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01-5683 Auth Note IssueRESOLUTION NO. 01-5683 OF THE CITY OF SALINA, KANSAS $925,000 GENERAL OBLIGATION TEMPORARY NOTES SERIES 2001-1 COASD Idd dS3l,13 INDEX P A CTR. Section1. Definitions.................................................................................................. 1 Section 2. Authorization of and Security for the Notes .............................................. 3 Section 3. Description of the Notes, Designation of Paying Agent andNote Registrar.................................................................................... 3 Section 4. Optional Redemption................................................................................. 4 Section 5. Method and Place of Payment of Principal of and Interest onthe Notes.............................................................................................. 5 Section 6. Execution, Authentication and Delivery of the Notes ............................... 6 Section 7. Registration, Transfer and Exchange of Notes .......................................... 6 Section 8. Persons Deemed Owners of Notes............................................................. 7 Section 9. Mutilated, Lost, Stolen or Destroyed Notes .............................................. 7 Section 10. Cancellation and Destruction of Notes Upon Payment ............................. 7 Section 11. Book -Entry Notes; Securities Depository ................................................. 8 Section12. Form of Notes............................................................................................. 9 Section 13. Disposition of Note Proceeds and Other Funds ........................................ 9 Section 14. Deposits into and Application of Moneys in the Rebate Fund ................. 9 Section 15. Transfer of Funds to Paying Agent and the Note Registrar ...................... 9 Section16. Tax Covenants............................................................................................ 10 Section17. Defeasance.................................................................................................. 11 Section18. Severability................................................................................................. 11 Section 19. Continuing Disclosure................................................................................ 11 Section 20. Further Authority........................................................................................ 12 Section21. Effective Date............................................................................................. 12 Exhibit A — Note Form CoivdcalecSa+na RESOLUTION NO. 01-5683 A RESOLUTION AUTHORIZING AND DIRECTING THE ISSUANCE, SALE AND DELIVERY OF $925,000 PRINCIPAL AMOUNT OF GENERAL OBLIGATION TEMPORARY NOTES, SERIES 2001-1 OF THE CITY OF SALINA, KANSAS FOR THE PURPOSE OF PROVIDING FUNDS TO PAY THE COST OF MAKING CERTAIN STREET, SEWER AND OTHER IMPROVEMENTS IN THE CITY AND PRESCRIBING THE FORM AND DETAILS OF SAID NOTES. WHEREAS, the governing body of the City finds and determines that it is necessary to make certain street, sewer and other improvements further described as follows (the "Project"): 1. Holiday Addition 2. 2000 Subdivision Improvements, Phase IV, Airport Industrial Center 3. 2000 Subdivision Improvements, Phase IV, Eastview Estates Addition, Phase III WHEREAS, the governing body of the City now finds and determines that the cost of the Project and related expenses (including issuance costs of the notes herein authorized) is at least $925,000 and it is necessary for the City to issue the notes herein authorized to pay said costs; and WHEREAS, all legal requirements pertaining to the Project have been complied with; and WHEREAS, the governing body of the City is authorized by law, including K.S.A. 10-123, to issue general obligation notes of the City to pay the costs of the Project; and WHEREAS, the governing body of the City has requested bids for the purchase of the notes herein authorized and the interest rates established herein are the rates of the lowest bidder; and WHEREAS, the governing body of the City now deems and finds it necessary to authorize the issuance of the aforesaid notes for delivery to the purchaser thereof, NOW, THEREFORE, BE IT RESOLVED BY THE GOVERNING BODY OF THE CITY OF SALINA, KANSAS, AS FOLLOWS: Section 1. Definitions. In addition to the words and terms otherwise defined herein, unless the context shall clearly indicate some other meaning, the words and terms defined in this Section shall for all purposes of this Resolution have the respective meanings specified in this Section, to wit: "Arbitrage Instructions" means the Arbitrage Instructions (dated as of the date of issuance of the Notes) attached to the City's Arbitrage Certificate with respect to the Notes and to be delivered at the time of issuance and delivery of the Notes relating to certain matters within the scope of Section 148 of the Code, as the same may be amended or supplemented in accordance with its terms. "Business Day" means a day, other than a Saturday, Sunday or holiday, 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, New York. "City" means Salina, Kansas. "City Clerk" means the duly appointed and acting City Clerk of the City or, in the City Clerk's absence, the duly appointed and/or elected Deputy or Acting City Clerk of the City. "Interest Payment Date" means the date specified in Section 3 of this Resolution as the fixed date on which interest is due and payable on the Notes. paid. "Maturity" means August 1, 2001, or such other time as the aggregate principal amount of the Notes is "Noteholder" and "Holder" mean a Person in whose name a Note is registered in the Note Register. "Note Register" means the register and all accompanying records