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93-9614 Issue BondsKunn-Cox Priming — Sa�lna, Kansas Document No. K102008\ORD3 _�-«<--------------------see--------�_�==e CITY OF SALINA, KANSAS ORDINANCE NO. 93-9614 $11,390,000 COMBINED WATER AND SEWAGE SYSTEM REVENUE REFUNDING BONDS SERIES 1994 DATED: JANUARY 1, 1994 Kinn -Cox Printing - Sal- Kansas _ ORDINANCE NO. 93- 011 OF THE CITY OF SALINA, KANSAS PAGE Recitals.............................................. l S ilction 1. Definitions ....................................... 3 S tion 2. Authorization of and Security for the 1994 Bonds ............... 9 S ction 3. Description of the Bonds, Designation of Paying Agent and Bond Registrar ................................. 10 S tion 4. Method and Place of Payment of Principal of and Interest �-- on the Bonds .................................... 10 S tion 5. Execution, Authentication and Delivery of the Bonds ............. 11 S ion 6. Registration, Transfer and Exchange of Bonds ................. 12 S ion 7. Persons Deemed Owners of Bonds ........................ 13 S tion 8. Mutilated, Lost, Stolen or Destroyed Bonds ................... 13 S tion 9. Cancellation and Destruction of Bonds Upon Payment ............ 13 S ion 10. Redemption of Bonds Prior to Maturity ..................... 13 S tion 11. Form of Bonds ..................................... 16 S tion 12. Uncertificated Bonds ................................. 22 S tion 13. Disposition of Proceeds ... .......................... 22 S ion 14. Water and Sewage Fund ............................... 23 S tion 15. Ratification and Creation of Funds and Accounts ................ 23 S tion 16. Application of Moneys in Funds and Accounts ................. 24 S ion 17. Deficiency in Payments or Credits into Funds or Accounts ......... 28 S tion 18. Use of Other Accounts to Pay Bonds and Interest ............... 28 S ion 19. Investments ....................................... 28 S tion 20. Particular Covenants of the City .......................... 29 S ion 21. Additional Bonds ................................... 31 S ion 22. Tax Matters ...................................... 33 S tion 23. Amendments ...................................... 33 S tion 24. Acceleration in the Event of Default ....................... 34 S tion 25. Enforcement ...................................... 34 S ion 26. Defeasance ....................................... 35 S tion 27. Approval of Preliminary Official Statement and Official Statement ..... 35 S ion 28. Authorization of Escrow Trust Agreement .................... 36 S tion 29. Redemption of Outstanding Bonds ......................... 36 S tion 30. Approval of Agreement with Underwriter .................... 36 Section 31. Authorization of Agreement with Bond Registrar and Paying Agent ................................. 36 Senion 32. Payments Under the Bond Insurance Policy ................... 36 Sch.tion 33. Notices Required by the Bond Insurer ...................... 38 Son 34. Severability ....................................... 38 S 'on 35. Effective Date ..................................... 38 A Preliminary Official Statement B Escrow Trust Agreement C Agreement with Underwriter D Agreement with State Treasurer Kuhn -Cox Priming — Salina, Kansas (PUBLISHED IN THE SALINA JOURNAL JANUARY d, 1994) ORDINANCE NO. 93- WIV ANORDINANCE AUTHORIZING AND DIRECTING THE ISSUANCE, SALE AND DELIVERY OF $ �NDS,390,000 PRINCIPAL AMOUNT OF COMBINED WATER AND SEWAGE SYSTEM REVENUE FUNDING BONDS OF THE CITY OF SALINA, KANSAS, FOR THE PURPOSE OF REFUNDING PORTION OF A PRIOR ISSUE OF COMBINED WATER AND SEWAGE SYSTEM REVENUE OF THE CITY, PRESCRIBING THE FORM AND DETAILS OF SAID REVENUE BONDS, OVIDING FOR THE COLLECTION, SEGREGATION AND APPLICATION OF THE REVENUES SAID SYSTEM FOR THE PURPOSES AUTHORIZED BY LAW, INCLUDING PAYING THE ST OF OPERATION AND MAINTENANCE OF SAID UTILITY, PAYING THE PRINCIPAL OF D INTEREST ON THE REVENUE BONDS OF SAID CITY ISSUED AGAINST SAID SYSTEM D PROVIDING ADEQUATE RESERVE FUNDS, MAKING CERTAIN COVENANTS WITH SPECT TO SAID BONDS; AND APPROVING A PRELIMINARY OFFICIAL STATEMENT AND FICIAL STATEMENT RELATING TO SAID BONDS. WHEREAS, the City of Salina, Kansas (the "City"), has heretofore combined the waterworks si stem and the sewage disposal system of said City, as said systems are defined and referred to in K.S.A. 1 456 to 12-868, inclusive, as amended (the "Act") and said combined water and sewage system (the "Water and Sewage Utility" or the "combined water and sewage system") has thenceforth been operated d financed in accordance with the provisions of the Act, and WHEREAS, the City has heretofore issued an issue of Combined Water and Sewage System Bonds, Series of 1977, in the original principal amount of $3,000,000 (the "1977 Bonds"), ed by Ordinance No. 8546 of said City (the "1977 Ordinance"), and WHEREAS, the City has heretofore issued its Combined Waterworks and Sewer System Jing Revenue Bonds, Series of 1978, in the original principal amount of $4,394,000 (the "1978 "), authorized by Ordinance No. 8635 of the City (the "1978 Ordinance"), for the purpose of ing, among other bond issues, the 1977 Bonds, and although payment of the 1977 Bonds was duly .ed for pursuant to an escrow agreement, under the terms of the 1977 Ordinance, the 1977 ince was not defeased, and WHEREAS, pursuant to Ordinance No. 90-9391 of the City adopted by the governing body on 2, 1990 (the "1990 Ordinance") the City issued $2,210,000 of its Combined Water and Sewage tem Revenue Bonds, Series 1990-B (the "Series 1990-B Bonds") to (mance certain improvements to Water and Sewage Utility; and WHEREAS, the 1990 Ordinance also authorized the issuance of $5,655,000 Combined Water and Sewage System Revenue Refunding Bonds, Series 1990-A (the "1990-A Bonds"), in addition to the Series 1990-13 Bonds (the 1990-A Bonds and the 1990-B Bonds being collectively referred to as the "1990 B nds"), to refund and defease the 1984 Bonds, the 1987 Bonds and the 1988 Bonds (as those terms are h einafter defined), and WHEREAS, the City has heretofore issued its Combined Water and Sewage System Revenue ing Bonds, Series 1992, in the original principal amount of $15,000,000 (the "1992 Bonds"), zed by Ordinance No. 92-9513 (the "1992 Ordinance"), to finance certain improvements to the KOI-Cox Printing — Salina, Kansas ater and Sewage Utility, and has spent all of the proceeds received from the 1992 Bonds for such inose. and WHEREAS, the City has heretofore issued its Combined Water and Sewage System Improvement ;venue Bonds, Series 1993-A, in the original principal amount of $3,200,000 (the "1993 Bonds"), thorized by Ordinance No. 93-9579 (the "1993 Ordinance") to finance certain improvements to the ater and Sewage Utility, and WHEREAS, except for the 1977 Bonds, the 1990 Bonds, the 1992 Bonds and the 1993 Bonds, City has no other combined water and sewage system revenue bonds outstanding which have not been rased, and WHEREAS, the governing body of the City hereby finds and determines that it is desirable and the best financial interest of the City to refund the portion of the 1992 Bonds maturing on October 1, 01, through October 1, 2012, inclusive, in the principal amount of $11,045,000 (the "Refunded ends") with the proceeds of the bonds herein authorized, and WHEREAS, pursuant to the provisions of K.S.A. 10-116x, as amended, and the Act, the City is authorized and empowered (1) to issue its revenue refunding bonds to refund any previous issue or is ues or part thereof of its outstanding revenue bonds, and (2) if such revenue refunding bonds are sold re than six months prior to the maturity or earliest prior redemption date of the bonds being refunded, tc deposit the proceeds derived from such sale, together with any other available moneys, in escrow under a st agreement with a Kansas bank having full trust powers, and (3) pending the application of the pipceeds of such revenue refunding bonds and other available funds to the payment of the principal, act -rued interest and redemption premium of the revenue bonds to be refunded, to invest such proceeds other available moneys in direct obligations of, or obligations the principal of and the interest on w ich are unconditionally guaranteed by, the United States of America, which obligations shall mature oi be subject to redemption not later than the respective dates when the proceeds of said obligations to ether with the interest accruing thereon and any other moneys or investments held in escrow will be required for the purposes intended, all as provided in the Act, and WHEREAS, it is hereby found and determined that it is necessary and desirable at this time that City issue, sell and deliver its combined water and sewage system revenue refunding bonds pursuant :.S.A. 10-116a and the Act as hereinafter provided in an amount sufficient, together with other funds he City which are or will become available, to refund the Refunded Bonds, and that the City enter an Escrow Trust Agreement, dated as of January 1, 1994, authorized by Section 28 of this linance, between the City and UMB National Bank of America, Salina, Kansas, providing for the lication of the proceeds derived from the sale of such revenue refunding bonds and other available ieys to the payment of the Refunded Bonds, and WHEREAS, prior to or concurrently with the issuance and delivery of the combined water and age system revenue refunding bonds herein authorized, the City will give notice of its intention to call redemption and payment prior to maturity the Refunded Bonds as provided in Section 29 hereof, and WHEREAS, under the provisions of the 1977 Ordinance, the City may issue additional bonds D out of the revenues of the Water and Sewage Utility which are junior and subordinate to the 1977 provided the conditions set forth in Section 16 of the 1977 Ordinance are met, and M Kinin -Cor Priming — Salina. Kansas WHEREAS, the governing body of the City hereby finds and determines that the issuance of the .nue bonds herein authorized will conform and comply in all respects with the conditions set forth in 1977 Ordinance; and WHEREAS, under the provisions of the 1990 Ordinance, the 1992 Ordinance and the 1993 linance, the City may issue additional bonds payable out of the revenues of the Water and Sewage ,ity which are on a parity with the 1990 Bonds, the 1992 Bonds and the 1993 Bonds provided that the ditions set forth in Section 21 of the 1990 Ordinance, the 1992 Ordinance and the 1993 Ordinance met, and WHEREAS, the governing body of the City hereby finds and determines that the issuance of the -- revenue bonds herein authorized on a parity with the 1990 Bonds, the 1992 Bonds and the 1993 Bonds wi 1 conform and comply in all respects with the conditions set forth in the 1990 Ordinance, the 1992 O inance and the 1993 Ordinance; and WHEREAS, the governing body of the City hereby finds and determines that it is necessary to the revenue bonds herein authorized to refund the Refunded Bonds. NOW, THEREFORE, BE IT ORDAINED BY THE GOVERNING BODY OF THE CITY OF k, KANSAS: Section 1. Definitions. In addition to the words and terms otherwise defined herein, unless the itext shall clearly indicate some other meaning, the words and terms defined in this Section shall for purposes of this Ordinance have the respective meanings specified in this Section, to wit: "Authorized Officer of the City" means the Finance Director, City Clerk or any officer of the succeeding to the functions of any of said officers. "Bondholder" and "Holder" mean a Person in whose name a Bond is registered in the Bond "Bond Insurance Policy" means the financial guaranty insurance policy issued by the Bond Insurer the date of delivery of the Bonds insuring the payment when due of the principal of and interest on Bonds as provided therein. "Bond Insurer" means Municipal Bond Investors Assurance Corporation, New York, New York, a ew York stock insurance company, and any successors or assigns thereto. "Bond Register" means the register and all accompanying records kept by the Bond Registrar ng the registration, transfer and exchange of Bonds. "Bond Registrar" means the Treasurer of the State of Kansas, Topeka, Kansas, and its successors acting in the capacity as registrar and transfer agent for the registration, transfer and exchange of and any successors thereto. "Bonds" or "1994 Bonds" means the $11,390,000 principal amount of Combined Water and System Revenue Refunding Bonds, Series 1994, authorized by this Ordinance. 511 Kinn -Cox Printing — Salina, Kansas "City" means the City of Salina, Kansas. "Consulting Engineer" means an independent consulting engineer, or firm of engineers, appointed time to time and having a favorable reputation for skill and experience in the operation of water and r utilities retained by the City. "Costs of Issuance" means all costs of issuing the Bonds, including all publication, printing, ning and mailing expenses in connection therewith, registration fees, all legal fees and expenses of rid counsel and other legal counsel, expenses incurred in connection with determination or verification yield, all expenses incurred in connection with receiving ratings on the Bonds, and any premiums or )enses incurred in obtaining municipal bond insurance on the Bonds. "Costs of Issuance Account" means the Costs of Issuance Account for the City of Salina, Kansas, ed Water and Sewage System Revenue Refunding Bonds, Series 1994, created herein and in the Trust Agreement. "Escrow Fund" means the Escrow Fund for the City of Salina, Kansas, Combined Water and System Revenue Refunding Bonds, Series 1994, created herein and in the Escrow Trust "Escrow Trust Agreement" means the Escrow Trust Agreement, dated as of January 1, 1994, the City and the Escrow Trustee. "Escrow Trustee" means UMB National Bank of America, Salina, Kansas, and its successors and "Interest Payment Date" means the Stated Maturity of an installment of interest on the Bonds. "Letter of Instructions" means the Arbitrage Letter of Instructions (dated as of the date of issuance the Bonds) attached to the City's Closing Certificate to be delivered at the time of issuance and ivery of the Bonds relating to certain matters within the scope of Section 148 of the Code, as the same y be amended or supplemented in accordance with its terms. "Maturity" with respect to any Bond means the date on which the principal of such Bond becomes —.