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8680 IRB KASA IndustrialaHd—ed in Jalt auro .JOLT-w4i Cn Lbeccmt-,er ZI , HI& ORDINANCE NO. 8680 WHEREAS, the City of Salina, Kansas, a city of the first class, hereinafter sometimes referred to as "City", desires to promote, stimulate and develop the general economic welfare and prosperity of the City of Salina, Kansas, and its environs and thereby to further promote, stimulate and develop the general economic welfare and prosperity of the State of Kansas. WHEREAS, pursuant to the provisions of K.S.A. 12-1740 to K.S.A. 12-1749a, as amended, the City is authorized to issue industrial 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 indus- trial revenue bonds of the City in the principal amount of $280,000.00 be authorized and issued, for the purpose of providing funds to purchase the real estate hereinafter - 1 - AN ORDINANCE AUTHORIZING THE CITY OF SALINA, KANSAS TO PURCHASE AND ACQUIRE THE REAL ESTATE HEREINAFTER DESCRIBED, TO RECONSTRUCT, REPAIR, ENLARGE, REMODEL AND IMPROVE THE BUILDING AND IMPROVEMENTS LOCATED ON A PORTION OF SAID REAL ESTATE, TO CONSTRUCT AN ADDITIONAL BUILDING AND IMPROVEMENTS ON A PORTION OF SAID REAL ESTATE AND TO PURCHASE CERTAIN MACHINERY AND EQUIPMENT, ALL TO BE USED FOR INDUSTRIAL AND MANUFACTURING FACILITIES AND TO BE LEASED TO KASA INDUSTRIAL CONTROLS, INC.; AUTHORIZING AND DIRECTING THE ISSUANCE OF $280,000.00 PRINCIPAL AMOUNT OF SALINA, KANSAS, KASA INDUSTRIAL CONTROLS, INC. INDUSTRIAL REVENUE BONDS OF 1978, OF SAID CITY FOR THE PURPOSE OF PROVIDING FUNDS FOR THE PURCHASE OF SAID REAL ESTATE, THE RECONSTRUCTION, REPAIR, ENLARGEMENT, REMODELING AND IMPROVEMENT OF THE BUILDING AND IMPROVEMENTS LOCATED ON A PORTION OF SAID REAL ESTATE, THE CONSTRUCTION OF AN ADDITIONAL BUILDING AND IMPROVEMENTS ON A PORTION OF SAID REAL ESTATE AND THE PURCHASE OF MACHINERY AND EQUIPMENT TO BE USED FOR INDUSTRIAL AND MANUFACTURING FACILITIES TO BE LEASED TO KASA INDUSTRIAL CONTROLS, INC.; AND PRESCRIBING THE FORM AND AUTHORIZING THE EXECUTION OF A LEASE BY AND BETWEEN SAID CITY AND KASA INDUSTRIAL CONTROLS, INC. WHEREAS, the City of Salina, Kansas, a city of the first class, hereinafter sometimes referred to as "City", desires to promote, stimulate and develop the general economic welfare and prosperity of the City of Salina, Kansas, and its environs and thereby to further promote, stimulate and develop the general economic welfare and prosperity of the State of Kansas. WHEREAS, pursuant to the provisions of K.S.A. 12-1740 to K.S.A. 12-1749a, as amended, the City is authorized to issue industrial 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 indus- trial revenue bonds of the City in the principal amount of $280,000.00 be authorized and issued, for the purpose of providing funds to purchase the real estate hereinafter - 1 - described, to reconstruct, repair, enlarge, remodel and improve the building and improvements located on a portion of said real estate, to construct an additional building and improvements on a portion of said real estate and to purchase certain machinery and equipment, all to be used as an industrial and manufacturing facility to be leased to KASA Industrial Controls, Inc., a Kansas corporation, hereinafter sometimes referred to as "Company", the proceeds of said bonds to be used for said purposes in conjunction with funds otherwise made available for said purposes. NOW, THEREFORE, BE IT ORDAINED BY THE GOVERNING BODY OF THE CITY OF SALINA, KANSAS: SECTION 1. That the City of Salina, Kansas, is hereby authorized to purchase the real estate described on Exhibit "A", attached hereto and by reference made a part hereof, to reconstruct, repair, enlarge, remodel and improve the building and improvements located on said real estate, to construct an additional building and improvements on a portion of said real estate and to purchase certain machinery and equipment as hereinafter set forth, herein- after sometimes referred to as the "project", to be used as an industrial and manufacturing facility in accordance with the provisions of a Lease dated as of October 1, 1978, between the City and KASA Industrial Controls, Inc., herein- after sometimes referred to as "Lease", said Lease being authorized by Section 16 of this Ordinance. The cost of the project shall not exceed the sum of $280,000.00 to the City. SECTION 2. That for the purpose of purchasing, acquiring, reconstructing and constructing the project to be leased to KASA Industrial Controls, Inc., there shall be - 2 - SECTION 3. The Salina, Kansas, KASA Industrial Controls, Inc. Industrial Revenue Bonds of 1978, of the City of Salina, Kansas, shall consist of 56 bonds, numbered from 1 to 56, inclusive. Each of the bonds shall be in the denomination of $5,000.00. All of the bonds shall be dated as of October 1, 1978, shall be numbered, shall bear interest at the rates and shall become due serially as follows: issued and hereby are authorized and directed to be issued a Aggregate series of Salina, Kansas, KASA Industrial Controls, Inc. Industrial Revenue Bonds of 1978, of the City of Salina, Bond Kansas, in the aggregate principal amount of $280,000.00, Interest hereinafter sometimes referred to as "bonds" or "revenue bonds". The bonds and interest thereon shall be paid solely Amount and only from the money and revenues received from the fees Maturity charged and rentals