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82-8899 IRB Gary HarbinPu6,�`--� M(kV& - 1a1 1Zl'�Z e ORDINANCE NO. 32-8899 AN ORDINANCE AUTHORIZING THE CITY OF SALINA, KANSAS, TO ACQUIRE THE REAL PROPERTY HEREINAFTER DESCRIBED AND TO CONSTRUCT, PURCHASE AND INSTALL BUILDINGS AND IMPROVEMENTS AND FURNISHINGS AND EQUIPMENT TO BE LEASED TO GARY L. HARBIN, AUTHORIZING AND DIRECTING THE ISSUANCE OF $361,000.00 PRINCIPAL AMOUNT OF MEDICAL CLINIC REVENUE BONDS, SERIES 1982-A, OF SAID CITY FOR THE PURPOSE OF PROVIDING FUNDS TO PAY THE COST OF ACQUIRING SAID REAL PROPERTY AND CONSTRUCTING, PURCHASING AND INSTALLING SAID BUILDINGS AND IMPROVEMENTS AND FURNISHINGS AND EQUIPMENT TO BE LEASED TO SAID GARY L. HARBIN; PRESCRIBING THE FORM AND AUTHORIZING THE EXECUTION OF A LEASE BY AND BETWEEN SAID CITY AND SAID GARY L. HARBIN; AND PRESCRIBING THE FORM AND APPROVING THE EXECUTION OF A GUARANTY AGREEMENT BY SAID GARY L. HARBIN; AND MAKING AN ELECTION UNDER SECTION 103(b)(6)(D) OF THE INTERNAL REVENUE CODE. WHEREAS, the City of Salina, Kansas, a municipal corporation duly organized and existing under the Constitution and laws of the State of Kansas, (hereinafter sometimes referred to as the "CITY"), desires to promote, stimulate and develop the general economic welfare and prosperity of the CITY and its environs, and thereby to further promote, stimulate and develop the general economic welfare and prosperity of the State of Kansas; and WHEREAS, pursuant to the provisions of K.S.A. 12-1740 to 12-1749a, as amended (hereinafter sometimes referred to as the "ACT"), the CITY is authorized to issue medical clinic revenue bonds of the CITY, and it is hereby found and determined to be advisable and in the interest and for the welfare of the CITY and its inhabitants that medical clinic revenue bonds of the CITY be authorized and issued for the purpose of providing funds to pay the cost of acquiring the real property hereinafter described, and constructing, purchasing and installing buildings and improvements and furnishings and equipment to be leased to GARY L. HARBIN, (hereinafter sometimes referred to as "HARBIN"). NOW, THEREFORE, BE IT ORDAINED BY THE GOVERNING BODY OF THE CITY OF SALINA, KANSAS: Section 1. Authority to Acquire Real Property and to Construct, Purchase and Install the Facility. The CITY is hereby authorized to acquire the real property described and set forth on Schedule 1, attached hereto and made a part hereof, and to construct, purchase and install the buildings and improvements and furnishings and equipment as described and set forth on said Schedule 1, attached hereto, in accordance with the provisions of the Lease dated as of March 17, 1982, between the CITY and HARBIN (hereinafter sometimes referred to as the "LEASE"), the LEASE being authorized by the provisions of this Ordinance (said real property being hereinafter, and in the LEASE, referred to as the "LAND", and the LAND, together with the buildings and improvements and furnishings and equipment being hereinafter, and in the LEASE, referred to as the "FACILITY"), all at an amount which will not exceed the cost of $361,000.00 to the City. Section 2. Authorization of and Security for the Bonds. For the purpose of providing funds to pay the cost of acquiring, constructing, purchasing and installing the E FACILITY to be leased to HARBIN, there shall be issued, and hereby are authorized and directed to be issued, a series of Medical Clinic Revenue Bonds, Series 1982-A, of the City in the principal amount of $361,000.00. The Bonds herein authorized (hereinafter sometimes referred to as the "BONDS"), and all interest thereon and any redemption premium, shall be paid solely from the money and revenue received from the fees charged and rental received for the use of the FACILITY and not from any other fund or source (except to the extent paid out of Bond proceeds or the income from the temporary investment thereof, and under certain circumstances, condemnation awards and the proceeds of insurance), and the CITY hereby pledges the FACILITY and the net earnings therefrom to the payment of the BONDS and the interest thereon. The payment of the principal of and interest and redemption premium, if any, on the BONDS shall be guaranteed by HARBIN pursuant to the terms of the Guaranty Agreement, the form of which is approved by Section 29 of this ORDINANCE. Section 3.Description and Details of the Bonds, Designation of Paying Agent. The BONDS shall be dated March 17, 1982, shall be numbered, shall become due on the dates, and shall bear interest at the respective rates as follows: 3 SERIAL BONDS INTEREST RATE: Interest will be at four percent (4%) below the prime rate charged by the First National Bank and Trust Company of Salina, computed on the seventeenth day of each month for the next succeeding month and paid on September 17, 1982, and each March 17, and September 17, thereafter. 4 PRINCIPAL MATURITY NUMBERS AMOUNT DATE 001 $ 91000.00 September 17, 1982 002 $ 91000.00 March 17, 1983 003 $ 91000.00 September 17, 1983 004 $ 91000.00 March 17, 1984 005 $ 9,000.00 September 17, 1984 006 $ 91000.00 March 17, 1985 007 $ 9,000.00 September 17, 1985 008 $ 91000.00 March 17, 1986 009 $ 91000.00 September 17, 1986 010 $ 91000.00 March 17, 1987 011 $ 91000.00 September 17, 1987 012 $ 9,000.00 March 17, 1988 013 $ 9,000.00 September 17, 1988 014 $ 91000.00 March 17, 1989 015 $ 91000.00 September 17, 1989 016 $ 91000.00 March 17, 1990 017 $ 91000.00 September 17, 1990 018 $ 9,000.00 March 17, 1991 019 $ 9,000.00 September 17, 1991 020 $ 9,000.00 March 17, 1992 021 $ 91000.00 September 17, 1992 022 $ 91000.00 March 17, 1993 023 $ 9,000.00 September 17, 1993 024 $ 91000.00 March 17, 1994 025 $ 91000.00 September 17, 1994 026 $ 91000.00 March 17, 1995 027 $ 9,000.00 September 17, 1995 028 $ 91000.00 March 17, 1996 029 $ 9,000.00 September 17, 1996 030 $ 91000.00 March 17, 1997 031 $ 9,000.00 September 17, 1997 032 $ 91000.00 March 17, 1998 033 $ 91000.00 September 17, 1998 034 $ 91000.00 March 17, 1999 035 $ 9,000.00 September 17, 1999 036 $ 91000.00 March 17, 2000 037 $ 9,000.00 September 17, 2000 038 $ 9,000.00 March 17, 2001 039 $ 91000.00 September 17, 2001 040 $10,000.00 March 17, 2002 INTEREST RATE: Interest will be at four percent (4%) below the prime rate charged by the First National Bank and Trust Company of Salina, computed on the seventeenth day of each month for the next succeeding month and paid on September 17, 1982, and each March 17, and September 17, thereafter. 4 The BONDS shall bear interest from their date, payable on September 17, 1982, and thereafter semiannually on March 17 and September 17 in each year. The BONDS and the interest thereon shall be payable to bearer in lawful money of the United States of America upon presentation and surrender of such BONDS or interest coupons as they respectively become due at the principal office of The First National Bank and Trust Company of Salina, Salina, Kansas, such bank being hereby designated as the CITY'S paying agent for the payment of the principal of and interest on the BONDS herein authorized, and such bank referred to herein as the "PAYING AGENT". In the event the interest on the BONDS is includable in the gross income of the recipients thereof for Federal income tax purposes by reason of the failure of the BONDS to qualify for the exemption provided in Section 103(b)(6)(D) of the Internal Revenue Code of 1954, as amended, all of the BONDS then outstanding shall mature and be due and payable at the principal amount thereof, plus accrued interest to the maturity date, together with a premium which shall be, on each Bond, equal to the stated interest rate on such Bond multiplied times the principal amount of such Bond for each full year, or fraction of a year, which elapses from the date on which the interest becomes includable in the gross income of the recipients and the date of maturity ' established by the CITY (which date of maturity shall not be earlier than forty-five (45) days, or later than one hundred 5 twenty (120) days after the Internal Revenue Service, HARBIN, or the Fiscal Agent hereinafter designated, shall give written notice to the CITY of the inclusion of the interest on the BONDS in the gross income of the recipients thereof). Section 