- d e and payable as therein or herein provided, whether at the Stated Maturity of such Bond or by d laxation of acceleration, call for redemption or otherwise. "Net Revenues" means the Revenues less that portion of the Revenues expended for operating d maintaining the Water and Sewage Utility (excluding depreciation, amortization, interest chargeable the income account and other similar payments or charges pursuant to Section 16 of this Ordinance). "1977 Bonds" means the Combined Water and Sewage System Revenue Bonds, Series of 1977, the original principal amount of $3,000,000, authorized by the 1977 Ordinance, all of which were landed with a portion of the proceeds of the 1978 Bonds. "1978 Bonds" means the Combined Water and Sewage System Refunding Revenue Bonds, Series 1978, authorized by the 1978 Ordinance, all of which were refunded and deemed to be paid with a -tion of the proceeds of the 1984 Bonds. -4- Kuhn Go. Printing — Salina, Kansas 11 1 as "1984 Bonds" means the Combined Water and Sewage System Refunding Revenue Bonds, Series 1984, in the original principal amount of $2,770,000, authorized by the 1984 Ordinance, all of which re refunded and deemed to be paid with a portion of the 1990 Bonds. "1987 Bonds" means the Combined Water and Sewage System Revenue Bonds, Series of 1987, the original principal amount of $2,650,000, authorized by the 1987 Ordinance, all of which were ended and deemed to be paid with a portion of the 1990 Bonds. "1988 Bonds" means the Combined Water and Sewage System Revenue Bonds, Series 1988, in original principal amount of $3,000,000, authorized by the 1988 Ordinance, all of which were nded and deemed to be paid with a portion of the 1990 Bonds. "1990 Bonds" means, collectively, the 1990-A Bonds and the 1990-B Bonds. "1990-A Bonds" means the Combined Water and Sewage System Revenue Refunding Bonds, ies 1990-A, in the original principal amount of $5,655,000, which refunded the Series 1984 Bonds, Series 1987 Bonds and the Series 1988 Bonds and which were authorized by the 1990 Ordinance. "1990-B Bonds" means the Combined Water and Sewage System Revenue Bonds, Series 1990-B, the original principal amount of $2,210,000, which were authorized by the 1990 Ordinance. "1992 Bonds" means the Combined Water and Sewage System Revenue Refunding Bonds, Series in the original principal amount of $15,000,000, which were authorized by the 1992 Ordinance. "1993 Bonds" means the Combined Water and Sewage System Improvement Revenue Bonds, ies 1993-A, in the original principal amount of $3,200,000, which were authorized by the 1993 "1977 Ordinance" means Ordinance No. 8546 of the City authorizing the 1977 Bonds. "1978 Ordinance" means Ordinance No. 8635 of the City authorizing the 1978 Bonds. "1984 Ordinance" means Ordinance No. 84-9025 of the City authorizing the 1984 Bonds. "1987 Ordinance" means Ordinance No. 87-9202 of the City authorizing the 1987 Bonds. "1988 Ordinance" means Ordinance No. 88-9292 of the City authorizing the 1988 Bonds. "1990 Ordinance" means Ordinance No. 90-9391 of the City authorizing the 1990 Bonds. "1992 Ordinance" means Ordinance No. 92-9513 of the City authorizing the 1992 Bonds. "1993 Ordinance" means Ordinance No. 93-9579 of the City authorizing the 1993 Bonds. "1994 Ordinance" or "this Ordinance" means this Ordinance of the City authorizing the Bonds, Tally executed or as it may be supplemented or amended from time to time. -5- Klhl Co. Priming — Salina, -- "Operating Expenses" shall mean the City's expenses of operating and maintaining the Water and Pvage Utility and keeping the same in good repair and working order, including all costs due under any le of contractual arrangement with respect to purchases of water and ordinary costs of operation, intenance, production, transmission, distribution, repairs, replacements, engineering, drilling wells, asportation, materials and supplies, salaries, wages, audit, legal, financial, pension, retirement, health, ,pitalization, insurance, taxes and administrative and general expenses and other expenses actually paid accrued, including without limitation any expenses of the City applicable to the Water and Sewage .lity as recorded on its books pursuant to standard accounting practices. Operating Expenses shall not lude any costs or expenses for extending or enlarging the Water and Sewage Utility, charges for )reciation, or payment of debt service on any bonds. —� "Outstanding" when used with respect to Bonds means, as of the date of determination, all Bonds retofore executed, authenticated and delivered under this Ordinance, except: (i) Bonds theretofore cancelled by the Bond Registrar or delivered to the Bond Registrar for cancellation; (ii) Bonds in exchange for or in lieu of which other Bonds have been authenticated and delivered pursuant to this Ordinance; and (iii) Bonds that have been defeased in accordance with Section 26 of this Ordinance. "Paying Agent" means the Treasurer of the State of Kansas, Topeka, Kansas, and its successors. "Permitted Investments" shall mean any of the following so long as such investments are legal the investment of funds of the City: A. Direct Obligations of the United States of America (including obligations issued or held -entry form on the books of the Department of the Treasury) or obligations the principal of and on which are unconditionally guaranteed by the United States of America. B. Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any the following federal agencies and provided such obligations are backed by the full faith and credit of United States of America (stripped securities are only permitted if they have been stripped by the ;ncy itself): 1 2 3 4. U.S. Export -Import Bank (Eximbank) District obligations or fully guaranteed certificates of beneficial ownership Farmers Home Administration (FmHA) Certificates of beneficial ownership Federal Housinz Administration Debentures (FHA) LV! KUM Cnx Printing — Sal—, Kansas 5. General Services Administration Participation certificates 6. Government National Mortgage Association (GNMA or "Ginnie Mae") GNMA - guaranteed mortgage-backed bonds GNMA - guaranteed pass-through obligations 7. U.S. Maritime Administration Guaranteed Title M financing 8. U.S. Department of Housing and Urban Development (HUD) Project Notes Local Authority Bonds New Communities Debentures - U.S. government guaranteed debentures U.S. Public Housing Notes and Bonds - U.S. government guaranteed public housing notes and bonds C. Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any the following non -full faith and credit U.S. government agencies (stripped securities are only permitted i they have been stripped by the agency itself): 1. Federal Home Loan Bank System Senior debt obligations 2. Federal Home Loan Mortgage Corporation (FHLMC or "Freddie Mac") Participation Certificates Senior debt obligations 3. Federal National Mortgage Association (FNMA or "Fannie Mae") Mortgage-backed securities and senior debt obligations 4. Student Loan Marketing Association (SLMA or "Sallie Mae") Senior debt obligations 5. Resolution Funding Coro. (REFCORP) obligations -7- Kuhn -Cox Printing — Salina. K—S 6. Farm Credit System Consolidated systemwide bonds and notes D. Money market funds registered under the Federal Investment Company Act of 1940, shares are registered under the Federal Securities Act of 1933, and having a rating by S&P of -G; AAAm; or AAm. E. Certificates of deposit secured at all times by collateral described in (A) and/or (B) above. certificates must me issued by commercial banks, savings and loan associations or mutual savings The collateral must be held by a third party and the bondholders must have a perfected first itv interest in the collateral. F. Certificates of deposit, savings accounts, deposit accounts or money market deposits ich are full insured by FDIC, including BIF and SAIF. G. Bonds or notes issued by any state or municipality which are rated by Moody's and S&P one of the two highest rating categories assigned by such agencies. H. Federal funds or bankers acceptances with a maximum term of one year of any bank ich has an unsecured, uninsured and unguaranteed obligation rating of "Prime - 1" or "A3" or better Moody's and "A-1" or "A" or better by S&P. I. The municipal investment pool fund established in K.S.A. 12-1677a. "Person" means any individual, corporation, partnership, joint venture, association, joint-stock �, trust, unincorporated organization or government or any agency or political subdivision thereof. "Record Date" for the interest and principal payable on any Interest Payment Date means the 15th (whether or not a business day) of the calendar month next preceding such Interest Payment Date. "Redemption Date" when used with respect to any Bond to be redeemed means the date fixed for ion by or pursuant to this Ordinance. "Redemption Price" when used with respect to any Bond means the price at which it is to be d pursuant to this Ordinance. "Refunded Bonds" means the portion of the 1992 Bonds, maturing on October 1, 2001, through ber 1, 2012, inclusive, in the principal amount of $11,045,000. "Reserve Requirement" means $1,139,000. "Revenues" shall mean (i) as long as any of the 1977 Bonds are outstanding, all revenues, income rents accrued by the City from the ownership and operation of the Water and Sewage Utility and the ceeds of any insurance covering business interruption loss relating to the Water and Sewage Utility wining after the City has provided for the credits and deposits required by the 1977 Ordinance, (ii) r the 1977 Bonds are no longer outstanding, all revenues, income and rents accrued by the City from ownership and operation of the Water and Sewage Utility and the proceeds of any insurance covering -8- Kuhn -COM Printing — Salina, Kansas 11 1 siness interruption loss relating to the Water and Sewage Utility, and (iii) at all times interest received any moneys or securities held pursuant to the 1978 Ordinance including Investment Income (as defined the 1978 Ordinance), received after February 15, 1991, and available for transfer into the Principal I Interest Account (as defined in the 1978 Ordinance) pursuant to Section 12(e) of the 1978 Ordinance L excluding interest from the Escrow Account (as defined in the 1978 Ordinance). "Special Record Date" for the payment of any Defaulted Interest, as defined in Section 4 hereof, a date fixed by the Bond Registrar pursuant to Section 4. "Stated Maturity" when used with respect to any Bond or any installment of interest thereon the date specified in Section 3 of this Ordinance as the fixed date on which the principal of such nd or such installment of interest is due and payable. "Term Bonds" means the Bonds scheduled to mature on October 1, 2012. "Underwriter" shall mean George K. Baum & Company, Kansas City, Missouri. "Water and Sewage Fund" means the fund by that name previously established and reconfirmed Section 14 of this Ordinance. "Water and Sewage Utility" or the "combined water and sewage system" means the combined and sewage system of the City including all extensions, enlargements and improvements thereto ter constructed or acquired by the City. Section 2. Authorization of and Security for the 1994 Bonds. For the purpose of providing funds to refund the Refunded Bonds and, pending such use, to pay interest on the Bonds to and including S ptember 1, 2000, and to pay the Costs of Issuance of the Bonds, there is hereby authorized and directed to be issued the combined water and sewage system revenue bonds of the City in the principal amount D $11,390,000 to be known as "Combined Water and Sewage System Revenue Refunding Bonds, Series 1 94. " The 1994 Bonds shall be special obligations of the City, and the principal of, premium, if any, aii d interest on the 1994 Bonds shall be payable solely from the net revenues of the combined water and s age system and not from any other fund or source. The 1994 Bonds constitute a lien on the net -- re ienues. The taxing power of the City is not pledged to the payment of the 1994 Bonds either as to ipnipal or interest. The 1994 Bonds shall not be or constitute a general obligation of the City, nor shall c y constitute an indebtedness of the City within the meaning of any constitutional, statutory or charter p vision, limitation or restriction. The 1994 Bonds shall be junior and subordinate with respect to the payments of principal and ;t out of the Revenues of the Water and Sewage Utility of the City and in other respects to the 1977 In the event of any default in the payment of either interest on or principal of any of the 1977 the City shall make no payments of either principal of or interest on the 1994 Bonds until such t be cured. The City has duly provided for the payment of the 1977 Bonds in accordance with the of an Escrow Trust Agreement dated as of May 1, 1978, between the City and the escrow trustee I therein with the proceeds of the Series 1978 Bonds. Kghn-Cox Pr tinq —Salina. Kansas The Bonds shall stand on a parity and are equally and ratably secured with respect to the payment principal and interest from the net revenues derived by the City from the operation of the combined ter and sewage system and in all other respects with the 1990 Bonds, the 1992 Bonds and the 1993 The covenants and agreements of the City contained herein and in the Bonds shall be for the equal nefit, protection, and security of the legal Holders of any or all of the Bonds, all of which Bonds shall of equal rank and without preference or priority of one Bond over any other Bond in the application the funds herein pledged to the payment of the principal of and the interest on the Bonds, or otherwise, cept as to rate of interest, date of maturity and right of prior redemption as provided in the Resolution. Section 3. Description of the Bonds. Designation of Paying Agent and Bond Registrar. The nds shall consist of fully registered Bonds, without coupons, transferable to subsequent owners only tWb he Bond Register maintained by the Bond Registrar as hereinafter provided. Each Bond shall be in denomination of $5,000 or any integral multiple thereof not exceeding the principal amount of Bonds oming due on the Stated Maturity of such Bond, as specified by the Holder of such Bond. The Bonds l be numbered in a manner determined by the Bond Registrar. The Bonds shall be dated January 1, 4. 