The URL can be used to link to this page

84-9025 W&S Revenue BondsF L CITY OF SALINA, KANSAS ORDINANCE NO. 84-9025 $2,770,000 COMBINED WATER AND SEWAGE SYSTEM REFUNDING REVENUE BONDS, SERIES OF 1984 DATED: JUNE 15, 1984 1 ORDINANCE NO. 84-9025 OF THE CITY OF SALINA, KANSAS PAGE ecitals---------------------------------------- 1 Section 1. Definitions----------------------------- 3 "Bonds" "Bond and Interest Account for Combined Water and Sewage System Bonds, Series of 1961, dated July 1, 1961" "Bond and Interest Account for Combined Water and Sewage System Revenue Bonds, Series of 1977, dated April 1, 1977" "Bondholder" "Bond Register" "Bond Registrar" "Combined Water and Sewage System Depreciation and Emergency Replacement Account" "Escrow Account" "Escrow Trust Agreement" "Escrow Trustee" "Interest Payment Date" "Maturity" "Maximum Reserve Account Requirement" "1978 Bonds" "1961 Ordinance" "1977 Ordinance" "1978 Ordinance" "1984 Ordinance" "Operating Expenses" "Ordinance" "Outstanding" "Paying Agent" "Person" "Principal and Interest Account" "Principal Installment" "Prior Lien Bonds" "Prior Lien Ordinances" "Record Date" "Redemption Date" "Redemption Price" "Reserve Account" "Reserve Account for Combined Water and Sewage System Revenue Bonds, Series of 1961" "Reserve Account for Combined Water and Sewage System Revenue Bonds, Series of 1977" (i) PAGE "Revenues" "Revenues Available for Debt Service" "Stated Maturity" "Underwriters" "Water and Sewage Fund" "Water and Sewer Utility" Section 2. Authorization of and Security for the 1984 Bonds---------------------------- 7 Section 3. Description of the Bonds, Designation of Paying Agent and Bond Registrar------- 7 Section 4. Method and Place of Payment of Principal of and Interest on the Bonds---------- g Section 5. Execution, Authentication and Delivery of the Bonds-------------------------- 9 Section 6. Registration, Transfer and Exchange of Bonds--------------------------------- 9 Section 7. Persons Deemed Owners of Bonds---------- 10 Section 8. Mutilated, Lost, Stolen or Destroyed Bonds--------------------------------- 11 Section 9. Cancellation and Destruction of Bonds Upon Payment-------------------------- 11 Section 10. Redemption of Bonds Prior to Maturity— 11 Section 11. Form of Bonds--------------------------- 13 Section 12. Uncertificated Bonds-------------------- 20 Section 13. Disposition of 1984 Bond Proceeds------- 21 Section 14. Discharge of 1978 Bonds----------------- 21 Section 15. Arbitrage Covenant---------------------- 21 Section 16. Water and Sewage Fund------------------- 22 Section 17. Ratification and Creation of 7,inds and Accounts------------------------------ 22 Section 18. Application of Moneys in Funds and Accounts------------------------------ 23 Section 19. Deficiency in Payments or Credits into Funds or Accounts--------------------- 28 Section 20. Use of Other Reserve Accounts to Pay Bonds and Interest-------------------- 28 Section 21. Investments----------------------------- 28 Section 22. Particular Covenants of the City-------- 29 Section 23. Additional Bonds------------------------ 32 Section 24. Amendments------------------------------ 34 Section 25. Acceleration in the Event of Default---- 34 Section 26. Enforcement----------------------------- 35 Section 27. Authorization of Escrow Trust Agreement; Redemption of Series 1978 Bonds------- 36 Section 28. Authorization of Agreement Between the City and the Bond Registrar and Paying Agent------------------------- 36 Section 29. Authorization of Bond Purchase Agreement----------------------------- 36 Section 30. Approval of Preliminary Official F Lj 1 PAGE Statement and Official Statement------ 36 ection 31. Defeasance------------------------------ 37 ection 32. Amendment to Ordinance No. 8635--------- 38 ection 33. Severability---------------------------- 38 ection 34. Effective Date-------------------------- 38 Exhibit A F Lj 1 (PUBLISHED IN THE SALINA JOURNAL JUNE 13, 1984) ORDINANCE NO. 84-9025 AN ORDINANCE AUTHORIZING AND DIRECTING THE ISSUANCE OF $2,770,000 PRINCIPAL AMOUNT OF COMBINED WATER AND SEWAGE SYSTEM REFUNDING REVENUE BONDS, SERIES OF 1984, OF THE CITY OF SALINA, KANSAS, FOR THE PURPOSE OF REFUNDING $4,388,000 PRINCIPAL AMOUNT OF OUTSTAND- ING COMBINED WATER AND SEWAGE SYSTEM REFUNDING REVENUE BONDS, SE- RIES 1978, OF SAID CITY, PRESCRIBING THE FORM AND DETAILS OF SAID REFUNDING REVENUE BONDS, PROVIDING FOR THE COLLECTION, SEGREGA- TION AND APPLICATION OF THE REVENUES OF SAID SYSTEM FOR THE PUR- POSES AUTHORIZED BY LAW, INCLUDING PAYING THE COST OF OPERATION, IMPROVEMENT AND MAINTENANCE OF SAID UTILITY, PAYING THE PRINCIPAL OF AND INTEREST ON THE REFUNDING REVENUE BONDS OF SAID CITY IS- SUED AGAINST SAID SYSTEM AND PROVIDING ADEQUATE RESERVE FUNDS, MAKING CERTAIN COVENANTS WITH RESPECT TO SAID BONDS, AUTHORIZING AN ESCROW TRUST AGREEMENT RELATING TO CERTAIN OUTSTANDING BONDS, AUTHORIZING AN AGREEMENT BETWEEN THE CITY AND THE BOND REGISTRAR AND PAYING AGENT, AUTHORIZING A BOND PURCHASE AGREEMENT WITH THE PURCHASERS OF SAID BONDS, APPROVING A PRELIMINARY OFFICIAL STATE- MENT AND OFFICIAL STATEMENT RELATING TO SAID BONDS AND AMENDING ORDINANCE NO. 8635 ADOPTED AND APPROVED ON MAY 15, 1978. WHEREAS, the City of Salina, Kansas (the "City"), pur- suant to the provisions of K.S.A. 12-856 to 12-868, inclusive, 1959 Supplement to the Genera.i }atutes of Kansas, 1949, acting through the governing body of the City, by Ordinance No. 6544, passed June 27, 1961, has heretofore combined the waterworks sys- tem and the sewage disposal system of said City, as said systems are defined and referred to in said Sections 12-856 to 12-868, inclusive, and said combined water and sewage system (the "Water and Sewer Utility" or the "combined water and sewage system") has thenceforth been operated and financed in accordance with the provisions of said statutes, and WHEREAS, the City has heretofore issued an issue of Combined Water and Sewage System Revenue Bonds, Series of 1961, dated July 1, 1961, in the original principal amount of $3,600,000, of which $630,000 principal amount is outstanding, authorized by Ordinance No. 6546 of said City, and an issue of Combined Water and Sewage System Revenue Bonds, Series of 1977, dated April 1, 1977, in the original principal amount of $3,000,000, of which $2,970,000 principal amount is outstanding, authorized by Ordinance No. 8546 of said City, said outstanding revenue bonds aggregating the principal amount of $3,600,000 being hereinafter referred to as the "Prior Lien Bonds", and said Ordinances being hereinafter referred to as the "1961 Ordinance" and the "1977 Ordinance", respectively, said Ordinances being collectively hereinafter referred to as the "Prior Lien Ordi- nances", and WHEREAS, the City has heretofore issued its Combined Waterworks and Sewer System Refunding Revenue Bonds, Series of 1978, in the original principal amount of $4,394,000 of which $4,388,000 principal amount remains outstanding (the "1978 Bonds"), authorized by Ordinance No. 8635 of the City (the "1978 Ordinance"), for the purpose of refunding the Prior Lien Bonds, and WHEREAS, (1) the 1978 Bonds have an average annual in- terest rate of 6.363% and the bonds herein authorized will have an average annual interest rate of 8.75%, (2) certain covenants. will be revised to permit the City greater flexibility to issue additional bonds, and it is desirable and in the best financial interest of the City to refund the 1978 Bonds, and WHEREAS, pursuant to the provisions of K.S.A. 10-116a, as amended, and K.S.A. 10-1201 to 10-1212, inclusive, as amended (the "Act"), the City is authorized and empowered (1) to issue its refunding revenue bonds to refund any previous issue or is- sues or part thereof of its outstanding revenue bonds, and (2) if such refunding revenue bonds are sold more than six months prior to the maturity or earliest prior redemption date of the bonds being refunded, to deposit the proceeds derived from such sale, together with any other available moneys, in escrow under a trust agreement with a Kansas bank having full trust powers, and (3) pending the application of the proceeds of such refunding revenue bonds, and other available funds to the payment of the principal, accrued interest and redemption premium of the revenue bonds to be refunded, to invest such proceeds and other available moneys in direct obligations :f or obligations the principal of and the interest on which are unconditionally guaranteed by, the United States of America, which obligations shall mature or be subject to redemption not later than the respective dates when the pro- ceeds of said obligations together with the interest accruing thereon and any other moneys or investments held in escrow will be required for the purposes intended, all as provided in the Act, and WHEREAS, it is hereby found and determined that it is necessary and desirable at this time that the City issue, sell and deliver its refunding revenue bonds pursuant to the Act as hereinafter provided in an amount sufficient to refund the 1978 Bonds, and that the City enter into an Escrow Trust Agreement, dated as of June 15, 1984, authorized by this Ordinance (the "Es- crow Trust Agreement"), by and between the City and Planters State Bank and Trust Company, Salina, Kansas (the "Escrow Trus- tee"), providing for the application of the proceeds derived from the sale of such refunding revenue bonds and other available mon- eys to the payment of the 1978 Bonds, NOW, THEREFORE, BE IT ORDAINED BY THE GOVERNING BODY OF THE CITY OF SALINA, KANSAS: -2- Section 1 Definitions. "Bonds", "1984 Bonds" or "Series 1984 Bonds" means the Combined Water and Sewage System Refunding Revenue Bonds, Series of 1984, dated June 15, 1984, authorized by the 1984 Ordinance. "Bond and Interest Account for Combined Water and Sew- age System Revenue Bonds, Series of 1961, dated July 1, 1961" means the account by that name established by the 1961 Ordinance and confirmed by Section 9 of the 1977 Ordinance and Section 17 of the 1984 Ordinance. "Bond and Interest Account for Combined Water and Sew- age System Revenue Bonds, Series of 1977, dated April 1, 1977" means the account by that name established by the 1977 Ordinance and confirmed by Section 17 of the 1984 Ordinance. "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 First National Bank and Trust Company of Salina, Salina, Kansas, and its successors when acting in the capacity as registrar and transfer agent for the registration, transfer and exchange of Bonds, and any successors thereto. "Combined Water and Sewage System Depreciation and Emergency Replacement Account" or "Depreciation and Emergency Ac- count" shall mean the Combined Water and Sewage System Deprecia- tion and Emergency Replacement Account, established by Ordinance No. 6546 of the City and referred to in Sections 9, 10(e) and 13 of the 1977 Ordinance and in Sections 17 and 18 of the 1984 Ordi- nance. "Escrow Account" means the account by that name created by the Escrow Trust Agreement. "Escrow Trust Agreement" means the Escrow Trust Agree- ment dated as of June 15, 1984, between the City and Planters State Bank and Trust Company, Salina, Kansas, as Escrow Trustee, authorized by the 1984 Ordinance. "Escrow Trustee" means the Escrow Trustee from time to time acting as such under the Escrow Trust Agreement. "Interest Payment Date" means the Stated Maturity of an installment of interest on the Bonds. -3- "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. "Maximum Reserve Account Requirement" means, as of any date of calculation, the greatest amount of Aggregate Debt Ser- vice for the current or