4. Redemption and Payment of Bonds Prior to Maturity. The BONDS shall be subject to redemption and payment prior to the stated maturity thereof after the notice specified in Section 5 of this ORDINANCE as follows: (a) Each of the BONDS shall be subject to redemption and payment at the option of the CITY, upon instructions from HARBIN, on any interest payment date upon any of the following conditions or events, provided all of the BONDS are redeemed and paid according to their terms: (1) if title to, or the use for a limited period of, substantially all of the FACILITY be condemned by any authority having the power of eminent domain; (2) if substantially all of the FACILITY is damaged or destroyed by fire or other casualty; or (3) if, as a result of changes in the Constitution of the State of Kansas, or of legislative or administrative action by the State of Kansas, or any political subdivision thereof, or by the United States, or by reason of any action instituted in any Court, the LEASE herein authorized shall become void or unenforceable, or impossible of performance without unreasonable delay, or in any other way, by reason of such change of circumstances, unreasonable burdens or excessive liabilities are imposed on HARBIN or the CITY. The BONDS redeemed pursuant to this paragraph shall be redeemed at the principal amount thereof, plus accrued interest thereon to date fixed for redemption and payment, without premium. (b) Each of the BONDS maturing in the year 1982 and thereafter is also subject to redemption and payment at the option of the CITY upon instructions from HARBIN on September 17, 1982, and on any interest payment date thereafter, at the principal amount thereof plus the accrued interest thereon. Section 5. Notice of Redemption. Notice of any redemption provided for by this ORDINANCE shall be given in 101 the name of the CITY by HARBIN or the Fiscal Agent, by United States registered mail to the PAYING AGENT herein designated; such notice to be mailed at least thirty (30) days prior to the date fixed for redemption and payment, and to specify the numbers of the BONDS to be redeemed and paid. Notice of any such redemption shall also be published at least once not less than thirty (30) days prior to the date fixed for redemption in the official newspaper of the State of Kansas and the Kansas Register. Notice of any such redemption shall also be given by registered mail in the manner hereinbefore specified to any bondholder who files his name with the Fiscal Agent pursuant to Section 24 of this ORDINANCE, provided that the failure to give any notice by mail as herein specified shall not affect the validity of any such call for redemption. Notice of any redemption as herein provided shall be given upon, but only upon, written instructions from HARBIN, as long as HARBIN is not in default in the payment of Basic Rent due under the LEASE. If, because of the temporary or permanent suspension of the publication or general circulation of any financial journal or for any other reason, it is impossible or impracticable to publish such notice of call for redemption in the manner herein provided, then such publication, in lieu thereof, as shall be made with the approval of the PAYING AGENT, shall constitute a sufficient publication of notice. Section 6. Unclaimed Principal and Interest Held by Fiscal Agent. Any monies deposited with the Fiscal Agent, 7 or the PAYING AGENT, for the payment of the principal of or interest on the BONDS and remaining unclaimed for six (6) years, after such principal and interest have become due shall be paid to HARBIN, and any bondholder entitled thereto shall thereafter, as an unsecured general creditor, look only to HARBIN for payment thereof, and all liability of the CITY, the Fiscal Agent and the PAYING AGENT with respect thereto shall cease; provided, however, that the Fiscal Agent and the PAYING AGENT, before being required to make any such payment to HARBIN may, at HARBIN'S expense, cause to be published once in the official newspaper of the State of Kansas and the Kansas Register, notice that such monies remain unclaimed, and that after a date specified therein, which shall not be less than thirty (30) days after the date of such publication, any such unclaimed monies then remaining will be paid to HARBIN. Section 7. Method of Execution and Authentication of the Bonds. The BONDS, including any Bonds issued in exchange, or as substitutions for the BONDS initially delivered, shall be executed for and on behalf of the CITY by the manual or facsimile signature of the Mayor and attested by the manual or facsimile signature of the City Clerk; provided, however, that one of said signatures shall be manually executed, and the seal of the CITY shall be affixed thereto or imprinted thereon. Interest coupons attached to the BONDS representing the interest thereon shall bear the facsimile signatures of said Mayor and City 0 R"S UNITED STATES OF AMERICA STATE OF KANSAS COUNTY OF SALINE CITY OF SALINA MEDICAL CLINIC REVENUE BONDS SERIES 1982-A KNOW ALL MEN BY THESE PRESENTS: That the City of Salina, in the County of Saline, State of Kansas (the "CITY"), for value received, hereby promises to pay, solely out of the revenues hereinafter specified, to the bearer, the principal sum of: DOLLARS in lawful money of the United States of America, on the first day of , except as the provisions hereinafter set forth with respect to redemption prior to maturity may become applicable hereto, and to pay interest thereon from the date hereof at the rate of 4% less than the then current prime rate charged by The First National Bank and Trust Company of Salina, computed on a monthly basis on the seventeenth day of each month for the next succeeding month and payable on September 17, 1982 and on each March 17, and September 17 in each year, until the said principal and all accrued interest shall have been thereon paid. The principal of and premium, if any, on this Bond and the interest hereon are payable in lawful money of the United States of America, at the principal office of The First National Bank and Trust Company of Salina, in the City of Salina, Kansas (the "PAYING AGENT"). 10 Clerk. In the event either said Mayor or City Clerk, or both of said officers, shall cease to hold such office before the BONDS and coupons bearing their signatures shall have been issued and delivered, the BONDS may be issued as though said officers had not ceased to hold office, and such signatures appearing on the BONDS and coupons shall be valid and sufficient for all purposes as if they had remained in office until such issuance. Section 8. Form of Bond. The BONDS shall be in substantially the following form: 9 In the event the interest on the Bonds of the series, of which this Bond is one, is includable in the gross income of the recipients thereof for Federal income tax purposes by reason of the failure of said Bonds to qualify for the exemption provided in Section 103(b)(6)(D) of the Internal Revenue Code of 1954, as amended, all of said Bonds then outstanding shall mature and be due and payable at the principal amount thereof, plus accrued interest to the maturity date, together with a premium which shall be, on each Bond, equal to the stated interest rate on such Bond multiplied times the principal amount of such Bond for each full year, or fraction of a year, which elapses from the date on which the interest becomes includable in the gross income of the recipients and the date of maturity established by the CITY (which date of maturity shall not be earlier than forty-five (45) days or later than one hundred twenty (120) days after the Internal Revenue Service, HARBIN (hereinafter identified), or the Fiscal Agent designated in the ORDINANCE authorizing this Bond shall give written notice to the CITY and the holders of the Bonds of the inclusion of the interest on the Bonds in the gross income of the recipients thereof). This Bond is one of an authorized series of Bonds aggregating the principal amount of $361,000.00 (the "BONDS") authorized by an Ordinance (the "ORDINANCE") of the CITY for the purpose of providing funds to pay the cost of acquiring real property, and constructing, purchasing and 11 installing buildings and improvements and furnishings and equipment (the "FACILITY", the FACILITY being further identified in the ORDINANCE) to be leased to GARY L. HARBIN, ("HARBIN"), pursuant to a Lease dated as of March 17, 1982, (the "LEASE") by and between the CITY and HARBIN, by the authority of and in conformity with the provisions, restrictions and limitations of the constitution and statutes of the State of Kansas, including K.S.A. 12-1740 to 12-1749a, and all amendments thereof and acts supplemental thereto, and all other provisions of the laws of said State applicable thereto, and this Bond and all interest hereon are to be paid by the CITY solely and only from the money and revenue received from the fees charged and rental received for the use of the FACILITY under the LEASE and not from any other fund or source (except to the extent paid out of Bond proceeds or the income from the temporary investment thereof and, under certain circumstances, condemnation awards and the proceeds of insurance). Pursuant to the provisions of said statutes, the governing body of the CITY has pledged the FACILITY and the net earnings therefrom to the payment of the BONDS and the interest thereon. The payment of the principal of and interest and redemption premium, if any, on this Bond has been guaranteed by HARBIN pursuant to the terms of a Guaranty Agreement (the "GUARANTY") dated March 17, 1982, by and between HARBIN and the Fiscal Agent designated in the ORDINANCE. 12 This Bond does not constitute a debt of the CITY within the meaning of any constitutional or statutory limitation. Reference is hereby made to the ORDINANCE, to the LEASE, and to the GUARANTY for a description of the FACILITY and the covenants of the CITY and HARBIN with respect to the payment, collection, segregation and application of the money and revenue received from the fees charged and rental received for the use of the FACILITY, the rights, duties and obligations of the CITY, HARBIN and the Fiscal Agent with respect thereto and otherwise, and the rights of the holders of this Bond. Each of the BONDS is subject to redemption and payment prior to maturity at the option of the CITY, upon instructions from HARBIN, on any interest payment date upon any of the following conditions or events, provided all of the BONDS are redeemed and paid according to their terms. (1) if title to, or the use for a limited period of, substantially all of the FACILITY be condemned by any authority having the power of eminent domain; (2) if substantially all of the FACILITY is damaged or destroyed by fire or other casualty; or (3) if, as a result of changes in the Constitution of the State of Kansas, or of legislative or administrative action by the State of Kansas, or any political subdivision thereof, or by the United States, or by reason of any action instituted in any Court, the LEASE shall become void or unenforceable, or impossible of performance without unreasonable delay, or in any other way 13 r by reason of such change of circumstances, unreasonable burdens or excessive liabilities are imposed on HARBIN or the CITY. The BONDS redeemed, as provided in this paragraph, shall be redeemed at the principal amount thereof, plus accrued interest thereon to, and including the date fixed for redemption and payment, without premium. Each of the BONDS maturing on September 17, 1982 and thereafter is also subject to redemption and payment prior to maturity at the option of the CITY, upon instructions from HARBIN, on September 17, and on any interest payment date thereafter, at the principal amount thereof, plus accrued interest thereon to and including the date of redemption; without premium. BONDS to be redeemed and paid pursuant to the provisions described in this paragraph shall be selected by the Fiscal Agent designated in the ORDINANCE in such equitable manner as it may determine. Notice of the CITY'S intention to redeem and pay said BONDS pursuant to any of the redemption provisions aforesaid, specifying the numbers of the BONDS to be redeemed and paid, shall be given by United States registered mail to the PAYING AGENT not less than thirty (30) days prior to the date fixed for redemption and payment. Notice of any such redemption shall also be published at least once not less than thirty (30) days prior to the date fixed for redemption in the official newspaper of the State of Kansas and the Kansas Register. If, because of the temporary or permanent suspension of the publication 14 or general circulation of any financial journal or for any other reason, it is impossible or impracticable to publish such notice of call for redemption in the manner herein provided, then such publication, in lieu thereof as shall be made with the approval of the PAYING AGENT, shall constitute a sufficient publication of notice. This Bond and appurtenant coupons are transferable by delivery. AND IT IS HEREBY DECLARED AND CERTIFIED that all acts, conditions and things required to be done and to exist precedent to and in the issuance of this Bond have been properly done and performed and do exist in due and regular form and manner as required by the Constitution and laws of the State of Kansas. IN WITNESS WHEREOF, the City of Salina, Kansas, by its governing body, has caused this Bond to be signed by the facsimile signature of its Mayor and attested by the manual signature of its City Clerk, and its corporate seal to be affixed hereto or imprinted hereon, and the interest coupons hereto attached to be signed with the facsimile signatures 15 of said officers, and this Bond to be dated this day of ATTEST: City Clerk 16 Mayor Section 9. Preparation, Authentication and Delivery of the Bonds. The Mayor and City Clerk are hereby authorized and directed to prepare and execute the Medical Clinic Revenue Bonds, Series 1982-A, dated March 17, 1982, herein authorized, and to deliver the BONDS to The First National Bank and Trust Company of Salina, Salina, Kansas, on payment of the purchase price. Section 10. Designation of Fiscal Agent. The First National Bank and Trust Company of Salina, Salina, Kansas, is hereby designated as the CITY'S Fiscal Agent under the provisions of this ORDINANCE and of the LEASE, and the proceeds of the BONDS shall be deposited with the Fiscal Agent. Section 11. Construction Fund. There is hereby authorized and ordered to be established in the hands of the Fiscal Agent a separate fund or account designated as "City of Salina, Kansas - Gary L. Harbin, Construction Fund", hereinafter referred to as the "CONSTRUCTION FUND". The Fiscal Agent shall, first, promptly pay from the proceeds of the sale of the BONDS into the Principal and Interest Account hereinafter created the accrued interest and premium, if any, received upon such sale, together with an additional amount of $ , representing a portion of the interest to become due during the estimated period of construction of the FACILITY. The Fiscal Agent shall also promptly pay from the proceeds of the sale of the BONDS into the Debt Service Reserve Account hereinafter created the sum 17 of $ The balance of the proceeds of the sale of the BONDS shall be deposited in the CONSTRUCTION FUND. The CONSTRUCTION FUND shall be used for the purpose of providing funds to pay the cost of acquiring the LAND and constructing, purchasing and installing the FACILITY to be leased to HARBIN as provided in the LEASE. Any monies not required for said purpose shall, when the FACILITY is complete as provided in the LEASE, be deposited by the Fiscal Agent to the Principal and Interest Account. Section 12. Principal and Interest Account. There is hereby authorized and ordered to be established in the hands of the Fiscal Agent a separate account to be known as the "City of Salina, Kansas, Principal and Interest Account for Medical Clinic Revenue Bonds, Series 1982-A, dated March 17, 1982", herein referred to as the "PRINCIPAL AND INTEREST ACCOUNT". The CITY covenants and agrees that from and after the delivery of any of the BONDS, the CITY will maintain said account with the Fiscal Agent. All payments of Basic Rent and Additional Rent (except to the extent provided under Section 13 hereof) due under the LEASE, and all other monies intended to pay the principal of and interest on the BONDS and the charges of the Fiscal Agent and the PAYING AGENT, shall be applied