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86-9166 GO BondsORDINANCE NO. 86-9166 OF THE CITY OF SALINA, KANSAS $1,983,000 GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES P-232 1 1 1 INDEX PAGE Section 1. Definitions-------------------------- 1 Section 2. Authorization of and Security for the Bonds-------------------------- 3 Section 3. Description of the Bonds, Designation of Paying Agent and Bond Registrar-------------------------- 3 Section 4. Redemption of Bonds Prior to Maturity--------------------------- 4 Section 5. Method and Place of Payment of Principal of and Interest on the Bonds------------------------------ 4 Section 6. Execution, Authentication and Delivery of the Bonds----------------------- 4 Section 7. Registration, Transfer and Exchange of Bonds------------------------------ 5 Section 8. Persons Deemed Owners of Bonds------- 6 Section 9. Mutilated, Lost, Stolen or Destroyed Bonds------------------------------ 6 Section 10. Cancellation and Destruction of Bonds Upon Payment----------------------- 7 Section 11. Form of Bonds------------------------ 7 Section 12. Disposition of Bond Proceeds--------- 12 Section 13. Levy and Collection of Annual Taxes------------------------------ 12 Section 14. Transfer of Funds to Paying Agent and the Bond Registrar------------- 12 Section 15. Authorization of Agreement Between the City and the Bond Registrar-------- 13 Section 16. Federal Tax Matters------------------ 13 Section 17. Defeasance--------------------------- 13 Section 18. Severability------------------------- 14 Section 19. Effective Date----------------------- 14 (Published in the Salina Journal November 25, 1986 ORDINANCE NO. 86-9166 AN ORDINANCE AUTHORIZING AND DIRECTING THE ISSUANCE, SALE AND DE- LIVERY OF $1,983,000 PRINCIPAL AMOUNT OF GENERAL OBLIGATION INTER- NAL IMPROVEMENT BONDS, SERIES P-232, OF THE CITY OF SALINA, KANSAS, FOR THE PURPOSE OF PROVIDING FUNDS TO PAY THE COST OF CONSTRUCTION OF STORM SEWERS, WATER MAINS, SANITARY SEWERS AND STREET IMPROVE- MENTS IN THE CITY OF SALINA, KANSAS; PRESCRIBING THE FORM AND DE- TAILS OF SAID BONDS; PROVIDING FOR THE LEVY AND COLLECTION OF THE NECESSARY ASSESSMENTS AND TAXES FOR THE PURPOSE OF PAYING THE PRIN- CIPAL OF AND INTEREST ON SAID BONDS AS THEY BECOME DUE; AND AUTHO- RIZING AN AGREEMENT BETWEEN THE CITY AND THE BOND REGISTRAR. WHEREAS, pursuant to K.S.A. 12-6a01 et sec., and other provi- sions of the laws of the State of Kansas applicable thereto, by proceedings duly had, the governing body of the City of Salina, Kansas (the "City"), has proceeded with construction of storm sew- ers, water mains, sanitary sewers and street improvements, said im- provements being more fully identified as Project 83-707 (street improvements), Project 83-711 (street improvements), Project 83-712 (street improvements), Project 84-717 (utility improvements), 84-718 (street improvements), Project 85-725 (utility improvements) and 85-726 (street improvements); and WHEREAS, all legal requirements pertaining to said improve- ments have been complied with, and the governing body of the City now finds and determines that the total cost of the Project and re- lated expenses are $2,554,887.17, part of said costs to be paid by the City -at -large and part to be paid by special assessments against the property benefitted, which have been duly levied and assessed against the lots, pieces and parcels of land liable for the special assessments for said improvements; and WHEREAS, the owners of said lots, pieces and parcels of land liable for special assessments as aforesaid, within the period specified, have paid $325,285.97 in cash on account of said special assessments in the total amount of $2,235,265.89, leaving the bal- ance of $1,909,979.92 of said special assessments still owing, and the City has previously paid $246,601.20 in cash on account of the City's share of $319,621.28, leaving the balance of $73,020.08 of the City's share still owing, all of which results in the sum of $1,983,000 being the total amount of the cost of said improvements to be paid by the issuance of bonds of the City; and WHEREAS, the governing body of the City is authorized by law to issue general obligation bonds of the City to pay the unpaid costs of said improvements; and WHEREAS, the governing body of the City has heretofore adver- tised the sale of said bonds in accordance with law and awarded the sale of said bonds to the lowest bidder; and WHEREAS, the governing body of the City now deems and finds it necessary to authorize the issuance of said bonds for delivery to the purchaser; NOW, THEREFORE, BE IT ORDAINED 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 -1- some other meaning, the words and terms defined in this Section shall for all purposes of this Ordinance have the respective mean- ings specified in this Section, to wit: "Bondholder" and "Holder" mean a Person in whose name a Bond is registered in the Bond Register. "Bond Register" means the register and all accompanying records kept by the Bond Registrar evidencing the registration, transfer and exchange of Bonds. "Bond Registrar" means the State Treasurer of Kansas when act- ing in the capacity as registrar and transfer agent for the regis- tration, transfer and exchange of Bonds, and any successors thereto. "Bonds" and "Series P-232 Bonds" mean the General Obligation Internal Improvement Bonds, Series P-232, of the City herein autho- rized. "City" means Salina, Kansas. "Interest Payment Date" means the Stated Maturity of an in- stallment of interest on the Bonds. "Maturity" with respect to any Bond means the date on which the principal of such Bond becomes due and payable as therein or herein provided. "Ordinance", "this Ordinance", "hereof", "herein", "hereto" and similar terms shall refer to this Ordinance of the City autho- rizing the Bonds, as originally executed or as it may be supple- mented or amended from time to time. "Outstanding" when used with respect to Bonds means, as of the date of determination, all Bonds theretofore executed, authenti- cated and delivered under this Ordinance, except: (i) Bonds theretofore cancelled by the Bond Regis- trar or delivered to the Bond Registrar for cancellation; (ii) Bonds that have been defeased by the deposit of funds or qualified securities with the Paying Agent or other qualified party in compliance with this Ordinance; and (iii) Bonds in exchange for or in lieu of which other Bonds have been authenticated and delivered pursu- ant to this Ordinance. "Paying Agent" means the State Treasurer of Kansas when acting in the capacity as paying agent for the payment of the principal of, premium, if any, and interest on the Bonds 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 construction of storm sewers, water mains, sanitary sewers and street improvements in the City. -2- "Registration Date" means the effective date of registration of a Bond as evidenced by the Bond Registrar in the Certificate of Authentication appearing on the Bond. "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. "Special Record Date" for the payment of any Defaulted Inter- est, as defined in Section 5, means a date fixed by the Bond Regis- trar pursuant to Section 5. "Stated Maturity" when used with respect to any Bond or any installment of interest thereon means the date specified in Section 3 of this Ordinance as the fixed date on which the principal of such Bond or such installment of interest is due and payable. Section 2. Authorization of and Security for the Bonds. For the purpose of providing funds to pay the cost of the Project, there shall be issued and are hereby authorized and directed to be issued the General Obligation Internal Improvement Bonds, Series P-232, of the City in the principal amount of $1,983,000. The Bonds shall be general obligations of the City, payable as to both principal and interest in part from special assessments on property benefitted, but any specially assessed part not so paid and the remainder of the principal and interest will be paid from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property within the terri- torial limits of the City. The full faith, credit and resources of the City are hereby irrevocably pledged for the payment of the Bonds and the interest thereon as the same become due. Section 3. Description of the Bonds, Designation of Paying Agent and Bond Registrar. The Bonds shall consist of fully regis- tered Bonds, without coupons, transferable to subsequent owners only in the Bond Register maintained by the Bond Registrar as here- inafter provided. Each Bond shall be in the denomination of $5,000 or any integral multiple thereof (provided that one of the Bonds maturing December 1, 1987, shall be in the denomination of $3,000 or integral multiples of $5,000 in excess thereof) not exceeding the principal amount of Bonds maturing in the year in which such Bond becomes due, as specified by the Holder of such Bond. The Bonds shall be numbered in a manner determined by the Bond Regis- trar. The Bonds shall be dated as of December 1, 1986, shall ma- ture without option of prior payment, and shall bear interest at the rates per annum, as follows: The Bonds shall bear interest from the most recent Interest Payment Date to which interest has been paid in full or, if no -3- MATURITY PRINCIPAL INTEREST DECEMBER 1 AMOUNT RATE 1987 $ 83,000 5.70% 1988 120,000 5.70% 1989 150,000 5.70% 1990 180,000 5.70% 1991 210,000 5.40% 1992 220,000 5.20% 1993 240,000 5.40% 1994 250,000 5.50% 1995 260,000 5.60% 1996 270,000 5.70% The Bonds shall bear interest from the most recent Interest Payment Date to which interest has been paid in full or, if no -3- Notwithstanding any of the foregoing provisions of