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6911 IRB Community InnR",sh,, L, ti, 6v,;� q,,� an rv,�ek,3 f J )q(a, ORDINANCE NO. 6911 AN ORDINANCE AUTHORIZING THE CITY OF SALINA, KANSAS, TO ACQUIRE A SITE FOR AND CONSTRUCT AND EQUIP A BUILDING TO BE USED FOR CO'I1MERCIAL FACILITIES; AUTHORIZING AND DIRECTING THE IS - "UA' 110E Or,$1,500,000 PRINCIPAL AIT,10UNT OF SALIPdA, KANSAS $ =17 UNITY IN:d AND CONVENTION CENTER REV%1UE BONDS, SERIES A. OF SAID CITY FOR THE PURPOSE OF CONSTRUCTING AND EQUIPPING A BUILD- ING TO BE USED FOR CO"'IMERCIAL FACILITIES; PRE- SC'?IBING THE POR" AND AUTHORIZING THE EXECUTION OF A LEASE AGREEMENT BY AND BETWEEN SAID CITY A14D SALI JA COMMUNITY INN OF AMERICA, INC., A KANSAS CORPORATION+ WHEREAS, the City of Salina, Kansas, a city of t'.�:_, first class, hereinafter sometimes referred to as the "City", desires to PGromote, 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 econ- oMic welfare and prosperity of the State of Kansas. WHEREAS, pursuant to the provisions of K.S.A. 12--1740 to 12-17+9, said 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 inhabit- ants that industrial revenue bonds of the City in the principal amount o $1,00,000 be authorized and issued, for the purpose of providing funds to pay the cost of acquiring a site for and constructing and equipping a building to be used for commercial facilities to be leased to Salina Community Inn of America, Inc., a Kansas corporation, hereinafter sometimes referred to as the "Company", the proceeds of said bonds to be used for said purpose in conjunction with the pro- celeds of an issue of Salina, Kansas, Community Inn and Convention Ceot-er Revenue Bonds, Series B, and the sum of $900,000 otherwise made available for said purpose, and WHEREAS, the City will acquire prior to or concurrently with the issuance of the bonds herein authorized the real property 3-24-66 hereinafter described. 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 acquire a site for and pay for the construction and equipping of a building to be used for commercial facilities on the following described real property, to wit: All of Lots Eirrhty-four (84), Eighty-six (86)1, Eighty-eiht (88), Ninety (90), Ninety-two (92), Ninety-four (94) g Ninety-six (96) and Ninety-eight (98) on Fourth Street, in the Original Town (now City) of Salina, Saline County, Kansas. All of Lots One Hundred (100), One Hundred Two (102), One hundred -four (104), One Hundred -six (106) and One Hundred- eir;ht (108), Except that part taken for Railroad Right-of- way, all on Fourth :Street, in the OriP;inal Town (now City) of Salina, Saline County, Kansas. All of Lots Eighty-nine (89), Ninety-one (91), Ninety- three (93), Ninety-five (95), Ninety-seven7Ninety- nine (99), One Hundred One (101), One Hundred Th Three One Hundred -five (105) and One Hundred Seven (107), all on Fifth Street in the Original Town (now City) of Salina, in Saline County, Kansas. Subject to: (i) easements, restrictions and reservations of record, and (ii) the rights of the public in that part of the aforesaid premises, if any, now lying and being in public roads and highways. Said real estate and building and any other improvements relating tlic , oto being h_-r2ina.f r described as the "Facil iy" ii7 accordance with the provisions of the Lease dated April 1, 1966, between said City and said Salina Community Inn of America, Inc., hereinafter sometimes referred to as the "Lease", said Lease being authorized by the provisions of this ordinance, (said Facility tieing referred to in the Lease as the "Project"), all at an amount -2- which shall not exceed the cost of $2,100,000 to said City,, SECTION 2. That for the purpose of constructing; and equinpinq a building to be used for commercial facilities to be leased to Salina Community Inn of America, Inc., a Kansas corpora- tion., there shall. be issued and hereby are authorized and directed to be issued a series of Salina, Kansas, Community Inn and Conven- tion Center Revenue Bonds, Series A. of the City of Salina, Kansas, in the principal amount of $125003000. Said bonds herein authorized, hereinafter sometimes referred to as the "bonds" or the "revenue bonds", and all interest thereon shall be paid solely from 'the money and revenue received from the fees charged and rental received for the use of the .Pacility and not .from any other fund or source. The City hereby pledges the Facility and said rentals, income and other moneys to the payment of the bonds and the interest thereon. SECTION 3. Said Revenue Bonds, Series A, of the City of Salina, Kansas, shall consist of 300 bonds, numbered from 1 to 3003 inclusive, each of said bonds being; in the denomination of $5,000. All of said bonds shall be dated April 1., 1966, and said bonds shall be numbered, shall become due serially on December 1 