and allocated by the Fiscal Agent to the PRINCIPAL AND INTEREST ACCOUNT. Except as hereinafter provided, all amounts credited to and deposited in the PRINCIPAL AND INTEREST ACCOUNT shall be used by the Fiscal Agent and forwarded to the PAYING AGENT for the sole purpose WE of paying the principal of and interest on the BONDS as and when the same become due, or are called for redemption and payment, and for paying the charges of the Fiscal Agent and PAYING AGENT for acting hereunder. The Fiscal Agent shall make appropriate arrangements with and shall transmit funds to the PAYING AGENT to pay such principal and interest as the same become due and the charges of the Fiscal Agent and PAYING AGENT herein referred to. Any balance remaining in the PRINCIPAL AND INTEREST ACCOUNT shall, when the BONDS have been paid, or payment provided for in accordance with Section 23 of this ORDINANCE, be paid to HARBIN. Section 13. Debt Service Reserve Account. There is hereby authorized and ordered to be established in the hands of the Fiscal Agent a separate account to be known as the "City of Salina, Kansas, Debt Service Reserve Account for Medical Clinic Revenue Bonds, Series 1982-A, dated March 17, 1982", hereinafter referred to as the "DEBT SERVICE RESERVE ACCOUNT". The CITY covenants and agrees that from and after the delivery of any of the BONDS it will maintain said account with the Fiscal Agent. All payments of Additional Rent due under the LEASE for deposit into the DEBT SERVICE RESERVE ACCOUNT shall be applied and allocated by the Fiscal Agent to the DEBT SERVICE RESERVE ACCOUNT. Monies in the DEBT SERVICE RESERVE ACCOUNT shall be used solely and exclusively by the Fiscal Agent and forwarded to the PAYING AGENT to prevent any default in the payment of the principal of, or interest on the BONDS, and any redemption premium, if 19 monies in the PRINCIPAL AND INTEREST ACCOUNT are insufficient to pay the same as they become due or are payable, provided that when the monies in the PRINCIPAL AND INTEREST ACCOUNT and the DEBT SERVICE RESERVE ACCOUNT are sufficient to pay at the times required, the principal of and redemption premium, if any, and interest on all the BONDS outstanding, the monies in the DEBT SERVICE RESERVE ACCOUNT shall be transferred to the PRINCIPAL AND INTEREST ACCOUNT. Section 14. Investments. Monies in the CONSTRUCTION FUND shall, upon instructions from HARBIN, be invested by the Fiscal Agent in (i) direct obligations of the United States of America, or agencies thereof, or in (ii) certificates of deposit secured by such obligations, becoming due within twelve (12) months from the date of purchase. Monies allocated and credited to and deposited in the PRINCIPAL AND INTEREST ACCOUNT in any amount in excess of the amount necessary to pay principal and interest next becoming due and monies on deposit in the DEBT SERVICE RESERVE ACCOUNT shall be invested by the Fiscal Agent, upon instructions from HARBIN, in (i) direct obligations of the United States of America, or agencies thereof, or in (ii) certificates of deposit secured by such obligations becoming due not later than March 17, 1982. No investment shall be made pursuant to this Section for a period longer than the time the Fiscal Agent shall determine that said funds are not required for the purpose of which they are intended. 20 T All interest, or income, on investments held in the CONSTRUCTION FUND shall accrue to and become a part of the PRINCIPAL AND INTEREST ACCOUNT. Until March 17, 1982, all interest or income on investments held in the DEBT SERVICE RESERVE ACCOUNT shall accrue to and become a part of the PRINCIPAL AND INTEREST ACCOUNT. Beginning on March 17, 1982, all interest or income on investments held in the DEBT SERVICE RESERVE ACCOUNT shall accrue to and become a part of the DEBT SERVICE RESERVE ACCOUNT, provided that so long as a sum equal to the maximum annual principal and interest requirement for the BONDS is on deposit in the DEBT SERVICE RESERVE ACCOUNT, all income, or interest, on investments in such account shall be deposited in the PRINCIPAL AND INTEREST ACCOUNT. All interest, or income, on investments held in the PRINCIPAL AND INTEREST ACCOUNT shall accrue to and become a part of said account so invested. Any losses suffered on investments held in any fund or account shall be charged to such fund or account. Whenever the Fiscal Agent determines that the cash balance in any fund or account is insufficient for the purposes of such fund or account, it shall sell and reduce to cash securities held in such fund or account until the cash balance is sufficient for such purposes. Any investments made by the Fiscal Agent pursuant to this ORDINANCE may be made through its own bond department, and any certificates of deposit may be those of the Fiscal Agent. 21 Section 15. Covenant to Pay Principal and Interest on the Bonds. The CITY covenants that it will promptly pay, or cause to be paid, the principal of and interest and redemption premium, if any, on the BONDS issued under this ORDINANCE on the dates and in the manner provided herein and in the BONDS, according to the true intent and meaning thereof. The principal and interest and redemption premium, if any, are payable solely from the revenues received from the fees charged and rental received for the use of the FACILITY (except to the extent paid out of monies attributable to Bond proceeds or the income from the temporary investment thereof and, under certain circumstances, condemnation awards and proceeds of insurance), and the FACILITY and the net earnings therefrom are pledged to the payment of the BONDS and the interest thereon as provided in Section 2 hereof. The CITY further covenants that it will make, or cause to be made, all other payments and deposits required under the provisions of this ORDINANCE from funds made available for such purpose under the LEASE. Section 16. Particular Covenants of the City. So long as any of the principal of and interest on any of the BONDS remains outstanding and unpaid, or until provisions are made for the payment thereof, in accordance with Section 23 of this ORDINANCE, the CITY covenants with each of the holders and owners of the BONDS as follows: 22 (a) The CITY will use the proceeds of the BONDS as soon as practicable and with all reasonable dispatch for the purpose for which the BONDS are issued as hereinbefore set forth. Said proceeds will not be invested in any securities or obligations except for the temporary period pending such use, and said proceeds will not be used directly or indirectly, so as to cause all or any part of the BONDS herein authorized to be or become "Arbitrage Bonds" within the meaning of Section 103(c) of the Internal Revenue Code of 1954. The CITY further covenants that the proceeds of the BONDS will not be used to acquire securities or obligations (other than obligations described in subsection (a)(1) of such Section) that will produce a yield higher than the yield of the BONDS herein authorized unless a statute, regulation of the Treasury Department of the United States, ruling by the Internal Revenue Service of the United States, or a decision by a Court of ultimate jurisdiction hold's that the acquisition of securities or obligations producing a yield higher than the BONDS will not cause the BONDS to be Arbitrage Bonds as defined in said Section 103(c). (b) The CITY will comply fully with all the terms, provisions and conditions of the LEASE which require performance by, or impose duties on, the CITY and it will not permit any default to occur on the part of the CITY; it will fully and promptly enforce all of the terms, provisions and conditions of the LEASE which require performance by, or impose duties on, HARBIN, and in the event of the occurrence of a default, as defined in the LEASE, will exercise all rights and remedies conferred by the LEASE for the full and complete protection of the security and rights of the bondholders and, to the extent permitted by the LEASE, will use its best efforts to procure a new tenant or tenants for the leased property under provisions which will provide funds sufficient in amount to make the rental payments and other payments which HARBIN is required to make under the LEASE. If the CITY is unable to procure a new tenant who will enter into such a lease, the CITY may sell the FACILITY at a price not less than the amount sufficient to pay the then outstanding BONDS plus interest then unpaid. If the CITY is unable to procure a new tenant who will enter into such a lease, the CITY may take such action as shall be in the best interest of the bondholders, which may include the sale of the FACILITY, and any monies derived from such sale shall be used for the purpose of paying the BONDS, the interest thereon and any redemption premium. 