this Sec- tion to the contrary, any interest on the Bonds 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 Bonds 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 Bond Registrar in writing of the amount of Defaulted Interest proposed to be paid on the Bonds and the date of the proposed payment, which proposed pay- ment date shall be at least 30 days after receipt by the Bond Reg- istrar 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 Bond 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 Bond Registrar shall promptly notify the City of such Spe- cial Record Date and, in the name and at the expense of the City, shall cause notice of the proposed payment of such Defaulted Inter- est and the Special Record Date therefor to be mailed, first class postage prepaid, to the Holder of each Bond at the Holder's address as it appears in the Bond 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 Bonds are registered at the close of business on such Special Record Date. Subject to the foregoing provisions of this Section, each Bond delivered under this Ordinance upon transfer of or in exchange for or in lieu of any other Bond shall carry the rights to interest ac- crued and unpaid, and to accrue, which were carried by such other Bond. Section 6. Execution, Authentication and Delivery of the Bonds. The Bonds shall be executed on behalf of the City by the interest has been paid, from December 1, 1986. Interest on the Bonds at the rates aforesaid shall be payable semiannually on June 1 and December 1 in each year, beginning June 1, 1987. The State Treasurer of Kansas, Topeka, Kansas, is hereby designated as the Paying Agent and as the Bond Registrar for the Bonds. Section 4. Redemption of Bonds Prior to Maturity. The Bonds shall not be subject to redemption prior to their respective dates of maturity set forth in Section 3. Section 5. Method and Place of Payment of Principal of and Interest on the Bonds. The principal of and interest (computed on the basis of a 360 -day year of twelve 30 -day months) on the Bonds 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 the interest on each Bond shall be made by the Paying Agent on each Interest Payment Date to the Person appearing as the Holder thereof in the Bond Register at the close of business on the Regular Record Date next preceding said Interest Payment Date, by check or draft mailed to such Holder at the Holder's address as it appears in the Bond Register. The principal of each Bond shall be payable to the Holder thereof upon the presentation of such Bond for payment and cancellation at its Maturity at the principal office of the Paying Agent. Notwithstanding any of the foregoing provisions of this Sec- tion to the contrary, any interest on the Bonds 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 Bonds 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 Bond Registrar in writing of the amount of Defaulted Interest proposed to be paid on the Bonds and the date of the proposed payment, which proposed pay- ment date shall be at least 30 days after receipt by the Bond Reg- istrar 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 Bond 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 Bond Registrar shall promptly notify the City of such Spe- cial Record Date and, in the name and at the expense of the City, shall cause notice of the proposed payment of such Defaulted Inter- est and the Special Record Date therefor to be mailed, first class postage prepaid, to the Holder of each Bond at the Holder's address as it appears in the Bond 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 Bonds are registered at the close of business on such Special Record Date. Subject to the foregoing provisions of this Section, each Bond delivered under this Ordinance upon transfer of or in exchange for or in lieu of any other Bond shall carry the rights to interest ac- crued and unpaid, and to accrue, which were carried by such other Bond. Section 6. Execution, Authentication and Delivery of the Bonds. The Bonds shall be executed on behalf of the City by the facsimile signature of its Mayor and attested by the facsimile sig- nature of its City Clerk, and shall have the seal of the City af- fixed thereto or imprinted thereon. In the event any officer whose signature or facsimile thereof appears on any Bond shall cease to be such officer before the delivery of such Bond, 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 Bond may be executed by such persons as at the actual time of the execution of such Bond shall be the proper offi- cers to sign such Bond although at the original date of such Bond such persons may not have been such officers. The Bonds shall have endorsed thereon a Certificate of Authen- tication substantially in the form hereinafter set forth and which shall have the date of registration inserted and shall be