kept by the Note Registrar evidencing the registration, transfer and exchange of Notes. "Note Registrar" means the Treasurer of the City when acting in the capacity as registrar and transfer agent for the registration, transfer and exchange of Notes, and any successors thereto. "Notes" means $925,000 original principal amount of General Obligation Temporary Notes, Series 2001-1, authorized according to the terms provided in this Resolution. "Outstanding" when used with respect to Notes means, as of the date of determination, all Notes theretofore executed, authenticated and delivered under this Resolution, except: (i) Notes theretofore cancelled by the Note Registrar or delivered to the Note Registrar for cancellation; (ii) Notes that have been defeased by the deposit of funds or qualified securities with the Paying Agent or other qualified party in compliance with this Resolution; and (iii) Notes in exchange for or in lieu of which other Notes have been authenticated and delivered pursuant to this Resolution. "Participants" means those financial institutions for whom the Securities Depository effects book -entry transfers and pledges of securities deposited with the Securities Depository, as such listing of Participants exists at the time of such reference. "Paying Agent" means the Treasurer of the City when acting in the capacity as paying agent for the payment of the principal of, premium, if any, and interest on the Notes and any successors thereto. "Person" means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization or government or any agency or political subdivision thereof. "Project" means the construction of certain street, sewer and other improvements referred to in the recitals to this Resolution. "Registration Date" means the effective date of registration of a Note as evidenced by the Note Registrar in the Certificate of Authentication appearing on the Note. "Regular Record Date" for the interest payable on any Interest Payment Date means the 15th day (whether or not a business day) of the calendar month next preceding such Interest Payment Date. "Replacement Notes" means Notes issued to the beneficial owners of the Notes in accordance with Section 11(b) hereof. "Representation Letter" shall mean the Representation Letter from the City and the Paying Agent to the Securities Depository with respect to the Notes. "Resolution" "this Resolution" "hereof' "herein" "hereto" and similar terms shall refer to this Resolution of the City authorizing the Notes, as originally executed or as it may be supplemented or amended from time to time. "Securities Depository" means, initially, The Depository Trust Company, New York, New York, and its successors and assigns. "Special Record Date" for the payment of any Defaulted Interest, as defined in Section 5, means a date fixed by the Note Registrar pursuant to Section 5 hereof. Section 2. Authorization of and Security for the Notes. For the purpose of providing funds for the Project, there shall be issued and are hereby authorized and directed to be issued the General Obligation Municipal Temporary Notes, Series 2001-1, of the City in the principal amount of $925,000. The sale of the Notes to (the "Original Purchaser"), is authorized and approved. The Notes shall be general obligations of the City, payable as to both principal and interest in part from special assessments levied upon the property benefited by certain improvements, from general obligation bonds, or from both and, if not so paid, from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the City. The balance of the principal of and interest on the Notes is payable from general obligation bonds and, if not so paid from ad valorem taxes which may be levied without limitation as to rate or amount upon the taxable tangible property, real and personal, within the territorial limits of the City. The full faith, credit and resources of the City are hereby irrevocably pledged for the payment of the Notes and the interest thereon as the same become due. Section 3. Description of the Notes. Designation of Paving Agent and Note Registrar. The Notes shall consist of fully registered Notes, without coupons, transferable to subsequent owners only in the Note Register -2- maintained by the Note Registrar as hereinafter provided. Each Note shall be in the denomination of $5,000 or any integral multiple of $5,000 in excess thereof. The Notes shall be numbered in a manner determined by the Note Registrar. The Notes shall be dated as of January 1, 2000, shall mature on August 1, 2001 and shall bear interest at the rate of % per annum. The interest on the Notes will be paid only at Maturity. The Treasurer of the City of Salina, Kansas, is hereby designated as the Paying Agent and as the Note Registrar for the Notes. Section 4. Optional Redemption. The Notes shall not be subject to optional redemption and payment prior to their maturity. Section 5. Method and Place of Payment of Principal of and Interest on the Notes. The principal of, premium, if any, and interest (computed on the basis of a 360 -day year of twelve 30 -day months) on the Notes shall be payable in such coin or currency of the United States of America as at the time of payment is legal tender for the payment of public and private debts. Payment of interest on the Notes shall be made by the Paying Agent on the Interest Payment Date to the Person appearing as the Holder thereof in the Note Register at the close of business on the Regular Record Date next preceding said Interest Payment Date, by check, draft or wire transfer to such Holder at the Holder's address as it appears in the Note Register. The principal of and redemption premium, if any, on each Note shall be payable to the Holder thereof upon the presentation of such Note for payment and cancellation at its Maturity at the principal