23 (c) The CITY will enforce collection of the rental payments and other charges in the amounts and at the time set forth in the LEASE and will not reduce, or cause or permit to be reduced, the rental payments and other charges fixed, established and required by the LEASE, nor change or alter the time or times when the same are due and payable under the LEASE. The CITY'S obligation to pay the expenses of such enforcement shall be limited to funds made available to it for that purpose by the holders of the BONDS or other interested parties. (d) Until payment of all the BONDS and interest thereon has been duly made or provided for, the CITY will not consent to any change, amendment, modification or termination of the LEASE, except as provided therein, which will in any manner affect adversely the rights, remedies or interest of the bondholders, nor will it consent to any merger, consolidation, dissolution or liquidation by HARBIN, except to the extent provided in the LEASE. (e) Any purchase price of the FACILITY, any condemnation awards, or any insurance proceeds, any of which are received by the CITY pursuant to the terms of the LEASE, or any other funds intended for the purpose of paying the BONDS will be used solely and exclusively to pay the BONDS and the interest thereon according to their terms or to redeem and pay any of the BONDS then outstanding and unpaid then subject to redemption and payment. Upon receipt of any such funds, and as soon as the BONDS are subject to redemption and payment, the CITY shall proceed promptly to call the BONDS for redemption and payment according to their terms, and shall give notice, or cause notice to be given thereof, as provided for by the terms of this ORDINANCE. Such funds shall be deposited with the Fiscal Agent, and the same shall be used solely for the payment of the BONDS and the accrued interest thereon, and the charges of the Fiscal Agent and the PAYING AGENT for paying the same. (f) The CITY will cause HARBIN to keep constantly insured all buildings and improvements and furnishings and equipment from time to time constituting a part of the property leased to HARBIN in the manner provided for by the LEASE. The CITY'S share of the proceeds of any such insurance policies shall be payable to and deposited with the Fiscal Agent as Insurance Trustee. Any of the proceeds of such policies shall be used and applied in the manner set forth in the LEASE. 24 (g) The CITY will cause the Fiscal Agent to maintain adequate records and accounts relating to the FACILITY, separate and apart from all other records or accounts of the CITY or the Fiscal Agent, which records and accounts shall be maintained in accordance with generally accepted principles of trust accounting and shall include complete details of all financial transactions related to the BONDS authorized herein and the leased property. Such records and accounts shall be specifically designed and maintained to show whether or not the provisions of this ORDINANCE and the LEASE referred to herein are being complied with. Such books and records shall be available for inspection by the agents of HARBIN, or any of the holders of the BONDS, during the regular business hours of the Fiscal Agent. Section 17. Additional Bonds. The CITY covenants with each of the holders and owners of the BONDS that it will not issue any other obligations payable from payments by HARBIN pursuant to the LEASE, nor voluntarily create, or cause to be created, any debt, lien, pledge, assignment, encumbrance, or any other charge on said payments or on the property subject to the LEASE, nor will it, unless required by law or by the terms of the LEASE, sell or otherwise dispose of the FACILITY or any part thereof; provided, however, that the CITY may issue from time to time additional industrial revenue bonds for the purpose of extending and improving the Project, which extensions and improvements may be located in whole or in part on the LAND, or for the purpose of completing the acquisition, construction, purchase and installation of the FACILITY, or adding additions thereto, provided that the following terms and conditions are met: (a) The CITY shall have entered into an amendment to the LEASE or a new lease or agreement with HARBIN providing for rentals or payments which, together with any rentals under the LEASE, will be at least 25 sufficient to pay the principal of and interest on the BONDS and said additional bonds as the same become due. (b) HARBIN is not in default in the payment of rent due under the LEASE. (c) The issuance of said additional bonds shall not affect the exemption from Federal income taxation of the interest on the BONDS herein authorized. In the event of the issuance of any such additional bonds, the CITY may pledge the FACILITY and the net earnings therefrom to the payment of such additional bonds and the interest thereon, provided the CITY also pledges the additional construction, furnishings and equipment and the net earnings therefrom purchased out of the proceeds of such additional bonds to the payment of the BONDS herein authorized and the interest thereon. Section 18. Amendments. The provisions of the BONDS and the provisions of this ORDINANCE may be modified or amended at any time by the CITY with the written consent of HARBIN (if it is not in default under the LEASE) and 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 outstanding, provided that no such modification or amendment shall permit, or be construed as permitting: (a) the modification of any duties or responsibilities of the Fiscal Agent unless it consents thereto; (b) the extension of the maturity of the principal of any of the BONDS, or the extension of the maturity of the interest on any BONDS; (c) a reduction in the principal amount of any of the BONDS, or the rate of interest thereon; or (d) a reduction in the KID aggregate principal amount of BONDS, the consent of the holders of which is required for any such amendment or modification. Any provision of the BONDS or of this ORDINANCE (other than those referred to in (a) above) may, however, be modified or amended in any respect with the written consent of HARBIN (if it is not then in default under the LEASE) and the holders of all of the BONDS then outstanding. Amendments to this ORDINANCE which, in the opinion of the CITY, correct omissions or ambiguities, or which add to the security of the bondholders, may be made by the CITY when agreed to by HARBIN. Every amendment or modification of a provision of the BONDS, or of this ORDINANCE, to which the written consent of the bondholders is required as above provided shall be expressed in an ordinance of the CITY amending or supplementing the provisions of this ORDINANCE and shall be deemed to be a part of this ORDINANCE. It shall not be necessary to note on any of the outstanding BONDS any reference to such amendment or modification, if any. Upon payment of the reasonable cost of preparing the same, a certified copy of every such amendatory or supplemental ordinance, if any, and a certified copy of this ORDINANCE will be sent by the City Clerk to any bondholder, or prospective bondholder, requesting the same. The LEASE may be amended by the CITY and HARBIN, except as to rent, or certain other matters, which may be made only 27 with the consent of a specified percentage of the holders of the then outstanding BONDS, as provided therein. Section 19. Enforcement. The provisions of this ORDINANCE shall constitute a contract between the CITY and the holders of the BONDS, and the holder of any one or more of the BONDS may sue to recover interest or principal which has not been paid according to the terms of said Bond. The holders of twenty-five percent (250) of the principal amount of BONDS then outstanding