1 The Bonds shall have the Stated Maturities and shall bear interest at the rates per annum as Stated Maturity September 1 Principal Amount Annual Rate of Interest 2001 $700,000 4.30% 2002 745,000 4.40% 2003 785,000 4.50% 2004 820,000 4.65% 2005 860,000 4.80% 2006 910,000 4.90% 2007 945,000 5.00% 2012 TERM BONDS $5,625,000 5.25% The Bonds shall bear interest from the most recent Interest Payment Date to which interest has paid in full or, if no interest has been paid, from January 1, 1994. Interest on the Bonds at the rates said shall be payable semiannually on March 1 and September 1 in each year, beginning March 1, (the "Interest Payment Dates"). The Treasurer of the State of Kansas, Topeka, Kansas, is hereby ;Hated as the Paying Agent and as the Bond Registrar for the Bonds. KI -Cox Printing — Salina, Kansas -day months) on the Bonds shall be payable in such coin or currency of the United States of America at the time of payment is legal tender for the payment of public and private debts. Payment of the erest on each Bond shall be made by the Paying Agent on each Interest Payment Date to the Person pearing as the Holder thereof in the Bond Register at the close of business on the Record Date next yceding said Interest Payment Date, by check or draft mailed to such Holder at the Holder's address it appears in the Bond Register. The principal of and redemption premium, if any, for each Bond shall payable to the Holder thereof upon the presentation of such Bond for payment and cancellation at its iturity at the principal office of the Paying Agent. Notwithstanding any of the foregoing provisions of this Section to the contrary, any interest on Bonds which is payable, but is not punctually paid on any Interest Payment Date (herein called "Defaulted Interest"), shall be payable to the Persons in whose names the Bonds are registered at the C, se of business on a Special Record Date. The Special Record Date shall be fixed in the following er: (1) the City shall notify the Bond Registrar in writing of the amount of Defaulted Interest p -oposed to be paid on the Bonds and the date of the proposed payment, which proposed payment date sl iall be at least 30 days after receipt by the Bond Registrar of such notice from the City; (2) at the same ti ne the City shall deposit with the Paying Agent an amount of money equal to the aggregate amount to b paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Paying Agent f r such deposit prior to the date of the proposed payment; and (3) thereupon, the Bond Registrar shall fix a Special Record Date for the payment of such Defaulted Interest which shall not be more than 15 nor less than 10 days prior to the date of the proposed payment. The Bond Registrar shall promptly notify the City of such Special Record Date and, in the name d at the expense of the City, shall cause notice of the proposed payment of such Defaulted Interest and Special Record Date therefor to be mailed, first class postage prepaid, to the Holder of each Bond such Holder's address as it appears in the Bond Register, not less than 10 days prior to such Special cord Date. Notice of the proposed payment of such Defaulted Interest and the Special Record Date ;refor having been mailed as aforesaid, such Defaulted Interest shall be paid to the Persons in whose mes the Bonds are registered at the close of business on such Special Record Date. Payment of principal of, redemption premium, if any, and interest on a Bond may be made by h other method of transferring funds as may be requested by the Holder of the Bond, provided that Paying Agent shall first receive a written request from such Holder (i) specifying the method and ite for transferring funds and (ii) providing for the Paying Agent to be reimbursed by the Holder for expenses incurred in connection with such fund transfers. Subject to the foregoing provisions of this Section, each Bond delivered under this Ordinance i transfer of or in exchange for or in lieu of any other Bond shall carry the rights to interest accrued unpaid, and to accrue, which were carried by such other Bond. Section 5. Execution. Authentication and Delivery of the Bonds. The Bonds shall be executed behalf of the City by the facsimile signature of the Mayor, attested by the facsimile signature of the .y Clerk, with the facsimile seal of the City affixed. In the event any officer whose signature or :simile thereof appears on any Bond shall cease to be such officer before the delivery of such Bond, ;h signature or facsimile thereof shall nevertheless be valid and sufficient for all purposes, the same if such person had remained in office until delivery. Any Bond may be executed by such persons as the actual time of the execution of such Bond shall be the proper officers to sign such Bond although the original date of such Bond such persons may not have been such officers. -11- Kuhn Co. — S,Ihna, Kansas The Bonds shall have endorsed thereon a Certificate of Authentication substantially in the form einafter set forth and which shall have the date of registration inserted and shall be manually executed the Bond Registrar. No Bond shall be entitled to any security or benefit under this Resolution or shall be valid or igatory for any purpose unless and until such Certificate of Authentication shall have been duly cuted by the Bond Registrar by manual signature. Such executed Certificate of Authentication upon Bond shall be conclusive evidence that such Bond has been duly authenticated and delivered under Resolution and that such registered owner has been entered of record in the Bond Register kept by Bond Registrar. The Certificate of Authentication shall be deemed to have been duly executed if aed and dated by any authorized officer or employee of the Bond Registrar, but it shall not be essary that the same officer or employee sign the Certificate of Authentication on all of the Bonds that y be issued hereunder at any one time. The Mayor and City Clerk are hereby authorized and directed to prepare and execute the Bonds the manner hereinbefore specified, to register the Bonds in the office of the City Clerk, and to cause Bonds to be registered in the office of the State Treasurer of Kansas as provided by law, and when Bonds have been duly registered with the Bond Registrar, to deliver the Bonds to the Underwriter, on the payment of the purchase price of 100% of the principal amount of the Bonds plus accrued erest to the date of payment and delivery together with any premium. Section 6. Registration. Transfer and Exchange of Bonds. So long as any of the Bonds remain tanding, the City shall cause the Bond Register to be kept at the principal office of the Bond Registrar all of the Bonds and transfers and/or exchanges thereof shall be fully registered as to both principal interest in the name of the Holders in the Bond Register and shall not be registered to bearer. Bonds may be transferred in the Bond Register only upon surrender thereof to the Bond Registrar y endorsed for transfer or accompanied by a written instrument of transfer duly executed by the lder thereof or his attorney or legal representative in such form as shall be satisfactory to the Bond gistrar. Upon any such transfer, the City shall execute and the Bond Registrar shall authenticate and iver in exchange for such Bond a new Bond or Bonds, registered in the name of the transferee, of any iomination or denominations authorized by this Ordinance in an aggregate principal amount equal to principal amount of such Bond, of the same Stated Maturity, bearing interest at the same rate and of same series. Bonds, upon surrender thereof at the principal office of the Bond Registrar, together with a wtten instrument of transfer duly executed by the Holder thereof or his attorney or legal representative in such form as shall be satisfactory to the Bond Registrar, may, at the option of the Holder thereof, be ex hanged for an equal aggregate principal amount of Bonds of the same Stated Maturity, of any de ommation or denominations authorized by this Ordinance, bearing interest at the same rate and of the s e series. In all cases in which Bonds shall be exchanged or transferred hereunder, the City shall execute the Bond Registrar shall authenticate and deliver at the earliest practicable time Bonds in accordance h the provisions of this Ordinance. All Bonds surrendered in any such exchange or transfer shall hwith be cancelled by the Bond Registrar. No service charge shall be made to any Bondholder for istration, transfer or exchange of Bonds, but the City or the Bond Registrar may make a charge for ry transfer or exchange of Bonds sufficient to reimburse it or them for any tax or other governmental -12- KI—Cl. Priming — required to be paid with respect to such transfer or exchange, and such charges shall be paid any such transfer or exchange shall be completed. The City and the Bond Registrar shall not be required (i) to issue, transfer or exchange any Bond firing a period beginning at the opening of business 15 days preceding a mailing of a notice of demption for Bonds selected for redemption pursuant to Section 10 and ending at the close of business i the date of such mailing; (ii) to transfer or exchange any Bond so selected for redemption in whole in part, or (iii) to issue, transfer or exchange any Bond during the period beginning at the opening of isiness on the day after receiving written notice from the City of its intent to pay Defaulted Interest and iding at the close of business on the date fixed for the payment of Defaulted Interest pursuant to Section of this Ordinance. Section 7. Persons Deemed Owners of Bonds. The Person in whose name any Bond shall be ;istered shall be deemed and regarded by the City, the Bond Registrar and the Paying Agent as the iolute owner thereof, whether such Bond shall be overdue or not, for the purpose of receiving payment ;refor or on account thereof and for all purposes, and neither the City, the Bond Registrar nor the ying Agent shall be affected by notice to the contrary. Payment of or on account of the principal of, :mium, if any, and interest on any Bond shall be made only to or upon the order of the Holder thereof his legal representative. All such payments shall be valid and effectual to satisfy and discharge the bility upon such Bond, including the interest thereon, to the extent of the sum or sums so paid. Section 8. Mutilated. Lost. Stolen or Destroyed Bonds. In the event any Bond shall become itilated, or be lost, stolen or destroyed, the City shall, if necessary, execute and the Bond Registrar 311 authenticate and shall deliver a new Bond of like date and tenor as the Bond mutilated, lost, stolen destroyed; provided that, in the case of any mutilated Bond, such mutilated Bond shall first be rrendered to the Bond Registrar, and in the case of any lost, stolen or destroyed Bond, that the luirements of K.S.A. 848-405 are met and that an indemnity bond and affidavit of loss are provided the Bond Registrar and the City at the expense of the Holder. Such indemnity bond and affidavit of ;s must be sufficient, in the judgment of the Bond Registrar and the City, to protect the Bond Registrar I the City from any loss which either of them might suffer if the Bond is replaced. In the event any :h Bond shall have matured, instead of issuing a substitute Bond the City may pay or authorize the yment of the same without surrender thereof. Upon the issuance of any substitute Bond, the City and : Bond Registrar may require the payment of an amount sufficient to reimburse the City and the Bond gistrar for any tax or other governmental charge that may be imposed in relation thereto and any other Lsonable fees and expenses incurred in connection therewith. The provisions of this Section are -lusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the Placement or payment of mutilated, lost, stolen or destroyed Bonds. Section 9. Cancellation and Destruction of Bonds Upon Payment. All Bonds surrendered for gent, transfer or exchange shall be delivered to the Bond Registrar and, if not already cancelled, the Registrar shall cancel such Bonds and record such cancellation in the Bond Register. Thereafter, cancelled Bonds shall be delivered to the City. 1 -MOAMITArs V (a) Qgtional Redemption. At the option of the City, Bonds maturing on September 1, 2003, thereafter may be called for redemption and payment prior to maturity (selection of the maturity or irities of Bonds to be redeemed to be determined by the City, selection of the Bonds to be redeemed -13- KUM1n-Cox Priming — Sal— Kansas * in a single maturity to be determined by the Bond Registrar in such equitable manner as it may mine) on September 1, 2002, and thereafter in whole on any date or in part on any Interest Payment , at a Redemption Price equal to 100 % of the principal amount of the Bonds so redeemed and paid, accrued interest thereon to the Redemption Date, without premium. (b) Mandatory Redemption. Each of the Term Bonds shall also be subject to mandatory emption and payment on September 1, 2008, and on each September 1 thereafter, pursuant to the emption schedule hereinafter set out, at a Redemption Price equal to 100% of the principal amount reof, plus accrued interest thereon to the Redemption Date, without premium. The City hereby agrees redeem the following principal amounts of the Term Bonds in each of the following years: PRINCIPAL YEAR AMOUNT SEPTEMBER 1 $1,005,000 2008 1,060,000 2009 1,120,000 2010 1,185,000 2011 1,255,000 2012* Maturity (c) Redemption Provisions. The Bond Registrar shall call Bonds for redemption and payment rsuant to paragraph (a) as herein provided upon mailing to the Bond Registrar at least 45 days prior the Redemption Date of a written request of the City, such request to be mailed by United States istered mail, postage prepaid, and a copy of such notice shall be sent to the Underwriter, but no such iuest shall be required for Bonds being redeemed pursuant to paragraph (b). Such request shall specify principal amount of Bonds and their maturities to be called for redemption, the applicable Redemption ce or Prices and the Redemption Date. Bonds shall be redeemed in the principal amount of $5,000 or any integral multiple thereof. In case of a partial redemption of Bonds of the same maturity the Bonds to be redeemed shall be selected the Bond Registrar from the Outstanding Bonds of that maturity by such method as the Bond Registrar 11 deem equitable and which may provide for the selection for redemption of portions of the principal Outstanding Bonds of that maturity of a denomination larger than $5,000. The portions of the ncipal of Outstanding Bonds so selected for partial redemption shall be equal to $5,000 or integral ltiples thereof. Any Bond which is to be redeemed only in part shall be submitted to the Paying Agent I delivered to the Bond Registrar, who shall authenticate and deliver to the Holder of such Bond, hout service charge, a new Bond or Bonds of the same series, of any authorized denomination as uested by such Holder in an aggregate principal amount equal to and in exchange for the unredeemed tion of the principal of the Bond so surrendered. If the Holder of any such Bond of a denomination ater than $5,000 shall fail to present such Bond to the Paying Agent for payment and exchange as relaid, such Bond shall, nevertheless, become due and payable on the Redemption Date to the extent he principal amount of such Bond called for redemption (and to that extent only). If and when the City shall call any of the Bonds for redemption and payment prior to the maturity reof, the Bond Registrar shall give written notice in the name of the City of its intention to redeem pay such Bonds at the office of the Paying Agent. Notice of Redemption shall be given by first class -14- Kuan-Cox Priming — Salina. Kansas States mail, postage prepaid, mailed not less than 30 days prior to the Redemption Date, to each of Bonds to be redeemed, at his address appearing in the Bond Register. All notices of tion shall state: (i) The Redemption Date; (ii) The Redemption Price; (iii) If less than all Outstanding Bonds are to be redeemed, the identification (and, in the case partial redemption, the respective principal