any future fiscal year, excluding the year of final maturity of any series of Bonds. "1978 Bonds" means the Combined Water and Sewage System Refunding Revenue Bonds, Series of 1978, authorized by the 1978 Ordinance. "1961 Ordinance" means Ordinance No. 6546 of the City authorizing the 1961 Bonds. "1977 Ordinance" means Ordinance No. 8546 of the City authorizing the 1977 Bonds. "1978 Ordinance" means Ordinance No. 8635 of the City authorizing the 1978 Bonds. "Ordinance", "this Ordinance", "herein" and "hereof" refer to the 1984 Ordinance. "Outstanding" when used with respect to Bonds means, as of the date of determination, all Bonds theretofore executed, au- thenticated and delivered under this Ordinance, except: (i) Bonds theretofore cancelled by the Bond Registrar or delivered to the Bond Registrar for can- cellation; and IM "1984 Ordinance" or "this Ordinance" means Ordinance No. 84-9025 of the City authorizing the 1984 Bonds. "Operating Expenses" shall mean the City's expenses of operating and maintaining the combined water and sewer system and keeping the same in good repair and working order, including all costs due under any type of contractual arrangement with respect to purchas-q of water, operation, maintenance, production, trans- mission, distribution, repairs, replacements, engineering, drill- ing wells, transportation, administrative and general, audit, legal, financial, pension, retirement, health, hospitalization, insurance, taxes and other expenses actually paid or accrued, including without limitation any expenses of the City applicable to the Water and Sewage Utility as recorded on its books pursuant to standard accounting practices. Operating Expenses shall not include any costs or expenses for new construction, charges for depreciation, payments to the City's general or other funds pur- suant to Section 18(g) of the 1984 Ordinance or payment of Debt Service on any bonds. "Ordinance", "this Ordinance", "herein" and "hereof" refer to the 1984 Ordinance. "Outstanding" when used with respect to Bonds means, as of the date of determination, all Bonds theretofore executed, au- thenticated and delivered under this Ordinance, except: (i) Bonds theretofore cancelled by the Bond Registrar or delivered to the Bond Registrar for can- cellation; and IM I(ii) Bonds in exchange for or in lieu of which other Bonds have been authenticated and delivered pursuant to this Ordinance. "Paying Agent" means The First National Bank and Trust ompany of Salina, Salina, Kansas, and its successors. "Person" means any individual, corporation, partner - hip, joint venture, association, joint-stock company, trust, nincorporated organization or government or any agency or polit- cal subdivision thereof. "Principal and Interest Account" means the account by at name in the Bond Fund created by Section 17 of the 1984 Or- nance. "Principal Installment" shall mean, as of any date of calculation with respect to any Bonds, so long as the same are outstanding, (i) the principal amount of Bonds due on a certain future date for which no Sinking Fund Installments have been established, or (ii) the unsatisfied balance of any Sinking Fund Installments due on a certain future date for any Bonds, plus the mount of the sinking fund redemption premiums, if any, which would be applicable upon redemption of such Bonds on such future ate or a principal amount equal to said unsatisfied balance of such Sinking Fund Installments, or (iii) if such future dates co- incide as to different series of Bonds, the sum of such principal. mount of Bonds and of such unsatisfied balance of Sinking Fund nstallments due on such future date plus such applicable redemp- io,. premiums, if any. "Prior Lien Bonds" means the Combined Water and Sewage ystem Revenue Bonds, Series of 1961, dated July 1, 1961, author - zed by the 1961 Ordinance, and the Combined Water and Sewage ystem Revenue Bonds, Series of 1977, dated April 1, 1977, au- horized by the 1977 Ordinance. "Prior Lien Ordinances" means the 1961 Ordinance and e 1977 Ordinance. "Record Date" for the interest and principal payable on ny Interest Payment Date or Maturity, respectively, means the st day (whether or not a business day) of the calendar month in hich such Interest Payment Date or Maturity occurs. "Redemption Date" when used with respect to any Bond to e redeemed means the date fixed for redemption by or pursuant to his Ordinance. "Redemption Price" when used with respect to any Bond eans the price at which it is to be redeemed pursuant to this rdinance. -5- "Reserve Account" means the Reserve Account for Com- bined Water and Sewage System Refunding Revenue Bonds, Series of 1984, created by Section 17 of the 1984 Ordinance. . "Reserve Account for Combined Water and Sewage System Revenue Bonds, Series of 1961" means the account by that name established by the 1961 Ordinance and confirmed by Section 17 of the 1984 Ordinance. "Reserve Account for Combined Water and Sewage System Revenue Bonds, Series of 1977" means the account by that name established by the 1977 Ordinance and confirmed by Section 17 of the 1984 Ordinance. "Revenues" shall mean (i) as long as any of the Prior Lien Bonds are outstanding, all revenues, income and rents ac- crued by the City from the ownership and operation of the Water and Sewage Utility and the proceeds of any insurance covering business interruption loss relating to the Water and Sewage Util- ity remaining after the City has provided for the credits and deposits required by the Prior Lien Ordinance, (ii) after the Prior Lien Bonds are no longer outstanding, all revenues, income and rents accrued by the City from the ownership and operation of the system and the proceeds of any insurance covering business interruption loss relating to the Water and Sewage Utility, and (iii) at all times interest received on any moneys or securities held pursuant to the 1984 Ordinance but excluding interest from the Escrow Account. "Revenues Available for Debt Service" for any fiscal year or period of 12 calendar months shall mean the sum of (i) Revenues, and (ii) the interest accrued on any moneys or securi- ties held pursuant to the Prior Lien Ordinances (except income from the proceeds of the 1984 Bonds deposited in the Escrow Ac- count, any income on the Bond and the Interest Accounts and the Reserve Accounts created by the Prior Lien Ordinances) less Operating Expenses for such year or period. "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 prin- cipal of such Bond or such installment of interest is due and payable. "Underwriters" shall mean the initial purchasers of any eries of Bonds or the manager or managers of any underwriting roup initially purchasing any series of Bonds. "Water and Sewage Fund" means the fund by that name established by Section 9 of Ordinance No. 6546 of the City, confirmed by Section 8 of the 1977 Ordinance and Section 16 of the 1984 Ordinance. "Water and Sewer Utility" or the "combined water and sewer system" means the combined water and sewer system of the City including all extensions, enlargements and improvements thereto hereafter constructed or acquired by the City. Section 2. Authorization of and Security for the 1984 Bonds. For the purpose of providing funds, together with other funds which are or will become available, to refund the 1978 Bonds, there is hereby authorized and directed to be issued a se- ries of Combined Water and Sewage System Refunding Revenue Bonds, Series of 1984, of the City in the principal amount of $2,770,000 (the "Bonds", "1984 Bonds" or the "Series 1984 Bonds"). The principal of, premium, if any, and interest on the 1984 Bonds shall be payable solely from the Revenues, as defined herein and not from any other fund or source. The 1984 Bonds constitute a lien on the Revenues. The 1984 Bonds shall be junior and subordinate with re- f� Section 3. Description of the Bonds, Designation of aying Agent and Bond Registrar. The Bonds shall consist of ully registered Bonds, without coupons, transferable to subse- uent owners only in the Bond Register maintained by the Bond egistrar as hereinafter provided. Each Bond shall be in the de- omination of $5,000 or any integral multiple thereof not exceed - ng the principal amount of Bonds becoming due on the Stated Ma- urity of such Bond, as specified by the Holder of such Bond. he Bonds shall be numbered in a manner determined by the Bond egistrar. The Bonds shall be dated June 15, 1984, shall have he Stated Maturities, and shall bear interest at the rates per nnum, as follows: -7- spect to the payments of principal and interest out of the Reve- nues of the Water and Sewage Utility of the City and in other respects to the Prior Lien Bonds. In the event of any default in the payment of either interest on or principal of any of the Prior Lien cipal of or Bonds, the interest on City shall make no payments of either prin- the 1984 Bonds until such default be cured. f� Section 3. Description of the Bonds, Designation of aying Agent and Bond Registrar. The Bonds shall consist of ully registered Bonds, without coupons, transferable to subse- uent owners only in the Bond Register maintained by the Bond egistrar as hereinafter provided. Each Bond shall be in the de- omination of $5,000 or any integral multiple thereof not exceed - ng the principal amount of Bonds becoming due on the Stated Ma- urity of such Bond, as specified by the Holder of such Bond. he Bonds shall be numbered in a manner determined by the Bond egistrar. The Bonds shall be dated June 15, 1984, shall have he Stated Maturities, and shall bear interest at the rates per nnum, as follows: -7- The Bonds shall bear interest from the most recent In- terest Payment Date to which interest has been paid in full or, if no interest has been paid, from June 15, 1984. Interest on the Bonds at the rates aforesaid shall be payable semiannually on February 15 and August 15 in each year, beginning February 15, 1985. The First National Bank and Trust Company of Salina, Salina, Kansas, is hereby designated as the Paying Agent and as the Bond Registrar for the Bonds. Section 4. Method and Place of Payment of Principal of and Interest on the Bonds. The principal of, redemption premium, if any, 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 ap- pearing as the Holder thereof in the Bond Register at the close of business on the Record Date next preceding said Interest Pay- ment Date, by check or draft mailed to such Holder at the Hold- er's address as it appears in the Bond Register. The principal of and redemption premium, if any, for each Bond shall be payable to the Holder thereof upon the presentation of such Bond for pay- ment and cancellation at its Maturity at the principal office of the Paying Agent. Payment of principal of, redemption premium, if any, and interest on a Bond may be made by such other method of trans- ferring funds as may be requested by the Holder of the Bond, pro- vided that the Paying Agent shall first receive a written request from such Holder (i) specifying the method and route for trans- ferring funds and (ii) providing for the Paying Agent to be reim- bursed by the Holder for all expenses incurred in connection with such fund transfers. Each Bond delivered under of or in exchange for or in lieu of the rights to interest accrued and were carried by such other Bond. -8- this Resolution upon transfer any other Bond shall carry unpaid, and to accrue, which MATURITY PRINCIPAL INTEREST FEBRUARY 15 AMOUNT RATE 1985 $490,000 7.25% 1986 310,000 7.75% 1987 210,000 8.25% 1988 230,000 8.50% 1989 250,000 8.75% 1990 275,000 9.00% 1991 190,000 9.20% 1992 310,000 9.40% 1993 345,000 