received for the use of the project and 1 not from any other fund or source. The City hereby pledges $ 5,000.00 the project and the net earnings therefrom to the payment of April 1, the bonds and the interest thereon, so that payment thereof 2 - is secured by a first lien on the project (consisting of a $10,000.00 single parcel of real estate upon which commercial buildings October will be located and related equipment). SECTION 3. The Salina, Kansas, KASA Industrial Controls, Inc. Industrial Revenue Bonds of 1978, of the City of Salina, Kansas, shall consist of 56 bonds, numbered from 1 to 56, inclusive. Each of the bonds shall be in the denomination of $5,000.00. All of the bonds shall be dated as of October 1, 1978, shall be numbered, shall bear interest at the rates and shall become due serially as follows: - 3 - Aggregate Bond Principal Interest Numbers Amount Rate Maturity 1 $ 5,000.00 71,2% April 1, 1979 2 - 3 $10,000.00 712% October 1, 1979 4 $ 5,000.00 7%2% April 1, 1980 5 - 6 $10,000.00 October 1, 1980 7 $ 5,000.00 1 71,,% April 1, 1981 8 - 9 $10,000.00 71,27. October 1, 1981 10 $ 5,000.00 72% April 1, 1982 11 - 12 $10,000.00 71,2% October 1, 1982 13 - 14 $10,000.00 72% April 1, 1983 15 - 16 $10,000.00 7%2% October 1, 1983 17 - 18 $10,000.00 8% April 1, 1984 19 - 20 $10,000.00 8% October 1, 1984 - 3 - 21 - 22 $10,000.00 8% April 1, 1985 23 - 24 $10,000.00 8% October 1, 1985 25 - 26 $10,000.00 8% April 1, 1986 27 - 28 $10,000.00 8% October 1, 1986 29 - 30 $10,000.00 8% April 1, 1987 31 - 32 $10,000.00 8% October 1, 1987 33 - 34 $10,000.00 8% April 1, 1988 35 37 - 36 - 38 $10,000.00 $10,000.00 8% 84% October April 1, 1, 1988 1989 39 - 40 $10,000.00 814% October 1, 1989 41 - 42 $10,000.00 814% April 1, 1990 43 - 44 $10,000.00 8140 October 1, 1990 45 - 46 $10,000.00 814% April 1, 1991 47 - 48 $10,000.00 814% October 1, 1991 49 - 50 $10,000.00 84% April 1, 1992 51 - 52 $10,000.00 84% October 1, 1992 53 - 54 $10,000.00 814% April 1, 1993 55 - 56 $10,000.00 84% October 1, 1993 The bonds shall bear interest at the rate specified herein from October 1, 1978 until fully paid, with interest payable April 1, 1979, and thereafter semi-annually on April 1st and October 1st of each year. The bonds shall be subject to redemption and payment in numerical order, as herein set forth, from money available for such purpose, on the stated maturity date for such bond or on any interest payment date thereafter, at the par value thereof, plus accrued interest thereon to the stated maturity date for such bond. The bonds shall be subject to redemption and prepayment without any prepayment premium or penalty prior to the stated maturity date for such bond, on any interest payment date, as herein set forth. Notice of a redemption of any bond provided for or permitted by this Ordinance at any time other than the stated maturity date specified for such bond shall be given in the name of the City by the Fiscal Agent or the Lessee by certified or registered United States Mail or by delivery in person to the Paying Agent herein desig- nated, such notice to be mailed or delivered in person at - 4 - hereunder. Any bond (and the coupons for such bond) which is called for prior redemption and prepayment as herein set forth shall cease to bear interest and shall not be deemed to be outstanding hereunder from and after the applicable redemption date or the date the funds for full payment thereof are deposited with the Paying Agent, whichever of said dates is later. least 20 days prior to the date fixed for such prior redemp- attached tion and prepayment and specify the number of each bond to thereto as hereinafter provided shall be redeemed and prepaid. Interest shall cease on each bond so called for prior redemption and prepayment as of the at The First redemption date, provided funds are available to prepay the same and accrued interest thereon according to their terms the City of on the redemption date. Upon receipt of any such written notice, the Paying Agent shall give written notice of such the "Paying prior redemption and prepayment to the holder or holders of the bonds so redeemed and prepaid as shown on the list of bondholders to be maintained in accordance with Section 8 and shall give a similar written notice to the person presenting any coupon detached from such bond for payment if the bond is not tendered for redemption and prepayment with such coupon. The Paying Agent shall be under no further obligation to give notice of such redemption or prepayment hereunder. Any bond (and the coupons for such bond) which is called for prior redemption and prepayment as herein set forth shall cease to bear interest and shall not be deemed to be outstanding hereunder from and after the applicable redemption date or the date the funds for full payment thereof are deposited with the Paying Agent, whichever of said dates is later. SECTION 4. The bonds and each of them shall be executed for and on behalf of the City by the facsimile signature of its Mayor and attested by the facsimile signa- ture of the City Clerk on the face of each bond, with the - 5 - The bonds and the interest coupons to be attached thereto as hereinafter provided shall be payable in lawful money of the United States of America at The First National Bank and Trust Company of Salina, in the City of Salina, Kansas, herein sometimes referred to as the "Paying Agent". SECTION 4. The