amounts) of the Bonds to be redeemed; (iv) That on the Redemption Date, the Redemption Price will become due and payable upon .h such Bond, and that interest thereon shall cease to accrue from and after said date; and (v) The place where such Bonds are to be surrendered for payment of the Redemption Price hich shall be the office of the Paying Agent). The failure of the Holder of any Bond to be redeemed to receive written notice mailed pursuant reto shall not affect or invalidate the redemption of said Bond. The Bond Registrar is also directed to mply with any mandatory or voluntary standards for processing redemptions of municipal securities tablished by the Securities and Exchange Commission. Failure to comply with such standards shall not ect or invalidate the redemption of said Bonds being redeemed. (d) Effect of Redemption. If any Bond is called for redemption and payment as aforesaid, 1 interest on such Bond shall cease from and after the date for which such call is made, provided funds e made available to the Paying Agent for its payment on the Redemption Date at the Redemption Price. -15- Kuhn-Cov Printing — Salina, Kansas J Section 11. Form of Bonds. The Bonds issued in fully registered form shall be substantially as REGISTERED UNITED STATES OF AMERICA STATE OF KANSAS COUNTY OF SALINE CITY OF SALINA COMBINED WATER AND SEWAGE SYSTEM REVENUE REFUNDING BOND SERIES 1994 est Maturity Bond to Date Date CUSIP % January 1, 1994 HOLDER: AL AMOUNT: DOLLARS THE CITY OF SALINA, in the County of Saline, State of Kansas (the "City"), for value 1, hereby promises to pay to the Registered Holder identified above, or registered assigns, on the Date identified above, unless called for redemption prior to maturity, the Principal Amount :d above and to pay interest thereon at the Interest Rate specified above from the most recent Payment Date to which interest has been paid in full or, if no interest has been paid, from 1, 1994, said interest being payable semiannually on March 1 and September 1 in each year, ig March 1, 1994 (the "Interest Payment Dates"). AS PROVIDED in the Ordinance (the "Ordinance") of the City authorizing the issuance of this nd, interest on this Bond will be paid on each Interest Payment Date by check or draft to the person ir whose name this Bond (or one or more predecessor Bonds) is registered in the hereinafter referred to nd Register at the close of business on the fifteenth day (whether or not a business day) of the month n xt preceding each Interest Payment Date (the "Record Date") to the registered owner hereof at such pi rson's address as it appears in the Bond Register. Interest not punctually paid will be paid as otherwise p ovided in the Ordinance. The principal of this Bond shall be payable by check or draft to the gistered Holder upon presentation and surrender hereof at the principal office of the Treasurer of the Spate of Kansas in the City of Topeka, Kansas. REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS BOND SET FORTH ON REVERSE HEREOF. SUCH PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME ',CT AS IF SET FORTH HEREIN. -16- KUM1rvCgx Prinlinq —Salina, Kansas _ THIS BOND shall not be valid or become obligatory for any purpose or be entitled to any ty or benefit under the Ordinance until the Certificate of Authentication hereon shall have been and executed by the Bond Registrar. IT IS HEREBY DECLARED AND CERTIFIED that all acts, conditions and things required to done and to exist precedent to and in the issuance of the Bonds have been done and performed and exist in due and regular form and manner as required by the constitution and laws of the State of asas. IN WITNESS WHEREOF, the City has caused this Bond to be executed by facsimile signatures oits Mayor and City Clerk and a facsimile of its corporate seal to be hereto affixed and this Bond to bi dated January 1, 1994. City Clerk CITY OF SALINA, KANSAS (facsimile) Mayor CERTIFICATE OF AUTHENTICATION This Bond is one of the Bonds described in the within mentioned Ordinance. TION DATE: THE TREASURER OF THE STATE OF KANSAS Bond Registrar and Paying Agent 0 Treasurer's Registration Number: 0322-085-010194-576 [ON REVERSE SIDE] FURTHER PROVISIONS THIS BOND is one of a duly authorized issue of Bonds of the City aggregating the principal Dunt of $11,390,000 (the "Bonds"), to be known as the "Combined Water and Sewage System venue Refunding Bonds, Series 1994." The Bonds are issued for the purpose of refunding a portion in outstanding issue of combined water and sewage system revenue bonds of the City by the authority and in full compliance with the provisions, restrictions and limitations of the Constitution and statutes the State of Kansas, including K.S.A. 12-856 to 12-869, inclusive, and K.S.A. 10-116a and all endments to such statutes and all other provisions of the laws of said State applicable thereto. -17- KgnmCO% Priming —Salina, Kansas THIS BOND and all interest hereon are special obligations of the City to be paid by said City si i lely from the revenues derived from the revenues, income and rents accrued by said City from the operation of its combined water and sewage system subject to reasonable operational maintenance expense d as described in the Ordinance and not from any other fund or source. The Bonds constitute a lien o such revenues. The Bonds do not constitute general obligations of the City nor do they constitute an ebtedness of the City within the meaning of any constitutional or statutory provision, and the City is u der no obligation to levy any taxes to pay any of the principal of or interest on the Bonds. The Bonds h e been authorized and issued under the provisions of the Ordinance to which reference is made for a escription of the covenants made by the City with respect to the collection, segregation and application o the revenues of the City's combined water and sewage system, the nature and extent of the security o such Bonds, the rights, duties and obligations of the City with respect thereto and the rights of the holders thereof. The Bonds are junior and subordinate with respect to the payment of principal and in erest and in other respects to an issue of Combined Water and Sewage System Revenue Bonds, Series ol 1977, dated April 1, 1977, in the original principal amount of $3,000,000. The Bonds are on a parity an I are equally and ratably secured with respect to the payment of principal and interest and in all other re pects to an issue of Combined Water and Sewage System Revenue Refunding Bonds, Series 1990-A, d ed July 1, 1990, in the original principal amount of $5,655,000, an issue of Combined Water and S age System Revenue Bonds, Series 1990-B, dated July 1, 1990, in the original principal amount of $ 210,000, an issue of Combined Water and Sewage System Revenue Refunding Bonds, Series 1992, d July 1, 1992, in the original principal amount of $15,000,000 and an issue of Combined Water and S age System Improvement Revenue Bonds, Series 1993-A, dated July 1, 1993, in the original principal ariount of $3,200,000. The Bonds, said Series 1977 Bonds, said Series 1990-A Bonds, said Series IS 90-B Bonds, said Series 1992 Bonds and said Series 1993-A Bonds, as of the Bond Date, constitute thonly obligations of the City payable from the net revenues of the combined water and sewage system. T1 ie City may issue additional bonds payable from the net revenues produced from the combined water arsewage system of the City as provided in and subject to the restrictions of the Ordinance and may pr vide that any such additional bonds shall enjoy equality of lien on said net revenues with the Bonds. THIS BOND has been duly registered in the office of the City Clerk of the City of Salina, and in the office or the Treasurer of the State of Kansas. THE BONDS maturing on September 1, 2003, and thereafter, at the option of the City, may be cal ed for redemption and payment prior to maturity (selection of the maturity or maturities of Bonds to be redeemed to be determined by the City, selection of the Bonds to be redeemed within a single maturity to be determined by the Bond Registrar in such equitable manner as it may determine) on September 1, 2 2, and thereafter, in whole on any date or in part on any Interest Payment Date, at a redemption price eq al to 100 % of the principal amount of the bonds so redeemed and paid, plus accrued interest thereon to a date fixed for redemption and payment, without premium. In EACH OF the Bonds of this issue maturing September 1, 2012 (the "Term Bonds") shall also be to mandatory redemption and payment on September 1, 2008 and on each September 1 thereafter on of bonds to be made by the Bond Registrar in such manner as it may deem equitable), pursuant redemption schedule hereinafter set forth, at the redemption price of 100% (expressed as a age of the principal amount), plus accrued interest thereon to the date of redemption: -18- Kuhn -Cox Priming — $alma. Kansas Principal Year Amount September 1 $1,005,000 2008 1,060,000 2009 1,120,000 2010 1,185,000 2011 1,255,000 2012* Final Maturity IN THE EVENT any of the Bonds are called for redemption and payment as aforesaid, written ice thereof will be given by first class United States mail mailed not less than 30 days prior to the date A for redemption and payment to each holder of Bonds to be redeemed. All bonds so called for emption will cease to bear interest on the specified redemption date, provided funds are deposited with Paying Agent on such redemption date, and will no longer be secured by the Ordinance and will not deemed to be outstanding under the provisions of the Ordinance. The failure of the holder of any id called for redemption to receive written notice mailed pursuant to the above provisions will not alidate or affect the redemption of such Bond. THE PRINCIPAL of and interest (computed on the basis of a 360 -day year of twelve 30 -day )nths) on this Bond are payable in such coin or currency of the United States of America as at the time payment is legal tender for the payment of public and private debts. THIS BOND is negotiable and is transferable, as provided in the Ordinance, only in the Bond agister at the office of the Bond Registrar upon surrender of this Bond to the Bond Registrar duly dorsed for transfer or accompanied by a written instrument of transfer satisfactory to the Bond ,gistrar duly executed by the Registered Holder hereof or his attorney or legal representative, and -reupon a new Bond or Bonds of the same series in the same aggregate principal amount shall be issued the transferee in exchange therefor subject to the conditions provided in the Ordinance. The Bonds r each maturity are issuable only in the form of fully registered bonds, without coupons, in the nomination of $5,000 or any integral multiple thereof. The Registered Holder of any Bond or Bonds 3y surrender the same in exchange for an equal aggregate principal amount of Bonds of any authorized nomination in the manner and subject to the conditions provided in the Ordinance. No service charge all be made for any such transfer or exchange, but, prior to any transfer or exchange, the registered finer hereof shall pay to the City or the Bond Registrar an amount sufficient to reimburse it or them for y tax or other governmental charge required to be paid with respect to such transfer or exchange. The ty, the Bond Registrar and the Paying Agent may deem and treat the person in whose name this Bond registered as the absolute owner hereof for the purpose of receiving payment of, or on account of, the incipal hereof and interest due hereon and for all other purposes. If the date for making any payment interest or principal occurs on a Saturday, Sunday or holiday in the City of Topeka, Kansas, then such yment may be made on the next succeeding business day with the same force and effect. -19- Kinn -Cox Printing — Salina, Kansas (FORM OF ASSIGNMENT) BOND ASSIGNMENT FOR VALUE RECEIVED the undersigned does (do) hereby sell, assign and transfer to (Name and Address) (Social Security or Taxpayer Identifying No.) bond to which this assignment is affixed in the outstanding principal amount of $ , standing the name of the undersigned on the books of the Treasurer of the State of Kansas, Topeka, Kansas. e undersigned does (do) hereby revocably constitute and appoint attorney to nsfer the said bond, on the books of said Treasurer of the State of Kansas, with full power of witution in the premises. Signature (Sign Here Exactly as Name or Names Appear on the Face of the Certificate) Signature Guaranteed By: (Name of Eligible Guarantor Institution) By Title: STATEMENT OF INSURANCE The Municipal Bond Investors Assurance Corporation (the "Insurer") has issued a policy co twining the following provisions, such policy being on file at the office of the Treasurer of the State ofKansas, Topeka, Kansas. The Insurer, in consideration of the payment of the premium and subject to the terms of this po 'cy, hereby unconditionally and irrevocably guarantees to any owner, as hereinafter defined, of the fo owing described obligations, the full and complete payment required to be made by or on behalf of Zo- A. — Salina. Kansas e Issuer to the Treasurer of the State of Kansas, Topeka, Kansas or its successor (the "Paying Agent") an amount equal to (i) the principal amount of and interest on, the Obligations (as that term is defined ,low) as such payments shall become due but shall not be so paid (except that in the event of any celeration of the due date of such principal by reason of optional redemption or acceleration resulting )m default or otherwise, the payments guaranteed hereby shall be made in such amounts and at such nes as such payments of principal would have been due had there not been any such acceleration); and the reimbursement of any such payment which is subsequently recovered from any owner pursuant a final judgment by a court of competent jurisdiction that such payment constitutes an avoidable eference to such owner within the meaning of any applicable bankruptcy law. The amounts referred in clauses (i) and (ii) of the preceding sentence shall be referred to herein collectively as the "Insured mounts." "Obligations" shall mean: $11,390,000 City of Salina, Kansas Combined Water and Sewage System Revenue Refunding Bonds Series 1994 Upon receipt of telephonic or telegraphic notice, such notice subsequently confirmed in writing registered or certified mail, or upon receipt of written notice by registered or certified mail, by the surer from the Paying Agent or any owner of an Obligation the payment of an Insured Amount for Eich is then due, that such required payment has not been made, the Insurer on the due date of such yment or within one business day after receipt of notice of such nonpayment, whichever is later, will ike a deposit of funds, in an account with Citibank, N.A., in New York, New York, or its successor, fcient for the payment of any such Insured Amounts which are then due. Upon presentment and rrender of such Obligations or presentment of such other proof of ownership of the Obligations, ether with any appropriate instruments of assignment to evidence the assignment of the Insured ounts due on the Obligations as are paid by the Insurer, and appropriate instruments to effect the ointment of the Insurer as agent for such owners of the Obligations in any legal proceeding related payment of Insured Amounts on the Obligations, such instruments being in a form satisfactory to ibank, N.A., Citibank, N.A. shall disburse to such owners or the Paying Agent payment of the Insured ounts due on such Obligations, less any amount held by the Paying Agent for the payment of such ured Amounts and legally available therefor. This policy does not insure against loss of any payment premium which may at any time be payable with respect to any Obligation. As used herein, the term 'owner" shall mean the registered owner of any Obligation as indicated on the books maintained by the Paying Agent, the Issuer, or any designee of the Issuer for such purpose. 