office of the Paying Agent. In any case where the Interest Payment Date is not a Business Day, then payment of principal or interest need not be made on such Interest Payment Date but may be made on the next succeeding Business Day with the same force and effect as if made on such Interest Payment Date, and no interest shall accrue for the period after such Interest Payment Date. Notwithstanding any of the foregoing provisions of this Section to the contrary, any interest on the Notes which is payable, but is not punctually paid on any Interest Payment Date (herein called "Defaulted Interest"), shall be payable to the persons in whose names the Notes are registered at the close of business on a Special Record Date. The Special Record Date shall be fixed in the following manner: (1) The City shall notify the Note Registrar in writing of the amount of Defaulted Interest proposed to be paid on the Notes and the date of the proposed payment, which proposed payment date shall be at least 30 days after receipt by the Note Registrar of such notice from the City; (2) at the same time the City shall deposit with the Paying Agent an amount of money equal to the aggregate amount to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Paying Agent for such deposit prior to the date of the proposed payment; and (3) thereupon, the Note Registrar shall fix a special Record Date for the payment of such Defaulted Interest which shall not be more than 15 nor less than 10 days prior to the date of the proposed payment. The Note Registrar shall promptly notify the City of such Special Record Date and, in the name and at the expense of the City, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, first class postage prepaid, to the Holder of each Note at the Holder's address as it appears in the Note Register, not less than 10 days prior to such Special Record Date. Notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor having been mailed as aforesaid, such Defaulted Interest shall be paid to the Persons in whose names the Notes are registered at the close of business on such Special Record Date. Subject to the foregoing provisions of this Section, each Note delivered under this Resolution upon transfer of or in exchange for or in lieu of any other Note shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Note. Section 6. Execution. Authentication and Delivery of the Notes. The Notes shall be executed on behalf of the City by the facsimile signature of its Mayor and attested by the facsimile signature of its City Clerk, and shall have the seal of the City affixed thereto or imprinted thereon. In the event any officer whose signature or facsimile thereof appears on any Note shall cease to be such officer before the delivery of such Note, such signature or facsimile thereof shall nevertheless be valid and sufficient for all purposes, the same as if such person had remained in office until delivery. Any Note may be executed by such persons as at the actual time of the execution of such Note shall be the proper officers to sign such Note although at the original date of such Note such persons may not have been such officers. The Notes shall have endorsed thereon a Certificate of Authentication substantially in the form hereinafter set forth and which shall have the date of registration inserted and shall be manually executed by the Note Registrar. The Notes shall be countersigned by the manual or facsimile signature of the City Clerk and the seal of the City shall be affixed or imprinted adjacent thereto following registration. caysowaieo-sema No Note shall be entitled to any security or benefit under this Resolution or shall be valid or obligatory for any purpose unless and until such Certificate of Authentication shall have been duly executed by the Note Registrar by manual signature. Such executed Certificate of Authentication upon any Note shall be conclusive evidence that such Note has been duly authenticated and delivered under this Resolution and that such registered owner has been entered on record in the Note Register kept by the Note Registrar. The Certificate of Authentication shall be deemed to have been duly executed if the Registration Date has been inserted and if it has been signed by any authorized officer or employee of the Note Registrar, but it shall not be necessary that the same officer or employee sign the Certificate of Authentication on all of the Notes that may be issued hereunder at any one time. The Mayor and the City Clerk are hereby authorized and directed to prepare and execute the Notes in the manner hereinbefore specified, the City Clerk is hereby authorized and directed to register the Notes, and the Mayor and the City Clerk or Acting City Clerk are hereby authorized and directed to cause the Notes to be registered in the office of the State Treasurer of Kansas as provided by law, and when the Notes have been duly registered with the Note Registrar, to deliver the Notes to the original purchaser named in Section 2 hereof upon the payment of 100% of the aggregate principal amount of the Notes [less a discount/plus a premium of $ and] plus accrued interest to the date of payment and delivery. Section 7. Registration, Transfer and Exchange of Notes. So long as any of the Notes remain outstanding, the City shall cause the Note Register to be kept at the principal office of the Note Registrar and all of the Notes and transfers and or exchanges thereof shall be fully registered as to both principal and interest in the names of the Holders in the Note Register and shall not be registered to bearer. Notes may be transferred in the Note Register only upon surrender thereof to the Note Registrar duly endorsed for transfer or accompanied by a written instrument of transfer duly executed by the Holder thereof or his attorney or legal