manually executed by the Bond Registrar. No Bond shall be entitled to any security or benefit under this Ordinance or shall be valid or obligatory for any purpose un- less and until such Certificate of Authentication shall have been duly executed by the Bond Registrar by manual signature. Such exe- cuted Certificate of Authentication upon any Bond shall be conclu- sive evidence that such Bond has been duly authenticated and deliv- ered under this Ordinance and that such registered owner has been entered on record in the Bond Register kept by the Bond 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 Bond Reg- istrar, but it shall not be necessary that the same officer or em- ployee sign the Certificate of Authentication on all of the Bonds that may be issued hereunder at any one time. The Mayor and the City Clerk are hereby authorized and di- rected to prepare and execute the Bonds in the manner hereinbefore specified, the City Clerk is hereby authorized and directed to reg- ister the Bonds, and the Mayor and the City Clerk are hereby autho- rized and directed to cause the Bonds to be registered in the of- fice of the State Treasurer of Kansas as provided by law, and when the Bonds have been duly registered with the Bond Registrar, to de- liver the Bonds to the original purchaser thereof, upon the payment of the aggregate principal amount of the Bonds plus accrued inter- est to the date of payment and delivery, together with any premium. Section 7. Registration, Transfer and Exchange of Bonds. So long as any of the Bonds remain outstanding, the City shall cause the Bond Register to be kept at the principal office of the Bond Registrar and all of the Bonds and transfers and or exchanges thereof shall be fully registered as to both principal and interest in the names of the Holders in the Bond Register and shall not be registered to bearer. Bonds may be transferred in the Bond Register only upon sur- render thereof to the Bond 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 Bond Registrar. Upon any such transfer, the City shall execute and the Bond Registrar shall au- thenticate and deliver in exchange for such Bond a new Bond or Bonds, registered in the name of the transferee, of any denomina- tion or denominations authorized by this Ordinance in an aggregate principal amount equal to the principal amount of such Bond, of the same Maturity and bearing interest at the same rate. -5- Bonds, upon surrender thereof at the principal office of the Bond Registrar, together with a written instrument of transfer duly executed by the Holder thereof or his attorney or legal representa- tive in such form as shall be satisfactory to the Bond Registrar, may, at the option of the Holder thereof, be exchanged for an equal aggregate principal amount of Bonds of the same Maturity, of any denomination or denominations authorized by this Ordinance, and bearing interest at the same rate. In all cases in which Bonds shall be exchanged or transferred hereunder, the City shall execute and the Bond Registrar shall au- thenticate and deliver at the earliest practicable time Bonds in accordance with the provisions of this Ordinance. A-11 Bonds sur- rendered in any such exchange or transfer shall forthwith be can- celled by the Bond Registrar. No service charge shall be made to any Bondholder for registration, transfer or exchange of Bonds, but the City or the Bond Registrar may make a charge for every transfer or exchange of Bonds 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 Bond Registrar shall not be required to transfer or exchange any Bond beginning on the day following the Regular Record Date and ending at the close of business on each In- terest Payment Date. Section 8. Persons Deemed Owners of Bonds. The Person in whose name any Bond shall be registered shall be deemed and re- garded by the City, the Bond Registrar and the Paying Agent as the absolute owner thereof, whether such Bond 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 Bond Registrar nor the Paying Agent shall be affected by notice to the contrary. Pay- ment of or on account of the principal of and interest on any Bond shall be made only to or upon the order of the Holder thereof or his legal representative. All such payments shall be valid and ef- fectual to satisfy and discharge the liability upon such Bond, including the interest thereon, to the extent of the sum or sums so paid. Section 9. Mutilated, Lost, Stolen or Destroyed Bonds. In the event any Bond shall become mutilated, or be lost, stolen or destroyed, the City shall, if necessary, execute and the Bond Reg- istrar shall authenticate and shall deliver a new Bond of like date and tenor as the Bond mutilated, lost, stolen or destroyed; provid- ed that, in the case of any mutilated Bond, such mutilated Bond shall first be surrendered to the Bond Registrar, and in the