711 e term owner shall not include the Issuer or any party whose agreement with the Issuer constitutes the underlying security for the Obligations. Any service of process on the Insurer may be made to the Insurer at its office located at 113 King Armonk, New York 10504. This policy is non -cancellable for any reason. The premium on this policy is not refundable for reason including the payment prior to maturity of the Obligations. MUNICIPAL BOND INVESTORS ASSURANCE CORPORATION -21- Kinn -G- Priming — Sal,- Kansas (FORM OF CITY CLERK'S CERTIFICATE) ATE OF KANSAS ) SS. 1UNTY OF SALINE ) I, the undersigned, City Clerk of the City of Salina, Kansas, do hereby certify that this Bond has duly registered in my office according to law. WITNESS my hand and official seal. 'SIMILE SEAL] (facsimile) City Clerk (FORM OF STATE TREASURER'S CERTIFICATE) OFFICE OF THE TREASURER, STATE OF KANSAS I, SALLY THOMPSON, Treasurer of the State of Kansas, do hereby certify that a transcript of proceedings leading up to the issuance of this Bond has been filed in my office and that this Bond was istered in my office according to law on , 1994. WITNESS my hand and official seal. SEAL] SALLY THOMPSON Treasurer of the State of Kansas By Assistant State Treasurer Section 12. Uncertificated Bonds. There will be no uncertificated bonds. Section 13. Disposition of Proceeds. The proceeds of the Bonds shall be deposited si ultaneously with the delivery of the Bonds as follows: (a) In the Costs of Issuance Account created and referred to in Section 15 of this Ordinance, there shall be deposited the sum set forth in the Escrow Trust Agreement. (b) The balance of the proceeds of the Bonds, including all accrued interest and premium, if any, received from the sale of the Bonds, shall be deposited in the Escrow Fund created and referred to in Section 15 of this Ordinance. Moneys in the Costs of Issuance Account shall be used by the Escrow Trustee to pay the Costs nce. Any funds remaining in the Costs of Issuance Account, after payment of all Costs of but not later than 90 days after the issuance of the Bonds, shall be transferred by the Escrow to the City for deposit in the Water and Sewage Fund referred to in Section 14 of this Ordinance. -22- Klhn-Cl, P-tinq — Salina, Kansas Moneys in the Escrow Fund shall be administered in accordance with the provisions of the Trust Agreement. Section 14. Water and Sewage Fund. The City covenants and agrees that so long as any of the 994 Bonds remain outstanding and unpaid all of the Revenues derived by the City from the operation f its Water and Sewage Utility, including all Revenues from improvements, extensions and enlargements a and to the Water and Sewage Utility, will be paid and deposited in the City's "Water and Sewage und" and that said Revenues will not be mingled with the other funds of the City and shall be dministered and used solely as hereinafter in this Ordinance provided. Section 15. Ratification and Creation of Funds and Accounts. The prior establishment of the separate accounts known respectively as the (a) "Combined Water and Sewage System Depreciation and Emergency Replacement Account" (herein called the "Depreciation and Emergency Replacement Account"), and (b) "Combined Water and Sewage System Extension and Bond Retirement Account" (herein called the "Extension and Bond Retirement Account") and the same is, hereby ratified and confirmed, and in addition to the accounts aforesaid there were ted and established by the 1977 Ordinance of the City two separate accounts known respectively as (c) "Bond and Interest Account for Combined Water and Sewage System Revenue Bonds, Series of 1977', and (d) "Reserve Account for Combined Water and Sewage System Revenue Bonds, Series of 1977" the same are hereby ratified and confirmed, and in addition to the accounts aforesaid, there were ted and established by the 1990 Ordinance of the City two separate accounts known respectively as (e) "Principal and Interest Account for Combined Water and Sewage System Revenue Bonds, Series 1990 (the "1990 Principal and Interest Account"), and (f) "Reserve Account for Combined Water and Sewage System Revenue Bonds, Series 1990 (the " 1990 Reserve Account") the same are hereby ratified and confirmed, and in addition to the accounts aforesaid, there are Led and established by the 1992 Ordinance of the City two separate accounts known respectively as (g) "Principal and Interest Account for Combined Water and Sewage System Improvement Revenue Bonds, Series 1992" (the "1992 Principal and Interest Account"), and (h) "Reserve Account for Combined Water and Sewage System Improvement Revenue Bonds, Series 1992" (the "1992 Reserve Account") -23- K,h.-Cox the same are hereby ratified and confirmed, and in addition to the accounts aforesaid, there were ted and established by the 1993 Ordinance of the City two separate accounts known respectively as (i) "Principal and Interest Account for Combined Water and Sewage System Improvement Revenue Bonds, Series 1993-A" (the "1993 Principal and Interest Account"), and (j) "Reserve Account for Combined Water and Sewage System Improvement Revenue Bonds, Series 1993-A" (the "1993 Reserve Account"). the same are hereby ratified and confirmed, and in addition to the accounts aforesaid, there are by created and established in the treasury of the City three separate accounts known respectively as (k) "Principal and Interest Account for Combined Water and Sewage System Refunding Revenue Bonds, Series 1994" (the "1994 Principal and Interest Account"), and (1) "Reserve Account for Combined Water and Sewage System Refunding Revenue Bonds, Series 1994" (the "1994 Reserve Account"), and (m) "Rebate Fund for Combined Water and Sewage System Refunding Revenue Bonds, Series 1994 (the "Rebate Fund"). e accounts referred in (a), (c) and (d) aforesaid shall be maintained and administered by the City in a ordance with the provisions of the 1977 Ordinance so long as any of the 1977 Bonds remain o tanding and unpaid. The accounts referred to in (e) and (f) aforesaid shall be maintained and a inistered by the City in accordance with the provisions of the 1990 Ordinance so long as any of the 1 0 Bonds remain outstanding and unpaid. The accounts referred to in (g) and (h) aforesaid shall be a 'ntained and administered by the City in accordance with the provisions of the 1992 Ordinance so long as any of the 1992 Bonds remain outstanding and unpaid. The accounts referred to in (i) and 0) aforesaid s 1 be maintained and administered by the City in accordance with the 1993 Ordinance so long as any of the 1993 Bonds remain outstanding and unpaid. The accounts referred to in (b), (k), 0) and (m) of relaid shall be maintained and administered by the City as hereinafter provided in this Ordinance so to g as any of the Bonds remain Outstanding. In addition to the aforesaid funds and accounts, there shall be created and established with the -ow Trustee the Escrow Fund and the Costs of Issuance Account, to be administered as provided in and in the Escrow Trust Agreement. Section 16. Application of Moneys in Funds and Accounts. Moneys paid and deposited in the ater and Sewage Fund" heretofore established by the City and hereinbefore referred to shall be ainistered and disposed of by the City so long as any of the Bonds remain outstanding, in the following er, to wit: (a) The City each month shall pay or make provision for the payment of the reasonable and Operating Expenses for the current month. So long as the 1977 Bonds remain outstanding and no moneys in the Water and Sewage Fund shall be used for the purpose of extending or enlarging -24- p K,hn-Co+ Phnt,.g — Salina. Kansas City's Water and Sewage Utility, except as provided in paragraph (g) of this Section 16; thereafter, provisions of this sentence shall be of no force or effect. (b) After paying or making provision for the payment each month of the reasonable and per expenses of operating and maintaining the City's Water and Sewage Utility for the current month, City shall next pay or credit from time to time from the Water and Sewage Fund to the Bond and ;rest Account for Combined Water and Sewage System Revenue Bonds, Series of 1977, so long as of the 1977 Bonds remain outstanding, amounts (if any) at the time required to be paid or credited the provisions of the 1977 Ordinance. (c) After making the payments and credits at the time required to be made by the City under the provisions of paragraphs (a) and (b) aforesaid the City shall pay or credit from time to time from the Water and Sewage Fund to the Reserve Account for Combined Water and Sewage System Revenue Bonds, Series of 1977, so long as any of the 1977 Bonds remain outstanding, any amounts at the time rqguired to be paid or credited by the provisions of the 1977 Ordinance. (d) After making all payments and credits at the time required to be made by the City under provisions of paragraphs (a), (b) and (c) aforesaid, the City shall next pay or credit from the Water Sewage Fund to the 1994 Principal and Interest Account, to the extent necessary to meet at the Stated urity thereof the interest on and principal of the Bonds, the following amounts: (i) Unless and to the extent the payment of the interest on the Bonds is provided for with moneys and securities held by the Escrow Trustee under the Escrow Trust Agreement, beginning on the first day of each month from and after the delivery of the Bonds, and continuing on the first day of each month thereafter to and including February 1, 1994, an equal pro rata portion of the amount of interest that will become due on the Bonds on March 1, 1994, and thereafter, unless and to the extent the payment of the interest on the Bonds is provided for with moneys and securities held by the Escrow Trustee under the Escrow Trust Agreement, beginning on March 1, 1994, and continuing on the first day of each month thereafter, an amount not less than one-sixth (1/6) of the interest that will become due on the Bonds on the next succeeding Interest Payment Date; and (ii) Beginning on October 1, 2000, and continuing on the first day of each month thereafter, an amount not less than one twelfth (1/12) of the principal amount of the Bonds that will become due on the next succeeding Stated Maturity; and (iii) On the first day of each month preceding a month in which fees of the Bond Registrar and Paying Agent are scheduled to become due, such amounts as may be required to pay such fees. All amounts paid and credited to the 1994 Principal and Interest Account shall be used and ded by the City for the sole purpose of paying the interest on and principal of the Bonds as and the same become due and the fees of the Paying Agent and Bond Registrar for acting hereunder. If at any time the moneys in the Water and Sewage Fund shall be insufficient to make in full the is and credits at the time required to be made by the City to the principal and interest accounts ied by the City to pay the principal of and interest on the outstanding revenue bonds of the City, g only the Bonds and any other combined water and sewage system revenue bonds of the City -25- spa i -25- .ofore or hereafter issued and standing on a parity with the Bonds, the available moneys in the Water Sewage Fund shall be divided among such principal and interest accounts in proportion to the active principal amounts of said series of combined water and sewage system revenue bonds of the at the time outstanding which are payable from the moneys in said principal and interest accounts. The amounts required to be paid and credited to the 1994 Principal and Interest Account pursuant this paragraph (d) shall be made at the same time and on a parity with the amounts at the time required be paid and credited to the 1990 Principal and Interest Account, the 1992 Principal and Interest .count and the 1993 Principal and Interest Account. (e) Prior to October 1, 2000, no moneys shall be deposited into the 1994 Reserve Account. October 1, 2000 (the redemption date for the Refunded Bonds), the City shall deposit the sum of $ ,139,000 (the "Reserve Requirement") into the 1994 Reserve Account from moneys and securities held b the City in the 1992 Reserve Account. In the event that on October 1, 2000, there are not sufficient neys and securities in the 1992 Reserve Account to make a deposit into the 1994 Reserve Account e ual to the Reserve Requirement, the City shall on October 1, 2000, transfer (i) from the 1992 Reserve count to the 1994 Reserve Account all moneys or securities then held in the 1992 Reserve Account d (ii) from the Extension and Bond Retirement Account (Surplus Account) to the 1994 Reserve Account 11amount equal to the difference between the Reserve Requirement and the amount transferred from the 92 Reserve Account to the 1994 Reserve Account on such date. All amounts paid or credited to the 1994 Reserve Account shall be used and expended solely to -vent any default in the payment of interest on or principal of the Outstanding Bonds of the City if the )neys in the 1994 Principal and Interest Account hereinbefore created are insufficient to pay the interest or principal of the Bonds as they become due. No part of said 1994 Reserve Account shall ever be pended or used by the City to call any Bonds for payment prior to their ultimate maturity unless all the Outstanding Bonds be called for payment and funds are available to pay the same according to their ms. From and after October 1, 2000, so long as the amount on hand in the 1994 Reserve Account gregates the Reserve Requirement, no further payments into the 1994 Reserve Account shall be luired, but if the City shall ever be compelled to use and expend any part of the 1994 Reserve Account the purpose of paying the interest on or principal of Bonds of the City and such expenditure shall luce the amount of the 1994 Reserve Account below the Reserve Requirement, then the City, after Lking all payments or credits at the time required to be made by