representative in such form as shall be satisfactory to the Note Registrar. Upon any such transfer, the City shall execute and the Note Registrar shall authenticate and deliver in exchange for such Note a new Note or Notes, registered in the name of the transferee, of any denomination or denominations authorized by this Resolution in an aggregate principal amount equal to the principal amount of such Note, of the same Maturity and bearing interest at the same rate. Notes, upon surrender thereof at the principal office of the Note Registrar, together with a written instrument of transfer duly executed by the Holder thereof or his attorney or legal representative in such form as shall be satisfactory to the Note Registrar, may, at the option of the Holder thereof, be exchanged for an equal aggregate principal amount of Notes of the same Maturity, of any denomination or denominations authorized by this Resolution, and bearing interest at the same rate. In all cases in which Notes shall be exchanged or transferred hereunder, the City shall execute and the Note Registrar shall authenticate and deliver at the earliest practicable time Notes in accordance with the provisions of this Resolution. All Notes surrendered in any such exchange or transfer shall forthwith be cancelled by the Note Registrar. No service charge shall be made to any Noteholder for registration, transfer or exchange of Notes, but the City or the Note Registrar may make a charge for every transfer or exchange of Notes sufficient to reimburse it or them for any tax or other governmental charge required to be paid with respect to such transfer or exchange, and such charges shall be paid before any such transfer or exchange shall be completed. The City and the Note Registrar shall not be required to issue, transfer or exchange any Note during a period beginning at the opening of business on the day after receiving written notice from the City of its intent to pay Defaulted Interest and ending at the close of business on the date fixed for the payment of Defaulted Interest pursuant to this Resolution. Section 8. Persons Deemed Owners of Notes. The Person in whose name any Note shall be registered shall be deemed and regarded by the City, the Note Registrar and the Paying Agent as the absolute owner thereof, whether such Note shall be overdue or not, for the purpose of receiving payment therefor or on account thereof and for all purposes, and neither the City, the Note Registrar nor the Paying Agent shall be affected by notice to the contrary. Payment of or on account of the principal of and interest on any Note shall be made only to or upon the order of the Holder thereof or his legal representative. All such payments shall be valid and effectual to satisfy and discharge the liability upon such Note, including the interest thereon, to the extent of the sum or sums so paid. Section 9. Mutilated, Lost, Stolen or Destroyed Notes. In the event any Note shall become mutilated, or be lost, stolen or destroyed, the City shall, if necessary, execute and the Note Registrar shall authenticate and shall deliver a new Note of like date and tenor as the Note mutilated, lost, stolen or destroyed; provided that, in the case of any mutilated Note, such mutilated Note shall first be surrendered to the Note Registrar, and in the case of any lost, stolen or destroyed Note, if the requirements of K.S.A. 84-8-405 are met and if an indemnity note and affidavit of loss are provided to the Note Registrar and the City at the expense of the Holder. Such indemnity note and affidavit of loss must be sufficient, in the judgment of the Note Registrar and the City, to -4- C11. 6111511,13 protect the Note Registrar and the City from any loss which either of them might suffer if the Note is replaced. In the event any such Note shall have matured, instead of issuing a substitute Note the City may pay or authorize the payment of the same without surrender thereof. Upon the issuance of any substitute Note, the City and the Note Registrar may require the payment of an amount sufficient to reimburse the City and the Note Registrar for any tax or other governmental charge that may be imposed in relation thereto and any other reasonable fees and expenses incurred in connection therewith. The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, lost, stolen or destroyed Notes. Section 10. Cancellation and Destruction of Notes Upon Payment. All Notes surrendered for payment, transfer or exchange shall be delivered to the Note Registrar and, if not already cancelled, the Note Registrar shall cancel such Notes and record such cancellation in the Note Register. Thereafter, such cancelled Notes shall be delivered to the City. Section 11. Book -Entry Notes, Securities Depository. (a) The Notes shall initially be registered to Cede & Co., the nominee for the Securities Depository, and no beneficial owner will receive certificates representing their respective interests in the Notes, except in the event the Note Registrar issues Replacement Notes as provided in subsection (b) hereof. It is anticipated that during the term of the Notes, the Securities Depository will make book -entry transfers among its Participants and receive and transmit payment of principal of, premium, if any, and interest on, the Notes to the Participants until and unless the Note Registrar authenticates and delivers Replacement Notes to the beneficial owners as described in subsection (b). (b) (1) If the City determines (A) that the Securities Depository is unable to properly discharge its responsibilities, or (B) that the Securities Depository is no longer qualified to act as a securities depository and registered clearing agency under the Securities and Exchange Act of 1934, as amended, or (C) that the continuation of a book -entry system to the exclusion of