND CERTIFIED that all acts, conditions, and things required to be done and to exist precedent to and in the issuance of this Bond have been properly done and performed and do exist in due and regular form and manner as required by the Constitution and laws of the state of Kansas, and that the total indebtedness of the City, including this series of bonds, does not exceed any constitutional or statutory limitation. This Bond shall not be valid or become obligatory for any purpose until the Certificate of Authentication and Registration hereon shall have been lawfully executed by the Bond Registrar. A-3 z IL W m 76 0 0 U 1 IN WITNESS WHEREOF, the City has caused this Bond to be executed by the manual or facsimile signature of its Mayor and attested by the manual or facsimile signature of its City Clerk, and its corporate seal to be affixed hereto or imprinted hereon, and this Bond to be dated the Dated Date shown above. (Facsimile Seal) (ATTEST: By (facsimile) City Clerk CITY OF SALINA, KANSAS (facsimile) Mayor CERTIFICATE OF AUTHENTICATION AND REGISTRATION This Bond is one of a series of General Obligation Internal Improvement Bonds, Series 2007-A, of the City of Salina, Kansas, described in the within -mentioned Resolution. Registration Date: Registration Number: A-4 Office of the State Treasurer, Topeka, Kansas as Bond Registrar and Paying Agent go F-� 1 BOND ASSIGNMENT FOR VALUE RECEIVED, the undersigned do(es) hereby sell, assign and transfer to (Name and Address) (Social Security or Taxpayer Identification No.) the Bond to which this assignment is affixed in the outstanding principal amount of $ , standing in the name of the undersigned on the books of the Bond Registrar. The undersigned do(es) hereby irrevocably constitute and appoint as agent to transfer said Bond on the books of said Bond Registrar with full power of substitution in the premises. Dated Name Social Security or Taxpayer Identification No. Signature (Sign here exactly as name(s) appear on the face of Certificate) Signature guarantee: By [Name of Eligible Guarantor Institution as defined by SEC Rule 17ad-15 (12CFR 240.17 Ad -15) or any similar rule which the Note Registrar deems applicable] A-5 0 CERTIFICATE OF CITY CLERK STATE OF KANSAS ) ) SS. COUNTY OF SALINE ) I, the undersigned, City Clerk of Salina, Kansas, hereby certify that the within Bond has been duly registered in my office according to law as of June _, 2007. WITNESS my hand and official seal. (Facsimile Seal) (facsimile) City Clerk CERTIFICATE OF STATE TREASURER OFFICE OF THE TREASURER, STATE OF KANSAS I, LYNN JENKINS, Treasurer of the State of Kansas, do hereby certify that a transcript of the proceedings leading up to the issuance of this Bond has been filed in my office, and that this Bond was registered in my office according to law on WITNESS my hand and official seal. (Facsimile Seal) i 1 A-6 Treasurer of the State of Kansas z ILLU ca I. 1 LEGAL OPINION I, the undersigned, City Clerk of the City of Salina, Kansas, hereby certify that the following is a true and correct copy of the approving legal opinion of Gilmore & Bell, a Professional Corporation, Attorneys at Law, Kansas City, Missouri, on the within Bond and the series of which it is a part, except that it omits the date of such opinion; that the opinion was manually executed and was dated and issued as of the date of delivery of and payment for the Bonds and is on file in my office. By (facsimile) City Clerk (PRINTED LEGAL OPINION) A-7 W co co m 0 N C U L� L EXHIBIT B CONTINUING DISCLOSURE INSTRUCTIONS SECTION 1. Purpose of the Continuing Disclosure Instructions. These Continuing Disclosure Instructions (the "Instructions") are being executed and delivered by the City for the benefit of the beneficial owners of any series of the Bonds and in order to assist the Participating Underwriters in complying with Rule 15c2712 (defined below). These Instructions are to govern the continuing disclosure obligations of the City with respect to the City's General Obligation Internal Improvement Bonds, Series 1996-A dated as of June 1, 1996 (the "1996 Bonds") and any additional series of Bonds that the City hereafter elects to make subject to these Instructions. SECTION 2. Definitions. Unless otherwise defined in these Instructions, the following capitalized terms shall have the following meanings for purposes of these Instructions: "Beneficial Owner" means any registered owner of the Bonds and any other person who, directly or indirectly, has investment power with respect to any of the Bonds. "Bond Counsel" means the firm of Gilmore & Bell, P.C., or any other attorney or firm of attorneys with a nationally recognized standing in the field of municipal bond financing selected by the City. "Bonds" means the 1996 Bonds and any additional series of bonds, notes or other municipal obligations of the City that the City elects at the time of issuance to have subject to these Instructions for the purpose of constituting the undertaking of the City to provide continuing disclosure pursuant to Rule 15c2-12. "City" means the City of Salina, Kansas. "MSRB" means the Municipal Securities Rulemaking Board. "NRMSIR" means any information repository recognized by the Securities and Exchange Commission as a nationally recognized municipal securities information repository under Rule 15c2-12. "Participating Underwriter" means any of the original underwriters of the 1996 Bonds and any future series of Bonds required to comply with Rule 15c2-12 in connection with the offering of any series of Bonds. "Rule 15c2-12" means Rule 15c2-12 adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time. "SID" means