9.60% 1994 160,000, 9.75% The Bonds shall bear interest from the most recent In- terest Payment Date to which interest has been paid in full or, if no interest has been paid, from June 15, 1984. Interest on the Bonds at the rates aforesaid shall be payable semiannually on February 15 and August 15 in each year, beginning February 15, 1985. The First National Bank and Trust Company of Salina, Salina, Kansas, is hereby designated as the Paying Agent and as the Bond Registrar for the Bonds. Section 4. Method and Place of Payment of Principal of and Interest on the Bonds. The principal of, redemption premium, if any, 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 ap- pearing as the Holder thereof in the Bond Register at the close of business on the Record Date next preceding said Interest Pay- ment Date, by check or draft mailed to such Holder at the Hold- er's address as it appears in the Bond Register. The principal of and redemption premium, if any, for each Bond shall be payable to the Holder thereof upon the presentation of such Bond for pay- ment and cancellation at its Maturity at the principal office of the Paying Agent. Payment of principal of, redemption premium, if any, and interest on a Bond may be made by such other method of trans- ferring funds as may be requested by the Holder of the Bond, pro- vided that the Paying Agent shall first receive a written request from such Holder (i) specifying the method and route for trans- ferring funds and (ii) providing for the Paying Agent to be reim- bursed by the Holder for all expenses incurred in connection with such fund transfers. Each Bond delivered under of or in exchange for or in lieu of the rights to interest accrued and were carried by such other Bond. -8- this Resolution upon transfer any other Bond shall carry unpaid, and to accrue, which Section 5. Execution, Authentication and Delivery of he Bonds. The Bonds shall be executed on behalf of the City by he facsimile signature of the Mayor, attested by the facsimile signature of the City Clerk, with the facsimile seal of the City affixed. In the event any officer whose signature or facsimile hereof appears on any Bond shall cease to be such officer before he 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. ny Bond may be executed by such persons as at the actual time of he execution of such Bond shall be the proper officers to sign such Bond although at the original date of such Bond such persons ay not have been such officers. The Bonds shall have endorsed thereon a Certificate of uthentication substantially in the form hereinafter set forth nd which shall have the date of registration inserted and shall e manually executed by the Bond Registrar. No Bond shall be entitled to any security or benefit ander this Resolution or shall be valid or obligatory for any purpose unless and until such Certificate of Authentication shall ave been duly executed by the Bond Registrar by manual signa- ure. Such executed Certificate of Authentication upon any Bond hall be conclusive evidence that such Bond has been duly authen- ticated and delivered under this Resolution and that such regis- tered owner has been entered of record in the Bond Register kept y the Bond Registrar. The Certificate of Authentication shall e deemed to have been duly executed if signed and dated by any uthorized officer or employee of the Bond Registrar, but it hall not be necessary that the same officer or employee sign the ertificate of Authentication on all of the Bonds that may be is- sued hereunder at any one time. The Mayor and City Clerk are hereby authorized and irected to prepare and execute the Bonds in the manner hereinbe- ore specified, to register the Bonds in the office of the City lerk, and to cause the Bonds to be registered in the office of he State Treasurer of Kansas as provided by law, and when the onds have been duly registered with the Bond Registrar, to de- iver the Bonds to Kirchner, Moore & Co., as managing underwrit- r, the purchaser thereof, upon the payment of 97.037% of the rincipal amount of the Bonds plus accrued interest to the date f payment and delivery. Section 6. Registration, Transfer and Exchange of Bonds. So long as any of the Bonds remain outstanding, the City hall cause the Bond Register to be kept at the principal office Df the Bond Registrar and all of the Bonds and transfers and/or exchanges thereof shall be fully registered as to both principal nd interest in the name of the Holders in the Bond Register and hall not be registered to bearer. Bonds may be transferred in the Bond Register only upon surrender thereof to the Bond Registrar duly endorsed for trans- fer or accompanied by a written instrument of transfer duly exe- cuted by the Holder thereof or his attorney or legal representa- tive in such form as shall be satisfactory to the Bond Registrar. Upon any such transfer, the City shall execute and the Bond Reg- istrar shall authenticate and deliver in exchange for such Bond a new Bond or Bonds, registered in the name of the transferee, of any denomination or denominations authorized by this Ordinance in an aggregate principal amount equal to the principal amount of such Bond, of the same Stated Maturity and bearing interest at the same rate. 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 representative in such form as shall be satisfactory to the Bond Registrar, may, at the option of the Holder thereof, be ex- changed for an equal aggregate principal amount of Bonds of the same Stated Maturity, of any denomination or denominations au- thorized 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 Regis- trar shall authenticate and deliver at the earliest practicable time Bonds in accordance with the provisions of this Ordinance. All Bonds surrendered in any such exchange or transfer shall forthwith be cancelled by the Bond Registrar. No service charge shall be made to any Bondholder for registration, transfer or ex- change of Bonds, but the City or the Bond Registrar may make a charge for every transfer or exchange of Bonds sufficient to re- imburse 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 ex- change shall be completed. The City and the Bond Registrar shall not be required (i) to issue, transfer or exchange any Bond during a period be- ginning at the opening of business 15 days preceding a mailing of a notice of redemption for Bonds selected for redemption pursuant to Section 10 and ending at the close of business on the date of such mailing; (ii) to transfer or exchange any Bond so selected for redemption in whole or in part, or (iii) to transfer or ex- change any Bond beginning on the day following each Record Date and ending at the close of business on each Interest Payment Date or Maturity. Section 7. Persons Deemed Owners of Bonds. The Person in whose name any Bond shall be registered shall be deemed and regarded by the City, the Bond Registrar and the Paying Agent as the absolute owner thereof, whether such Bond shall be overdue or -10- not, for the purpose of receiving payment therefor or on account thereof and for all purposes, and neither the City, the Bond Reg- istrar nor the Paying Agent shall be affected by notice to the contrary. Payment of or on account of the principal of, premium, if any, 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 effectual to satisfy and dis- charge the liability upon such Bond, including the interest thereon, to the extent of the sum or sums so paid. Section 8. 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 Registrar shall authenticate and shall deliver a new Bond of like date and tenor as the Bond mutilated, lost, stolen or destroyed; provided 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, that the requirements of K.S.A. 84-8-405 are met and that an indemnity bond and affida- vit 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 surrender thereof. Upon the issuance of any substitute Bond, the City and the Bond Registrar may require the payment of an amount sufficient to reimburse the City and the Bond Registrar for any tax or other governmental charge that .,.ay 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 law- ful) all other rights and remedies with respect to the replace- ment or payment of mutilated, lost, stolen or destroyed Bonds. Section 9. 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 can- celled Bonds shall be delivered to the City. Section 10. Redemption of Bonds Prior to Maturity. At the option of the City, Bonds maturing on February 15, 1992, and thereafter may be called for redemption and payment prior to ma- turity, as a whole or in part, in inverse order of maturity on February 15, 1991, or on any Interest Payment Date thereafter, at the principal amount thereof plus accrued interest to and including the Redemption Date at the respective Redemption Prices (expressed as percentages of principal amount) set out below, plus accrued interest thereon to the Redemption Date: -11- Redemption Redemption Dates Prices February 15, 1991 to August 15, 1993, inclusive. 101% The Bond Registrar shall call Bonds for redemption and payment as herein provided upon receipt by the Bond Registrar at least 45 days prior to the Redemption Date of a written request of the City. Such request shall specify the principal amount of Bonds and their maturities to be called for redemption, the ap- plicable Redemption Price or Prices and the Redemption Date. Bonds shall be redeemed in inverse order of maturity in the principal amount of $5,000 or any integral multiple thereof. In the case of a partial redemption of Bonds of the same maturity the Bonds to be redeemed shall be selected by the Bond Registrar from the Outstanding Bonds of that maturity by such method as the Bond Registrar shall deem fair and appropriate and which may pro- vide for the selection for redemption of portions of the princi- pal of Outstanding Bonds of that maturity of a denomination larger than $5,000. The portions of the principal of Outstanding Bonds so selected for partial redemption shall be equal to $5,000 or integral multiples thereof. Any Bond which is to be redeemed only in part shall be submitted to the Paying Agent and delivered to the Bond Registrar, who shall authenticate and deliver to the Holder of such Bond, without service charge, a new or Bonds, of any authorized denomination as requested by such Holder in an aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Bond so surrendered. If the Holder of any such Bond of a denomination greater than $5,000 shall fail to present such Bond to the Paying Agent for payment and exchange as aforesaid, such Bond shall, nevertheless, become due and payable on the Redemption Date to the extent of the principal amount of such Bond called for redemption (and to that extent only). If and when the City shall call any of the Bonds for redemption and payment prior to the maturity thereof, the Bond Registrar shall give written notice in the name of the City of its intention to redeem and pay such Bonds at the office of the Paying Agent. Notice of Redemption shall be given by first class mail, postage prepaid, mailed not less than 30 days prior to the Redemption Date, to each Holder of Bonds to be redeemed, at his address appearing in the Bond Register. All notices of redemp- tion shall state: (i) The Redemption Date; -12- 1 C (ii) The Redemption Price; (iii) 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; (iv) That on the Redemption Date, the Redemption Price will become due and payable upon each such Bond, and that interest thereon shall cease to accrue from and after said date; and (v) The place where such Bonds are to be surrendered