any Notes being issued to any owner other than Cede & Co. is no longer in the best interests of the beneficial owners of the Notes, or (2) if the Note Registrar receives written notice from Participants having interests in not less than 50% of the Notes Outstanding, as shown on the records of the Securities Depository (and certified to such effect by the Securities Depository), that the continuation of a book -entry system to the exclusion of any Notes being issued to any owner other than Cede & Co. is no longer in the best interests of the beneficial owners of the Notes, then the Note Registrar shall notify the owners of such determination or such notice and of the availability of certificates to owners requesting the same, and the Note Registrar shall register in the name of and authenticate and deliver Replacement Notes to the beneficial owners or their nominees in principal amounts representing the interest of each, making such adjustments as it may find necessary or appropriate as to accrued interest and previous calls for redemption; provided, that in the case of a determination under (1)(A) or (1)(B) of this subsection (b), the City, with the consent of the Note Registrar, may select a successor securities depository in accordance with Section 11(c) hereof to effect book -entry transfers. In such event, all references to the Securities Depository herein shall relate to the period of time when the Securities Depository has possession of at least one Note. Upon the issuance of Replacement Notes, all references herein to obligations imposed upon or to be performed by the Securities Depository shall be deemed to be imposed upon and performed by the Note Registrar, to the extent applicable with respect to such Replacement Notes. If the Securities Depository resigns and the City, the Note Registrar or owners are unable to locate a qualified successor of the Securities Depository in accordance with Section 11(c) hereof, then the Note Registrar shall authenticate and cause delivery of Replacement Notes to owners, as provided herein. The Note Registrar may rely on information from the Securities Depository and its Participants as to the names of the beneficial owners of the Notes. The cost of printing, registration, authentication and delivery of Replacement Notes shall be paid for by the City. (c) In the event the Securities Depository resigns, is unable to properly discharge its responsibilities, or is no longer qualified to act as a securities depository and registered clearing agency under the Securities and Exchange Act of 1934, as amended, the City may appoint a successor Securities Depository provided the Note Registrar receives written evidence satisfactory to the Note Registrar with respect to the ability of the successor Securities Depository to discharge its responsibilities. Any such successor Securities Depository shall be a securities depository which is a registered clearing agency under the Securities and Exchange Act of 1934, as amended, or other applicable statute or regulation that operates a securities depository upon reasonable and customary terms. The Note Registrar upon its receipt of a Note or Notes for cancellation shall cause the delivery of Notes to the successor Securities Depository in appropriate denominations and form as provided herein. (d) The execution and delivery of any required Representation Letter to the Securities Depository by an authorized officer of the City is hereby authorized. Section 12. Form of Notes. The Notes and the Note Registrar's Certificate of Authentication to be endorsed thereon shall be in substantially the form attached hereto as Exhibit "A". The Notes may have 5611 NWA, d5alim endorsed thereon such legends or text as may be necessary or appropriate to conform to any applicable rules and regulations of any governmental authority or any custom, usage or requirement of law with respect thereto. Section 13. Disposition of Note Proceeds and Other Funds. All accrued interest and premium, if any, received from the sale of the Notes shall be deposited in the Principal and Interest Account for General Obligation Municipal Temporary Notes, Series 2001-1 (the "Principal and Interest Account") held by the City Treasurer for the retirement of the Notes. The remaining balance of the proceeds derived from the sale of the Notes shall be deposited in a fund (the "Series 2001-1 Project Fund") held by the City Treasurer and shall be used solely for the purpose of paying the costs of the Project and the costs of issuing the Notes. Any moneys remaining in the Series 2001-1 Project Fund after the completion of the Project will be deposited in the Principal and Interest Account and used to pay the next maturing principal of and interest on the Notes. Section 14. Deposits into and Application of Moneys in the Rebate Fund. (a) There shall be deposited in the Rebate Fund for General Obligation Municipal Temporary Notes, Series 2001-1 (the 'Rebate Fund") such amounts as are required to be deposited therein pursuant to the Arbitrage Instructions. 