in each year and shall bear interest as follows; NUMBER' AMOUNT 1 - 6 $309000 7 - 12 30,000 13 - 19 352000 20 - 26 35,000 �7 — 37 55,000 38 — 48 55,000 49 — 60 60,000 61 — 72 6o.000 73' — 85 65,000 86 — 99 703000 100 - 113 000 114 - 128 75,000 C6_. tiI0-�, _ ?17 S's MATURITY DECEMBER 1 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 —3— INTEREST 4 3/4% 11 3/4% 4 3/4% 4 3/4% 4 3/4" 4 3/4% 11 3/4% 11 3/4% 4 3/4% 4 3/4% 4 3/11% 4 3/47 129 - 144 801000 1980 4 3/4% 145 - 160 80,000 1981 4 3/4% 161 -177 85,000 1982 4 3/4% 178 - 195 903000 1983 4 3/4% 10 - 214 95,000 1984 4 3/4% 2.15 - 234 100,000 1985 4 3/4% 235 - 254 105,000 1986 4 3/4% 255 - 276 1103000 1987 4 3/4% 277 - 300 115,000 1988 4 3/4% Said bonds shall bear interest from date, payable June 1, 1966, and the.renfter se-iannually on December 1 and .lune 1 in o_Lcl). year, at the r-te hereinabove specified. In addition to the above basic rate of interest, all out- standing and unmatured bonds shall beat an additional rate of interest represented by separate detachable interest coupons designated "A" at 1 1/11% per annum for the period from May 1, 1966, through May 31, 1972, payable on June 1, 1966, and thereafter semiannually on Decem- ber 1 and June 1 in each year. Bonds numbered 1 to 160, inclusive, shall become due with- out option of prior payment, except as hereinafter specified, but bonds numbered 161 to 300, inclusive, may be called for redemption and payment at the option of said City in whole or in part, in inverse numerical order, on December 1, 1981, or on any interest pay- ment date thereafter at the par value thereof, plus accrued interest thereon to date fixed for redemption and payment, together with a premium which shall be equal to 4 3/4% of the principal amount of bonds so redeemed and paid. Each of said bonds numbered 1 to 300, inclusive, shall be subject to redemption and payment on any interest payment date upon either of the following conditions or events, provided all of said bonds are so redeemed and paid: (1) If title to, or the use for a limited period of, substantially all of the Facility subject to said Lease be condemned by any authority having the power of eminent do - mann or (2) If substantially all of the improvements and equipment constituting, a part of such Facility are damaged or destroyed by fire or other casualty. In either of such events all of said bonds shall -4- be subject to redemption and payment at the par value thereof, plus accrued interest thereon to date fixed for redemption and payment, together with a premium which shall be equal to 2 1/4% of the principal amount of bonds so redeemed and paid. Notice of any redemption provided for by this Ordinance shall be given by United States registered mail to the paying agent herein designated and to Almon, McKinney & Dudley, Inc., in the City of Dallas, Texas, such notice to be mailed at least 30 days prior to the date fixed for redemption and payment and to specify the numbers of the bonds to be redeemed and paid. Interest shall cease on any of said bonds so called for redemption and payment as of the redemption date, provided funds are available to pay the same according to their terms. Said bonds and interest coupons to be attached thereto as hereinafter provided shall be payable in lawful money of the United States of America at Mercantile National Bank at Dallas, in the City of Dallas, Texas, hereinafter sometimes referred to as the "Paying Agent." SECTION 4. Said bonds and each of them shall be executed for and on behalf of the City by the Mayor and attested by the City Clerk, with the seal of the City affixed. Interest coupons shall be attached to said bonds representing; the interest to mature there- on, and said interest coupons shall bear the facsimile signatures of: the Mayor and City Clerk of said City. SEC'T'ION 5. Each of said bonds and interest coupons and the certificates attached thereto shall be in substantially the following; form: No, $5,000 UNITED STATES OF AMERICA STATE OF KANSAS COUNTY OF SALINE CITY OF SALINA SALINA, KANSAS, COMMUNITY INN AND CONVENTION CENTER REVENUE BOND SERIES A KNOW ALL MEN BY THESE PRESENTS: That the City of Salina, -5- in the County of Saline, State of Kansas, for value received, hereby promises to pay, out of the revenuas hereinafter specified, to the bearer, the sum of FIVE THOUSAND DOLLARS in lawful money of the United States of America, on the first day of December, 19_, and to pay interest thereon from the date hereof at the rate of four and three-quarters per cent (4 3/4%) per annum, and for the period beginning May 1, 1966, and ending May 31, 1972, only, additional interest, represented by separate detachable coupons des- ignated "A", at tyle rate of one and one quarter percent (1 1/4%) per annum, (likewise payable out of said revenues) payable on June 1, 