bonds and each of them shall be executed for and on behalf of the City by the facsimile signature of its Mayor and attested by the facsimile signa- ture of the City Clerk on the face of each bond, with the - 5 - 1 1 seal of the City affixed. Interest coupons shall be attached to the bonds representing the interest to mature thereon on or before the maturity date of such bond, and the interest coupons shall bear the facsimile signatures of the Mayor and City Clerk of said City. Said bonds and each of them shall be registered in the office of the City Clerk of said City, which registration shall be evidenced by a certificate on the reverse side thereof bearing the manual signature of the City Clerk. SECTION S. Each of the bonds and interest coupons and the certificates attached thereto shall be in substantially the following form: No. $5,000.00 UNITED STATES OF AMERICA STATE OF KANSAS COUNTY OF SALINE CITY OF SALINA SALINA, KANSAS, KASA INDUSTRIAL CONTROLS, INC. INDUSTRIAL REVENUE BOND OF 1978 KNOW ALL MEN BY THESE PRESENTS: That the City of Salina, in the County of Saline, State of Kansas, for value received, hereby promises to pay to the bearer, solely and only from the revenues hereinafter specified, the sum of FIVE THOUSAND DOLLARS - 6 - in lawful money of the United States of America, on October 1, 1993, together with interest thereon at the rate of % per annum from October 1, 1978 until fully paid (likewise payable out of the revenues hereinafter speci- fied), with interest payable April 1, 1979, and thereafter semi-annually on April 1st and October 1st of each year after the date hereof until said principal sum shall have been paid, upon presentation and surrender of the interest coupons hereto attached, bearing the facsimile signatures of the Mayor and City Clerk of said City as said coupons severally become due, both principal of and interest on this bond being payable at The First National Bank and Trust Company of Salina, in the City of Salina, Kansas, (herein- after sometimes referred to as the "Fiscal Agent" or the "Paying Agent"). - 7 - THIS BOND is one of an authorized issue of 56 bonds of like date and tenor, except as to interest rate, maturity date and number, in the aggregate principal amount of $280,000.00, numbered from 1 to 56, inclusive, each in the denomination of $5,000.00, authorized by ordinance of said City, issued for the purpose of providing funds to purchase and acquire the real estate described in Section 1 of said Ordinance, to reconstruct, repair, enlarge, remodel and improve the building and improvements located on a portion of said real estate, to construct an additional building and improvements on a portion of said real estate and to purchase certain machinery and equipment to be used as an industrial and manufacturing project (hereinafter sometimes referred to as the "project") to be leased to KASA Industrial Controls, Inc., a Kansas corporation authorized to do business in the State of Kansas, by the authority of and in conformity with the provisions, restrictions and - 7 - limitations of the Constitution and Statutes of the State of Kansas, including K.S.A. 12-1740 to K.S.A. 12-1749a, and all amendments thereof and acts supplemental thereto, and all other provisions of the laws of the State of Kansas appli- cable thereto, and in accordance with a Lease dated as of October 1, 1978, between the City of Salina, Kansas and KASA Industrial Controls, Inc. (hereinafter sometimes referred to as the "Lease"). This bond does not constitute a debt of the City within the meaning of any constitutional or statutory limitation. This bond and all interest thereon shall be payable by the City of Salina, Kansas, solely and only from the money and revenue received from the fees charged and rental received for the use of the project and not from any other fund or source. Pursuant to the provisions of said statute, the governing body of the City does hereby pledge the project and the net earnings therefrom to the payment of the bonds of which this bond is a part and the interest thereon. Reference is hereby made to the Lease for a description of the covenants of the City with respect to the collection, segregation and application of the revenues derived from the project, the nature and extent of the security for the bonds, the rights, duties and obligations of the City and of the Fiscal Agent with respect thereto, and the rights of the holders thereof. =:= Each of the bonds of the issue of which this bond is one may be called for redemption and payment prior to maturity in the manner specified in the ordinance of the City authorizing the issuance of the bonds, on April 1, 1979, or any interest payment date thereafter, at the par value thereof and accrued interest to date of redemption. =:= redemption and payment is necessary with respect to any bond paid on the maturity date specified for such bond in Section 3 of said Ordinance. 