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92-9513 Issue BondsKinn -C- P—t— — Salina, Kansas GILMORE & BELL Draft - 6/17/92 Document No. 9231R Account No. 101147 =3as=ss:a:asaxaxxa=aaaasxaaaaaasaaasa:s sasax==s==a======sxasxsxx CITY OF SALINA, KANSAS ORDINANCE NO. 92-9513 $15,000,000 COMBINED WATER AND SEWAGE SYSTEM IMPROVEMENT REVENUE BONDS SERIES 1992 DATED: JULY 1, 1992 xa=xaaaaaaaaxs===asaa=a=a=asaxa==ss=x=xsa=sax=a========x==s=s==x KUM1n C- P-1ing — Sabina. Kansas ORDINANCE NO. 90-9391 OF THE CITY OF SALINA, KANSAS PAGE Recitals------------------------------------------- 1 Section 1. Definitions-------------------------------- 3 Section 2. Authorization of and Security for the 1992 Bonds------------------------------ 8 Section 3. Description of the Bonds, Designation of Paying Agent and Bond Registrar--------- 8 Section 4. Method and Place of Payment of Principal of and Interest on the Bonds------------ 9 Section 5. Execution, Authentication and Delivery of the Bonds---------------------------- 11 Section 6. Registration, Transfer and Exchange of Bonds 12 Section 7. Persons Deemed Owners of Bonds------------- 13 Section 8. Mutilated, Lost, Stolen or Destroyed Bonds- 13 Section 9. Cancellation and Destruction of Bonds Upon Payment---------------------------- 13 Section 10. Redemption of Bonds Prior to Maturity------ 14 Section 11. Form of Bonds------------------------------ 16 Section 12. Uncertificated Bonds----------------------- 22 Section 13. Disposition of Proceeds-------------------- 22 Section 14. Water and Sewage Fund---------------------- 22 Section 15. Ratification and Creation of Funds and Accounts-------------------------------- 23 Section 16. Application of Moneys in Funds and Accounts 24 Section 17. Deficiency in Payments or Credits into Funds or Accounts----------------------- 28 Section 18. Use of Other Accounts to Pay Bonds and Interest---------------------------- 28 Section 19. Investments-------------------------------- 28 Section 20. Particular Covenants of the City----------- 29 Section 21. --------------- Additional Bonds----------- - 32 Section 22. Tax Matters-------------------------------- 34 Section 23. Amendments--------------------------------- 35 Section 24. Acceleration in the Event of Default------- 35 Section 25. Enforcement-------------------------------- 36 Section 26. Defeasance--------------------------------- 37 Section 27. Approval of Preliminary Official Statement and Official Statement------------------ 38 Section 28. Authorization of Agreement with Bond Registrar and Paying Agent--------- 38 Section 29. Severability------------------------------- 38 Section 30. Effective Date----------------------------- 38 Exhibit A Preliminary Official Statement Exhibit B Agreement with State Treasurer Kinin C- Printing — Salina. Kansas (PUBLISHED IN THE SALINA JOURNAL JU4 1992) ORDINANCE NO. 92-9513 AN ORDINANCE AUTHORIZING AND DIRECTING THE ISSUANCE, SALE AND DELIVERY OF $15,000,000 PRINCIPAL AMOUNT OF COMBINED WATER AND SEWAGE SYSTEM IMPROVEMENT REVENUE BONDS OF THE CITY OF SALINA, KANSAS, FOR THE PURPOSE OF REPAIRING, ALTERING, EXTENDING, RECONSTRUCTING, ENLARGING AND IMPROVING THE COMBINED WATER AND SEWAGE SYSTEM, PRESCRIBING THE FORM AND DETAILS OF SAID REVENUE BONDS, PROVIDING FOR THE COLLECTION, SEGREGATION AND APPLICATION OF THE REVENUES OF SAID SYSTEM FOR THE PURPOSES AUTHORIZED BY LAW, INCLUDING PAYING THE COST OF OPERATION AND MAINTENANCE OF SAID UTILITY, PAYING THE PRINCIPAL OF AND INTEREST ON THE REVENUE BONDS OF SAID CITY ISSUED AGAINST SAID SYSTEM AND PROVIDING ADEQUATE RESERVE FUNDS, MAKING CERTAIN COVENANTS WITH RESPECT TO SAID BONDS; AND APPROVING A PRELIMINARY OFFICIAL STATEMENT AND OFFICIAL STATEMENT RELATING TO SAID BONDS. WHEREAS, the City of Salina, Kansas (the "City"), has heretofore combined the waterworks system and the sewage disposal system of said City, as said systems are defined and referred to in K.S.A. 12-856 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 and financed in accordance with the provisions of the Act, and WHEREAS, pursuant to the provisions of