1966, and thereafter semiannually on December land June lin each year after the date hereof until the 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 princi- pal of and interest on this bond being payable at Mercantile National Bank at Dallas, in the City of Dallas, Texas. THIS BOND is one of an authorized series of 300 bonds of like date and tenor, except as to number, privilege of redemption, and maturity, aggregating the principal amount of �1,500,000, num- bered from 1 to 300, inclusive, each in the denomination of $5,0003 authorized by ordinance of said City, issued for the purpose of pro- viding funds to pay the cost of constructing and equipping a building to be used for commercial facilities (hereinafter sometimes referred to as the "Facility") to be leased to Salina Community Inn of America, Inc., a Kansas corporation authorized to do business in the State ,f 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 amend- ments thereof and acts supplemental thereto, and all other provi- sionls of the laws of said State applicable thereto, and this bond -6- and all interest hereon are to be paid by said City of Sal-ina, Kansas, solely and only 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. Pursuant to the provisions of said statute, the governing body of the City has pledged said facility and said rentals, income and other moneys to the payment of the series of bonds of which this bond is a part, and the interest thereon. Reference is hereby made to the ordinance aforesaid and to said Lease for a description of the covenants of the City with respect to the collection, segregation and application of the revenues of said Facility, the nature and extent of the security of said bonds, the right of the City to issue additional bonds to finance the Facility, the rights9duties and obligations of the City and of. the Fiscal Agent with respect thereto, and the rights of the holders thereof. At the option of the City, bonds numbered 161 to 3003 inclusive, of the series of bonds of which this bond is one, may be called for redemption and payment prior to maturity, in whole or in part, in inverse numerical order, on December 1, 1981, or on any interest payment date thereafter, at the par value thereof and ac- crued interest to date of redemption, together with a premium of 4 3/4% of the principal amount of bonds so redeemed and paid. Each of the bonds of the series of which this bond is one is subject to .redemption and payment prior to maturity at any time upon any of the following; conditions or events, provided all of said bonds are so redeemed and paid: (1) If title to, or the use for a limited period of, substantially all of the Facility leased to said tenant be condemned by any authority having the power of eminent domain; or (2) If substantially all of the improvements and equipment constituting a part of such Facility be damaged or destroyed by fire or other casualty. In any of such events said bonds shall be subject to redemption and payment at the par value thereof, plus accrued in- terest thereon to date of redemption, together with a premium of -7- 2 1/4f of the principal amount of bonds so called for redemption and payment. 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 herein named not less than 30 days prior to the date fixed for redemption and payment and as otherwise provided in the bond 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 perform- ed and do exist in due and regular form and manner as required by the Constitution and laws of the State of Kansas. IN WITNESS !,,THERE -OF., the City of Salina, Kansas, by its governing; body, has caused this bond to be signed by its Mayor and attested by its City Clerk, and its corporate sea]. to be hereto affixed and the interest coupons hereto attached to be signed with the facsimile signatures of said officers, and this bond to be dated this first day of April, 1966. ATTEST: City Clerk Mayor Coupon No. (FORM OF COUPON) First Coupon for 2 All other Coupons for months from April 1, 6 months due June 1 1966 due June 1 1966 and December 1 9.5 $118-75 Unless previously called for prior ) June 1, redemption and payment thereof duly made or pro- vided for, on the first day of 'Tune the City of Salina, Kansas, will pay bearer, solely from the money and revenue received from the _fees charged and rentals received for the use of the Facility described in the bond to which this coupon is attached, and not from any other fund or source, in lawful money of the United States of America, at Mercantile National Bank at Dallas, in the City of Dallas, Texas, being; interest due on its Salina, Kansas, Community Inn and Convention Center Revenue Bond, Series A. dated April 11 1966, No. ATTEST: (facsimile) City Clerk (facsimile) Mayor December 1, 19—. City of Salina, Kansas Salina, Kansas, Community