any public or private information depository, if any, designated by the State of Kansas and the Securities and Exchange Commission as such for purposes of Rule 15c2-12. SECTION 3. Provision of Annual Reports. (a) Within 180 days after the close of each fiscal year, the City shall furnish to each NRMSIR and to the SID, if any, (i) a copy of the financial statements of the City prepared in accordance with generally accepted accounting principles and audited by its independent auditors (or if not available as of such date, the unaudited financial statements of the City and as soon thereafter as available such audited financial statements of the City), and (ii) the operating data of the City, updated for the fiscal year then ended, in substantially the z a W W 1 scope and form contained in the Official. Statement dated May 6, 1996, with respect to the 1996 Bonds in the tables under the following headings: 1. Debt Summary 2. Tax Levies 3. Assessed Valuation 4. Estimated Actual Valuation 5. Tax Collections 6. Largest Taxpayers (b) Any or all of the financial information or operating data required by this Section 3 may be incorporated by reference from other documents, including official statements of debt issues with respect to the City that have been filed with each NRMSIR or the Securities and Exchange Commission, and in the case of a final official statement, that is available from the MSRB. The City shall clearly identify in each annual report filed under this Section 3 each document incorporated by reference and the source from which it is available. SECTION 4. Reporting of Material Events. (a) The City shall disseminate to the SID, if any, and to each NRMSIR or to the MSRB, promptly upon the occurrence thereof notice of any of the following events with respect to each series of the Bonds, if material: Bonds; (i) Any principal or interest payment delinquencies; (ii) Any non-payment related defaults; (iii) Any unscheduled draws on debt service reserves reflecting financial difficulties; (iv) Any unscheduled draws on credit enhancements reflecting financial difficulties; (v) Any substitution of credit or liquidity providers, or their failure to perform; (vi) Any adverse tax opinions or events affecting the tax-exempt status of any series of the (vii) Any modifications to rights of security holders; (viii) Any calls (other than mandatory sinking fund redemptions or redemptions at maturity); (ix) Any defeasances; (x) Any release, substitution or sale of property securing repayment of any series of the Bonds; and (xi) Any rating changes. 1 i 1 (b) The City shall also provide to the SID, if any, and to each NRMSIR or to the MSRB, as promptly as practicable notice of any failure of the City to provide the NRMSIRs and the SID, if any, the annual financial information or operating data required by Section 3 on or before the date specified. SECTION 5. Termination of Reporting Obligation. The City's obligations under these Instructions shall terminate with respect to each series of Bonds upon the defeasance, prior redemption or payment in full of all of such series of Bonds. SECTION 6. Amendment; Waiver. (a) The provisions of these Instructions may be amended only by a written instrument executed by the Mayor of the City if the City receives an opinion from Bond Counsel to the effect that these Instructions, as so amended, are in compliance with Rule 15c2-12 and all current amendments thereto and interpretations thereof that are applicable to these Instructions. (b) If an amendment is made to these Instructions, the City shall describe in the next annual financial report submitted to the NRMSIRs pursuant to Section 3 the substance of the amendment, the reasons for such amendment and the impact of such amendment on the type of operating data or financial information required to be provided under these Instructions. SECTION 7. Additional Information. Nothing in these Instructions shall be deemed to prevent the City from disseminating any other information, or including any other information in any report or notice made hereunder, in addition to that which is required by these Instructions. If the City chooses to include any information in any report or notice made hereunder in addition to that which is specifically required by these Instructions, the City shall have no obligation hereunder to update such information or include it in any future report or notice. SECTION 8. Noncompliance. The provisions of these Instructions shall be subject to specific enforcement or action in mandamus in a court of equity by any beneficial owner of any series of the Bonds. A breach of the provisions of this Section shall not constitute a default or event of default under the resolution adopted by the City authorizing any series of the Bonds. SECTION 9. Beneficiaries. These Instructions are for the benefit of the City, the Participating Underwriters and the beneficial owners of any series of the Bonds, and shall create no rights in any other person. SECTION 10. Applicability to Future Series of Bonds. These Instructions shall apply to any future series of Bonds of the City that the City elects to have subject to these Instructions at the time of issuance thereof. These Instructions shall constitute the undertaking of the City with respect to any such future series of Bonds for the purpose of any Participating Underwriters determining compliance with Rule 15c2-12. Nothing contained herein shall obligate the City to adopt these Instructions with respect to any future bonds or municipal obligations issued by the City. Dated: May 6, 1996. LIM CITY OF SALINA, KANSAS