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 Holder of any Note 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 Arbitrage Instructions (which are incorporated herein by reference). (b) Pursuant to the Arbitrage Instructions, 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 Notes and payment and satisfaction of any rebate amounts, or provision made therefor, shall be withdrawn and released to the City. (c) Notwithstanding any other provision of the Resolution, including in particular this Section, the obligation to remit rebatable arbitrage to the United States and to comply with all other requirements of this Section and the Arbitrage Instructions shall survive the defeasance or payment in full of the Notes. Section 15. Transfer of Funds to Paying Agent and the Note Registrar. The City Treasurer is hereby authorized and directed to withdraw from the funds received in payment of the taxes and from the Principal and Interest Account of the City and forward to the Paying Agent sums sufficient to pay the principal of and interest on the Notes as and when the same become due and to pay the charges of the Paying Agent for acting as paying agent in the payment of principal and interest. In addition, the City Treasurer is hereby authorized and directed to withdraw from the Principal and Interest Account and forward to the Note Registrar sums sufficient to pay the charges of the Note Registrar for acting as note registrar. Sums sufficient to pay said charges shall be forwarded to the Paying Agent and Note Registrar over and above the amount of the principal of and interest on the Notes. Section 16. Tax Covenants. (a) The City covenants and agrees that (1) it will comply with all applicable provisions of the Internal Revenue Code of 1986, as amended (the "Code"), including Sections 103 and 141 through 150, necessary to maintain the exclusion from gross income for federal income tax purposes of the interest on the Notes and (2) it will not take any action, or fail to take any action, if any such action or failure to take action would adversely affect the exclusion from gross income of the interest on the Notes. The City will, in addition, adopt such other ordinances or resolutions and take such other actions as may be necessary to comply with the Code and with all other applicable future laws, regulations, published rulings and judicial decisions, in order to ensure that the interest on the Notes will remain excluded from federal gross income, to the extent any such actions can be taken by the City. (b) The City covenants and agrees that (1) it will comply with all requirements of Section 148 of the Code to the extent applicable to the Notes, (2) it will use the proceeds of the Notes as soon as practicable and with all reasonable dispatch for the purposes for which the Notes are issued and (3) it will not invest or directly or indirectly use or permit the use of any proceeds of the Notes or any other funds of the City in any manner, or take or omit to take any action, that would cause the Notes to be "arbitrage bonds" within the meaning of Section 148(a) of the Code. (c) The City covenants and agrees that it will pay or provide for the payment from time to time of all amounts required to be rebated to the United States pursuant to Section 148(f) of the Code and any Treasury Regulations applicable to the Notes from time to time. This covenant shall survive payment in full or defeasance of the Notes. The City specifically covenants to comply with the Arbitrage Instructions attached as Exhibit A to the Arbitrage Certificate. Notwithstanding anything to the contrary contained herein, the W Arbitrage Instructions may be amended or replaced if, in the opinion of counsel nationally recognized on the subject of municipal notes, such amendment or replacement will not adversely affect the exclusion from gross income for federal income tax purposes of interest on the Notes. (d) The City hereby designates the Notes as "qualified tax-exempt obligations" as defined in Section 265(b)(3) of the Code and hereby represents that: (1) the aggregate face amount of all tax-exempt obligations (other than private activity bonds which are not "qualified 501(c)(3) bonds") which will be issued by the City (and all subordinate entities thereof) during calendar year 2001 is not reasonably expected to exceed $10,000,000; and (2) the City (including all subordinate entities thereof) will not issue an aggregate principal amount of obligations designated by the City to be "qualified tax-exempt obligations" during the calendar year in which the Notes are issued, including the Notes, in excess of $10,000,000, without first obtaining an opinion of Bond Counsel that the designation of the Notes as "qualified tax-exempt obligations" will not be adversely affected. The Mayor is hereby authorized to take such other action as may be necessary to make effective the designation in this subsection (d). (e) The foregoing covenants shall remain in full force and effect notwithstanding the defeasance of the Notes pursuant to Section 17 of this Resolution until the final maturity date of all Notes Outstanding. Section 17. Defeasance. When all of the Notes shall have been paid and discharged, then the requirements contained in this Resolution and all other rights granted hereby shall terminate. Notes shall be deemed to have been paid and discharged within the meaning of this Resolution if there shall have been deposited with the Paying Agent or with a bank located in the State of Kansas and having full trust powers, at or prior to the Maturity of said Notes, in trust for and irrevocably appropriated thereto, moneys and/or direct obligations of, or obligations the principal of and interest on which are guaranteed by, the United States of America, or in evidences of ownership of such obligations, which, together with the interest to be earned on any such obligations, will be sufficient for the payment of the principal of said Notes and interest accrued to Maturity, or if default in such payment shall have occurred on such date, then to the date of the tender of such payments. Any moneys and obligations which at any time shall be deposited with said Paying Agent or bank or on behalf of the City, for the purpose of paying and discharging any of the Notes, shall be and are hereby assigned, transferred and set over to such Paying Agent or bank in trust for the respective Holders of the Notes, and such moneys shall be and are hereby irrevocably appropriated to the payment and discharge thereof. All moneys deposited with said Paying Agent or bank shall be deemed