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 Notice of the intention of the City to redeem and pay body, has caused any of the bonds at any time other than the time such bonds be signed are to be paid and redeemed from the funds to be deposited in the Principal and Income Account in the time and manner signature of its Mayor and specified in Section 9 of the Ordinance providing for the by the issuance of the bonds, pursuant to any of the redemption facsimile provisions aforesaid, specifying the numbers of the bonds to City Clerk, be redeemed and paid, shall be given by certified or regis- tered United States Mail or by delivery in person to the and the interest coupons Paying Agent herein named not less than twenty days prior to the date fixed for such redemption and payment, in accor- to be signed with and this bond to dance with Section 3 of said Ordinance. No notice of redemption and payment is necessary with respect to any bond paid on the maturity date specified for such bond in Section 3 of said Ordinance. 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 facsimile Attest: Mayor (facsimile) City Clerk - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 9 - governing body, has caused this bond to be signed by the facsimile signature of its Mayor and attested by the facsimile signature of its City Clerk, and its corporate seal to be hereto affixed and the interest coupons hereto attached officers, to be signed with and this bond to the facsimile be issued as signatures of the lst of said day of October 1978. facsimile Attest: Mayor (facsimile) City Clerk - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 9 - (FORM OF COUPON) Coupon No. Unless previously called for prior redemption and payment thereof duly made or provided for, on the first day of , 19_ the City of Salina, Kansas, will pay bearer, solely and only from the money and revenue received from the fees charged and rental received for the use of the project described in the bond to which the coupon is attached, and not from any other fund or source, [amount of interest payable by the coupon] in lawful money of the United States of America, at The First National Bank and Trust Company of Salina, in the City of Salina, Kansas, being six months' interest on its Salina, Kansas, KASA Industrial Controls, Inc. Industrial Revenue Bond of 1978, dated October 1, 1978. No. I Attest: (facsimile) City Clerk (facsimile) Mayor - 10 - April 1, 19 October 1, 19 City of Salina, Kansas Salina, Kansas, KASA Industrial Controls, Inc. Industrial Revenue Bond of 1978 STATE OF KANSAS ) ) ss COUNTY OF SALINE ) I, the undersigned, the City Clerk of the City of Salina, Kansas, hereby certify that the within Bond, of the City of Salina, Kansas, has been duly registered in my office according to law. WITNESS my hand and official seal this day of 19 City Clerk The interest rate to be specified in Bonds numbered 1 to 16, inclusive, shall be 71,27. per annum and the amount of interest evidenced by each coupon attached thereto, maturing on or before October 1, 1983, shall be the sum of $187.50; the interest rate to be specified in Bonds numbered 17 to 36, inclusive, shall be 8% and the amount of interest evidenced by each coupon attached thereto, maturing after October 1, 1983 and on or before October 1, 1988, shall be the sum of $200.00; and the interest rate to be specified in Bonds numbers 37 to 56, inclusive, shall be 84% and the amount of interest evidenced by each coupon attached thereto, maturing after October 1, 1988, shall be the sum of $206.25. Each bond shall have attached thereto only such coupons as will become due and payable on or before the maturity date specified for such bond in Section 3 hereof, and all subsequent coupons shall be detached prior to the issuance and delivery of the bond to the purchaser thereof. =8M SECTION 6. The Mayor and City Clerk are hereby autho- rized and directed to prepare and execute in the manner hereinbefore specified the Salina, Kansas, KASA Industrial Controls, Inc. Industrial Revenue Bonds of 1978, of the City herein authorized and to sell and deliver said bonds to The First National Bank and Trust Company of Salina, a national banking association with its principal place of business at Salina, Kansas, upon full payment of the purchase price therefore and upon compliance with Section 22 of this Ordinance, and to pay the proceeds from the sale thereof to the Fiscal Agent hereinafter designated to be deposited in the KASA Industrial Controls, Inc. Construction Fund (Construction Fund) and disbursed by the Fiscal Agent for the purposes set forth in Article III and Article IV of the Lease dated as of October 1, 1978, for the acquisition of the land described in Section 1 of this Ordinance, the reconstruction, repair, enlargement, remodeling and improve- ment of the building and improvements located on a portion of said real estate, the construction of an additional building and improvements on a portion of said real estate and the purchase of certain machinery and equipment as fully set forth in the Lease dated as of October 1, 1978. SECTION 7. The City hereby designates The First National Bank and Trust Company of Salina, a national banking association with its principal place of business in the City of Salina, Kansas, as the City's fiscal agent, herein referred to as the "Fiscal Agent". There is hereby authorized and ordered to be established in the hands of the Fiscal Agent a sinking fund to be designated as the "City of Salina, Kansas, Principal and Interest Account for Salina, Kansas, KASA Industrial Controls, Inc. Industrial Revenue Bonds of 1978, dated October 1, 1978" (hereinafter referred - 12 - to as "Principal and Interest Account"). In addition, there is hereby authorized and ordered to be established in the hands of the Fiscal Agent a separate account to be desig- nated