for payment of the Redemption Price (which shall be the office of the Paying Agent). Section 11. Form of Bonds. The Bonds issued in fully egistered form shall be substantially as follows: -13- EGISTERED REGISTERED NUMBER $ UNITED STATES OF AMERICA STATE OF KANSAS COUNTY OF SALINE CITY OF SALINA COMBINED WATER AND SEWAGE SYSTEM REFUNDING REVENUE BOND SERIES OF 1984 nterest Maturity Bond Rate Date Date CUSIP June 15, 1984 ISTERED HOLDER: MPLOYER IDENTIFICATION NUMBER OR SOCIAL SECURITY NUMBER: INCIPAL AMOUNT: DOLLARS THE CITY OF SALINA, in the County of Saline, State of ansas (the "City"), for value received, hereby promises to pay o the Registered Holder identified above, or registered assigns, n the Maturity Date identified above, unless called for redemp- ion prior to maturity, the Principal Amount identified above and o pay interest thereon at the Interest Rate specified above from he most recent Interest Payment Date to which interest has been aid in full or, if no interest has been paid, from June 15, 984, said interest being payable semiannually on February 15 and ugust 15 in each year, beginning February 15, 1985. AS PROVIDED in the Ordinance (the "Ordinance") of the City authorizing the issuance of this Bond, interest on this Bond ill be paid on each Interest Payment Date to the person in whose name this Bond is registered in the hereinafter referred to Bond Register at the close of business on the first day (whether or -14- J 1 F_j not a business day) of the calendar month in which each interest payment date occurs (the "Record Date") to the registered owner hereof at such person's address as it appears in the Bond Regis- ter. The principal of this Bond shall be payable to the Regis- tered Holder upon presentation and surrender hereof at the prin- cipal office of The First National Bank and Trust Company of Salina, in the City of Salina, Kansas. REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS BOND SET FORTH ON THE REVERSE HEREOF. SUCH PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH HEREIN. THIS BOND shall not be valid or become obligatory for any purpose 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, con- ditions and things required to be done and to exist precedent to and in the issuance of the Bonds 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. IN WITNESS WHEREOF, the City has caused this Bond to be executed by facsimile signatures of its Mayor and City Clerk and a facsimile of its corporate seal to be hereto affixed and this Bond to be dated June 15, 1984. ATTEST: (facsimile) City Clerk CITY `v SALINA -15- facsimile Mayor F_� CERTIFICATE OF AUTHENTICATION This Bond is one of the Bonds described in the within tioned Ordinance. GISTRATION DATE: THE FIRST NATIONAL BANK AND TRUST COMPANY OF SALINA Bond Registrar and Paying Agent By [ON REVERSE SIDE] THIS BOND is one of an authorized series of Bonds of the City of Salina, Kansas, of like date and tenor, except as to number, denomination, rate of interest, privilege of redemption and maturity, aggregating the principal amount of $2,770,000, is- sued for the purpose of providing funds, together with other mon- eys which are or will become available, to refund all of the out- standing Combined Water and Sewage System Refunding Revenue Bonds, Series 1978, of the City, aggregating the outstanding rincipal amount of $4,388,000 (the "Series 1978 Bonds") more fully described in the Ord'--ance, by the authority of and in full compliance with the provisions, restrictions and limitations of the Constitution and statutes of the State of Kansas, including K.S.A. 10-116a and 10-1201 to 10-1212, inclusive, and all amend- ments thereof and all other provisions of the laws of said State applicable thereto, and this Bond and all interest hereon are to be paid by said City solely from the revenues derived from the rates, fees or charges collected by said City from the operation of its combined water and sewer system and not from any other fund or source as described in the Ordinance. The Bonds have been authorized and issued under the provisions of the Ordinance to which reference is made for a description of the covenants made by the City with respect to the collection, segregation and application of the revenues of the City's Water and Sewage Utili- ty, the nature and extent of the security of such Bonds, the rights, duties and obligations of the City with respect thereto and the rights of the holders thereof. The Bonds are junior and subordinate with respect to the payment of principal and interest and in other respects to an issue of Combined Water and Sewage System Revenue Bonds, Series of 1961, dated July 1, 1961, in the original principal amount of $3,600,000, of which $630,000 prin- cipal amount is outstanding, and an issue of Combined Water and Sewage System Revenue Bonds, Series of 1977, dated April 1, 1977, -16- M in the original principal amount of $3,000,000, of which $2,970,000 principal amount is outstanding. The City may issue additional bonds payable from the net revenues produced from the combined water and sewer system of the City as provided in and subject to the restrictions of the Ordinance and may provide that any such additional bonds shall enjoy equality of lien on said net revenues with the Bonds. THIS Bond has been duly registered in the office of the City Clerk of the City of Salina, Kansas, and in the office of the Treasurer of the State of Kansas. THE BONDS maturing on February 15, 1992, and thereaf- ter, at the option of the City, may be called for redemption and payment prior to maturity, as a whole or in part in inverse order of maturity on February 15, 1991, or on any interest payment date thereafter, at the principal amount thereof plus accrued interest to and including the date of redemption, at the respective re- demption prices (expressed as percentages of principal amount) set out below, plus accrued interest thereon to the date fixed for redemption. Redemption Redemption Dates Prices February 15, 1991 to August 15, 1993, inclusive. 101% IN THE EVENT any of the Bonds are called for redemption and payment as aforesaid, written notice thereof will be given by first class mail mailed not less than 30 days prior to the date fixed for redemption and payment to each holder of Bonds to be redeemed. All bonds so called for redemption will cease to bear interest on the specified redemption date, provided funds are deposited with the Paying Agent on such redemption date. 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 the payment of public and private debts. Interest shall be paid to the person appearing as the registered owner hereof in the bond register of the City (the "Bond Register") maintained by The First National Bank and Trust Company of Salina, as Bond Registrar, or its successor. THIS BOND is transferable only in the Bond Register at the office 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 executed by the registered owner hereof or his attorney or -17- 1 legal representative, and thereupon a new Bond or Bonds in the same aggregate principal amount shall be issued to the transferee in exchange therefor subject to the conditions provided in the rdinance. The Bonds for each maturity are issuable only in the form of fully registered Bonds, without coupons, in the denomina- tion of $5,000 or any integral multiple thereof. The registered caner of any Bond or Bonds may surrender the same in exchange for n equal aggregate principal amount of Bonds of any authorized enomination in the manner and subject to the conditions 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 owner hereof shall pay to the City or the Bond Regis- trar an amount sufficient to reimburse it or them for any tax or ther 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 registered as the absolute owner hereof for the purpose f receiving payment of, or on account of, the principal hereof and interest due hereon and for all other purposes. --------------------------------------------------------------- (FORM OF ASSIGNMENT) The following abbreviations, when used in the inscrip- tion on the face of the within Bond, shall be construed as though they were written out in full according to applicable laws or ecTulations. COM -as tenan,L 4n common UNIF GIFT MIN ACT- Custodian ENT -as tenants by the entireties (Cust) (Minor) TEN -as joint tenants with right of under Uniform Gifts to survivorship and not as tenants Minors Act in common (State) Additional abbreviations may also be used though not in the list above BOND ASSIGNMENT FOR VALUE RECEIVED the undersigned does (do) hereby ell, assign and transfer to (Name and Address) (Social Security or Taxpayer Identifying No.) -18- he bond to which this assignment is affixed in the outstanding rincipal amount of $ , standing in the name of the ndersigned on the books of The First National Bank and Trust ompany of Salina, Salina, Kansas. The undersigned does (do) ereby revocably constitute and appoint ttorney to transfer the said bond, on the books of said The first National Bank and Trust Company of Salina, with full power f substitution in the premises. ated 1 D Name Account No. Signature (Sign Here Exactly as Name or Names Appear on the Face of the Certificate) (Signature Guarantee) -19- 11 1 (FORM OF CITY CLERK'S CERTIFICATE) STATE OF KANSAS ) ) SS. COUNTY OF SALINE ) I, the undersigned, 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. [FACSIMILE SEAL] facsimile) City Clerk (FORM OF STATE TREASURER'S CERTIFICATE) OFFICE OF THE TREASURER, STATE OF KANSAS I, JOAN FINNEY, 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 , 19 WITNESS my hand and official seal. [FACSIMILE SEAL] State Treasurer's Registration Number: JOAN FINNEY Treasurer of the State of Kansas By Assistant State Treasurer Section 12. Uncertificated Bonds uncertificated bonds. -20- There will be no Section 13. Disposition of 1984 Bond Proceeds. (a) 11 accrued interest and premium, if any, received from the sale f the 1984 Bonds shall be credited to and deposited in the Prin- ipal and Interest Account hereinafter created by Section 17 of his Ordinance. (b) From the proceeds of the sale of the 1984 Bonds, he City shall set aside such amount as shall be required for the ayment of the costs, fees and expenses incurred in connection ith (i) the creation of the trust described in and created by he Escrow Trust Agreement hereinafter authorized and in carrying ut the duties, terms and provisions of said Escrow Trust Agree- ent and (ii) the issuance of the 1984 Bonds. (c) The remainder of bond proceeds together with 288,328.50 of additional moneys now on deposit in the Bond Fund or Combined Waterworks and Sewage System Refunding Revenue Bonds, Series of 1978, and which shall be available to the City or such purpose, shall be irrevocably paid over to and deposited ith the Escrow Trustee, and such moneys, and the obligations in hich such moneys may be invested pursuant to the provisions of he Escrow Trust Agreement, shall be deposited and held in the "City of Salina, Kansas, Escrow Account", a special and irrevoca- le escrow account created by the Escrow Trust Agreement, which ccount shall be held in trust in the custody of the Escrow Trus- tee in accordance with the terms and provisions of the Escrow rust Agreement. Moneys and obligations in the Escrow Account and all earnings thereon shall be used and applied, in accordance with the terms of the Escrow Trust Agreement. Section 14. Discharge of 1978 Bonds. Prior to or con- urrently with the issuance and delivery of the Series 1984 onds, the City shall obtain the certification of an independent ertified public accountant that