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8339 IRB Lee CompanyORDINANCE NO. 8339 WHEREAS, the AN ORDINANCE AUTHORIZING THE CITY OF SALINA, KANSAS, TO PURCHASE AND ACQUIRE THE REAL ESTATE HEREINAFTER city of DESCRIBED AND TO CONSTRUCT THEREON CERTAIN BUILDINGS class, hereinafter AND IMPROVEMENTS AND TO PURCHASE MACHINERY AND "City", EQUIPMENT, ALL TO BE USED FOR INDUSTRIAL AND MANUFACTURING FACILITIES, AND TO BE LEASED TO THE LEE COMPANY; AUTHORIZING AND DIRECTING THE ISSUANCE OF $800,000 PRINCIPAL AMOUNT OF SALINA, KANSAS, THE LEE COMPANY INDUSTRIAL REVENUE BONDS OF 1974, OF SAID CITY FOR THE PURPOSE OF PROVIDING FUNDS FOR THE PURCHASE OF THE REAL ESTATE AND THE CONSTRUCTION OF BUILDINGS AND IMPROVEMENTS THEREON AND TO PURCHASE MACHINERY AND EQUIPMENT TO BE USED FOR INDUSTRIAL AND MANUFACTURING FACILITIES TO BE LEASED TO THE LEE COMPANY; AND PRESCRIBING THE FORM AND AUTHORIZING THE EXECUTION OF A LEASE BY AND BETWEEN SAID CITY AND THE LEE COMPANY 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 12-1749, as amended, the City is authorized to issue industrial revenue bunds 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 industrial revenue bonds of the City in the principal amount of $800,000 be authorized and issued, for the purpose of providing funds to purchase the real - 1 - estate hereinafter described and to construct thereon certain buildings and improvements and to purchase machinery and equipment all to be used as an industrial and manufacturing facility to be leased to The Lee Company, 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, and construct thereon certain buildings and improvements and to purchase certain machinery and equipment as hereinafter set forth, hereinafter 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 January 1, 1974, between the City and The Lee Company, hereinafter sometimes referred to as "Lease", said Lease being authorized by Section 16 of this Ordinance. The cost of purchasing, acquiring and constructing the project shall not exceed the sum of $800,000 to the City. SECTION 2. That for the purpose of purchasing, acquiring and constructing the project to be leased to The Lee Company, - 2 - there shall be issued and hereby are authorized and directed to be issued a series of Salina, Kansas, The Lee Company Industrial Revenue Bonds of 1974, of the City of Salina, Kansas, in the aggregate principal amount of $800,000, hereinafter sometimes referred to as "bonds" or "revenue bonds". The bonds and interest thereon shall be paid solely and only from the money and revenues received from the fees charged and rentals received for the use of the project and not from any other fund or source. The City hereby pledges the project and the net earnings therefrom to the payment of the bonds and the interest thereon, so that payment thereof is secured by a first lien on the project (consisting of a single parcel of real estate upon which commercial buildings will be located). SECTION 3. The Salina, Kansas, The Lee Company Industrial Revenue Bonds of 1974, of the City of Salina, Kansas,, shall consist of 160 bonds, numbered from 1 to 160, inclusive. Each of the bonds shall be in the denomination of $5,000.00. All of the bonds shall be dated as of January 1, 1974, shall be numbered, shall bear interest at the rates and shall become due serially on January 1st of each year, as follows: - 3 - Aggregate Bond Principal Interest Maturity Numbers Amount Rate January 1st 1 - 8 $ 40,000.00 6% 1975 9 - 14 $ 30,000.00 6% 1976 15 - 20 $ 30,000.00 6% 1977 - 3 - 21 - 27 $ 35,000.00 6% 1978 28 - 34 $ 35,000.00 6% 1979 35 - 42 $ 40,000.00 6% 1980 43 - 50 $ 40,000.00 6 1/4% 1981 51 59 - 58 - 66 $ $ 40,000.00 40,000.00 6 6 1/4% 1/4% 1982 1983 67 - 74 $ 40,000.00 6 1/4% 1984 75 - 82 $ 400000.00 6 1/4% 1985 83 -90 $ 40,000.00 6 1/4% 1986 91 - 98 $ 40,000.00 6 1/4% 1987 99 - 106 $ 40,000.00 6 1/4% 1988 107 - 114 $ 40,000.00 6 1/4% 1989 115 - 122 $ 40,000.00 6 1/4% 1990 123 - 131 $ 45,000.00 6 1/2% 1991 132 - 140 $ 45,000.00 6 1/2% 1992 141 - 150 $ 50,000.00 6 1/2% 1993 151 - 160 $ 50,000.00 6 1/2% 1994 The bonds shall bear interest at the rate specified herein from January 1, 1974 until fully paid, with interest payable July 1, 1974, and thereafter semi-annually on January 1st and July 1st of each year. The bonds shall be subject to redemption and payment in numerical order, as herein set forth, from moneys available for such purpose, on July 1, 1974, or on any interest payment date thereafter, at the par value thereof, plus accrued interest thereon to the date fixed for redemption and payment,; provided, however, that the bonds shall not be subject to redemption and payment prior to the respective maturity dates thereof or prior to January 1, 1984, whichever of said dates is the earlier, on account of any voluntary prepayment of the basic rent payable by The Lee Company under the terms of the Lease, without obtaining the prior written consent of the holders of the bonds which would be prepaid prior to the stated maturity date - 4 - thereof on account of any such prepayment of the basic rent under the terms of the Lease. Notice of any redemption provided for by this Ordinance at any time other than the maturity date specified for such bond from the funds to be deposited in the Principal and Income Account in the time and manner specified in Section 9 shall be given by certified or registered United States Mail or by delivery in person to the paying agent herein designated, such notice to be mailed or delivered in person at least 20 days prior to the date fixed for redemption and payment and specify the numbers of the bonds to be redeemed and paid. Interest shall cease on the bonds so called for redemption and payment as of the redemption date, provided funds are available to pay the same according to their terms. 