may sue in any action, in mandamus, injunction, or other proceedings, either at law or in equity, to enforce or compel performance of all duties and obligations required by this ORDINANCE to be done or performed by the CITY or HARBIN. Nothing contained in this ORDINANCE shall, however, be construed to impose on the CITY any duty or obligation to levy any taxes either to meet any obligation contained herein, or to pay the principal of or interest on the BONDS. Section 20. Default, Events of Default. If any of the following events occur, it is hereby defined as, and declared to be and to constitute, an "event of default" within the meaning of this ORDINANCE: (a) Default in the due and punctual payment of any interest on any Bond; (b) Default in the due and punctual payment of the principal of or redemption premium, if any, on any Bond, whether at the stated maturity thereof, or upon any redemption, or upon the maturity thereof by declaration as provided in Section 22 hereof; or (c) Default in the performance or observance of any other of the covenants, agreements or conditions on the W part of the CITY in this ORDINANCE or in the BONDS contained, or default on the part of HARBIN under the LEASE in failing to pay, or causing to be paid, the rentals or other payments provided in the LEASE, or its failure to maintain continuance thereof for a period of thirty (30) days after written notice given to the CITY by the Fiscal Agent, or by the holders, of not less than twenty-five percent (25%) of the aggregate principal amount of BONDS then outstanding. Section 21. Acceleration of Maturity in Event of Default. Upon the happening of an event of default, as defined in Section 20 hereof, the holders of twenty-five percent (250) or more of the aggregate principal amount of BONDS then outstanding may, by written notice given to the Fiscal Agent to the Mayor or City Clerk of the CITY and to HARBIN, declare the principal of and interest on all of the BONDS then outstanding to be due and payable immediately, and upon such declaration given as aforesaid, said principal and interest shall be immediately due and payable, anything in the BONDS or this ORDINANCE contained to the contrary, notwithstanding. This provision, however, is subject to the condition that if, at any time thereafter, all arrears of interest, except interest accrued, but not yet due, and all arrears of principal shall have been paid in full, or such default otherwise cured, then in every such case the holders and owners of a majority in principal amount of the BONDS then outstanding, by written notice to the Fiscal Agent, to the Mayor or City Clerk and to HARBIN, may rescind and annul such declaration and its consequences, but no such rescission or annulment shall extend to or affect any subsequent default or impair any rights consequent thereon. Section 22. Application of Monies. Anything in this ORDINANCE to the contrary, notwithstanding, if, at any time, the monies in the PRINCIPAL AND INTEREST ACCOUNT shall not be sufficient to pay the principal of, or premium, if any, and interest on the BONDS as they become due and payable, all monies received by the Fiscal Agent shall, after payment of the cost and expenses of the proceedings resulting in the collection of such monies and of the expenses, liabilities and advances incurred or made by the Fiscal Agent, be applied by the Fiscal Agent as follows: (a) Unless the principal of all the BONDS shall have become or shall have been declared due and payable, all such monies shall be applied: FIRST - To the payment to the persons entitled thereto of all installments of interest then due on the BONDS, in the order of the maturity of the installments of such interest and, if the amount available shall not be sufficient to pay in full any particular installment, then to the payment ratably, according to the amounts due on such installment, to the persons entitled thereto, without any discrimination or privilege; and SECOND - To the payment to the persons entitled thereto of the unpaid principal of and premium, if any, on any of the BONDS which shall have become due (other than BONDS called for redemption for the payment of which monies are held pursuant to the provisions of this ORDINANCE), in the order of their due dates, with interest on such BONDS from the respective dates upon which they become due and, if the amount available shall not be sufficient to pay in full the principal of, or premium, if any, and such interest on the BONDS due on any particular date, then to the payment ratably, according to the amount of the principal, interest and premium, if any, due on such date, to the persons entitled thereto without any discrimination or privilege. (b) If the principal of all the BONDS shall have become due or shall have been declared due and payable, all such monies shall be applied to the payment of the principal, or premium, if any, and interest then due 30 and unpaid upon the BONDS, without preference or priority, ratably, according to the amounts due respectively for principal, or premium, if any, and interest, to the persons entitled thereto without any discrimination or privilege. (c) If the principal of all the BONDS shall have been declared due and payable, and if such declaration shall thereafter have been rescinded and annulled under the provisions of Section 22 hereof then, subject to the provisions of paragraph (b) of this Section 23 in the event that the principal of all the BONDS shall later become due, or be declared due and payable, the monies shall be applied in accordance with the provisions of paragraph (a) of this Section. Whenever monies are to be applied pursuant to the provisions of this Section, such monies shall be applied at such times, and from time to time, as the Fiscal Agent shall determine, having due regard to the amount of such monies available for such application in the future. Whenever the Fiscal Agent shall apply such funds, it shall fix the date (which shall be an interest payment date unless it shall deem another date more suitable) upon which such application is to be made, and upon such date interest on the amounts of principal to be paid on such date shall cease to accrue. The Fiscal Agent shall give such notice as it may deem appropriate of the deposit with it of any such monies and of the fixing of any such date, and shall not be required to make payment to the bearer of any unpaid coupon, or the owner or holder of any Bond, until such coupon or such Bond and all unmatured coupons, if any, appertaining to such Bond shall be presented to the Fiscal Agent for appropriate endorsement or for cancellation if fully paid. 31 Section 23. Defeasance. When all of the BONDS and all coupons representing interest thereon shall have been paid and discharged, then the agreements, obligations, covenants and requirements contained in this ORDINANCE (other than those set forth in this Section), and the pledge of the rents and revenues derived from the FACILITY made hereunder, and all other rights granted hereby, shall cease and terminate. The BONDS and coupons shall be deemed to have been paid and discharged within the meaning of this ORDINANCE and within the meaning of the LEASE when there shall have been deposited with the Fiscal Agent at or prior to the maturity or redemption date of the BONDS and coupons, in trust for and irrevocably appropriated thereto, monies and/or direct obligations of, or obligations the principal of and interest on which are guaranteed by, the United States of America, which monies and obligations, together with the interest to be earned on such obligations, will be at least sufficient for the payment of the principal of and premium, if any, on the BONDS and interest to accrue thereon 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, and provision shall also have been made for all other sums payable under the provisions of this ORDINANCE; provided, always, that if any of the BONDS are to be redeemed prior to the maturity thereof, the CITY (and HARBIN, if required hereunder) shall have elected to redeem such BONDS, and such 32 BONDS shall have been called for redemption or irrevocable instructions to call such BONDS for redemption shall have been given. Any monies and obligations which at any time shall