the moneys and obligations equired to be irrevocably deposited in trust with the Escrow rustee pursuant to Section 13 of this Ordinance, together with he earnings to accrue thereon, will always be sufficient for the ayment of the principal of, redemption premium, if any, and in- erest accrued to the date of maturity or redemption, of the 1978 onds, and accordingly, when said certification shall have been iven and when such moneys and obligations shall have been eposited with the Escrow Trustee the 1978 Bonds shall be deemed o be paid and discharged and the requirements contained in the 978 Ordinance and the pledge of revenues thereunder and all ther rights granted thereby shall cease and determine. -21- Section 15. Arbitrage Covenant. The City covenants and agrees that no part of the proceeds of the 1984 Bonds or of he money rectly or in the Escrow Account shall be used, indirectly, in a manner which, if such at any time, di- use had been reasonably anticipated on the date of issuance of the 1984 Bonds, ould have caused any of the 1984 Bonds to be.or become -21- "Arbitrage Bonds" within the meaning of Section 103(c) of the Internal Revenue Code of 1954, as amended, and the regulations of the Treasury Department thereunder proposed or in effect at the time of such use and applicable to obligations issued on the date of issuance of the 1984 Bonds. Section 16. Water and Sewage Fund. The City covenants and agrees that so long as any of the 1984 Bonds remain outstand- ing and unpaid all of the revenues derived by the City from the operation of its Water and Sewage Utility, including all revenues from improvements, extensions and enlargements in and to the Water and Sewage Utility, will be paid and deposited in the City's "Water and Sewage Fund" and that said revenues will not be mingled with the other funds of the City and shall be adminis- tered and used solely as hereinafter in this Ordinance provided. Section 17. Ratification and Creation of Funds and Ac- counts. The establishment by Ordinance No. 6546 of the City of the four accounts known as the (a) "Bond and Interest Account for Combined Water and Sewage System Revenue Bonds, Series of 1961", (b) "Reserve Account for Combined Water and Sewage System Revenue Bonds, Series of 1961", (c) "Combined Water and Sewage System Depreciation and Emergency Replacement Account", and (d) "Combined Water and Sewage System Extension and Bond Retirement Account" be, and the same is, hereby ratified and confirmed, and in addi- tion to the accounts aforesaid there were created and established by the 1977 Ordinance of the City two separate accounts known re- spectively as the (e) "Bond and Interest Account for Combined Water and Sewage System Revenue Bonds, Series of 1977", and (f) "Reserve Account for Combined Water and Sewage System Revenue Bonds, Series of 1977" and the same are, hereby ratified and confirmed, and in addition to the accounts aforesaid there are hereby created and established in the Treasury of the City the following accounts to be known respectively as the (g) "Principal and Interest Account for Combined Water and Sewage System Refunding Revenue Bonds, Series of 1984" (the "Principal and Interest Account"), and -22- (h) "Reserve Account for Combined Water and Sewage System Refunding Revenue Bonds, Series 1984" (the "Reserve Account"). The accounts referred to in paragraphs (a), (b), (e) and (f) aforesaid shall be maintained and administered in compliance with the provisions of the Prior Lien Ordinances and the 1978 Ordi- nance so long as any of the Prior Lien Bonds authorized by the Prior Lien Ordinances, respectively, remain outstanding. The ac- counts referred to in paragraphs (c), (d), (g) and (h) aforesaid shall be maintained and administered by the City as herein pro- vided so long as any of the 1984 Bonds remain outstanding. Section 18. Application of Moneys in Funds and Ac- counts. Moneys paid and deposited in the "Water and Sewage Fund" heretofore established by the City and hereinbefore referred to shall be administered and disposed of by the City so long as any of the Bonds remain outstanding, in the following order, to wit: (a) The City each month shall pay or make provision for the payment of the reasonable and proper Operating Expenses for the current month. No moneys in the Water and Sewage Fund shall be used for the purpose of extending or enlarging the City's Water and Sewage Utility, except as provided in paragraph (g) of this Section 18. (b) After paying or making provision for the payment each month of the reasonable and proper expenses of operating and maintaining the City's combined water and sewer system for the current month, the City shall next pay or credit from time to time from the Water and Sewage Fund to the Bond and Interest Ac- count for Combined Water and Sewage System Revenue Bonds, Series of 1961, so long as any of the bonds dated July 1, 1961, remain outstanding, amounts (if any) at the time required to be so paid or credited by the provisions of the 1961 Ordinance, and, from time to time, but only after and junior to such payments or cred- its, the City shall pay or credit from the Water and Sewage Sys- tem Revenue Fund to the Bond and Interest Account for Combined Water and Sewage System Revenue Bonds, Series of 1977, so long as any of said bonds dated April 1, 1977, remain outstanding, amounts (if any) at the time required to be paid or credited by the provisions of the 1977 Ordinance. (c) After making the payments and credits at the time required to be made by the City under the provisions of para- graphs (a) and (b) aforesaid the City shall pay or credit from time to time from the Water and Sewage Fund to the Reserve Ac- count for Combined Water and Sewage System Revenue Bonds, Series of 1961, so long as any of the Bonds dated July 1, 1961, remain outstanding, any amounts at the time required to be so paid or credited by the provisions of the 1961 Ordinance, and, from time to time, but only after and junior to such payments or credits, -23- the City shall pay or credit from the Water and Sewage Fund to the Reserve Account for Combined Water and Sewage System Revenue Bonds, Series of 1977, so long as any of said Bonds dated April 1, 1977, remain outstanding, any amounts at the time required to be paid or credited by the provisions of the 1977 Ordinance. (d) After making all payments and credits at the time required to be made by the City under the provisions of para- graphs (a), (b) and (c) aforesaid, the City shall next pay or credit from the Water and Sewage Fund to the Principal and Inter- est Account, to the extent necessary to meet at the maturity thereof the interest on and principal of the Series 1984 Bonds, the following amounts: (i) Beginning on July 15, 1984, and continuing on the fifteenth day of each month to and including January 15, 1985, an amount not less than one-seventh (1/7) of the amount that will be required to pay the interest that will become due on the Bonds on February 15, 1985; and beginning on February 15, 1985, and con- tinuing on the fifteenth day of each month thereafter, an amount not less than one-sixth (1/6) of the interest that will become due on the Bonds on the next succeed- ing interest payment date; and (ii) Beginning on July 15, 1984, and continuing on the fifteenth day of each month to and including January 15, 1985, an amount not less than one-seventh (1/7) of the principal amount of the Bonds that will become due on February'15, 1985; and beginning on February 15, 1985, and continuing on the fifteenth day of each month thereafter, an amount not less than one - twelfth (1/12) of the principal amount of the Bonds that will become due on the next succeeding Bond matur- ity date; and (iii) Beginning on July 15, 1985, and continuing on the fifteenth day of each month thereafter, a pro rata portion of the charges of the Paying Agent next becoming due for acting as such under this Ordinance. All amounts paid and credited to the Principal and In- terest Account shall be used and expended by the City for the sole purpose of paying the interest on and principal of the Se- ries 1984 Bonds as and when the same become due and the charges of the Paying Agent for acting hereunder. (e) Prior to or concurrently with the issuance and de- livery of the 1984 Bonds, there shall be paid and credited to the Reserve Account, from available cash funds and investments which the City has on hand, the sum of $401,000. -24- 1 All amounts paid or credited to the Reserve Account shall be used and expended solely to prevent any default in the payment of interest on or principal of the outstanding Bonds of the City if the moneys in the Principal and Interest Account hereinbefore created are insufficient to pay the interest on or principal of the Bonds as they become due. No part of said Re- serve Account shall ever be expended or used by the City to call any Bonds for payment prior to their ultimate maturity unless all of the outstanding Bonds be called for payment and funds are available to pay the same according to their terms. After said payments into said Reserve Account aggregate the Maximum Reserve Account Requirement, no further payments into said Reserve Ac- count shall be required, but if the City shall ever be compelled to use and expend any part of said Reserve Account for the pur- pose of paying the interest on or principal of Bonds of the City and such expenditure shall reduce the amount of said Reserve Ac- count below the Maximum Reserve Account Requirement, then the City, after making all payments or credits at the time required to be made by the City under the provisions of paragraphs (a), (b), (c) and (d) hereof, will thereafter, each month, pay or credit to said Reserve Account for Combined Water and Sewage Sys- tem Refunding Revenue Bonds, Series of 1984, all available funds until said Reserve Account aggregates the Maximum Reserve Account Requirement. Moneys in the Reserve Account in excess of the Maximum Reserve Account Requirement may be used to pay or redeem out- standing Bonds or, at the option of the City, shall become a part of the Water and Sewage Fund. (f) The Combined Water and Sewage System Depreciation and Emergency Replacement Account established by Ordinance No. 6546 of the City shall be maintained and administered by the City so long as any of the City's 1984 Bonds remain outstanding. After making all payments and credits at the time required to be made by the City under the provisions of paragraphs (a), (b), (c), (d) and (e) aforesaid, the City shall next pay or credit from the Water and Sewage Fund to said Depreciation and Emergency Account on the first day of each month, a sum not less than $2,500 until said account shall aggregate in cash and securities not less than the sum of $125,000. Except as hereinafter provid- ed, all amounts credited to said account shall be used by the City, if no other funds are available therefor, for the purpose of making emergency maintenance, repairs and improvements in and to the City's Water and Sewage Utility and keeping the same in good repair and working order so that the Water and Sewage Utili- ty may continue in effective and efficient operation. If no other funds are available therefor, moneys in said account may be used to pay the cost of operating and maintaining the City's Water and Sewage Utility and for the purpose of making major ex- tensions or enlargements of said system. -25- So long as said Depreciation and Emergency Account ag- gregates not less than $125,000, no further payments into said account shall be. required, but if the City be compelled to use and expend any part of said account