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97-9836 Issue IRB(Published in the Salina Journal on Novemberg,1997) ORDINANCE NO.97-9836 AN ORDINANCE AUTHORIZING THE CITY OF SALINA, KANSAS, TO ISSUE $980,000 PRINCIPAL AMOUNT OF INDUSTRIAL REVENUE BONDS (CORONADO ENGINEERING, INC. PROJECT) SERIES 1997, FOR THE PURPOSE OF PROVIDING FUNDS TO PAY PART OF THE COST OF THE ACQUISITION, CONSTRUCTION, FURNISHING AND EQUIPPING OF A MANUFACTURING FACILITY; AUTHORIZING THE CITY TO ENTER INTO A TRUST INDENTURE WITH SUNFLOWER BANK, N.A.; AUTHORIZING THE CITY TO ENTER INTO A LEASE AGREEMENT WITH CORONADO ENGINEERING, INC.; AND AUTHORIZING AND APPROVING THE EXECUTION OF CERTAIN DOCUMENTS AND THE TAKING OF OTHER ACTIONS IN CONNECTION WITH THE ISSUANCE OF SAID BONDS. WHEREAS, the City of Salina, Kansas (the "City"), is authorized pursuant to the provisions of K.S.A. 12-1740 et seg., all as amended (the "Act"), to acquire, construct, furnish and equip certain commercial and industrial facilities, and to issue industrial revenue bonds for the purpose of paying the cost of such facilities, and to lease such facilities to private persons, firms or corporations; and WHEREAS, the governing body of the City has heretofore and does now find and determine that it is desirable in order to promote, stimulate and develop the general economic welfare and prosperity of the City and the State of Kansas that the City issue its Industrial Revenue Bonds (Coronado Engineering, Inc. Project), Series 1997, in the principal amount of $980,000 (the "Bonds"), for the purpose of providing funds to pay part of the cost of the acquisition, construction and equipping of a manufacturing facility (the "Project"), and that the City lease the Project to Coronado Engineering, Inc., a Kansas corporation (the "Company"); and WHEREAS, the governing body of the City further finds and determines that it is necessary and desirable in connection with the issuance of these bonds that the City enter into certain agreements, and that the City take certain other actions and approve the execution of certain other documents as herein provided; NOW, THEREFORE, BE IT ORDAINED BY THE GOVERNING BODY OF THE CITY OF SALINA, KANSAS, AS FOLLOWS: Section 1. Authorization for the Acquisition, Construction, Furnishing and Equipping of the Project. The City is hereby authorized to provide for the acquisition, construction, furnishing, and equipping of the Project, all in the manner and as more particularly described in the Indenture and the Lease hereinafter authorized. Section 2. Authorization of and Security for the Bonds. The City is hereby authorized to issue and sell the Bonds for the purpose of providing funds to pay a part of the cost of acquiring, constructing, furnishing and equipping the Project. The Bonds shall be issued and secured pursuant to the herein authorized Indenture and shall bear such date, shall mature at such time, shall be in such denominations, shall bear interest at such rates, shall be in such form, shall be subject to redemption and UWP *Sw. other terms and conditions, and shall be issued in such manner, subject to such provisions, covenants and agreements, as are set forth in the Indenture. The Bonds shall be payable solely out of the rents, revenues and receipts derived by the City from the Project, and the Project and the net earnings derived by the City from the Project shall be pledged and assigned to the Trustee as security for payment of the Bonds as provided in the Indenture. Section 3. Authorization of Documents. The City is hereby authorized to enter into the following documents, in substantially the forms presented to and reviewed by the governing body of the City (copies of which documents, upon execution thereof, shall be filed in the office of the City Clerk), with such changes therein as shall be approved by the officers of the City executing such documents, such officers' signatures thereon being conclusive evidence of their approval thereof: (a) Trust Indenture dated as of November 1, 1997 (the "Indenture"), between the City and Sunflower Bank, N.A. (the "Trustee"), pursuant to which the Bonds shall be issued and the City shall pledge the Project and assign the rents, revenues and receipts received pursuant to the Lease to the Trustee for the benefit of and security of the holder of the Bonds upon the terms and conditions as set forth in said form of Indenture; (b) Lease Agreement dated as of November 1, 1997 (the "Lease"), between the City and the Company under which the City will agree to use the proceeds derived from the sale of the Bonds for the purpose of purchasing, constructing, furnishing and equipping a part of the Project and to lease the Project to the Company, and the Company will agree to make payments in amounts sufficient to provide for the payment of the principal of, redemption premium, if any, and interest on the Bonds as the same become due; (c) Tax Compliance Agreement dated as of November 1, 1997 (the "Tax Compliance Agreement") among the City, the Company and the Trustee, pursuant to which the parties agree to certain provisions to assure the exemption of the interest on the Bonds from federal income taxes. (d) Payment in Lieu of Tax Agreement dated as of November 1, 1997 (the "Tax Abatement Agreement") between the City and the Company pursuant to which the Company agrees to make certain payments in lieu of taxes in the amounts and at the times set forth in the Tax Abatement Agreement. Section 4. Execution of Bond and Documents. The Mayor of the City is hereby authorized and directed to execute the Bonds and to deliver the Bonds to the Trustee for authentication for and on behalf of and as the act and deed of the City in the manner provided in the Indenture. The Mayor of the City is hereby authorized and directed to execute the Indenture, the Lease, the Tax Compliance Agreement, the Tax Abatement Agreement and such other documents, certificates and instruments as may be necessary or desirable to carry out and comply with the intent of this Ordinance, for and on behalf of and as the act and deed of the City. The City Clerk of the City is hereby authorized and directed to attest to and affix the seal of the City to the Bonds, the Indenture, the Lease, the Tax Compliance Agreement, the Tax Abatement Agreement and such other documents, certificates and instruments as may be necessary. Section 5. Approval of Guaranty Agreements. The Guaranty Agreements dated as of November 1, 1997, pursuant to which the Company and certain other named individuals guarantee to the Trustee, for the benefit of the owners of the Bonds, the full and prompt payment of the principal of, redemption premium, if any, and interest on the Bonds, are hereby approved. -2- cora hd.M S.O. Section 6. Further Authority. The City shall, and the officers, employees and agents of the City are hereby authorized and directed to, take such action, expend such funds and execute such other documents, certificates and instruments as may be necessary or desirable to carry out and comply with the intent of this Ordinance and to carry out, comply with and perform the duties of the City with respect to the Bonds, the Indenture, the Lease, the Tax Compliance Agreement and the Tax Abatement Agreement. Section 7. Effective Date. This Ordinance shall take effect and be in force from and after its passage and publication in the Salina Journal. PASSED by the governing body of the City of Salina, Kansas, this November 3 , 1997. Second reading November 10, 1997 [SEAL] ATTEST: Clerk -3- Mayor