Inn and Convention Center Revenue Bond, Series A. ------------------------------------------------------------------- (FORM OF SUPPLEMENTAL COUPON) Coupon No. A First Coupon for 1 month due June 1, 1966 $5.21 Other Coupons for 6 months due June 1 and December 1 31.25 Unless previously called for prior re- demption and payment thereof duly made or pro- vided for on the Pi.rst da of June 19 ' y December, the City of Salina, Kansas, will pay b.:arer, solely from the money and revenue received from the fees charged and rentals received for the use of the Facility described in the bond to which this coupon is attached, and not from any other fund or source, , in lawful money of the United States of America, at Mercantile National Bank at Dallas, in the City of Dallas, Texas, being interest due on its Salina, Kansas, Community Inn and Convention Center Revenue Bond, Series A, dated April 1, 1966. No. (facsimile) Mayor ATTEST: (facsimile) City Clerk STATE OF KANSAS ) ) SS. COUNTY OF SALINE ) June 1, December 1, 19 City of Salina, Kansas Salina, Kansas, Community Inn and Convention Center Revenue Bond, Series A. 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 -10- , 1966. City Clerk SECTION 6. The Mayor and City Clerk are hereby authorized and directed to prepare and execute in the manner hereinbefore specified the Salina, Kansas, Community Inn and Convention Center Revenue Bonds, Series A, of the City herein authorized, and to deliver said bonds to Almon, McKinney & Dudley, Inc., of Dallas, Texas, the purchaser thereof, on payment of the purchase price ir'-Iich shall be deposited with the Fiscal Agent hereinafter designated. SECTION 7. The City hereby designates (1) Mercantile National Bank at Dallas in the City of Dallas, Texas, as the City's Fiscal Agent, hereinafter referred to as the Fiscal Agent and (2) Planters State Bank in the City of Salina, Kansas as its Co -Fiscal Agent, hereinafter referred to as the Co -Fiscal Agent. There is hereby authorized and ordered to be established in the hands of the Fiscal Agent five separate accounts, as follows:. (a) "Salina Community Inn of America, Inc. Construction Fund" (hereinafter referred to as the "Construction Fund.") (b) "City of Salina, Kansas, Principal and Interest Ac- count for Salina, Kansas, Community Inn and Convention Center Revenue Bonds, Series A, Dated April l,_ 1966" (hereinafter referred to as the "Principal and Interest Account for Series A Bonds.") (c) "Reserve Account for Salina, Kansas, Community Inn and Convention Center Revenue Bonds, Series A, Dated April 1_, 1966" (hereinafter referred to as the "Reserve Account for Series A Bonds.") (d) "City of Salina, Kansas, Principal and Interest Account for Salina, Kansas, Community Inn and Convention Center Rev=enue Bonds, Series B, dated Anril 1, 1966" (hereinafter referred to as the "Principal and Interest Account for Series B Bonds.") (e) "Redemption Account for Salina, Kansas, Community Inn and Convention Center Revenue Bonds, Series A. Dated April 1, 1966" (hereinafter referred to as "Redemption Account for Series A Bonds.") There is hereby authorized and ordered to be established in the hands of the Co -Fiscal Agent two separate accounts, as follows: (f) "Salina Community Inn of America, Inc., Revenue Account" (hereinafter referred to as the "Revenue Account.") 0-) "Reblacement and Maintenance Account - Salina Community Inn and Convention Center Revenue Bonds, Dated April 1, 1966" (hereinafter referred to as the "Replacement and Maintenance Account.") SECTION 8. The proceeds from the sale of said bonds ( less any expenses incurred by said City in connection with the issuance and sale thereof, including; but not limited to underwriting expenses, legal fees and expenses of counsel and publication expenses, which expenses shall be paid out of said proceeds by the Fiscal Agent as directed by the City and any accrued interest received by said City from the sale of said bonds, plus such additional amount as may be necessary, together with such accrued interest, to pay the interest becominrr due on the Series A and Series B Bonds on June 1 and December 1, 1966, June 1 and December 1, 1967 and June 1, 19681 and deposit same in "Principal and Interest Account for Series A Bonds," and "Principal and Interest Account for Series B Bonds," respectively, hereinafter created, said deposit representing; interest durinrr, the construction of the Facility), together with $6501000 cash from tenant, shall be deposited in the "Construction Fund." The Fiscal Agent shall make disbursements from said Con- struction Fund for the completion of the Facility in accordance with the terms and provisions of the Lease dated April 1, 19663 -12- between said City and said Salina Community Inn of America, Inc., and authorized by the provisions of this ordinance. Any