to be deposited in accordance with and subject to all of the provisions contained in this Resolution. Section 18. Severability. If any one or more of the covenants or agreements provided in this Resolution (including the exhibits hereto) on the part of the City should be contrary to law, then such covenant or covenants or agreement or agreements shall be deemed severable from the remaining covenants and agreements, and shall in no way affect the validity of the other provisions of this Resolution or of said exhibits. It shall not be necessary for said exhibits to be published in the official City newspaper, but all such exhibits shall be on file in the office of the City Clerk and shall be available for inspection by any interested party. Section 19. Continuing Disclosure. Pursuant to Rule 15c2 -12(a) of the Securities Exchange Commission, the continuing disclosure requirements of said Rule 15c2-12 do not apply to the Notes. Section 20. Further Authority. The Mayor, City Clerk, Finance Director and other City officials are hereby further authorized and directed to execute any and all documents and take such actions as they may deem necessary or advisable in order to carry out and perform the purposes of the Resolution to make alterations, changes or additions in the foregoing agreements, statements, instruments and other documents herein approved, authorized and confirmed which they may approve and the execution or taking of such action shall be conclusive evidence of such necessity or advisability. Section 21. Effective Date. This Resolution shall take effect and be in full force from and after its passage by the governing body. -7- PASSED by the governing body of the City of Salina, Kansas, this 8th day of January, 2001. (SEAL) Oilk4 ATTEST:ayor / EXHIBIT A EXCEPT AS OTHERWISE PROVIDED IN THE RESOLUTION (DESCRIBED HEREIN), THIS GLOBAL NOTE MAY BE TRANSFERRED, IN WHOLE BUT NOT IN PART, ONLY TO ANOTHER NOMINEE OF THE SECURITIES DEPOSITORY (DESCRIBED HEREIN) OR TO A SUCCESSOR SECURITIES DEPOSITORY OR TO A NOMINEE OF A SUCCESSOR SECURITIES DEPOSITORY. REGISTERED REGISTERED NUMBER $ UNITED STATES OF AMERICA STATE OF KANSAS COUNTY OF SALINE CITY OF SALINA GENERAL OBLIGATION TEMPORARY NOTES SERIES 2001-1 Interest Maturity Dated Rate Date Date CUSIP _% Per Annum August 1, 2001 January 1, 2001 REGISTERED HOLDER: CEDE & CO. PRINCIPAL AMOUNT: DOLLARS The City of Salina, in the County of Saline, State of Kansas (herein called the "City"), for value received, hereby promises to pay to the Registered Holder identified above, or registered assigns, on the Maturity Date identified above, the Principal Amount identified above and to pay interest thereon at the Interest Rate specified above from January 1, 2001 to the Maturity Date specified above, payable only on said Maturity Date or such other time as the aggregate principal amount of this Note is paid. INTEREST on this Note will be paid by check, draft or wire transfer to the person in whose name this Note (or one or more predecessor Notes) is registered in the Note Register maintained by the Note Registrar at the close of business on the fifteenth day of the month next preceding the interest payment date (the "Regular Record Date"). Interest not punctually paid will be paid as otherwise provided in the resolution authorizing this Note (the 'Resolution"). The Principal Amount of this Note shall be payable by check or draft to the Registered Holder upon presentation and surrender hereof at the principal office of the Treasurer of the City. The full faith, credit and resources of the City are hereby irrevocably pledged for the prompt payment of the principal of and interest on this Note as the same become due. The principal of and interest (computed on the basis of a 360 -day year of twelve 30 -day months) on this Note are payable in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. THIS NOTE is one of an authorized series of fully registered notes of the City designated "General Obligation Temporary Notes, Series 2001-1", aggregating the principal amount of $925,000 (the "Notes"), issued by the City for the purpose of providing funds to pay the cost of certain street, sewer and other improvements under the authority of and in full compliance with the constitution and laws of the State of Kansas, including K.S.A. 10-101 et seq. and K.S.A 12-6a01 et seq., and all laws amendatory thereof and supplemental thereto, and pursuant to resolutions duly passed and proceedings duly and legally had by the governing body of the City. THE NOTES are general obligations of the City, payable as to both principal and interest in part from special assessments levied upon the property benefited by certain improvements being financed, from general obligation bonds, or from both and, if not so paid, from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the City. The balance of the principal and interest on the Notes shall be 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 NOTES shall not be subject to redemption and payment prior to maturity. ClllltliIdJ1111 The Notes 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 Note certificate with respect to each date on which the Notes are stated to mature, registered in the nominee name of the Securities Depository, is being issued and required to be deposited with the Securities Depository and immobilized in its custody. The book - entry system will evidence positions held in the Notes by the Securities Depository's participants, beneficial ownership of the Notes in authorized denominations being evidenced in the records of such participants. Transfers of ownership shall be effected on the records of the Securities Depository and its participants pursuant to rules and procedures established by the Securities Depository and its participants. The City, the Note Registrar