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, hereinafter 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 signature of the City Clerk on the face of each bond, with the 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 - 5 - 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 5. 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, THE LEE COMPANY INDUSTRIAL REVENUE BOND OF 1974 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 in lawful money of the United States of America, on January 1, 19 , together with interest thereon at the rate of % per annum from January 1, 1974 until fully paid (likewise payable out of the revenues hereinafter specified), with interest payable July 1, 1974, and thereafter semi-annually on January 1st and July 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 (hereinafter sometimes referred to as the "Fiscal Agent" or the "Paying Agent"). THIS BOND is one of an authorized issue of 160 bonds of like date and tenor, except as to interest rate, maturity date and number, in the aggregateprincipal amount of $800,000, numbered from 1 to 160, inclusive, each in the denomination of $5,000, 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 and to construct thereon certain buildings and improvements and to purchase machinery and equipment to be used as an industrial and manufacturing project (hereinafter sometimes referred to as the "project") to be leased to The Lee Company, a Kansas corporation authorized to do business in the State of Kansas, 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 12-1749, and all amendments thereof and acts supplemental thereto, and all other provisions - 7 - of the laws of the State of Kansas applicable thereto, and in accordance with a Lease dated as of January 1, 1974, between the City of Salina, Kansas and The Lee Company (hereinafter sometimes referred to as the "Lease"). 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 series of which this bond is one may be called for redemption and payment prior to maturity, in numerical order, in the manner specified in the ordinance of the City authorizing the issuance of the bonds, on July 1, 1974, or on any interest payment date thereafter, at the par value thereof and accrued interest to date of redemption; provided, however, that this bond shall not be subject to redemption and payment prior to the maturity date specified herein or prior to January 1, 1984, whichever of said dates is the earlier, on account of any voluntary prepayment of the basic rent payable by The Lee Company to the City under the terms of the Lease, without obtaining the prior written consent of the holder hereof to such prior redemption and payment. Notice of the City's intention to redeem and pay any of the bonds at any time other than the time such bonds are to be paid and redeemed from the funds to be deposited in the Principal and Income Account in the time and manner specified in Section 9 of the Ordinance providing for the issuance of the bonds, pursuant to any of the redemption provisions aforesaid, specifying the numbers of the bonds to be redeemed and paid, shall be given by certified or registered United States Mail or by delivery in person to the Paying Agent herein named not less than twenty days prior to the date fixed for such redemption and payment. 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 facsimile signature of its City Clerk, and its corporate seal to be hereto affixed and the interest coupons hereto attached to be signed with the � I 1 L facsimile signatures of said officers, and this bond to be issued as of the 1st day of January, 1974. (facsimile) Mayor Attest: (facsimile) City Clerk (FORM OF COUPON) Coupon No. Unless previously called for prior ) redemption and payment thereof duly made or ) January ) provided for, on the First day of July, 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 this 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 ) - 10 - January 1, 19 . July 1, 19 . City of Salina, Kansas Salina, Kansas, The Lee Company Industrial Revenue Bond of 1974 1 1 Salina, Kansas, The Lee Company Industrial Revenue Bond of 1974, dated January 1, 1974. No. (facsimile) Mayor Attest: (facsimile) City Clerk 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 is . City Clerk day of The amount of interest evidenced by each coupon attached to Bonds numbered 1 to 42, inclusive, maturing on or before January 1, 1980, shall be the sum of $150.00; the amount of interest evidenced by each coupon attached to Bonds numbered 43 to 122, inclusive, maturing after January 1, 1980 and on or before January 1, 1990, shall be the sum of $156.25; and the amount of interest evidenced by each coupon attached to Bonds numbered 123 to 160, inclusive, maturing after January 1, 1990 and on or before January 1, 1994, shall be the sum of $162.50. 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, and all subsequent coupons shall be detached prior to the issuance and delivery of the bond to the purchaser thereof. SECTION 6. The Mayor and City Clerk are hereby authorized and directed to prepare and execute in the manner hereinbefore specified the Salina, Kansas, The Lee Company Industrial Revenue Bonds of 1974, of the City herein authorized and to sell and deliver said bonds on or before April 30, 1974, to the buyers thereof, and to pay the proceeds from the sale thereof to the Fiscal Agent hereinafter designated to be deposited in The Lee Company 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 January 1, 1974, for the acquisition of the land described in Section 1 of this Ordinance, the construction of the facility and the acquisition of equipment as fully set forth in the Lease dated as of January 1, 1974. - 12 - 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, The Lee Company Industrial Revenue Bonds of 1974, dated January 1, 1974" (hereinafter referred 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 designated as "The Lee Company 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 specified 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. 