for the purpose specified in the last preceding paragraph hereof, and such use shall reduce the amount of said account below the sum of $125,000, then the City, after making all payments or credits at the time required to be made by the City under the provisions of paragraphs (a), (b), (c), (d) and (e) hereof, will thereafter pay or credit from the Water and Sewage Fund to said Depreciation and Emergency Ac- count all sums in said Water and Sewage Fund until said Deprecia- tion and Emergency Account aggregates $125,000. (g) After all amounts required at the time to be paid or credited by the City from the Water and Sewage Fund to the ac- counts hereinbefore named in paragraphs (b), (c), (d), (e) and (f) of this Section shall have been so paid or credited, and if at the time the City shall not be in default in the performance of any covenant or agreement contained in this Ordinance, all moneys remaining in the "Water and Sewage Fund" shall be credited monthly to the "Combined Water and Sewage System Extension and Bond Retirement Account". Except as hereinafter provided, moneys in said "Combined Water and Sewage System Extension and Bond Re- tirement Account" shall be used solely for the following purposes s determined from time to time by the governing body of the Pity: (i) Paying the cost of operation, maintenance and repair of the City's combined water and sew- age system to the extent that may be neLa7- sary after the application of the moneys held in the "Water and Sewage Fund" under the pro- visions of paragraph (a) of this Section. (ii) Anticipating payments into or increasing the amounts of the "Bond and Interest Accounts", the "Bond Reserve Accounts", or the "Depreci- ation and Emergency Account", referred to in paragraphs (b), (c), (d) and (f) of this Sec- tion, or any of them, or establishing or increasing the amount of any bond and inter- est account or bond reserve account created by the City for the payment of any combined water and sewage system revenue bonds of the City hereafter issued under the conditions hereinafter specified and standing on a pari- ty with the bonds herein authorized. (iii) Paying the cost of improving, extending or enlarging the City's combined water and sew- age system as hereinafter in this Section 18(g) provided. -26- (iv) Redeeming or paying prior to maturity com- bined water and sewage system revenue bonds of the City but only as hereinafter in this Section 18(g) provided. The City covenants and agrees that it will not expend or permit the expenditure of any moneys in said "Combined Water and Sewage System Extension and Bond Retirement Account" for any extensions, improvements or enlargements of the City's combined water and sewage system which are not economically sound or which will not properly and advantageously contribute to the efficient and economical conduct of the operation and business of said sys- tem as evidenced by a written report and recommendation of the Superintendent or Manager of said system, nor will it make any such extension, improvement or enlargement costing in excess of $100,000 for any single purchase or improvement without securing from the City's consulting engineer or engineers a report and recommendation with respect thereto, nor will it make such pur- chase or improvement except in accordance with such report and recommendation. At least once in every two years the City's consulting engineers hereinafter referred to in Section 22(d) of this ordi- nance, after making their examination and report on the condi- tion, operation and needs of the City's combined water and sewage system as provided in said Section 22(d), shall, by written in- strument filed in the office of the City Clerk and sent by such engineers by United States registered mail to the Underwriters purchasing the bonds herein authorized, certify whether or not in their opinion the moneys in the "Combined Water Sewage System Extension and Bond Retirement Account" are in excess of the amount reasonably required to be maintained in such account for extending, improving or enlarging the City's combined water and sewage system, and, if so, the amount of such excess. If such engineers shall certify that in their opinion there is an excess in said account, such excess moneys in the "Combined Water and Sewage System Extension and Bond Retirement Account" shall be used by the City from time to time for the purpose of redeeming and paying prior to maturity any of the bonds of the City herein authorized if any of such bonds be subject to redemption, or, at the option of the City, for purchasing any of the bonds herein authorized in the open market at the lowest price at which such bonds may be purchased not exceeding the call price, or, if none of the bonds herein authorized is at the time subject to redemp- tion, then for the purpose of purchasing such bonds in the open market at the lowest price at which such bonds may be purchased; provided, however, that if the City in conformity with the provi- sions hereinafter contained shall hereafter issue one or more se- ries of its combined water and sewage system revenue bonds which stand on a parity with the bonds herein authorized, moneys in the "Combined Water and Sewage System Extension and Bond Retirement Account" available for the redemption or purchase of bonds shall -27- be divided among and applied to the redemption or purchase of bonds of the respective series of combined water and sewage sys- tem revenue bonds at the time outstanding in proportion to the total principal amount of bonds of said respective series then outstanding, whether or not the bonds of any series are at the time subject to redemption. Bonds so redeemed or purchased shall be canceled. Section 19. Deficiency in Payments or Credits into Funds or Accounts. If at any time the revenues derived by the City from the operation of its Water and Sewage Utility shall be insufficient to make any payment or credit on the date or dates hereinbefore specified, the City shall make good the amount of such deficiency by making payments or credits out of the first available revenues thereafter received by the City from the operation of its Water and Sewage Utility, such payments and credits being made and applied in the order hereinbefore specified in Section 18 hereof. Section 20. Use of Other Reserve Accounts to Pay Bonds and Interest. If at any time the moneys in the Principal and In- terest Account and in the Reserve Account for Combined Water and Sewage System Refunding Revenue Bonds, Series of 1984, are not sufficient to pay the principal of and interest on the Bonds as and when the same become due, then the amount of such deficiency shall be made up by transfer of moneys from other funds and ac- counts hereinbefore referred to in the following order: First, from the Depreciation and Emergency Account, and secondly, from moneys held in the Water and Sewage Fund, provided, however, that there shall always remain in the Water an(.: 2 --wage Fund an amount sufficient to pay the reasonable and proper expenses of operating and maintaining the City's Water and Sewage Utility during the next succeeding period of thirty days. Section 21. Investments. Any moneys held in any fund or account which are not immediately needed for the purposes of such fund or account may be invested by the City in direct obli- gations of the United States Government, or, except as to moneys in the Escrow Account, in any other investment permitted by law; 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 such fund or account was created. Cash moneys in each of the funds and accounts herein created or established, except for moneys in the Escrow Account, shall be deposited in a bank or banks in the City of Salina, Kansas, which are members of the Federal Deposit Insurance Corpo- ration, and all such bank deposits shall be adequately secured by the banks holding such deposits. Except as to interest accumu- lated in the Bond and Interest Accounts and in the Reserve Ac- counts relating to the Prior Lien Bonds, which interest shall be deposited in the escrow account for the Prior Lien Bonds, all in- terest on any investments held in any fund or account created by -28- or referred to in this Ordinance shall accrue to and become a part of such fund or account, except that interest on investments in the Reserve Account and interest on investments in the Com- bined Water and Sewage System Depreciation and Emergency Replace- ment Account if the City shall not be in default in making any payment into said accounts at the time required to be made by the provisions of Section 18, shall be paid and credited to the Water and Sewage Fund and used and applied for the purposes and in the order hereinbefore specified in Section 18 of this Ordinance. In determining the amount held in any fund or account under any of the provisions of this Ordinance, obligations of the United States Government shall be valued at the market value thereof. Section 22. Particular Covenants of the City. The City covenants with each of the purchasers and owners of any of the Bonds that so long as any of said Bonds remain outstanding and unpaid: (a) Rates. The City will fix, establish and maintain rates, fees and other charges for the sale of water and sewage services and commodities of the Water and Sewage Utility as shall be required to provide Revenues at least sufficient in each fis- cal year to pay: (i) Operating Expenses during such fiscal year, including reserves, if any, provided for in the annual budget for such fiscal year; (ii) an amount equal to at least 1.25% of the Aggregate Debt Service for such fiscal year; (iii) an amount, if any, to be paid during such fiscal year into the Reserve Account; (iv) to the extent not otherwise provided an amount equal to Ag- gregate Debt Service on the Prior Lien Bonds for such fiscal year; (v) an amount, if any, to be ra;d into the Reserve Accounts for Prior Lien Bonds and into the Emergency Account during such fiscal year; and (vi) any and all charges or liens whatsoever payable out of revenues during such fiscal year. (b) No Free Service, Service to City. None of the fa- cilities or services afforded by the Water and Sewage Utility will be furnished to any user without a reasonable charge being made therefor. The City will require the prompt payment of ac- counts and will discontinue water and sewage service to any cus- tomer delinquent in the payment of his account for a period which shall not exceed sixty (60) days. The City will pay monthly into the Water and Sewage Fund for the water and sewage service fur- nished the City in accordance with effective applicable rates, fees and charges. In the event that the net revenues derived by the City from the operation of its Water and Sewage Utility shall at any time prove insufficient to pay the principal of and inter- est on the 1984 Bonds of the City as and when the same become due, then the City will thereafter pay into the Water and Sewage Fund a fair and reasonable payment in accordance with effective applicable rates, fees and charges for all water and sewage ser- vice furnished the City and any other service rendered by the City's Water and Sewage Utility to the City or any of its -29- epartments, and such payments will continue so long as necessary o prevent any default in the payment of the principal of or in- erest on Bonds of the City, or so long as any default in such Payment shall exist. (c) Good Repair. The City will maintain in good re - air and working order the City's Water and Sewage Utility and ill operate the same in an efficient manner and at reasonable ost. (d) Engineering Report. At