as "KASA Industrial Controls, Inc. Industrial Revenue Account" (hereinafter referred to as "Revenue Account"). Prior to receipt of the proceeds from the issuance of the bonds as herein set forth, the Fiscal Agent shall file with the City Clerk its written acceptance of the duties speci- fied in this Ordinance and in the Lease and its agreement to act in said capacity. The duties and responsibilities of the Fiscal Agent shall be limited to those expressly set forth in this Ordinance and under the Lease. SECTION 8. The City covenants and agrees that from and after the delivery of the revenue bonds herein authorized and so long as any of the bonds shall remain outstanding the City will maintain the Principal and Interest Account and the Revenue Account referred to in Section 7. To the extent that such information shall be made known to the City under the terms of this Section 8, it will keep on file at the principal office of the Fiscal Agent the name and address of the last known holder of all of the bonds issued hereunder and believed to be held by such last known holder. Any bondholder may request that his name and address be placed on said list by filing a written request with the City or with the Fiscal Agent, which request shall include a state- ment of the principal amount of bonds held by such holder and the number of such bonds. The Fiscal Agent shall be under no responsibility with regard to the accuracy of said list. At reasonable times and under reasonable regulations established by the Fiscal Agent said list may be inspected and copied by KASA Industrial Controls, Inc. or its repre- sentatives or by the holders of 25% or more in principal - 13 - amount of the bonds then outstanding, or their representa- tives, with any such ownership and the authority of any designated representative to be evidenced to the satis- faction of the Fiscal Agent. SECTION 9. So long as any of the bonds herein autho- rized remain outstanding and unpaid, the Fiscal Agent shall deposit in the Principal and Interest Account, semi- annually, on the 1st day of April and the 1st day of October of each year, commencing April 1, 1979, the amount of the basic rent payable under the terms of the Lease dated as of October 1, 1978, in an amount equal to (a) the interest becoming due on the bonds on the next succeeding interest payment date and (b) such additional amounts as may be necessary to pay the principal of the bonds when the same become due as set forth in Article II of the Lease dated as of October 1, 1978 and as set forth in Section 3 of this Ordinance. All amounts credited to and deposited in the Principal and Interest Account shall be expended and used for the sole purpose of paying the principal of and interest on the bonds herein authorized as the same become due. SECTION 10. So long as any of the bonds herein autho- rized remain outstanding and unpaid, the Fiscal Agent shall deposit in the Revenue Account all amounts received under the Lease, dated as of October 1, 1978, from time to time as required, and upon demand of the Fiscal Agent, such amount or amounts of money as may be necessary to pay when due the fees, taxes, insurance premiums and other costs and expenses required to be paid as additional rent under the provisions of Article II of the Lease dated as of October 1, 1978. The Fiscal Agent shall make disbursements from funds deposited with it in the Construction Fund to the extent thereof or - 14 - from funds deposited with it in the Revenue Account for the payment of any expenses incurred by the City in connection with the issuance and sale of the bonds, including but not limited to underwriting expenses, legal fees, expenses of counsel and publication expenses, which expenses shall be paid by the Fiscal Agent as directed by the City, and for the payment of all fees, charges and expenses of the Fiscal Agent or the Paying Agent, and for the payment of taxes, assessments, insurance premiums and the like required to be paid from amounts received from the Company as additional rent under the provisions of Article II of the Lease dated as of October 1, 1978. If at any time the Fiscal Agent determined that there are more than sufficient funds in the Revenue Account to pay such fees, taxes, premiums and other expenses for the succeeding six months, the amount of such excess may be paid to the Company, provided that such excess shall not be paid to the Company if at such time the Principal and Interest Account is insufficient to fully pay interest and principal to become due on the next succeeding payment date in accordance with Section 9 of this Ordinance. SECTION 11. When money accumulated in the Principal and Interest Account shall aggregate an amount sufficient to pay the principal of any of the bonds then outstanding, and all interest accrued to the date fixed for redemption and payment, and when the bonds become subject to redemption as herein set forth, the Fiscal Agent shall proceed to give notice of such redemption in the manner herein specified, if such notice is required hereunder, and the Fiscal Agent, as Paying Agent, shall use moneys in said account for said purpose. After full payment of the bonds and interest thereon, any balance in the Principal and Interest Account shall be returned to the Company. - 15 - SECTION 12. Subject to the provisions of Section 21 of this Ordinance, money credited to and deposited