moneys in said Fund not required for such purpose shall be deposited in the 'Trincipal and Interest Account for Series A Bonds" at such time as the Company shall certify that the Facility is complete. SECTION 9. The City covenants and agrees that from and after the delivery of the Series A Revenue Bonds herein authorized and continuing so long as any of said bonds shall remain outstanding, said City will maintain said accounts Neferred to in Section 7, here- inbefore set out. SECTION 10. As long as any of the Bonds herein authorized remain outstanding and unpaid, Salina Community Inn of America, Inc., shall deposit with the Co -Fiscal Agent in the "Revenue Account" as hereinbefore provided, monthly, beginning on the 10th day of the month following the date the project is put into operation, but in no case later than December 10, 1967, and on the 10th day of each month thereafter (a) 1/12 of the aggregate requirements as called for by Exhibits C, D, E and F hereto being the aggregate of all basic rent as provided for under Article II of the Lease, and (b) such additional amounts as may constitute additional rent as provided for in Article II of said Lease. Additionally, Salina Community Inn of America, Inc., shall deposit semi-annually on May 1 and November 1 of each year with the Co -Paying Agent in said "Revenue Account" (e) all remaining net revenues derived from the operation of the project after paying expenses of operating and maintaining the pro- ject as provided for in Article XXVII (b) of the Lease. The Co -Fiscal Agent is hereby directed to transmit to Fiscal Agent on May 15 and November 15 of each year beginning in that semi-annual period following which the project is put into operation, but in no case later than November 15, 1967, all amounts then residing in its "Revenue Account." The Fiscal Agent shall apply and allocate -13- these funds immediately upon receipt of same from the Co -Fiscal Agent, as long as any of the Revenue Bonds herein authorized remain outstanding and unpaid, as follows: (a) There shall. first be credited to and deposited in the "Principal and Interest Account for Series A Bonds," as herein- before established, all moneys due under Exhibit C to said Lease. (b) There shall next be credited to and deposited in the "Reserve Account for Series A Bonds," as hereinbefore established, all moneys due under Exhibit D to said Lease. (c) There shall next be transmitted to the Co -Fiscal Agent and the said Co -Fiscal Agent will credit to and deposit in the "Replacement and Maintenance Account," as hereinbefore established, all moneys required. under Exhibit F to said Lease. (d) There shall next be credited to and deposited in the "Principal and Interest Account for Series B Bonds," as hereinbefore provided, all moneys due under Exhibit E to said Lease. The City's obligations to make payments to said Principal and Interest Account for Series B Bonds shall be junior and subordinate in all respects to the City's obligation to make the payments provided for in sub- paragraphs (a), (b) and (c) above. (e) There shall next be credited to and deposited in the "Redemption Account for Series A Bonds," as hereinbefore provided, all remaining uncredited and unallocated funds held by the Fiscal Agent; PROVIDED, HOWEVER, if the Company shall ever be compelled to use or expend its operating; capital to such an extent as to reduce the amount thereof available at any time to less than the amount re- quired to be maintained by the Company under. Article II of the Lease to wit the sum of 1150,0003 then and in such event, upon an appropri- ate certificate signed by an executive officer of the Company, such remaining and unallocated funds held by the Fiscal Agent shall be paid out to the Company for that purpose and to the extent necessary to restore operating; capital to the amount required by said Article II of the Lease, before any such funds are allocated to said Redemption Account for `aeries A Bonds. All amounts credited to and deposited in said "Principal and Interest Account for Series A Bonds" (Sub -Paragraph (a) above) shall be expended and used for the sole purpose of paying the princi- pal of and interest on said Bonds herein authorized as the same become due. All moneys credited to and deposited in said "Principal and Interest Account for Series B Bonds" (Sub -Paragraph (d) above) shall be expended and used solely for the purpose of paying interest on -14a- and principal of said Series B Bonds in manner provided for by the ordinance authorizing said Bonds. All amounts credited to and deposited in said "Reserve Account for Series A Bonds" (Sub -Paragraph (b) above) shall be expended and used by the Fiscal Agent solely to prevent any default in the payment of interest on or principal of said Series A Bonds if moneys in the "Principal and Interest