the City under the provisions of ragraphs (a), (b), (c) and (d) hereof, will thereafter, each month, pay or credit on the first day of each )nth from the Water and Sewage Fund to the 1994 Reserve Account the sum of $38,000 each month til the Reserve Account aggregates the Reserve Requirement. l� At no time shall the balance of moneys on hand in the 1994 Reserve Account exceed the sum of $ 139,000. If at any time the moneys in the Water and Sewage Fund shall be insufficient to make in full the rments and credits at the time required to be made by the City to the bond reserve accounts established the City to protect the payment of the outstanding combined water and sewage system revenue bonds the City, including only the Bonds and any other combined water and sewage system revenue bonds the City heretofore or hereafter issued and standing on a parity with the Bonds, the available moneys the Water and Sewage Fund shall be divided among such bond reserve accounts in proportion to the pective principal amounts of said series of combined water and sewage system revenue bonds of the y at the time outstanding which are payable from the moneys in such bond reserve accounts. Ea Kinn-Cov Printing — Salina, Kansas The amounts required to be paid and credited to the 1994 Reserve Account pursuant to this graph (e) shall be made at the same time and on a parity with the amounts at the time required to be and credited to the 1990 Reserve Account, the 1992 Reserve Account and the 1993 Reserve (f) After making all payments and credits at the time required to be made by the City under provisions of paragraphs (a), (b), (c), (d) and (e) aforesaid, the City shall next pay or credit from time time from the Water and Sewage Fund to the Combined Water and Sewage System Depreciation and iergency Replacement Account, so long as any of the 1977 Bonds remain outstanding and unpaid, any counts at the time required to be paid or credited by the provisions of the 1977 Ordinance, said preciation and Emergency Replacement Account to be administered in accordance with the 1977 dinance. At no time shall the balance of monies on hand in said Depreciation and Emergency placement Account exceed the sum of $125,000. From and after the time there are no longer any 1977 nds remaining outstanding and unpaid, the City shall transfer all amounts then on hand in said preciation and Replacement Account to the Surplus Account (hereinafter referred to). (g) After all amounts required at the time to be paid or credited by the City from the Water d Sewage Fund to the accounts hereinbefore named in paragraphs (a) (b), (c), (d), (e) and (f) of this .ction shall have been so paid or credited, and if at the time the City shall not be in default in the rformance of any covenant or agreement contained in this Ordinance, all moneys remaining in the ater and Sewage Fund shall be credited monthly to the Extension and Bond Retirement Account so long any of the 1977 Bonds remain outstanding and unpaid, and all moneys in the Extension and Bond xirement Account shall be used as provided in Section 10(f) of the 1977 Ordinance and the City shall mply with the covenants and agreements set forth in said Section 10(f) so long as any of the 1977 Bonds main outstanding and unpaid. From and after the time there are no longer any 1977 Bonds remaining outstanding and unpaid, City shall change the name of the Extension and Bond Retirement Account to the Combined Water I Sewage System Surplus Account (the "Surplus Account"). Thereafter, after all payments and credits uired at the time to be made by the City under the provisions of paragraphs (a), (b), (c), (d), (e) and of this Section have been made, all moneys remaining in the Water and Sewage Fund shall be paid I credited to the Surplus Account. Moneys in the Surplus Account may be expended and used for the owing purposes as determined by the governing body of the City: (i) paying the cost of the operation, maintenance and repair of the System if no other funds are available therefor; (ii) preventing certain defaults as hereinafter described in Section 18; (iii) paying the cost of extending, enlarging or improving the System; (iv) preventing default in, anticipating payments into or increasing the amounts in the other accounts referred to in this Section, or establishing or increasing the amount of any principal and interest account or bond reserve account created by the City for the payment of any combined water and sewage system revenue bonds of the City hereafter issued under the conditions hereinafter specified; or -27- 4f, 27- Kinn -Cox Printing —Salina, Kansas (v) calling, redeeming and paying prior to maturity, or, at the option of the City, purchasing in the open market at the best price obtainable not exceeding the call price (if any bonds are callable), the Bonds or any other combined water and sewage system revenue bonds of the City hereafter issued under the conditions hereinafter specified. So long as any of the Bonds remain outstanding and unpaid, no Revenues or moneys held in the Account shall be diverted to the general governmental or municipal functions of the City. (h) There shall be deposited in the Rebate Fund such amounts as are required to be deposited ein pursuant to the Letter of Instructions. All money in the Rebate Fund shall be held in trust, to the nt required to satisfy the Rebate Amount (as defined in the Letter of Instructions), for payment to the :ed States of America, and neither the City nor the Holder of any Bond shall have any rights in or n to such money. All amounts deposited into or on deposit in the Rebate Fund shall be governed by Section and the Letter of Instructions. (i) The City shall periodically determine the rebatable arbitrage under Section 148(f) of the e in accordance with the Letter of Instructions, and the City shall make payments to the United States ernment at the times and in the amounts determined under the Letter of Instructions. Any funds wining in the Rebate Fund after redemption and payment of all of the Bonds and the interest thereon, payment and satisfaction of any Rebate Amount, or provision made therefor, shall be released to the 0) Notwithstanding any other provision of this Ordinance, including in particular Section 26 the obligation to pay rebatable arbitrage to the United States and to comply with all other ;ments of this Section and the Letter of Instructions shall survive the defeasance or payment in full Bonds. Section 17. Deficiency in Payments or Credits into Funds or Accounts. If at any time the ues derived by the City from the operation of its Water and Sewage Utility shall be insufficient to any payment or credit on the date or dates hereinbefore specified, the City shall make good the it of such deficiency by making payments or credits out of the first available revenues thereafter ed by the City from the operation of its Water and Sewage Utility, such payments and credits being and applied in the order hereinbefore specified in Section 16 hereof. Section 18. Use of Other Accounts to Pay Bonds and Interest. If at any time the moneys in the 1 4 Principal and Interest Account and in the 1994 Reserve Account are not sufficient to pay the pr cipal of and interest on the Bonds as and when the same become due, then the amount of such deficiency shall be made up by transfer of moneys from other funds and accounts hereinbefore referred to in the following order: First, from the Extension and Bond Retirement Account or the Surplus Adcount, as applicable, secondly from the Depreciation and Emergency Replacement Account (so long as it exists), and thirdly from moneys held in the Water and Sewage Fund, provided, however, that there sh 1 always remain in the Water and Sewage Fund an amount sufficient to pay the reasonable and proper expenses of operating and maintaining the City's Water and Sewage Utility during the next succeeding p iod of thirty days. Section 19. Investments. Any moneys held in any fund or account which are not immediately for the purposes of such fund or account may be invested in Permitted Investments but in nce with and as provided in Section 13 of the 1977 Ordinance so long as any of the 1977 Bonds outstanding and unpaid. From and after the time there are no longer any 1977 Bonds remaining -28- KUM1n-Cox Printing — Sall-, Kansas o itstanding and unpaid, any moneys held in any fund or account which are not immediately needed for purposes of such fund or account may be invested in Permitted Investments in which public funds are p rmitted to be invested under Kansas law; provided, however, that no such investment shall be made f r a period extending longer than to the date when the moneys invested may be needed for the purpose f which such fund or account was created. Cash moneys in each of the funds and accounts herein cjj ated or established shall be deposited in a bank or banks in the City of Salina, Kansas, which are tubers of the Federal Deposit Insurance Corporation, and all such bank deposits shall be adequately sl ured by the banks holding such deposits. Moneys held in the 1994 Reserve Account may be invested o y in investments which have maturities not extending beyond five years from the date of the investment. Except as to interest accumulated in the Bond and Interest Account and in the Reserve count relating to the 1977 Bonds, which interest shall be deposited in the escrow account for the 1977 --� B nds, all interest on any investments held in any fund or account created by or referred to in this Ordinance shall accrue to and become a part of such fund or account, except that interest on investments i the 1994 Reserve Account and interest on investments in the Depreciation and Emergency Replacement Account if the City shall not be in default in making any payment into said accounts at the time required to be made by the provisions of Section 16, shall immediately be paid and credited to the Water and S wage Fund and used and applied for the purposes and in the order hereinbefore specified in Section 1 of this Ordinance. In determining the amount held in any fund or account under any of the provisions G: this Ordinance, obligations in which moneys are invested shall be valued at fair market value and ir ked to market on December 31 of each year. The Bond Insurer must approve any forward supply ci i ntract used in conjunction with a refunding of the Bonds prior to its execution and delivery. Section 20. Particular Covenants of the City. The City covenants that it will comply with the venants and agreements set forth in the 1977 Ordinance so long as any of the 1977 Bonds remain tstanding and unpaid. From and after the time there are no longer any 1977 Bonds remaining Lstanding and unpaid, the 1977 Ordinance shall be of no force or effect. The City covenants with each the purchasers and owners of any of the Bonds that so long as any of said Bonds remain outstanding I unpaid: (a) Rates. The City will fix, establish and maintain rates, fees and other charges for the sale of water and sewage services and commodities of the Water and Sewage Utility as shall be required to provide Revenues at least sufficient in each fiscal year to pay: (i) operation and maintenance expenses dii ring such fiscal year, including reserves, if any, provided for in the annual budget for such fiscal year; (i an amount equal to at least 125% of the amount required to be paid in the current fiscal year on a ount of principal of and interest on all obligations payable from the Revenues at the time outstanding ( cept to the extent any such principal and interest is to be paid from moneys held in trust for the s ific purpose of making such payments); (iii) an amount, if any, to be paid during such fiscal year into th 1994 Reserve Account; (iv) to the extent not otherwise provided for, an amount equal to debt service oi the 1977 Bonds for such fiscal year; (v) an amount, if any, to be paid into the reserve account for the 1 77 Bonds and into the Depreciation and Emergency Replacement Account during such fiscal year; and (A) any and all charges or liens whatsoever payable out of Revenues during such fiscal year. (b) No Free Service: Service to City. None of the facilities or services afforded by the Water Sewage Utility will be furnished to any user without a reasonable charge being made therefor. The i will require the prompt payment of accounts and will discontinue water and sewage service to any :ower delinquent in the payment of his account for a period which shall not exceed sixty (60) days. City will pay monthly into the Water and Sewage Fund for the water and sewage service furnished City in accordance with effective applicable rates, fees and charges. -29- Kuhn -Cor Prinlinq — Salina, Kansas (c) Good Repair. The City will maintain in good repair and working order the City's Water Sewage Utility and will operate the same in an efficient manner and at reasonable cost. (d) Disposal of Property. The City will not mortgage, pledge or otherwise encumber the W ter and Sewage Utility or any part thereof or any improvement, extension or enlargement thereof, nor will they sell, lease or otherwise dispose of said Water and Sewage Utility or any material part thereof, provided, however, that the City may dispose of any property which has become obsolete, nonproductive or otherwise unusable to the advantage of the City. Any cash proceeds derived from the sale of such property shall be used by the City to improve, extend or enlarge the City's Water and Sewage Utility. Fr:)m and after the time there are no longer any 1977 Bonds remaining outstanding and unpaid, the City may lease, with an option to purchase, real and personal property for the extension or improvement of thWater and Sewage Utility, and such property being leased shall not be treated as part of the Water anSewage Utility for purposes of this paragraph (d) and may be mortgaged, pledged or otherwise (e) Insurance. The City will carry and maintain a reasonable amount of all-risk insurance up:)n the properties forming a part of the Water and Sewage Utility insofar as they are of an insurable na re, the amount of such insurance being such amount as would normally be insured by a private co poration engaged in a similar type of business. In the event of loss or damage, the City, with all reA sonable dispatch, will use the proceeds of such insurance in reconstructing and replacing the property danaged or destroyed, or, if such reconstruction or replacement be unnecessary, then in redeeming or pu chasing outstanding bonds of the City, such redemption or purchase being made in accordance with th provisions of the Ordinance authorizing the issuance of the bonds. The City in operating the Water anI Sewage Utility will carry and maintain public liability and workmen's compensation insurance in such amounts as would normally be maintained by a private corporation engaged in a similar type of business, anI the proceeds derived from any such policies shall be used in paying the claims on account of which