in the Construction Fund and moneys credited to and deposited in the Principal and Interest Account may be invested by the Fiscal Agent, upon instructions from the Company, in savings accounts and certificates of deposit of the Fiscal Agent or others or in direct obligations of the United States Govern- ment becoming due not later than the date funds in the Construction Fund are to be disbursed or not later than ten days prior to the next interest payment date with respect to funds in the Principal and Interest Account. No investment shall be made hereunder for a longer period of time than the Fiscal Agent determines is reasonably necessary or required for the purpose for which they are intended. All interest on any bonds or other investments held in the Construction Fund or the Principal and Interest Account shall accrue to and become a part of such respective fund or account. SECTION 13. So long as any of the principal of and interest on the revenue bonds herein authorized remain outstanding and unpaid, the City covenants with each of the purchasers and owners of the bonds as follows: (a) The City will comply fully with all the terms, provisions and conditions of the Lease to the extent it requires performance by or imposes duties on the City and it will not permit any default to occur on the part of the City; that it will fully and promptly enforce, and permit the Fiscal Agent to enforce on its behalf and on behalf of the bondholders, all of the terms, provisions and conditions of the Lease to the extent it requires performance by or imposes duties on the Company; and, in the event of the occurrence of a default as defined in the Lease, that it - 16 - will exercise, and permit the Fiscal Agent to exercise on its behalf and on behalf of the bondholders, all rights and remedies conferred by the Lease for the full and complete protection of the security and the rights of the bond- holders, 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 lease provisions which will provide funds sufficient in amount to make the rental payments and other charges which the Company is required to make under the Lease dated as of October 1, 1978. If the City is unable to procure a new tenant who will enter into such a lease, the City may, with the consent of the holders of not less than seventy-five per cent (75%) of the bonds herein authorized at the time outstanding, sell the project without any right of redemption at a price which is not less than the amount of the then outstanding revenue bonds plus interest then unpaid. If the City is unable to sell the project at such a price, the City shall transfer and convey the project to the various bondholders without any right of redemption in the same proportions that the bonds are then owned and held by them. The obligation of the City to enforce any provision of the Lease dated as of October 1, 1978, or of this Ordinance, shall be conditioned upon the availability of funds for such purposes with such funds to be provided by the bondholders or other interested parties. (b) The City will enforce, and will permit the Fiscal Agent to enforce on its behalf and on behalf of the bond- holders, collection of the rental payments and other charges in the amounts and at the times set forth in the Lease dated as of October 1, 1978, 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 - 17 - alter the time or times when the same are due and payable under said 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 bondholders or other interested parties. (c) 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 termi- nation of the Lease, except as provided therein, which will in any manner adversely affect the rights, remedies, security or interest of the bondholders. (d) Any purchase price of the leased property received by the City pursuant to the termination of the Lease, any proceeds of condemnation awards, any insurance proceeds and any other funds received by the City and intended for the payment of the bonds and the interest thereon will be promptly deposited with the Fiscal Agent and used solely and exclusively to pay the bonds herein authorized and the interest thereon according to their terms or to redeem and pay any of the bonds then outstanding and unpaid and then subject to redemption and payment. Upon receipt of any such funds, if the bonds are then subject to redemption and payment, the Fiscal Agent shall proceed promptly to call the revenue bonds for redemption and payment according to their terms and shall give notice thereof as required in this Ordinance. Such funds shall be deposited in the Principal and Interest Account maintained by the Fiscal Agent, and the same shall be used solely for the payment of the revenue bonds herein authorized, accrued interest thereon and the charges of the Fiscal Agent for paying the same, and after full payment of such amounts, the balance of such funds, if any, shall be allocated and credited to the Revenue Account. (e) The City will not issue any other obligations payable from payments to be made by KASA Industrial Controls, Inc. 