Account for Series A Bonds" are insufficient to pay said principal or interest as and when the same become due. When the amount in said "Reserve Account for Series A Bonds" aggregates the principal amount of $120,000, the Fiscal Agent shall not be required to make any further deposits to said account, but if the Fiscal Agent shall ever be compelled to use or expend any part of said deposits for the purpose of paying interest on or principal of the Series A Revenue Bonds herein authorized, then the Fiscal Agent shall, after mailing all deposits or credits at the time required to be made under the provisions of Sub -Paragraph (a) hereof, out of the first moneys available for that purpose, there- after credit and deposit in said "Reserve Account for Series A Bonds" sufficient funds until said withdrawals are restored. Said "Reserve Account for Series A Bonds" shall be used by the Fiscal Agent for the purpose of redeeming and paying the Revenue Bonds herein authorized prior to their ultimate maturity provided all of such outstanding Bonds are subject to payment and funds are available to pay the same, according to their terms. All amounts credited to and deposited in said "Replacerient and Maintenance Account" (Sub -Paragraph (c) above) shall be expended and used for making replacements or repairs to the Facility from time to time. Moneys in the said account shall be paid out to the Company for that purpose upon an appropriate certificate signed by an executive officer of the Company, that such replacements and/or repairs are necessary. Moneys in the said "Replacement and Maintenance -15- Account" small be allowed to accumulate wit�-iout limitation from deposits made therein according to the provisions of Sub -Paragraph (g) of Section 7 and Sub -Paragraph (c) of Section 10 in this Ordinance and under Exhibit F to the Lease and may be used to the limit available for replacements and/or repairs from time to time as the same are necessary. Moneys in the said "Replacement and Mainten- ance Account" shall also be used by the Fiscal Agent for the purpose of paying the principal of and interest on the Series A Revenue Bonds herein authorized if no other funds are available for that purpose. All amounts credited to and deposited in said "Redemption Account for Series A Bonds" shall be used by the Fiscal Agent for the purpose of calling any of said bonds for redemption and payment, if the same be subject to redemption, and said Fiscal Agent shall act for the City in so calling said bonds, said redemption to be made by the City in the manner and after the notice herein provided for. Moneys in said Redemption Account for Series A Bonds shall also be used by the Fiscal Agent to pay principal of and interest on said Series A Bonds herein authorized, if no other funds are available for that purpose. SECTION 11. 11hen moneys accumulated in Principal and Interest Account for Series A Bonds, Reserve Account for Series A Bonds and Redemption Account for Series A Bonds shall aggregate an amount sufficient to pay the principal of all of said Series A revenue bonds then outstanding, and all interest accrued to date fixed for redemption and payment, together with the premium required to pay the same upon call for redemption and payment, and when said bonds become subject to redemption, said City shall proceed to give notice of such redemption in the manner herein specified, and said Fiscal Agent shall forward the necessary funds to the Paying Agent out of said Accounts. Any balance in said accounts not required for said purpose shall be returned to Salina Community Inn of America, Inc. --16- SECTION 12. Moneys in the Construction Fund shall, upon instructions from the Company, be invested by the Fiscal Agent in direct obligations of the United }States Government becoming due within twelve months from date of purchase. Moneys allocated and credited to and deposited in Principal and Interest Account for Series A Bonds may be invested by the Fiscal Agent, upon instructions from the Company, in any such obligations becoming due not later than twenty days prior to the next principal and interest paying date. Moneys in the Reserve Account for Series A Bonds, in the Replacement Account and in the Redemption Account for Series A Bonds shall be invested by the Fiscal Agent or Co -Fiscal Agent upon the instructions from the Company, in any such obligations becoming due within five years from the date of purchase. 