be deposited by, or on behalf of, the CITY for the purpose of paying and discharging any of the BONDS or coupons shall be, and are hereby assigned, transferred and set over to the Fiscal Agent in trust for the respective holders of the BONDS and coupons, and such monies and obligations shall be and are hereby irrevocably appropriated to the payment and discharge thereof. If, through lapse of time or otherwise, the holders of the BONDS or coupons shall no longer be entitled to enforce payment of their obligations, then in such event, it shall be the duty of the holder of such monies and obligations forthwith to pay such monies and obligations to HARBIN, as provided in Section 6 above. Section 24. List of Bondholders. To the extent that such information shall be made known to the Fiscal Agent under the terms of this Section, the Fiscal Agent will keep on file at its principal office a list of names and addresses of the last known holders of all BONDS, provided that any bondholder must request that his name and address be placed on said list by filing a written request with the Fiscal Agent, which request shall include a statement of the principal amount of BONDS held by such holder and the numbers of such BONDS. The Fiscal Agent shall be under no responsibility with regard to the accuracy of said list. At 33 r reasonable times and under reasonable regulations established by the Fiscal Agent, said list may be inspected and copied by HARBIN, or by the holders and/or owners (or a designated representative thereof) of twenty-five percent (25%) or more in principal amount of BONDS then outstanding, such ownership and the authority of any such designated representative to be evidenced to the satisfaction of the Fiscal Agent. Section 25. Consents, Etc., of Bondholders. Any consent, request, direction, approval, objection or other instrument required by this ORDINANCE or the LEASE herein authorized to be signed and executed by the bondholders may be in any number of concurrent writings of similar tenor and may be signed or executed by such bondholders in person or by agent appointed in writing. Proof of the execution of any such consent, request, direction, approval, objection or other instrument or of the writing appointing any such agent and of the ownership of BONDS, if made in the following manner, shall be sufficient for any of the purposes of this ORDINANCE, and shall be conclusive in favor of the CITY, the Fiscal Agent, the PAYING AGENT and HARBIN with regard to any action taken under such request or other instrument, namely: (a) The fact and date of the execution by any person of any such writing may be proved by the certificate of any officer in any jurisdiction who by law has power to take acknowledgments within such jurisdiction that the person signing such writing acknowledged before him the execution thereof, or by affidavit of any witness to such execution. 34 (b) The fact of the holding by any person of BONDS and/or coupons transferable by delivery and the amounts and numbers of such BONDS, and the date of the holding of such may be proved by a certificate executed by any trust company, bank or bankers, wherever situated, stating that at the date thereof, the party named therein did exhibit to an officer of such trust company or bank or to such bankers, as the property of such party, the BONDS and/or coupons therein mentioned, if such certificate shall be deemed by the person to whom such consent is addressed to be satisfactory. Such person may, in his discretion, require evidence that such BONDS have been deposited with a bank, bankers or trust company before taking any action based on such ownership. In lieu of the foregoing, such person may accept other proofs of the foregoing as he shall deem appropriate. For all purposes of this ORDINANCE and of the proceedings for the enforcement hereof, such person shall be deemed to continue to be the holder of such Bond until the PAYING AGENT shall have received notice in writing to the contrary. Section 26. Provisions Relating to the Fiscal Agent. (a) Prior to the receipt of the Bond proceeds pursuant to the provisions of Section 10 hereof, the Fiscal Agent shall file with the City Clerk its written acceptance of the duties specified in this ORDINANCE and in the LEASE and its agreement to act in said capacity, and further accept and acknowledge the assignment by the CITY to FISCAL AGENT of the CITY'S interest in the LEASE. (b) The Fiscal Agent's duties and responsibilities shall be limited to those expressly set forth in this ORDINANCE, the LEASE and the GUARANTY. (c) All resolutions, opinions, certificates and other instruments referred to or provided for herein or in the LEASE may be accepted by the Fiscal Agent as conclusive evidence of the facts, opinions and conclusions stated therein and shall be full warrant, protection and authority to the Fiscal Agent for any action reasonably taken pursuant thereto. The Fiscal Agent shall be under a duty to examine any such resolutions, opinions, certificates and other instruments to determine whether or not they conform to the requirements of this ORDINANCE and the LEASE. 35 r (d) No provision contained in this Section shall be construed to relieve the Fiscal Agent from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that this subsection shall not be construed to limit the effect of subsections (b) , (c) and (d) of this Section, and the Fiscal Agent shall not be liable for any error of judgment made in good faith unless it shall be proved that the Fiscal Agent was negligent in ascertaining the pertinent facts. (e) The Fiscal Agent shall have the right to buy, sell, own, deal or trade in the BONDS or the coupons relating thereto without giving notice thereof to the CITY or HARBIN or any bondholder and without incurring any liability whatsoever with respect thereto. (f) The Fiscal Agent may be removed at any time by the CITY with the consent of HARBIN and may resign by an instrument in writing delivered to the CITY and HARBIN to take effect not sooner than ninety (90) days after its delivery, and upon such removal or resignation the CITY, with the consent of HARBIN, shall immediately, in writing, designate a successor fiscal agent. Such successor fiscal agent shall be a bank, trust company or national banking association which is a member of the Federal Reserve System and which has a capital stock and surplus aggregating at least $10,000.00. Such successor fiscal agent shall be subject to the same duties and obligations and shall have the same rights, privileges and immunities specified in this ORDINANCE and in the LEASE for the Fiscal Agent. Any such successor fiscal agent shall file an acceptance in the form referred to in subsection (a) hereof with the City Clerk within ten (10) days of its appointment. (g) The Fiscal Agent shall be entitled to payment or reimbursement for reasonable fees for its ordinary services and all advances, counsel fees and other ordinary expenses reasonably and necessarily made or incurred by it in connection with its ordinary services, all such fees and expenses to be paid by HARBIN as Additional Rent as specified in Article II of the LEASE. (h) The Fiscal Agent shall have the right to continue, or to enter into, banking relationships with HARBIN, with the CITY, and with any corporation, all or any part of the stock of which is owned by HARBIN or the CITY, including without limitation, the acceptance of deposits of funds from, or the making of, secured or unsecured loans to HARBIN or the CITY and any such corporation, without giving either notice thereof or W notice of any information concerning HARBIN or the CITY or any such corporation which comes to the attention of the Fiscal Agent as a result thereof, to the CITY or to any bondholder, and the Fiscal Agent shall not incur any liability whatsoever to the CITY or to any bondholder as a result thereof, or as a result of the collection or other enforcement by the Fiscal Agent of its rights with respect to any such transaction. (i) The Fiscal Agent is hereby authorized and directed to bill and collect from HARBIN any and all payments made by HARBIN in lieu of taxes, due upon the FACILITY whether under the LEASE or under any other agreement and to promptly deliver said payments to the