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 sell or otherwise dispose of the project or any part thereof, unless required by law or required by the terms of the Lease. (f) The City will use the proceeds of the bonds as soon as practicable and with all reasonable dispatch for the purposes for which such series of bonds are issued as hereinbefore set forth. Said proceeds shall 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 such series of bonds to be or become "arbitrage bonds" within the meaning of Section 103(c) of the Internal Revenue Code of 1954, as amended. The City further covenants that the proceeds of the bonds will not be used to acquire securities or obligations [other than obligations described in Section 103(a)(1) of the Internal Revenue Code of 1954, as amended] that will produce a yield higher than the yield of the bonds of such series herein authorized unless a regulation of the Treasury Department of the United States, ruling by the Internal Revenue Service of the United States or a decision of a Court of ultimate jurisdiction holds the acquisition of securities or obligations producing a yield higher than the bonds of such series will not cause the bonds to be arbitrage bonds as defined in said Section 103(c) of the Internal Revenue Code of 1954, as amended. - 19 - SECTION 14. The provisions of the bonds authorized by this Ordinance and provisions of this Ordinance may be modified or amended at any time by the City with the written consent of the holders of not less than seventy-five per cent (75%) in aggregate principal amount of the bonds herein authorized at the time outstanding; provided, that no such modification or amendment shall permit or be construed as permitting: (a) the extension of the maturity of the principal of any of the bonds issued hereunder, or the extension of the maturity of any interest on any bonds issued hereunder; (b) the reduction in the principal amount of any bonds or the rate of interest thereon, or (c) the reduction in the aggregate principal amount of bonds, the consent of all of the holders of which are required for any such amendment or modification. Any provision of the bonds or of this Ordinance may, however, be modified or amended in any respect with the written consent of the holders of all of the bonds then outstanding. Every amendment or modifica- tion of a provision of the bonds or of this Ordinance to which the written consent of the bondholders is given 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 any such amendment or modification. A certified copy of every such amendatory or supplemental ordinance, and a certified copy of this Ordi- nance shall always be kept on file in the office of the City Clerk and shall be made available for inspection by the holder of any bond or prospective purchaser or holder of any bond authorized by this Ordinance, and upon payment of the reasonable cost of preparing the same, a certified copy of any such amendatory or supplemental ordinance or of this �Afm II Ordinance will be sent by the City Clerk to any such bond- holder or prospective bondholder. SECTION 15. The provisions of this Ordinance shall constitute a contract between the City of Salina, Kansas, and the holders of the revenue bonds herein authorized, and the holder of any one or more of said bonds may sue, in any action, in mandamus, injuction, 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. Nothing contained in this Ordi- nance 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 revenue bonds of the City herein authorized. SECTION 16. The tract of land herein referred to and the buildings and improvements to be acquired and constructed thereon pursuant to this Ordinance shall be leased to KASA Industrial Controls, Inc. under and pursuant to a Lease dated as of October 1, 1978, substantially in the form attached hereto as Exhibit "B" and by reference made a part hereof, which Lease 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 17. The City of Salina, Kansas, shall have the right, if it shall find it desirable, to refund any of the revenue bonds herein authorized then subject to redemption or becoming due under the provisions of any law then avail- able. Said bonds or any part thereof may be refunded and the refunding bonds so issued shall enjoy complete equality of pledge with any of the revenue bonds issued hereunder, - 21 - which are not refunded, if any there be, upon the revenues of the project, provided, however, that if only a portion of the revenue bonds herein authorized be refunded and if said bonds are refunded in such manner that the refunding bonds bear a higher rate of interest or become due on a date earlier than that of any of the bonds issued hereunder which are not refunded, then said bonds may be refunded only by and with the written consent of the holders of seventy-five per cent (75%) of the bonds herein authorized not refunded. SECTION 18. If any one or more of the covenants, agreements or provisions of this Ordinance or of the Lease dated as of October 1, 1978, should be held contrary to any express provisions of law or contrary to the policy of express law, though not expressly prohibited, or against public policy, or shall 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 coupons issued hereunder or of the Lease. SECTION 19. The property purchased or constructed with the proceeds of the bonds authorized hereunder shall be exempt from taxation in accordance with the provisions of K.S.A. 79-201 Sixth for a period of ten calendar years after 1978, or until the prior redemption and payment of all of the revenue bonds issued hereunder. SECTION 20. Upon receipt by the City of the purchase price of the