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 for which they are intended. All interest on any bonds or other investments held in any account authorized and established by this ordinance shall accrue to and become a part of such 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 said bonds as follows: (A) The City will comply fully with all the terms, pro- visions and conditions of the Lease which require performance by or impose duties on the City and that 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 condi- tions of the Lease which require performance by, or impose duties on -17- Salina Community Inn of America, Inc., and in the event of the occurrence of a default, as defined in the Lease, 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 tho 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 lease provisions which will provide funds sufficient in amount to make the rental payments and other charges which Salina Community Inn of America, Inc is required to make under the Lease dated Anril 1, 1966. 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 riot less than seventy-five per cent (75;5) of the bonds herein authorized at the time outstanding, sell the Facility leased at a price not less than the amount of then outstanding revenue bonds plus interest then unpaid. (13) The City will. enforce, and will, permit the Fiscal Agent to enforce on it 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 authorized hereby 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 cr gimes when the same are due and ;payable under said Lease. The City's obl.i at:ion to pay the expenses of such en- forcement shall be limited to funds made available to it for that purpose by the bondholders or other interested parties. (C) That until payment of all the bonds and interest thereon has ween duly made or provided for, the City will not con -- sent to any change, amendment, modification or termination of said Lease, except as provided therein_ which will in any manner affect adversely the rights, remedies or interest of the bondholder. (D) Any purchase price o..: the leased property received by City pursuant to the termination of the Lease, any proceeds or condemnation awards, insurance proceeds or any other funds intended for the purpose of paying said bonds will be used first solely and enclusively to pay the bonds herein authorized and the interest thereon according to their terms or to redeem and pay any of said bonds then outstanding and unpaid and then subject to redemption and payment. gpon receipt of any such Funds, is said bonds be then sub` :pct to redemption and payment, the City shall proceed promptly to cell said revenue bonds for redemption and payment according to their terms and shall give notice thereof provided for by the teras of this ordinance. Such funds shall be deposited with the Fiscal Agent, and the same shall be used first solely for the payment of the revenue bonds herein authorized, accrued interest thereon, any premium provided for by this ordinance and the charges of the Fiscal Agent for paylnC the same. (E) The City will not issue any other obligations payable from payments made by Salina Community Inn of America, 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 said Lease nor will it, unless required by law or by the terms of said Lease sell or .19- or otherwise dispose of the Facility or any part thereof; provided, however, that said City may Issue from time to time additional revenue bonds for the purpose of extending and improving the facili- ties financed out of the proceeds of the revenue bonds herein author- ized or completing the construction or acquisition thereof, or con- structing and equipping additional improvements which extensions and improvements may be located on the land hereinbefore described, provided the following terms and conditions are met: (a) The City shall have entered into a lease or agree- ment with Salina Community Inn of America, Inc. with rentals or payments at least sufficient to pay the principal of and interest on said additional bonds as the same become due, and provided Salina Community Inn of America, Inc. first enters into a management con- tract with Hilton Hotel Corporation, a Delaware corporation, or an affiliate of said corporation, for the operation and management of said addition. (b) Salina Community Inn of America, Inc. is not in de- fault with respect to the payment of rent or with respect to any other material obligation or covenant contained in said Lease. (c) That the annual aggregate deposits made by the Com- pany into the Revenue Account maintained by the Co -Fiscal Agent as provided for in Section 10 of this ordinance, including the sum of all basic rents, additional rents and surplus earnings from operations, shall have exceeded for the two fiscal years prior to issuance of any additional bonds, total annual requirements into the Principal and Interest Account for Series A Bonds, Principal and Interest Account for Series B Bonds as required in Exhibits C and E to the Lease, and any additional bonds issued pursuant to subparagraph (d) below by not less than one and one-half times, including the annual require- ments on any bonds then