CITY. (j) The Fiscal Agent's duties and responsibilities shall include those expressly set forth in this ORDINANCE and in the LEASE and shall further include those rights, duties, responsibilities and obligations which are reserved to or imposed upon the CITY under this ORDINANCE and the LEASE, excepting only such of those rights, duties, responsibilities and obligations as may only be properly and lawfully exercised by or imposed upon the CITY. In the case of a default in the payment of principal or interest on any of the BONDS, or in the case of a default under the LEASE, the FISCAL AGENT shall be and is hereby authorized to bring appropriate action for judgment or such other relief as may be appropriate and such action may be brought solely in the name of the FISCAL AGENT or in the name of the CITY and FISCAL AGENT jointly; but in such case the CITY shall have no obligation for any fees and expenses of such action except out of any funds which might come into the hands of the CITY by reason of its ownership of the FACILITY and this ORDINANCE and the LEASE. In addition, the FISCAL AGENT may file such proofs of claim and such other documents as may be necessary and advisable in order to have the claims of the FISCAL AGENT and the bondholders relative to the BONDS or the obligations relating thereto allowed in any judicial proceeding. In the event of a default in the payment of either principal or interest on any of the BONDS, the FISCAL AGENT shall take reasonable steps to ascertain the names of the holders of the BONDS outstanding or their representatives, and notification of those persons presenting interest coupons and BONDS not honored for payment; and upon ascertainment of any holders by such methods, the FISCAL AGENT shall give such holders, by mail, copies of all previous and future notices sent to the holders of the BONDS pursuant to the foregoing provisions. 37 Section 27. Payments Due on Saturdays, Sundays and Holidays. In any case where the date of maturity of interest on or principal of the BONDS or the date fixed for redemption of any BONDS shall be a Saturday, a Sunday or a legal holiday, or a day on which banking institutions are authorized by law to close, then payment of interest or principal need not be made on such date, but may be made on the next succeeding business day not a Saturday, a Sunday or a legal holiday, or a day upon which banking institutions are authorized by law to close, with the same force and effect as if made on the date of maturity or the date fixed for redemption, and no interest shall accrue on the amount being paid for the period after such date. Section 28. Authorization of Lease. The FACILITY shall be leased to HARBIN under and pursuant to a LEASE dated as of March 17, 1982, substantially in the form attached to this ORDINANCE and marked Exhibit "A", which LEASE (with such corrections and changes therein as the officers executing the same deem appropriate) the Mayor and City Clerk are hereby authorized and directed to execute for and on behalf of and as the act and deed of the CITY. Section 29. Approval of Guaranty Agreement. The Guaranty Agreement dated as of March 17, 1982, pursuant to which HARBIN guarantees to the Fiscal Agent, for the benefit of the bondholders, the payment of the prinicipal of and interest and redemption premium, if any, on the BONDS, is hereby approved in the form attached to this ORDINANCE and go marked Exhibit "B", which Guaranty Agreement the Fiscal Agent is authorized to accept. The Fiscal Agent shall enforce the Guaranty Agreement for the benefit and protection of the owners and holders of the BONDS as long as the BONDS remain outstanding and unpaid, and prevent any default or prospective default in the payment of the BONDS, or the interest thereon, at the stated maturity thereof or the redemption, as the case may be, or in the observance of any covenant, agreement or undertaking contained in the Guaranty Agreement. The Fiscal Agent shall not permit or consent to any change, amendment, modification or termination of the Guaranty Agreement except to the extent provided therein. Section 30. Election Under Section 103(b)(6)(D) of the Internal Revenue Code. The CITY hereby elects that Section 103(b)(6)(D) of the Internal Revenue Code of 1954, as amended, shall apply to the BONDS, and the Mayor and City Clerk are hereby authorized and directed to file evidence of said election with any appropriate officer of the United States, including the Secretary of the Treasury, or his delegate, and to take such other action as may be necessary to make effective the election made herein. Section 31. Severability. If any one or more of the covenants, agreements or provisions of this ORDINANCE, or of the LEASE, should be held contrary to any express provision of law, or contrary to the policy of express law, though not expressly prohibited, or against public policy, or should 39 for any reason whatsoever be held invalid, then such covenants, agreements or provisions shall be null and void and shall be deemed separate from the remaining covenants, agreements or provisions, and shall in no way affect the validity of the other provisions of this ORDINANCE, or of the BONDS, or of the LEASE. Section 32. Agreements of the City. All covenants, stipulations and obligations of the CITY contained in this ORDINANCE and the LEASE shall be deemed to be the covenants, stipulations, obligations and agreements of the CITY to the full extent authorized or permitted by law, and all such covenants, stipulations, obligations and agreements shall be binding upon the CITY and its successors from time to time and upon any board, body or agency to which any powers or duties affecting such covenants, stipulations, obligations and agreements shall be transferred by or in accordance with law. Except as otherwise provided in this ORDINANCE, all rights, powers and privileges conferred, and duties and liabilities imposed upon the CITY, or any officials thereof, by the provisions of this ORDINANCE or the LEASE, shall be exercised or performed by the CITY or by such officers as may be required by law to exercise such powers and to perform such duties. No covenant, stipulation, obligation or agreement herein contained, or contained on the LEASE, shall be deemed to be a covenant, stipulation, obligation or agreement of any official, officer, agent or employee of the CITY in his individual capacity, and neither the officials 40 of the CITY, nor any officer executing the BONDS, shall be liable personally on the BONDS or by such for any personal liability or accountability by reason of the issuance thereof. Section 33. Conveyance of Facility. Upon receipt by the CITY of the purchase price of all or any part of the property subject to the LEASE, title to said property shall be transferred and conveyed to HARBIN as provided in the LEASE, and the Mayor and other appropriate officers of the CITY are hereby authorized and directed to execute such deeds, bills of sale and other instruments as may be necessary to effect such conveyance and transfer. Section 34. Performance of Acts. All acts, conditions and things required by the Constitution and laws of the State of Kansas relating to the enactment of this ORDINANCE to the issuance of the BONDS, to the execution of the LEASE, and to the approval of the Guaranty Agreement, to happen, exist and be performed precedent to and in the enactment of this ORDINANCE, precedent to the issuance of the BONDS, precedent to the execution of the LEASE, and precedent to the approval of the Guaranty Agreement have happened, exist and have been performed as required by law. Section 35. Further Authority. The officials of the CITY, and the attorneys, engineers and other agents or employees of the CITY are hereby authorized to do all acts and things required of them by this ORDINANCE and the LEASE for the full, punctual and complete performance of all of 41 the terms, covenants and agreements contained in the BONDS, the LEASE and this ORDINANCE. Section 36. Effective Date. This ORDINANCE shall take effect and be in force from and after its passage and publication in the official CITY paper. PASSED AND APPROVED by the governing body of the CITY of Salina, Kansas, this 15th day of March 1982 ATTEST: City Clerk 42 `Mayor �T