property subject to said Lease title to said - 22 - II property shall be transferred and conveyed to KASA Industrial Controls, Inc., or its successors and assigns, as provided in the Lease and the Mayor, the City Clerk 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 21. The City hereby certifies that, on the basis of the facts, estimates and circumstances in existence on the date hereof, it is not expected that the proceeds of the issue of the Salina, Kansas, KASA Industrial Controls, Inc. Revenue Bonds of 1978 will be used in a manner which would cause such obligations to be "arbitrage bonds" within the meaning of Section 103(c) of the Internal Revenue Code of 1954, as amended, and the Mayor and City Clerk are hereby authorized and directed to execute an Arbitrage Certificate which shall set forth the facts, estimates and circumstances in brief and summary terms, and state that to the best of their knowledge and belief there are no other facts, estimates or circumstances that would materially change such expectation. The Mayor and City Clerk shall furnish such Arbitrage Certificate to KASA Industrial Controls, Inc., the Fiscal Agent and any of the holders of the bonds authorized herein. SECTION 22. The bonds are issued on the condition that The First National Bank and Trust Company of Salina, a national banking association with its principal place of business at Salina, Kansas, as the purchaser of the bonds, prior to the issuance thereof, represents and certifies that: �X= (a) The bonds to be acquired by the purchaser are acquired for investment purposes only and not for resale or further distribution and such bonds shall not be offered for resale in a public offering without obtaining the prior written consent of the City or an opinion of counsel acceptable to the City. At the time of the execution and delivery of each bond, the purchaser thereof shall certify that it has no present intention, agreement or arrangement for distribution, transfer, assignment, resale or division of its interest in such bond in a manner inconsistent with the provisions hereof. (b) All materials and information requested by the purchaser or its counsel or others representing its inter- ests, including any information requested to verify any such information furnished, has been furnished and there has been direct communication between KASA Industrial Controls, Inc. and its representatives on the one hand and the purchaser of such bond and its representatives and advisers on the other hand in connection with all of the information furnished hereunder and otherwise requested and the terms of the acquisition of the bond from the City as set forth herein. There has been made available to the satisfaction of the purchaser and its advisers adequate opportunity to ask questions of and receive answers from KASA Industrial Controls, Inc. and its officers and employees and repre- sentatives thereof concerning the terms and conditions of the bonds to obtain all additional information desired or necessary to verify the accuracy of the information furnished. (c) The City shall be released from any requirement, duty, obligation or committment, express or implied, to - 24 - furnish the purchaser or any subsequent holder of any bond issued hereunder any financial information concerning KASA Industrial Controls, Inc. or to investigate and furnish such purchaser or any subsequent holder with any information concerning the financial status of KASA Industrial Controls, Inc. Each purchaser shall represent that it is relying upon its own resources and expertise to obtain and evaluate all such information. SECTION 23. The officials of the City and the attor- neys, 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 the terms, covenants and agreements contained in the bonds, the Lease and this Ordinance. SECTION 24. This Ordinance shall take effect and be in force from and after its passage and publication in the official City paper. PASSED by the Governing Body of the City of Salina, Kansas, this ,� day of A-1-- , 1978. 1 � ack Weisger r, Mayor Attest: D. L. Harrison, City Clerk APPROVED by the Mayor this day of zG/ , 1978: J j i Jack Weisger er, Mayor Attest: D. L. Harrison, City Clerk - 25 - KASA INDUSTRIAL CONTROLS, INC. DESCRIPTION OF REAL ESTATE Exhibit "A" 1 The real estate to be acquired by the City of Salina, Kansas, and to be Leased to KASA Industrial Controls, Inc., in accordance with the Ordinance to which this Exhibit "A" is attached, is described as follows: The South Half (S/2) of Lot Two (2), all of Lot Three (3) except the East Nineteen feet (E 191) of the North Half (N/2) thereof, and the East Fifty feet (E 50') of Lot Four (4), all in Block Two (2) of the South Industrial Area, being located in the South Half of the Northwest Quarter (S/2NW/4) of Section One (1), Township Fifteen (15) South, Range Three (3) West of the 6th P.M., in Saline County, Kansas, together with a perpetual non- exclusive easement on and over the East Nineteen feet (E 19') of the North Half (N/2) of said Lot Three (3) for use as a roadway and for use in connection with the construction, maintenance, repair, removal or replacement of improvements on the adjoining real estate, and with the right to fill, slope or grade the land subject to such easement from time to time to an elevation or height not greater than that of the real estate otherwise described herein. r