least once in every two ears the City will employ an independent consulting engineer or irm of consulting engineers having a reputation for knowledge, kill and experience in the operation of municipal water and sew- ge systems and will cause such consulting engineer or engineers o make an examination and report on the condition and operation f the City's Water and Sewage Utility, such report to include ecommendations as to any changes in such operation deemed desir- able. Such report shall also make reference to any unusual or xtraordinary items of maintenance and repair and any extensions r improvements that may be needed in the ensuing year. A copy f each such report will be filed in the office of the City Clerk nd duplicate copies thereof shall be mailed promptly to the Un- derwriters purchasing the Bonds herein authorized. (e) Disposal of Property. The City will not mortgage, ledge or otherwise encumber the Water and Sewage System Utility Dr any part thereof or any improvement, extension or enlargement hereof, nor will they sell, lease or otherwise dispose of said later and Sewage Utility or ar.;material part thereof, provided, owever, that the City may dispose of any property which has be- ome obsolete, nonproductive or otherwise unusable to the advan- age of the City. Any cash proceeds derived from the sale of uch property shall be used by the City to improve, extend or en- arge the City's Water and Sewage Utility. (f) Insurance. The City will carry and maintain a easonable amount of all-risk insurance upon the properties orming a part of the Water and Sewage Utility insofar as they re of an insurable nature, the amount of such insurance being uch amount as would normally be insured by 'a private corporation ngaged in a similar type of business. In the event of loss or damage, the City, with all reasonable dispatch, will use the pro- eeds of such insurance in reconstructing and replacing the prop- erty damaged or destroyed, or, if such reconstruction or replace- ment be unnecessary, then in redeeming or purchasing outstanding onds of the City, such redemption or purchase being made in ac- ordance with the provisions of the Ordinance authorizing the is- suance of the Bonds. The City in operating the Water and Sewage tility will carry and maintain public liability and workmen's ompensation insurance in such amounts as would normally be aintained by a private corporation engaged in a similar type of -30- usiness, and the proceeds derived from any such policies shall e used in paying the claims on account of which such proceeds were received, provided, however, that the City may elect to ac- ept the provisions of the Workmen's Compensation Act of the State of Kansas as authorized by K.S.A. 44-505 and any amendments hereto hereafter enacted, and, in such event, may elect to carry its own risk in accordance with the provisions of the statutes of he State of Kansas. The cost of all insurance referred to in his paragraph (f) shall be paid as an operating cost out of the evenues of the City's Water and Sewage Utility. (g) Books and Records; Annual Audit. The City will install and maintain proper books, records and accounts (entirely separate from all other records and accounts of the City) in which complete and correct entries will be made of all dealings and transactions of or in relation to the properties, business nd affairs of the Water and Sewage Utility of the City. Such ccounts shall show the amount of revenue received from said later and Sewage Utility, the application of such revenue, and 11 financial transactions in connection therewith. Said books hall be kept by the City according to standard accounting prac- ices as applicable to the operation of water and sewage utilities. The City will operate the Water and Sewage Utility on he basis of a fiscal year beginning on January 1st and ending on .December 31st. Annually, as soon as possible following the close Df each fiscal year, the City will cause an audit to be made by a ompetent firm of certified public accountants experienced in ublic utility accounting of the accounts of its Water and Sewage tility for the preceding fiscal year. In addition to such mat- ers as are customarily included in the audit report, the accoun- ants shall, without limiting the generality of the foregoing, urnish to the City separately a compiled statement of the number Df customers served, the amount and character of all insurance arried and a statement and summary of the accountants' recommen- dations as to the City's practices and procedures of water and sewage system operations. Within thirty (30) days after the com- letion of each such audit, said accountants shall file a copy hereof in the office of the City Clerk and shall forward copies f such audit to the Underwriters purchasing the Bonds. If such audit shall disclose that proper provision has of been made for all of the requirements of the law under which he Bonds herein authorized are issued, and of this Ordinance, he City covenants and agrees that it will promptly proceed to ause to be charged for the services rendered by the City's Water nd Sewage Utility rates which will adequately provide for such equirements. (h) Right to Inspect. The holder of any of the Bonds Df the City herein authorized shall have the right at all reason- able times to inspect the Water and Sewage Utility and all records, accounts and data relating thereto, and any such holder -31- hall be furnished by the City all such information concerning said Water and Sewage Utility and the operation thereof which he ay reasonably request. (i) Operation and Maintenance. The City will punctu- lly perform all duties and obligations with respect to the peration and maintenance of the water and sewage system, ncluding all improvements, extensions and enlargements thereof, ow or hereafter imposed upon the City and by the Constitution nd laws of the State of Kansas, and by the provisions of this rdinance. Section 23. Additional Bonds. The City of Salina, ansas, hereby covenants and agrees that so long as any of the onds herein authorized remain outstanding and unpaid, said City ill not issue any additional bonds or other obligations payable ut of the revenues of its combined water and sewer system which ave a claim on Revenues superior to the Bonds and that it will of issue any such additional bonds or obligations which stand on parity or equality with the Bonds herein authorized unless all f the following conditions are met: (a) The issuance of the additional Bonds shall be au- thorized or permitted under the laws of the State of Kansas. (b) Either (i) Revenues Available for Debt Service of any 12 consecutive calendar months out of the 24 calendar months _ext preceding the issuance of such additional Bonds are not less han 1.25 times the maximum Aggregate Debt Service for any suc- eeding fiscal year (excluding the year of final maturity of any eries of Bonds) on all Bonds which will be outstanding immedi- tely after the issuance of the proposed additional Bonds or (ii) he estimated Revenues Available for Debt Service for the fiscal year immediately following the year in which the project, the cost of construction of which is being financed by such addition - 1 Bonds, is to be in commercial operation are not less than 1.25 Imes the maximum Aggregate Debt Service for any succeeding fis- al year (excluding the year of final maturity of any series of onds) on all Bonds which are outstanding in such fiscal year. Prior to the issuance of any additional bonds the City hall obtain a certificate of an Authorized Officer evidencing ull compliance with the provisions of clause (i) of paragraph b) of this Section or a certificate of the Consulting Engineer videncing full compliance with the provisions of clause (ii) of aragraph (b) of this Section, as the case may be. In determining the amount of Revenues Available for Debt Service for the purposes of (i) above, the Authorized Offi- er of the City may adjust the Revenues Available for Debt Ser - ice by adding thereto, in the event any adjustment of rates with respect to the Water and Sewage Utility shall have become -32- effective subsequent to the beginning of the 12 -month period selected pursuant to (i) above, an estimate made by an Authorized Officer of the City of such additional Revenues Available for Debt Service for such 12 -month period which would have resulted had such rate adjustment been in effect for the entire period. In determining the amount of estimated Revenues Avail- able for Debt Service for the purpose of (ii) above, the Con- sulting Engineers may adjust the estimated Revenues Available for Debt Service by adding thereto any estimated increase in revenue resulting from any increase in water and sewer rates which, in the opinion of the Consulting Engineers, are economically feasi- ble and reasonably considered necessary based on projected operations of the Water and Sewage Utility. Notwithstanding the restrictions upon the issuance of additional bonds set out above, additional Bonds may be issued if it is necessary in the opinion of the Consulting Engineers to re- pair any damage or loss to the Water and Sewage Utility if the Water and Sewage Utility has been destroyed or damaged by disas- ter to such an extent that it cannot be operated or if it is nec- essary to keep the Water and Sewage Utility in good operating condition. (c) The City shall not be in default in making any payments at the time required to be made by it into the respec- tive funds and accounts created or established by this Ordinance. Additional bonds of the City issued under the condi- tions iic—inbefore in this section set forth shall stand on a parity with the Bonds herein authorized and shall enjoy complete equality of lien on and claim against the revenues of the City's Water and Sewage Utility with the Bonds herein authorized, and the City may make equal provision for paying said Bonds and the interest thereon out of the Water and Sewage Fund and may like- wise provide for the creation of reasonable reserve accounts out of moneys in said Water and Sewage Fund. Nothing in this section contained shall prohibit or re- strict the right of the City to issue additional water and sewer revenue bonds or other revenue obligations for the purpose of reconstructing, altering, repairing, improving, extending or en- larging the City's Water and Sewage Utility and to provide that the principal of and interest on said revenue bonds or obliga- tions shall be payable out of the revenues of the City's Water and Sewage Utility, provided that such additional revenue bonds or obligations shall be junior and subordinate to the Bonds so that if at any time the City shall be in default in paying either interest on or principal of the Bonds the City shall make no pay- ments of either principal of or interest on said junior and sub- ordinate revenue bonds or obligations until said default or de- faults be cured. In the event of the issuance of any such junior -33- and subordinate revenue bonds or obligations, the City, subject o the provisions aforesaid, may make provision for paying the principal of and interest on said revenue bonds or other revenue bligations out of moneys in the Water and Sewage Fund. Section 24. Amendments. The provisions of the Bonds authorized by this Ordinance and the provisions of this Ordinance may be modified at any time by the City with the written consent f the holders of not less than sixty-six and two-thirds percent (66 2/3%) in aggregate principal amount of the Bonds at the time utstanding; provided, however, that no such modification or amendment shall permit or be construed