proposed to be issued. (d) Nothing contained in this Section 13 shall prevent the City from issuing, not to exceed One Hundred Fifty Thousand -20- Dollars ($150,000), additional principal amount of bonds under the terms of this ordinance having a parity charge or lien on the revenues of the Facility with the Series A Bonds authorized herein; provided, however, such additional Bonds may only be issued for the purpose of completing the Facility. Any such issuance of additional Bonds shall be accompanied by a revision of basic rents under Exhibit C to the Lease and mature substantially pro rata with the bonds authorized herein. (e) Nothing contained in this Section 13 shall prevent the City from issuing, not to exceed $600,000, principal amount of revenue bonds to finance the construction and equipping of the Facility which bonds are to be paid out of rentals due under the Lease, provided said additional bonds are junior and subordinate in all respects to the Bonds h-erein authorized, including the pay- ment of the principal and interest and said additional bonds become due after December 1, 1988. (F) The City will cause the Company to keep constantly insured all buildings and improvements from time to time, constitut- ing a part of the property and premises leased by the Company, in the manner provided for by the Lease herein authorized. The City's share of the proceeds of any such insurance policies shall be pay- able 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 Article XX of said Lease. (G) The City will keep books and records, or cause the Fiscal Agent to keep books and records relating to the Facility, i,:rhich shall be separate and apart from all other books, records and accounts of the City, in which complete and correct entries shall be made in accordance with standard principles of accounting of all transactions relating to the leased property and improvements and the original purchasers of the revenue bonds herein authorized, any -21- bondholder of the bonds authorized herein, or their agents, shall have the right at all reasonable times to inspect all records, accounts and data of the City relating to the leased property and improvements. In the event said boo;is and records are maintained by the City rather than by the Fiscal Agent, the City shall, at least once a year cause such books, records and accounts to be properly audited by a competent auditor or accountant of recognized standing or by the City Clerk and shall make said audit available at all reasonable times to any bondholder or to the Company. A copy of said audit shall also be mailed to Almon, McKinney & Dudley, Inc. of Dallas, Texas, the purchaser. 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 outstand- ing; provided, that no such modification or amendment siiall 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) a reduction in the principal amount of any bonds or the rate of interest thereon, or (c) a reduction in the 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 may, however, be modified or amended in any respect with the written con- sent 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 amend- -22- ing 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 amend- ment or modification, if any. A certified copy of every such amend- atory or supplemental ordinance, if any, 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 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 con- stitute 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 en- force or compel performance of all duties and obligations rec!uired by this ordinance to be done or performed by said City. Nothing contained in this ordinance, shall, however, be construed to impose on said City any duty or obligations 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. That the tract of land hereinbefore described and the improvements and equipment to be acquired, installed and Con- structed thereon pursuant to this ordinance shall be leased to Salina Community Inn of America, Inc., under and pursuant to a Lease dated April 1, 1966, substantially in the form attached to this ordinan,:e, 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. -23- SECTION 17. If any one or more of the covenants, agree- ments or provisions of this ordinance or of said Lease dated April 1, 1966, 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 sliall in no way affect the validity of the other provisions of this ordinance or of the bonds or coupons issued hereunder, or the Lease. SECTION 18. This ordinance shall take effect and be in force frorn and after its passage and publication in the official City paper. PASSED by the Governing Body of the City of Salina, Kansas, this 8th day of r'arch, 1966. Mayor ATTEST: h City Clerk APPROVED by the Mayor this 8th day of `larch, 1966. ATTEST: City Clerk -24- may.