SUCI proceeds were received, provided, however, that the City may elect to accept the provisions of the Workers Compensation Act of the State of Kansas as authorized by K.S.A. 44-505 and any amendments thereto hereafter enacted, and, in such event, may elect to carry its own risk in accordance with the pravisions of the statutes of the State of Kansas. The cost of all insurance referred to in this paragraph (f) phall be paid as an Operating Expense out of the revenues of the City's Water and Sewage Utility. of of a (f) Books and Records: Annual Audit. The City will install and maintain proper books, ds and accounts in which complete and correct entries will be made of all dealings and transactions in relation to the properties, business and affairs of the Water and Sewage Utility of the City. Such rots shall show the amount of revenue received from said Water and Sewage Utility, the application :h revenue, and all financial transactions in connection therewith. Said books shall be kept by the according to standard accounting practices as applicable to the operation of water and sewage es. The City will operate the Water and Sewage Utility on the basis of a fiscal year beginning on ry Ist and ending on December 31st. Annually, as soon as possible following the close of each fiscal the City will cause an audit to be made by a competent firm of certified public accountants fenced in public utility accounting of the accounts of its Water and Sewage Utility for the preceding year. In addition to such matters as are customarily included in the audit report, the accountants without limiting the generality of the foregoing, furnish to the City separately a summary of the mtants' recommendations as to the City's practices and procedures of water and sewage system tions. Within thirty (30) days after the completion of each such audit, said accountants shall file y thereof in the office of the City Clerk and shall forward copies of such audit to the Underwriter. -30- Kuhn -Cos P - t— — Salina, Kansas If such audit shall disclose that proper provision has not been made for all of the requirements the law under which the Bonds herein authorized are issued, and of this Ordinance, the City covenants J. agrees that it will promptly proceed to cause to be charged for the services rendered by the City's ater and Sewage Utility rates which will adequately provide for such requirements. (g) Right to Inspect. The Holder of any of the Bonds of the City herein authorized shall have right at all reasonable times to inspect the Water and Sewage Utility and all records, accounts and data lating thereto, and any such Holder shall be furnished by the City all such information concerning said ater and Sewage Utility and the operation thereof which he may reasonably request. (h) Operation and Maintenance. The City will punctually perform all duties and obligations with respect to the operation and maintenance of the Water and Sewage Utility, including all iinprovements, extensions and enlargements thereof, now or hereafter imposed upon the City and by the Constitution and laws of the State of Kansas, and by the provisions of this Ordinance. Section 21. Additional Bonds. The City hereby covenants and agrees that so long as any of the herein authorized remain outstanding and unpaid, said City will not issue any additional bonds or obligations payable out of the Revenues of its Water and Sewage Utility which have a claim on roes superior to the Bonds and that it will not issue any such additional bonds or obligations which on a parity or equality with the Bonds herein authorized unless all of the following conditions are (a) The issuance of the additional bonds shall be authorized or permitted under the laws of State of Kansas. (b) The City shall not be in default in the payment of principal of or interest on the Bonds, making any payment at the time required to be made into the respective funds and accounts created i and referred to in this Ordinance or in the performance of any covenant herein contained; and (c) Either: (i) the annual Net Revenues for the fiscal year next preceding the issuance of additional bonds shall have been not less than 125 % of the average amount required to be paid in all succeeding fiscal years on account of both principal and interest becoming due with respect to all obligations payable from the Net Revenues (except to the extent any such principal and interest is to be paid from moneys held in trust for the specific purpose of making such payments), including the additional bonds proposed to be issued; or (ii) if the City shall have made changes in its rates, fees and charges for the use and services furnished by the Water and Sewage Utility, which changes shall not have been in effect for the fiscal year next preceding the issuance of additional bonds, the City shall obtain an investigation and report from a Consulting Engineer as to the amount of annual Net Revenues which the City would have received from the operation of the Water and Sewage Utility during said preceding fiscal year if such increased rates had been in effect during all of said period, which investigation and report shall certify that, in the opinion of the Consulting Engineer, the requirements of subparagraph (i) above would have been met if the increased rates had been in effect during all of such period; or -31- Kinn -Cox Priming — Sallna. Kansas (iii) the City shall obtain an investigation and report from a Consulting Engineer incorporating projections which indicate that the Net Revenues for the twelve months immediately following the month in which the additional bonds are being issued will be equal to at least 125 % of the average amount required to be paid in all succeeding fiscal years on account of principal and interest becoming due with respect to all obligations payable from the Net Revenues (except to the extent any such principal and interest is to be paid from moneys held in trust for the specific purpose of making such payments), including the additional bonds proposed to be issued. If the City shall have made any increase in the rates, fees and charges for the use and services of the System which is not in effect at the time such report is issued but which shall be in effect during the period covered by an investigation and report made pursuant to this subparagraph (iii), then the report of the Consulting Engineer shall certify that such increased rates are economically feasible and reasonably necessary for the projected operation of the System. Prior to the issuance of any additional parity bonds, the City shall obtain a certificate of an Ai i thorized Officer evidencing either full compliance with the provisions of subparagraph (i) of paragraph (c or stating that in the opinion of the Authorized Officer the conclusions set forth in the investigation anreport made pursuant to subparagraph (ii) or subparagraph (iii) of paragraph (c) is reasonable. An in estigation and report made pursuant to subparagraph (ii) or subparagraph (iii) of paragraph (c) above slif 11 be considered final and conclusive and shall govern in determining the right of the City to issue additional parity bonds under the provisions contained therein. Such report shall be filed in the office of he City Clerk. Notwithstanding the restrictions upon the issuance of additional bonds set out above, additional bo i ds may be issued if it is necessary in the opinion of the Consulting Engineers to repair any damage or oss to the Water and Sewage Utility if the Water and Sewage Utility has been destroyed or damaged by lisaster to such an extent that it cannot be operated or if it is necessary to keep the Water and Sewage Ut ity in good operating condition. in of be on Additional bonds of the City issued under the conditions hereinbefore in this section set forth shall on a parity with the Bonds herein authorized and shall enjoy complete equality of lien on and claim Lst the Revenues of the City's Water and Sewage Utility with the Bonds herein authorized, and the may make equal provision for paying said Bonds and the interest thereon out of the Water and age Fund and may likewise provide for the creation of reasonable reserve accounts out of moneys A Water and Sewage Fund. Nothing in this section contained shall prohibit or restrict the right of the City to issue additional -r and sewage system revenue bonds or other revenue obligations for the purpose of reconstructing, ring, repairing, improving, extending or enlarging the City's Water and Sewage Utility and to provide the principal of and interest on said revenue bonds or obligations shall be payable out of the revenues he City's Water and Sewage Utility, provided that such additional revenue bonds or obligations shall unior and subordinate to the Bonds so that if at any time the City shall be in default in paying either rest on or principal of the Bonds the City shall make no payments of either principal of or interest -aid junior and subordinate revenue bonds or obligations until said default or defaults be cured. In event of the issuance of any such junior and subordinate revenue bonds or obligations, the City, iect to the provisions aforesaid, may make provision for paying the principal of and interest on said ;nue bonds or other revenue obligations out of moneys in the Water and Sewage Fund. -32- Nuhn -Cox Priming — Sal—, Kansas El Section 22. Tax Matters. The City will comply with all applicable provisions of the Internal sue Code of 1986 (the "Code"), including Section 103 thereof, and the regulations of the Treasury tment thereunder, from time to time proposed or in effect, in order to maintain the exclusion from income for purposes of federal income taxation of the interest on the Bonds. The City covenants and agrees that it will use the proceeds of the Bonds as soon as practicable I with all reasonable dispatch for the purpose for which the Bonds are issued as hereinbefore set forth, J that no part of the proceeds of the Bonds shall be invested in any securities, obligations or other ,estments except for the temporary period pending such use nor used, at any time, directly or lirectly, in a manner which, if such use had been reasonably anticipated on the date of issuance of the nds, would have caused any of the Bonds to be or become "arbitrage bonds" within the meaning of :tion 103(b)(2) or Section 148 of the Code and the regulations of the Treasury Department thereunder )posed or in effect at the time of such use and applicable to obligations issued on the date of issuance the Bonds. The City agrees that there shall be paid from time to time all amounts required to be rebated to United States pursuant to Section 148(f) of the Code and any temporary, proposed or final Treasury gulations as may be applicable to the Bonds from time to time. This covenant shall survive payment full or defeasance of the Bonds. The City specifically covenants to pay or cause to be paid to the Red States, at the times and in the amounts determined under this Ordinance, the Rebate Amounts as .cribed in the Letter of Instructions. Notwithstanding anything to the contrary contained herein, the Letter of Instructions may be ded or replaced if, in the opinion of counsel nationally recognized on the subject of municipal bonds, amendment or replacement will not adversely affect the exclusion from gross income for federal ie tax purposes of interest on the Bonds. Section 23. Amendments. The provisions of the Bonds authorized by this Ordinance and the visions of this Ordinance may be modified at any time by the City with the written consent of the nd Insurer and the Holders of not less than sixty-six and two-thirds percent (66 2/3 %) in aggregate 'ncipal amount of the Bonds at the time Outstanding; provided, however, that no such modification or endment shall permit or be construed as permitting (a) the extension of the maturity or the principal any of the Bonds, or the extension of the maturity of any interest on any Bonds, or (b) a reduction in principal amount of any Bonds or the rate of interest thereon, or (c) a reduction in the aggregate cipal amount of Bonds the consent of the Holders of which is required for any such amendment or dification. Any provision of the Bonds or of this Ordinance may, however, be modified or amended any respect with the written consent of the Bond Insurer and the Holders of all of the Bonds then tstanding. Amendments to this Ordinance which correct errors or which add to or supplement the urity of the Holders of the Bonds may be adopted by the City without the consent of such Holders or Bond Insurer, but notice of such Amendment shall be given to the Bond Insurer. Every amendment modification of a provision of the Bonds or of this Ordinance to which the written consent of the Bond surer and the Holders is given as above provided shall be expressed in an ordinance and shall be coed to be a part of this Ordinance and a copy provided to Standard & Poor's Rating Group. It shall t be necessary to note on any of the Outstanding Bonds any reference to such amendment or dification, if any. A certified copy of every such amendatory or supplemental ordinance, if any, and rtified copy of this Ordinance shall always be kept on file in the office of the City Clerk and shall made available for inspection by the Holder of any Bond or prospective purchaser or Holder of any nd authorized by this Ordinance, and upon payment of the reasonable cost of preparing the same, a -33- Kohn -Cox Priming — Salina. Kansas pied copy of any such amendatory or supplemental ordinance or of this Ordinance will be sent by the Clerk to any such Holder or prospective bondholder. Section 24. Acceleration in the Event of Default. The City agrees that if any of the following occur: (i) the City shall default in the payment of the principal of or interest on any of the Bonds as the same shall become due and such default shall continue for a period of thirty (30) days; or (ii) if the Net Revenues for the preceding fiscal year did not equal 100% of the annual amount required to be paid in the current fiscal year on account of principal of and interest on all obligations payable from the Net Revenues (except to the extent any such principal and interest is to be paid from moneys held in trust for the specific purpose of making such payments); or (iii) the City or its governing body or any of the officers, agents or employees thereof shall fail or refuse to comply with any provisions of this Ordinance or of the statutes of the State of Kansas for a period of 6 months after a written request to so comply has been delivered to the City by the Holders of twenty-five percent (25 %) of the amount of the Bonds then outstanding, n, upon the occurrence of any one or more of the above events and at any time thereafter and while h event shall continue, the Holders of twenty-five percent (25%) of the amount of the Bonds then tstanding may, with the written consent of the Bond Insurer and by written notice to the City filed in