case of any lost, stolen or destroyed Bond, if the requirements of K.S.A. 84-8-405 are met and if an indemnity bond and affidavit of loss are provided to the Bond Registrar and the City at the expense of the Holder. Such indemnity bond and affidavit of loss must be sufficient, in the judgment of the Bond Registrar and the City, to protect the Bond Registrar and the City from any loss which either of them might suffer if the Bond is replaced. In the event any such Bond shall have matured, instead of issuing a substitute Bond the City may pay or authorize the payment of the same without sur- render thereof. Upon the issuance of any substitute Bond, the City and the Bond Registrar may require the payment of an amount suffi- cient to reimburse the City and the Bond 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 W -M 1 D respect to the replacement or payment of mutilated, lost, stolen or destroyed Bonds. Section 10. Cancellation and Destruction of Bonds Upon Payment. All Bonds surrendered for payment, transfer or exchange shall be delivered to the Bond Registrar and, if not already can- celled, the Bond Registrar shall cancel such Bonds and record such cancellation in the Bond Register. Thereafter, such cancelled Bonds shall be delivered to the City. Section 11. Form of Bonds. The Bonds and the Bond Regis- trar's Certificate of Authentication to be endorsed thereon shall be in substantially the form set forth in this Section. The Bonds may have endorsed thereon such legends or text as may be necessary or appropriate to conform to any applicable rules and regulations of any governmental authority or any custom, usage or requirement of law with respect thereto. -7- REGISTERED NUMBER REGISTERED UNITED STATES OF AMERICA STATE OF KANSAS COUNTY OF SALINE CITY OF SALINA GENERAL OBLIGATION INTERNAL IMPROVEMENT BOND SERIES P-232 Interest Maturity Bond Rate Date Date CUSIP December 1, 1986 Per Annum REGISTERED HOLDER: 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 as- signs, on the Maturity Date identified above, the Principal Amount identified above and to pay interest thereon at the Interest Rate specified above from the most recent Interest Payment Date to which interest has been paid in full or, if no interest has been paid, from December 1, 1986, semiannually on June 1 and December 1 in each year, beginning June 1, 1987. INTEREST on this Bond will be paid by check or draft mailed to the person in whose name this Bond (or one or more predecessor Bonds) is registered in the Bond Register maintained by the Bond Registrar at the close of business on the fifteenth day of the month next preceding each interest payment date (the Regular Record Date). Interest not punctually paid will be paid as otherwise pro- vided in the ordinance authorizing this Bond (the "Ordinance"). The Principal Amount of this Bond shall be payable to the Regis- tered Holder upon presentation and surrender hereof at the princi- pal office of the State Treasurer of Kansas, in the City of Topeka, Kansas. The full faith, credit and resources of the City are here- by irrevocably pledged for the prompt payment of the principal of and interest on this Bond 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 Bond 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. 1 1 REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS BOND SET FORTH ON THE REVERSE HEREOF. SUCH PROVISIONS SHALL FOR ALL PURPOS- ES HAVE THE SAME EFFECT AS IF SET FORTH HERE. THIS BOND shall not be valid or become obligatory for any pur- pose or be entitled to any security or benefit under the Ordinance until the Certificate of Authentication hereon shall have been dated and executed by the Bond 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 Bond 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 Bond and the series of which it is one, does not exceed any constitutional or statutory limitation. IN WITNESS WHEREOF, the governing body of the City of Salina, Kansas, has caused this Bond 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 Bond to be dated December 1, 1986. ATTEST: CITY OF SALINA, KANSAS By facsimile) City Clerk facsimile Mayor Registration No. 0322-085-120186-835 CERTIFICATE OF AUTHENTICATION REGISTRATION DATE: This Bond is one of the Bonds described in the within men- tioned Ordinance. OFFICE OF THE STATE TREASURER OF KANSAS Bond Registrar By Bond Registrar and Paying Agent: STATE TREASURER OF KANSAS 1 [ON REVERSE SIDE] THIS BOND is one of an authorized series of fully registered bonds of the City designated "General Obligation Internal Improve- ment Bonds, Series P-232", aggregating the principal amount of $1,983,000 (the "Bonds"), issued by the City for the purpose of providing funds to pay the cost of construction of storm sewers, water mains, sanitary sewers and street improvements in the City, under the authority of and in