and the Paying Agent will recognize the Securities Depository nominee, while the registered owner of this Note, as the owner of this Note for all purposes, including (i) payments of principal of, and redemption premium, if any, and interest on, this Note, (ii) notices and (iii) voting. Transfers of principal, interest and any redemption premium payments to participants of the Securities Depository, and transfers of principal, interest and any redemption premium payments to beneficial owners of the Notes by participants of the Securities Depository will be the responsibility of such participants and other nominees of such beneficial owners. The City, the Note Registrar and the Paying Agent will not be responsible or liable for such transfers of payments or for maintaining, supervising or reviewing the records maintained by the Securities Depository, the Securities Depository nominee, its participants or persons acting through such participants. While the Securities Depository nominee is the owner of this Note, notwithstanding the provision hereinabove contained, payments of principal of and interest on this Note shall be made in accordance with existing arrangements among the City, the Note Registrar and the Securities Depository. EXCEPT AS OTHERWISE PROVIDED IN THE RESOLUTION, THIS GLOBAL NOTE MAY BE TRANSFERRED, IN WHOLE BUT NOT IN PART, ONLY TO ANOTHER NOMINEE OF THE SECURITIES DEPOSITORY OR TO A SUCCESSOR SECURITIES DEPOSITORY OR TO A NOMINEE OF A SUCCESSOR SECURITIES DEPOSITORY. THIS NOTE is transferable only in the Note Register at the office of the Note Registrar upon surrender of this Note to the Note Registrar duly endorsed for transfer or accompanied by a written instrument of transfer satisfactory to the Note Registrar duly executed by the Registered Holder hereof or his attorney or legal representative, and thereupon a new Note or Notes in the same aggregate principal amount shall be issued to the transferee in exchange therefor, subject to the conditions as provided in the Resolution. The Notes for each maturity are issuable only in the form of fully registered Notes without coupons in the denomination of $5,000 or any integral multiple of $5,000 in excess thereof. The Registered Holder of any Note or Notes may surrender the same in exchange for an equal aggregate principal amount of Notes of any authorized denomination in the manner and subject to the conditions as provided in the Resolution. No service charge shall be made for any such transfer or exchange, but, prior to any transfer or exchange, the Registered Holder hereof shall pay to the City or the Note Registrar an amount sufficient to reimburse it or them for any tax or other governmental charge required to be paid with respect to such transfer or exchange. The City, the Note Registrar and the Paying Agent may deem and treat the person in whose name this Note is registered as the absolute owner hereof for the purpose of receiving payment of, or on account of, the principal hereof and interest due hereon and for all other purposes. If the date for making any payment of interest or principal occurs on a Saturday or Sunday or a holiday in the City of Salina, Kansas, then such payment may be made on the next succeeding business day with the same force and effect. THIS NOTE shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Resolution until the Certificate of Authentication hereon shall have been dated and executed by the Note Registrar. 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 Note have been 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 Note and the series of which it is one, does not exceed any constitutional or statutory limitation. IM C11s01 0.111 Salina IN WITNESS WHEREOF, the governing body of the City of Salina, Kansas, has caused this Note to be signed by facsimile signature of its Mayor and attested by facsimile signature of its City Clerk, the City's corporate seal to be printed hereon and this Note to be the Dated Date shown above. SEAL ATTEST: (facsimile) City Clerk MN CITY OF SALIVA, KANSAS By (facsimile) Mayor This Note shall not be negotiable unless and until countersigned below by the City Clerk following registration by the Treasurer of the State of Kansas. SEAL (facsimile) City Clerk CERTIFICATE OF AUTHENTICATION REGISTRATION DATE: This Note is one of the Notes described in the within mentioned Resolution. OFFICE OF THE TREASURER OF THE CITY OF SALINA, KANSAS Note Registrar By (manual) Note Registrar and Paying Agent: TREASURER OF THE CITY OF SALINA, KANSAS Registration No. (FORM OF ASSIGNMENT) FOR VALUE RECEIVED the undersigned does (do) hereby sell, assign and transfer to (Name and Address) (Social Security or Taxpayer Identifying No.) the Note to which this assignment is affixed in the outstanding principal amount of $ , standing in the name of the undersigned on the books of the State Treasurer. The undersigned does (do) hereby revocably constitute and appoint attorney to transfer the said Note, on the books of said State Treasurer, with full power of substitution in the premises. Dated Name Account No. Signature (Sign Here Exactly as Name or Names Appear on the Face of the Certificate) (Signature Guarantee) STATE OF KANSAS ) ) SS. COUNTY OF SALINE ) I, Judy D. Long, City Clerk of the City of Salina, Kansas, do hereby certify that this Note has been duly registered in my office according to law. [SEAL] WITNESS my hand and official seal this January 1, 2001. (facsimile) City Clerk OFFICE OF THE STATE TREASURER OF KANSAS I, TIM SHALLENBURGER, Treasurer of the State of Kansas, do hereby certify that a transcript of the proceedings leading up to the issuance of this Note has been filed in my office and that this Note was registered in my office according to law this WITNESS my hand and official seal. [SEAL] State Treasurer of Kansas