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 - 13 - they conform to the requirements of this Ordinance and the Lease. The Fiscal Agent shall not be liable with respect to any action taken or omitted to be taken by it in good faith and, if appropriate, upon advice of counsel who may be counsel for the Fiscal Agent or the City or The Lee Company. The Fiscal Agent shall not be liable for any error of judgment made in good faith unless it shall be established that the Fiscal Agent was negligent in ascertaining the pertinent facts. The Fiscal Agent shall have the right to buy, sell, own, deal or trade in the bonds or the coupons relating thereto for its own account or for the account of others without giving notice thereof to the City or any bondholder or The Lee Company and without incurring any liability whatsoever with respect thereto; and the Fiscal Agent shall have the right to loan money to the City or any bondholder or The Lee Company upon such terms and conditions as it deems advisable, without incurring any liability whatsoever with respect thereto on account of its acting as Fiscal Agent hereunder. The Fiscal Agent may resign by an instrument in writing delivered to the City and The Lee Company to take effect not sooner than ninety days after the date of delivery of such written statement, whereupon the City with the consent of The Lee Company 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 has capital stock and surplus aggregating at least that of the Fiscal Agent at the time of its designation hereunder. Such successor fiscal agent shall be subject to the same duties and obligations and shall have the same rights, - 14 - 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 herein with the City Clerk within ten days of its appointment. 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 The Lee Company as additional rent as specified in Article II of 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 or cause the Fiscal Agent to 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 a list of names and addresses of the last known holders of all of the bonds issued hereunder and believed to be held by each of such last known holders. 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 statement 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 lista At reasonable times and under reasonable regulations - 15 - established by the Fiscal Agent said list may be inspected and copied by The Lee Company or its representatives or by the holders of 25% or more in principal amount of the bonds then 0 outstanding, or their representatives, with any such ownership and the authority of any designated representative to be evidenced to the satisfaction of the Fiscal Agent. SECTION 9. So long as any of the bonds herein authorized remain outstanding and unpaid The Lee Company shall deposit in the Principal and Interest Account of the Fiscal Agent, semiannually, on the 15th day of June and the 15th day of December of each year, commencing June 15, 1974, the amount of the basic rent payable under the terms of the Lease dated as of January 1, 1974, 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 January 1, 1974 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 authorized remain outstanding and unpaid, The Lee Company shall deposit in the Revenue Account of the Fiscal Agent, from time to time as required, and upon demand of the Fiscal Agent, such amount - 16 - 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 January 1, 1974. The Fiscal Agent shall make disbursements from funds deposited with it in the Construction Fund to the extent thereof or 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 January 1, 1974. If at any time the Fiscal Agent determines 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 moneys accumulated in the Principal and Interest Account shall aggregate an amount sufficient to pay the - 17 - 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 City 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. SECTION 12. Subject to the provisions of Section 21 of this Ordinance, moneys 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 direct obligations of the United States Government 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 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 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 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 January 1, 1974. 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 - 19 - 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. (b) The City will enforce, and will permit the Fiscal Agent to enforce on its behalf and on behalf of the bondholders, collection of the rental payments and other charges in the amounts and at the times set forth in the Lease dated as of January 1, 1974, 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 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 termination 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 - 20 - payment of the bonds and the interest thereon will be used solely and exclusively to pay the bonds herein authorized and the interest thereon according to their terms or to redeem and 0 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 City 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 The Lee Company 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. 