office of the City Clerk or delivered in person to said City Clerk, declare the principal of all Bonds n Outstanding to be due and payable immediately, and upon any such declaration given as aforesaid, of said Bonds shall become and be immediately due and payable, anything in this Ordinance or in said nds contained to the contrary notwithstanding. This provision, however, is subject to the condition Lt if at any time after the principal of said Bonds shall have been so declared to be due and payable, arrears of interest upon all of said Outstanding Bonds, except interest accrued but not yet due on such nds, and all arrears of principal upon all of said Bonds shall have been paid in full, and all other auIts, if any, by the City under the provisions of this Ordinance and under the provisions of the tutes of the State of Kansas shall have been cured, then, and in every such case, the Holders of a jority in amount of the Bonds then Outstanding, with the written consent of the Bond Insurer and by itten notice to the City given as hereinbefore specified, may rescind and annul such declaration and consequences, but no such rescission or annulment shall extend to or affect any subsequent default or air any rights consequent thereon. Section 25. Enforcement. The provisions of this Ordinance, including the covenants and .ments hereinbefore contained, shall constitute a contract between the City and the Holders of the s, and the Holder or Holders of not less than ten percent (10%) of the Bonds at the time Outstanding have the right upon receiving the written consent of the Bond insurer, for the equal benefit and ction of all Holders of Bonds similarly situated: (a) By mandamus or other suit, action or proceeding at law or in equity to enforce his or rights against the City and its officers, agents and employees, and to require and compel the City its officers, agents and employees to perform all duties and obligations required by the provisions its Ordinance or by the Constitution and laws of the State of Kansas. -34- Kuhn -Cox Printing — Salina, Kansas (b) By suit, action or other proceeding in equity or at law to require the City, its officers, and employees to account as if they were the trustees of an express trust. (c) By suit, action or other proceeding in equity or at law to enjoin any acts or things which be unlawful or in violation of the rights of the Holders of the Bonds. Nothing contained in this Ordinance, however, shall be construed as imposing on the City any ty or obligation to levy any taxes either to meet any obligations incurred herein or to pay the principal or interest on the Bonds. No remedy conferred hereby upon any holder of the Bonds herein authorized is intended to be e iclusive of any other remedy, but each such remedy is cumulative and in addition to every other remedy d may be exercised without exhausting and without regard to any other remedy conferred hereby. No Iver of any default or breach of duty or contract by the Holder of any Bond shall extend to or affect y subsequent default or breach of duty or contract or shall impair any rights or remedies thereon. No d i lay or omission of the Holder to exercise any right or power accruing upon any default shall impair y such right or power or shall be construed to be a waiver of any such default or acquiescence therein. ery substantive right and every remedy conferred upon the Holders of the Bonds may be enforced and e ercised from time to time and as often as may be deemed expedient. In case any suit, action or p oceeding to enforce any right or exercise any remedy shall be brought or taken and then discontinued o abandoned, or shall be determined adversely to the Holders of the Bonds, then, and in every such case, City and the Holders of the Bonds shall be restored to their former positions and rights and remedies if no such suit, action or other proceeding had been brought or taken. Section 26. Defeasance. When all of the Bonds shall have been paid and discharged, then the drements contained herein and the pledge of Revenues made hereunder and all other rights granted by shall cease and determine. Bonds shall be deemed to have been paid and discharged within the ning of this Ordinance if there shall have been deposited with the Paying Agent, or with a Kansas c having full trust powers, at or prior to the maturity or redemption date of such Bonds, in trust for irrevocably appropriated thereto, moneys and/or direct obligations of, or obligations the principal of interest on which are unconditionally guaranteed by, the United States of America, which, together the interest to be earned on such investments, will be sufficient for the timely payment of the cipal of such Bonds, the redemption premium thereon, if any there be, and interest accrued to the of maturity or redemption, as the case may be; provided, however, always that if any such Bonds l be redeemed prior to the maturity thereof, the City shall have elected to redeem such Bonds and vocable instructions to give notice of such redemption shall have been given. The Bond Insurer must ove any forward supply contract used in conjunction with a refunding of the Bonds prior to its �ution and delivery. Section 27. Avnroval of Preliminary Official Statement and Official S atemPnt, The Preliminary ficial Statement dated December 13, 1993, a copy of which has been submitted to and reviewed by the iverning Body of the City on the date hereof and is attached hereto as Exhibit "A," was final within meaning of Rule 15c2-12 under the Securities Exchange Act of 1934 and the information therein was ;urate and complete. Said Preliminary Official Statement and the final Official Statement, in )stantially the form of the Preliminary Official Statement, and the public distribution of the same by s Underwriters is hereby approved. The Mayor of the City is hereby authorized and directed to execute I deliver said final Official Statement on behalf of the City with such changes therein or amendments supplements thereto as shall be approved by the Mayor, the Mayor's execution thereof to be conclusive ,dente of said representative's approval thereof. -35- KUM1n-Cox Printing —Salina, Kansas Section 28. Authorization of Escrow Trust Agreement. The Escrow Trust Agreement between City and UMB National Bank of America, Salina, Kansas, with respect to the Refunded Bonds is in respects hereby approved, authorized and confirmed and the Mayor and the City Clerk are hereby horized and directed to execute said Escrow Trust Agreement substantially in the form attached to this linance and marked Exhibit "B", with such changes therein as such officials may approve, the cution thereof by such officials to be conclusive evidence of said officials' approval thereof, for and behalf of and as the act and deed of the City. Section 29. Redemption of Outstanding Bonds. The Refunded Bonds becoming due on October 1 in the years 2001 to 2012, inclusive, aggregating the principal amount of $11,045,000, are hereby cilled for redemption and payment prior to maturity on October 1, 2000. The Refunded Bonds shall be redeemed at the office of Treasurer of the State of Kansas, in the City of Topeka, Kansas, on said r emption date by the payment of the principal thereof and the accrued interest thereon to such re lemption date. In accordance with the requirements of the 1992 Ordinance, the City Clerk is hereby d. -ected to cause notice of the call for redemption and payment of the Refunded Bonds to be given as p bvided in said Ordinance. The officers of the City are hereby authorized and directed to take such o ier action as may be necessary in order to effect the redemption and payment of the Refunded Bonds o October 1, 2000. Section 30. Approval of Agreement with Underwriter. The agreement between the Underwriter I the City with respect to the sale of the Bonds, in the form attached to the Ordinance and marked hibit "C", is in all respects hereby approved, authorized and confirmed and the Mayor and City Clerk s hereby authorized and directed to execute said agreement for and on behalf of and as the act and deed the City. Section 31. Authorization of Agreement with Bond ReLdstrar and Paying Agent. The agreement peen the City and the State Treasurer of Kansas with respect to the duties of the State Treasurer as d Registrar and Paying Agent, in the form attached to this Ordinance and marked Exhibit "D", in all ects hereby approved, authorized and confirmed and the Mayor and City Clerk are hereby authorized directed to execute said agreement for and on behalf of and as the act and deed of the City. Section 32. Payments Under the Bond Insurance Policy. (a) In the event that, on the second Business Day, and again on the Business Day, prior to Payment Date on the Bonds, the Paying Agent has not received sufficient moneys to pay all principal of and interest on the Bonds due on the second following or following, as the case may be, Business Day, thPaying Agent shall immediately notify the Bond Insurer or its designee on the same Business Day by to phone or telegraph, confirmed in writing by registered or certified mail, of the amount of the (b) If the deficiency is made up in whole or in part prior to or on the Payment Date, the Agent shall so notify the Bond Insurer or its designee. (c) In addition, if the Paying Agent has written notice that any Owner of one or more Bonds been required to disgorge payments of principal or interest on the Bonds to a trustee in bankruptcy creditors or others pursuant to a final judgment by a court of competent jurisdiction that such payment istitutes a voidable preference to such Bondowner within the meaning of any applicable bankruptcy K! Kuhn Cox Printina — S,I.,,, Kansas then the Paying Agent shall notify the Bond Insurer or its designee of such fact by telephone or aphic notice, confirmed in writing by registered or certified mail. (d) The Paying Agent is irrevocably designated, appointed, directed and authorized to act as -in-fact for Owners of the Bonds as follows: (1) If and to the extent there is a deficiency in amounts required to pay interest on the Bonds, the Paying Agent shall (A) execute and deliver to Citibank, N.A., or its successors under the Bond Insurance Policy (the "Insurance Paying Agent"), in form satisfactory to the Insurance Paying Agent, an instrument appointing the Bond Insurer as agent for such Owners in any legal proceeding related to the payment of such interest and an assignment to the Bond Insurer of the claims for interest to which such deficiency relates and which are paid by the Bond Insurer, (B) receive as designee of the respective Owners (and not as Paying Agent) in accordance with the tenor of the Bond Insurance Policy payment from the Insurance Paying Agent with respect to the claims for interest so assigned, and (C) disburse the same to such respective Owners; and (2) If and to the extent of a deficiency in amount required to pay principal of the Bonds, the Paying Agent shall (A) execute and deliver to the Insurance Paying Agent in form satisfactory to the Insurance Paying Agent an instrument appointing the Bond Insurer as agent for such Owner in any legal proceeding relating to the payment of such principal and an assignment to the Bond Insurer of any of the Bonds surrendered to the Insurance Paying Agent of so much of the principal amount thereof as has not previously been paid or for which moneys are not held by the Paying Agent and available for such payment (but such assignment shall be delivered only if payment from the Insurance Paying Agent is received), (B) receive as designee of the respective Owner (and not as Paying Agent) in accordance with the tenor of the Bond Insurance Policy payment therefor from the Insurance Paying Agent, and (C) disburse the same to such Owners. (e) Payments with respect to claims for interest on and principal of Bonds disbursed by the tying Agent from proceeds of the Bond Insurance Policy shall not be considered to discharge the (ligation of the Corporation with respect to such Bonds, and the Bond Insurer shall become the Owner ' such unpaid Bonds and claims for the interest in accordance with the tenor of the assignment made to under the provisions of this Resolution or otherwise. (f) Irrespective of whether any such assignment is executed and delivered, the District and Paying Agent agree for the benefit of the Bond Insurer that: (1) They recognize that to the extent the Bond Insurer makes payments, directly or indirectly (as by paying through the Paying Agent), on account of principal of or interest on the Bonds, the Bond Insurer will be subrogated to the rights of such Owners of the Bonds to receive the amount of such principal and interest from the District, with interest thereon as provided and solely from the sources stated in this Resolution and the Bonds; and (2) They will accordingly pay to the Bond Insurer the amount of such principal and interest (including principal and interest covered under subparagraph (ii) of the first paragraph of the Bond Insurance Policy, which principal and interest shall be deemed past due and not to have been paid), with interest thereon as provided in this Resolution and the Bonds, but only -37- Kunn-Cox Priming —Salina, Kansas from the sources and in the manner provided in this Resolution for the payment of principal of and interest on the Bonds to Owners of the Bonds, and will otherwise treat the Bond Insurer as the Owner of such rights to the amount of such principal and interest. (g) In connection with the issuance of additional bonds pursuant to Section 21, the City shall er to the Bond Insurer a copy of the disclosure document, if any, circulated with respect to such ional Obligations. Section 33. Notices Required by the Bond Insurer. Any notices required to be given to any party hdreunder shall also be given to the Bond Insurer. The Bond Insurer shall receive notice of the rcsignation or removal of the Bond Registrar and the appointment of a successor thereto. The Bond Insurer shall receive copies of all notices required to be delivered to Bondholders and, on an annual basis, cc pies of the City's audited financial statements and annual budget. All notices required herein to be given to the Bond Insurer shall be in writing and shall be sent by registered or certified mail addressed to the Municipal Bond Investors Assurance Corporation, 113 King Street, Armonk, New York 10504, A ntion: Surveillance, or at such other address given in writing to the Paying Agent and the City. Section 34. Severability. If any part of this Ordinance, whether large or small, shall be held the invalidity thereof shall not affect the other provisions of this Ordinance. Section 35. Effective Date. This Ordinance shall take effect and be in full force from and after passage and publication once in the official City newspaper. -38- Kuftn-Coy Printing — S,I,,,, Kansas PASSED by the governing body of the City of Salina, Kansas, this -3 day of January, 1994. City Clerk 1 Mayor -39- ,r. y M 1 Mayor -39-