full compliance with the constitution and laws of the State of Kansas, including K.S.A. 10-101 to 10-132, inclusive, and K.S.A. 12-6aO1 to 12-6al7, inclusive, and all laws amendatory thereof and supplemental thereto, and pursuant to ordi- nances duly passed and proceedings duly and legally had by the governing body of the City. THE BONDS are general obligations of the City, payable as to principal and interest in part from special assessments on property benefitted, but any specially assessed part not so paid and the re- mainder of the principal and interest will be paid from ad valorem taxes which may be levied without limitation as to rate or amount upon all taxable tangible property within the territorial limits of the City. THIS BOND is transferable only in the Bond Register at the of- fice of the Bond Registrar upon surrender of this Bond to the Bond Registrar duly endorsed for transfer or accompanied by a written instrument of transfer satisfactory to the Bond Registrar duly exe- cuted by the Registered Holder hereof or his attorney or legal rep- resentative, and thereupon a new Bond or Bonds in the same aggre- gate principal amount shall be issued to the transferee in exchange therefor, subject to the conditions as provided in the Ordinance. The Bonds for each maturity are issuable only in the form of fully registered Bonds without coupons in the denomination of $5,000 or any integral multiple thereof (provided that one of the Bonds maturing December 1, 1987, shall be in the denomination of $3,000 or integral multiples of $5,000 in excess thereof). The Registered Holder of any Bond or Bonds may surrender the same in exchange for an equal aggregate principal amount of Bonds of any authorized de- nomination in the manner and subject to the conditions as provided in the Ordinance. 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 Bond Regis- trar 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 Bond Registrar and the Paying Agent may deem and treat the person in whose name this Bond is reg- istered 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. -10- (FORM OF ASSIGNMENT) FOR VALUE RECEIVED the undersigned does (do) hereby sell, as- sign and transfer to (Name and Address) (Social Security or Taxpayer Identifying No.) the bond to which this assignment is affixed in the outstanding principal amount of $ , standing in the name of the un- dersigned on the books of the State Treasurer. The undersigned does (do) hereby revocably constitute and appoint attorney to transfer the said bond, on the books of said State Treasurer, with full power of substitution in the premises. Dated 1 1 Name Account No. Signature (Sign Here Exactly as Name or Names Appear on the Face of the Certificate) (Signature Guarantee) -11- (FORM OF CLERK'S CERTIFICATE) STATE OF KANSAS ) SS. COUNTY OF SALINE ) I, D.L. Harrison, City Clerk of the City of Salina, Kansas, do hereby certify that this Bond has been duly registered in my office according to law. WITNESS my hand and official seal this 1986. [SEAL] City Clerk (FORM OF STATE TREASURER'S CERTIFICATE) OFFICE OF THE STATE TREASURER OF KANSAS I, JOAN FINNEY, Treasurer of the State of Kansas, do hereby certify that a transcript of the proceedings leading up to the is- suance of this Bond has been filed in my office and that this Bond was registered in my office according to law this WITNESS my hand and official seal. (facsimile) State Treasurer of Kansas [SEAL] ------------------------------------------------------------------ Section 12. Disposition of Bond Proceeds. All accrued inter- est and premium, if any, received from the sale of the Bonds shall be deposited in the general obligation bond fund held by the City Treasurer for the retirement of the Bonds. The remaining balance of the proceeds derived from the sale of the Bonds shall be deposited in a fund held by the City Treasurer and shall be used solely for the purpose of paying the costs of the Project as hereinbefore provided. Section 13. Levy and Collection of Annual Taxes. The gov- erning body of the City shall annually make provision for the pay- ment of the principal of and interest on the Bonds as the same be- come due by levying and collecting the necessary taxes and assessments therefor in the manner provided by law. Section 14. Transfer of Funds to Paying Agent and the Bond Registrar. The City Treasurer is hereby authorized and directed to withdraw from the funds received in payment of the taxes and spe- cial assessments and from the general obligation bond fund and for- ward to the Paying Agent sums sufficient to pay the principal of -12- and interest on the Bonds 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 Trea- surer is hereby authorized and directed to withdraw from the gener- al obligation bond fund and forward to the Bond Registrar sums suf- ficient to pay the charges of