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 - 21 - 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 modification 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 Ordinance 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 - 22 - supplemental ordinance or of this Ordinance will be sent by the City Clerk to any such bondholder 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, 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. 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 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 The Lee Company under and pursuant to a Lease dated as of January 1, 1974, substantially in the form attached to this Ordinance and marked Exhibit "A", 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 - 23 - becoming due under the provisions of any law then available. 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, 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. ISECTION 18. If any one or more of the covenants, agreements or provisions of this Ordinance or of the Lease dated as of January 1, 1974, 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 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 - 24 - from taxation in accordance with the provisions of K.S.A. 79-201 Sixth for a period of ten calendar years after 1974, 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 property shall be transferred and conveyed to The Lee Company, 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, The Lee Company Industrial Revenue Bonds of 1974 will be used in a manner which would cause such obligations to be "arbitrage bonds" within the meaning of Section 103(d) 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 The Lee Company, - 25 - J e t the Fiscal Agent and any of the holders of the bonds authorized herein. SECTION 22. 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 4th day of March , 1974. 171 Tack Weisge er, Mayor Attest D. L. Harrison, City Clerk APPROVED by the Mayor this 4th day of March , 1974. Jack Weisger r, Mayor Attest: r D. L. Harrison, City Clerk - 26 - [l SALINA, KANSAS, THE LEE COMPANY INDUSTRIAL REVENUE BONDS OF 1974 A tract of land lying in part of the Southeast Quarter (SE/4) of Section Twenty -Seven (27), Township Fourteen South, Range Three West of the Sixth Principal Meridian, known as part of Block Twenty -Four Schilling Addition of Saline County, Kansas, and being more particularly described as follows: From the Southeast corner of said Southeast Quarter (SE/4) thence N 00°50'15" E along the East line of said Southeast Quarter (SE/4) a distance of Three Hundred Sixty -Three and Ninety -Three Hundredths (363.93) Feet to the point of beginning, said point of beginning being a point on the North line of a Drainage right-of-way: Thence S 51057'36" W along said North line a distance of Four Hundred Sixty -One and One Hundredth (461.01) Feet to the North right-of-way line of Magnolia Road; thence N 88029'05" W along said North right-of-way line a distance of Three Hundred Fifteen and Seventeen Hundredths (315.17) Feet; thence N 41026'05" W along said North right-of-way line, a distance of One Hundred Fifty -Three and Fifty -One Hundredths (153.51) Feet to the East right-of-way line of Centennial Road; thence N 00006'53" W along said East right-of-way line, a distance of Five Hundred Thirty -Eight and Seventy -One Hundredths (538.71) Feet: thence S 89046'54f1 East, parallel with the South line of said Southeast Quarter (SE/4) a distance of Seven Hundred Eighty -Six and Thirty Hundredths (786.30) Feet to the East line of said Southeast Quarter (SE/4); thence S 00050'15" W along said East line a distance of Three Hundred Seventy -Five and Ten Hundredths (375.10) Feet to the point of beginning; Said tract being subject to a drainage easement along the East line of said Southeast Quarter; Said tract of land containing ten and forty-nine hundredths (10.49) acres. Exhibit "A11 ARBITRAGE CERTIFICATE We, the undersigned, Jack Weisgerber, Mayor, and D. L. Harrison, Clerk of the City of Salina, Saline County, Kansas, (the "Issuer"), reasonably expect as of the date of issue of the Salina, Kansas, The Lee Company Industrial Revenue Bonds of 1974, in the principal amount of $800,000 (the "Bonds") that the following will occur: (1) Within six months after the date of issue of the Bonds, the Issuer will incur a substantial binding obligation to commence such project to be financed by the Bonds. (2) Work on the project will proceed thereafter with due diligence to completion. (3) At least 85% of the spendable proceeds of the Bonds will be expended for project costs by the third anniversary of the date of issue of the Bonds. (4) Property financed by the Bonds has not been and is not expected during the life of the Bonds to be sold or otherwise disposed of, in whole or in part, prior to the last maturity of the Bonds. (5) The estimated cost of the project, reduced by the amount of other funds available for such project, will equal or exceed the amounts borrowed for the project to be financed by the Bonds. (6) On the basis of the foregoing, it is not expected that the proceeds of the Bonds will be used in a manner that would cause the Bonds to be arbitrage bonds under Section 103(d) of the Internal Revenue Code. (7) To the best of the knowledge and belief of the undersigned, there are no other facts, estimates or circumstances which would materially change the foregoing conclusion. (8) The Issuer has not been notified of any listing or proposed listing of it by the Internal Revenue Service as an issuer whose arbitrage certificates may not be relied upon. (9) The undersigned are officers of the Issuer charged with the responsibility for issuing the Bonds. IN WITNESS WHEREOF, the City of Salina, Kansas, has caused this Arbitrage Certificate to be executed on its behalf by its Mayor, attested by its City Clerk and has caused its seal to be hereunder affixed this 4th day of March 1974. , CITY OF SALINA, ANSAS BY: a Weisger , Mayor c D. L. Harrison, City Clerk