as permitting (a) the ex- tension of the maturity or the principal of any of the Bonds, or he extension of the maturity of any interest on any Bonds, or (b) a reduction in the principal amount of any Bonds or the rate f interest thereon, or (c) a reduction in the aggregate princi- al amount of Bonds the consent of the holders of which is equired for any such amendment or modification. Any provision f the Bonds or of this Ordinance may, however, be modified or mended in any respect with the written consent of the holders of 11 of the Bonds then outstanding. Amendments to this Ordinance which correct errors or which add to or supplement the security f the holders of the Bonds may be adopted by the City without he consent of such bondholders. Every amendment or modification f a provision of the Bonds or of this Ordinance to which the ritten consent of the bondholders is given as above provided hall be expressed in an ordinance and shall be deemed to be a Dart of this Ordinance. It shall not be necessary to note on any f the outstanding Bonds any reference to such amendment or modi- -ation, if any. A certified copy of every such amendatory or supplemental ordinance, if any, and a certified copy of this Or- dinance shall always be kept on file in the office of the City Jerk and shall be made available for inspection by the holder of any Bond or prospective purchaser or holder of any Bond author- ized by this Ordinance, and upon payment of the reasonable cost f preparing the same, a certified copy of any such amendatory or upplemental ordinance or of this Ordinance will be sent by the ity Clerk to any such bondholder or prospective bondholder. Section 25. Acceleration in the Event of Default. The ity agrees that it shall default in the payment of the principal f or interest on any of its Bonds as the same shall become due and such default shall continue for a period of thirty (30) days, r if the City or its governing body or any of the officers, gents or employees thereof shall fail or refuse to comply with any of the provisions of this Ordinance or of the statutes of the State of Kansas, then, at any time thereafter and while such de- fault shall continue, the holders of twenty-five percent (250%) of he amount of the Bonds then outstanding may, by written notice o the City filed in the office of the City Clerk or delivered in erson to said City Clerk, declare the principal of all Bonds hen outstanding to be due and payable immediately, and upon any -34- such declaration given as aforesaid, all of said Bonds shall become and be immediately due and payable, anything in this Ordi- nance or in said Bonds contained to the contrary notwithstanding. his provision, however, is subject to the condition that if at any time after the principal of said Bonds shall have been so de- clared to be due and payable, all arrears of interest upon all of said outstanding Bonds, except interest accrued but not yet due on such Bonds, and all arrears of principal upon all of said onds shall have been paid in full, and all other defualts, if any, by the City under the provisions of this Ordinance and under the provisions of the statutes of the State of Kansas shall have been cured, then, and in every such case, the holders of a major- ity in amount of the Bonds then outstanding, by written notice to the City given as hereinbefore specified, may rescind and annul such declaration and its consequences, but no such rescission or annulment shall extend to or affect any subsequent default or im- pair any rights consequent thereon. Section 26. Enforcement. The provisions of this Ordi- nance, including the covenants and agreements hereinbefore contained, shall constitute a contract between the City and the holders of the Bonds, and the holder or holders of not less than ten percent (10%) of the Bonds at the time outstanding shall have he right, for the equal benefit and protection of all holders of Bonds similarly situated: (a) By mandamus or other suit, action or proceeding at law or in equity to enforce his or their rights against the City and its officers, agents and employees, and to require and compel he City and its officers, agents and employees to perform all uties and obligations required by the provisions of this Ordi- ance or by the Constitution and laws of the State of Kansas. (b) By suit, action or other proceeding 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. (c) By suit, action or other proceeding in equity or at law to enjoin any acts or things which may be unlawful or in violation of the rights of the holders of the Bonds. Nothing contained in this Ordinance, however, shall be construed as imposing on the City any duty or obligation to levy any taxes either to meet any obligations incurred herein or to pay the principal of or interest on the Bonds. No remedy conferred hereby upon any holder of the Bonds herein authorized is indended to be exclusive of any other remedy, but each such remedy is cumulative and in addition to every other remedy and may be exercised without exhausting and without regard to any other remedy conferred hereby. No waiver of any default or breach of duty or contract by the holder of any -35- BlDnd shall extend to or affect any subsequent default or breach oC duty or contract or shall impair any rights or remedies there - No delay or omission of the holder to exercise any right or wer accruing upon any default shall impair any such right or wer or shall be construed to be a waiver of any such default or quiescence therein. Every substantive right and every remedy nferred upon the holders of the Bonds may be enforced and exer- sed from time to time and as often as may be deemed expedient. I case any suit, action or proceeding to enforce any right or exercise any remedy shall be brought or taken and then discontin- ued or abandoned, or shall be determined adversely to the holders the Bonds, then, and in every such case, the City and the holders of the Bonds shall be restored to their former positions d rights and remedies as if no such suit, action or other pro- eding had been brought or taken. Section 27. Authorization of Escrow Trust Agreement; 4demption of Series 1978 Bonds. The Mayor and the City Clerk e hereby authorized and directed to execute the Escrow Trust Agreement, dated as of June 15, 1984, between the City and Plant- s State Bank and Trust Company, Salina, Kansas, substantially i the form attached to this Ordinance and marked Exhibit "A", th such changes therein to correct omissions and ambiguities as such officials may deem appropriate, for and on behalf of and as e act and deed of said City. The City covenants and agrees at it will redeem and pay the Series 1978 Bonds as provided in e Escrow Trust Agreement. Section 28. Authorization of Agreement Between the ty and the Bond Registrar and Paying Agent. The Mayor and the ty Clerk are hereby authorized and directed to execute the reement between the City and The First National Bank and Trust mpany of Salina, Salina, Kansas, with respect to the duties of id Bank as Bond Registrar and Paying Agent, substantially in e form attached to this Ordinance and marked Exhibit "B", with ch changes therein to correct omissions and ambiguities as such ficers may deem appropriate, for and on behalf of and as the t and deed of said City. Section 29. Authorization of Bond Purchase Agreement. Mae Mayor and the City Clerk are hereby authorized and directed to execute the Bond Purchase Agreement among the City and rchner Moore & Company, United Securities, Inc., Ranson & Com - piny, Inc. and Zahner and Company, the purchasers of the Bonds, substantially in the form attached to this Ordinance and marked Exhibit "C", with such changes therein to correct omissions and ambiguities as such officers may deem appropriate, for and on be- half of and as the act and deed of said City. Section 30. Approval of Preliminary Official Statement d Official Statement. The Preliminary Official Statement dated ij�y 21, 1984, a copy of which has been submitted to and reviewed -36- by the Governing Body of the City on the date hereof and is attached hereto as Exhibit "D", and the final Official Statement, in substantially the form of the Preliminary Official Statement, and the public distribution of the same by the purchasers of the Series 1984 Bonds is hereby approved. The Mayor of the City is hereby authorized and directed to execute and deliver said final Official Statement on behalf of the City with such changes there- in or amendments or supplements thereto as shall be approved by the representative of the City executing said Final Official Statement on behalf of the City, said representative's execution thereof to be conclusive evidence of said representative's ap- proval thereof. Section 31. Defeasance. When all of the 1984 Bonds or any maturity thereof shall have been paid and discharged, then the requirements contained herein and the pledge of revenues made hereunder and all other rights granted hereby shall cease and de- termine with respect to such bonds. Bonds shall be deemed to have been paid and discharged within the meaning of this Ordi- nance if there shall have been deposited with the Paying Agent, or with a Kansas bank having full trust powers, at or prior to the maturity or redemption date of such bonds, in trust for and irrevocably appropriated thereto, moneys and/or direct obliga- tions of, or obligations the principal of and interest on which are guaranteed by, the United States of America, which, together with the interest to be earned on such investments, will be suf- ficient for the payment of the principal of such bonds, the re- demption premium thereon, if any there be, and interest accrued to the date of maturity or redemption, as the case may be, or if default in such payment shall have occurred on such date, then to the date of the tender of such payments; provided, however, al- ways that if any such bonds shall be redeemed prior to the matur- ity thereof, the City shall have elected to redeem such bonds and notice of such redemption shall have been given. Any moneys and obligations which at any time shall be deposited with said Paying Agent or Kansas bank by 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 Kansas bank in trust for the respective holders of the bonds, and such moneys shall be and are hereby irrevocably appropriated to the payment and discharge thereof. All moneys deposited with -37- 1 said Paying Agent or bank shall be deemed to be deposited in ac- cordance with and subject to all the provisions contained in this Ordinance. Section 32. Amendment to Ordinance No. 8635. Ordi- nance No. 8635, adopted and approved by the governing body on May 15, 1978, is hereby amended by deleting the defination of "Sink- ing Fund Agent" appearing in Section 1 and substituting in its place the following: "Sinking Fund Agent" means Planters State Bank and Trust Company, Salina, Kansas, and its succes- sors. All funds and investments held by The First National Bank and Trust Company of Salina as Sinking Fund Agent under Ordinance No. 8635 shall be delivered to Planters State Bank and Trust Com- pany as Sinking Fund Agent under this Ordinance. Section 33. Severability. If any part of this Ordi- nance, whether large or small, shall be held invalid, the invalidity thereof shall not affect the other provisions of this Ordinance. Section 34. Effective Date. This Ordinance shall take effect and be in full force from and after its passage and pub- lication once in the official City newspaper. PASSED by the governing body of the City of Salina, Kansas, this 23�� day of rr1�_, 1984. ATTEST: Mayor Acting City Clerk -38-