the Bond Registrar for acting as bond registrar. Sums sufficient to pay said charges shall be forwarded to the Paying Agent and Bond Registrar over and above the amount of the principal of and interest on the Bonds. Section 15. Authorization of Agreement Between the City and the Bond Registrar. The Agreement between the City and the State Treasurer of Kansas, in substantially the form attached hereto, with respect to the duties of the State Treasurer as Bond Registrar is in all respects hereby approved, authorized and confirmed and the Mayor and City Clerk are hereby authorized and directed to exe- cute said Agreement for and on behalf of the City. Section 16. Federal Tax Matters. The City covenants and agrees that it will use the proceeds of the Bonds as soon as prac- ticable and with all reasonable dispatch for the purpose for which the Bonds are issued as hereinbefore set forth, and that no part of the proceeds of the Bonds shall be invested in any securities, ob- ligations or other investments except for the temporary period pending such use nor used, at any time, directly or indirectly, in a manner which, if such use had been reasonably anticipated on the date of issuance of the Bonds, would have caused any of the Bonds to be or become "arbitrage bonds" within the meaning of Section 103(b)(2) or Section 143 of the Internal Revenue Code of 1986 (the "Code") and the Income Tax Regulations under Section 103(c) of the Internal Revenue Code of 1954 or the Code, proposed or in effect at the time of such use and applicable to obligations issued on the date of issuance of the Bonds. The City represents and warrants that (i) it is a governmental unit under Kansas law with general taxing powers, (ii) none of the Bonds is or will become a private activity bond as defined in Sec- tion 141 of the Code, (iii) 95% or more of the net proceeds of the Bonds will be used for local governmental activities of the City and (iv) the aggregate face amount of all tax-exempt bonds (other than private activity bonds) issued by the City (and all subordi- nate entities thereof) during the calendar year 1986 is not rea- sonably expected to exceed $5,000,000. The City hereby covenants that the City and all its subordinate entities will not issue in excess of $5,000,000 of tax-exempt bonds (including the Bonds but excluding private activity bonds) during the calendar year 1986. -13- The City hereby designates the Bonds as "qualified tax-exempt obligations" as defined in Section 265(b)(3)(B) of the Code. The City reasonably anticipates that the City and its subordinate entities will issue qualified tax-exempt obligations (excluding private activity bonds other than qualified 501(c)(3) bonds) during the calendar year 1986 in an amount not exceeding $10,000,000. The City hereby covenants that the City and its subordinate entities will not issue in excess of $10,000,000 of qualified tax-exempt ob- ligations (including the Bonds but excluding private activity bonds other than qualified 501(c)(3) bonds) during the calendar year 1986. Section 17. Defeasance. When all of the Bonds shall have been paid and discharged, then the requirements contained in this Ordinance and all other rights granted hereby shall terminate. Bonds shall be deemed to have been paid and discharged within the meaning of this Ordinance if there shall have been deposited with -13- 1 1 the Paying Agent or with a bank located in the State of Kansas and having full trust powers, at or prior to the Stated Maturity of said Bonds, in trust for and irrevocably appropriated thereto, mon- eys 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 Bonds and interest accrued to the Stated Maturity, or if default in such payment shall have occurred on such date, then to the date of the tender of such payments. Any moneys and obligations which at any time shall be deposited with said Paying Agent or bank or on behalf of the City, for the purpose of paying and discharging any of the Bonds, shall be and are hereby assigned, transferred and set over to such Paying Agent or bank in trust for the respective Holders of the Bonds, and such moneys and obligations shall be and are hereby irrevocably appropriated to the payment and discharge thereof. All moneys and obligations 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 Ordinance. Section 18. Severability. If any one or more of the cove- nants or agreements provided in this Ordinance 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 re- maining covenants and agreements, and shall in no way affect the validity of the other provisions of this Ordinance. Section 19. Effective Date. This Ordinance shall take effect and be in full force from and after its publication in the official City newspaper. PASSED by the governing body of the City of Salina this 17th day of November, 1986. (SEAL) ATTEST: City Cler -14- Mayor