the Act and Resolution No. 90-4169 of the City adopted by the governing body on February 12, 1990, the City authorized certain repairs, alterations, extensions, reconstructions, enlargements and improvements to the combined water and sewage system of the City at a total cost estimated to be $14,000,000 to be paid for by the issuance of $11,000,000 principal amount of combined water and sewage system revenue bonds of the City, such work mainly including completion of water system improvements and the making of improvements to the City's wastewater treatment plant (the "Wastewater Treatment Plant Improvements"), and WHEREAS, pursuant to Ordinance No. 90-9391 of the City adopted by the governing body on July 2, 1990 (the "1990 Ordinance") the City issued $2,210,000 of its Combined Water and Sewage System Improvement Revenue Bonds, Series 1990-B (the "Series 1990-B Bonds") under the authority established by Resolution No. 4169 to complete the water system improvements, leaving $8,790,000 of bond authority for Wastewater Treament Plant Improvements; and WHEREAS, pursuant to Resolution No. 90-4246 adopted by the governing body on November 19, 1990, as amended by Resolution No. 91-4405 adopted by the governing body on November 25, 1991, KU C1. Printing — Sellne. Kanses the City authorized certain additional repairs, alterations, extensions, reconstructions, enlargements and improvements to the Water and Sewage Utility, including, but not limited to the construction of a new interceptor sewer (the "Interceptor Improvements"), the Interceptor Improvements being a separate project from the Wastewater Treatment Plant Improvements approved by Resolution No. 90-4169, the Interceptor Improvements having an estimated cost of $8,100,000, which cost is to be financed in whole or in part with the proceeds from the issuance of one or more series of water and sewage system revenue bonds of the City in an aggregate amount not to exceed $8,100,000; and WHEREAS, pursuant to Resolution No. 92-4440 adopted by the governing body on March 23, 1992, the City, based on estimates by the City's engineers, increased the estimated cost of the Wastewater Treatment Plant Improvements to $15,073,000 and increased its authorization for water and sewage system revenue bonds of the City to finance the Wastewater Treatment Plant Improvements to $12,073,000, and WHEREAS, the City published notice of its intention to make each of the aforesaid improvements in accordance with the Act and each of the aforesaid resolutions and no written protest was filed with the City Clerk against such improvements or against the issuance of the water and sewage system revenue bonds, and the City is now authorized to proceed with the Wastewater Treatment Plant Improvements and the Interceptor Improvements (collectively, the "Project") and to issue its revenue bonds herein authorized to pay part of the cost thereof, the balance of said cost to be paid with funds of the Water and Sewage Utility, grants and additional revenue bonds, and WHEREAS, the governing body of the City has caused a report covering the Project and an estimate of the cost thereof to be made by the City's engineers and said report and estimate have been and hereby are accepted and approved and are now on file in the office of the City Clerk, and WHEREAS, the City has heretofore issued an issue of Combined Water and Sewage System Revenue Bonds, Series of 1977, in the original principal amount of $3,000,000 (the "1977 Bonds"), authorized by Ordinance No. 8546 of said City (the "1977 Ordinance"), and WHEREAS, the City has heretofore issued its Combined waterworks and Sewer System Refunding Revenue Bonds, Series of 1978, in the original principal amount of $4,394,000 (the "1978 Bonds"), authorized by Ordinance No. 8635 of the City (the 111978 Ordinance"), for the purpose of refunding, among other bond issues, the 1977 Bonds, and although payment of the 1977 Bonds was duly provided for pursuant to an escrow agreement, under the terms of the 1977 Ordinance, the 1977 Ordinance was not defeased, and -2- Kinn -Cox Priming — Sarna, Kansas 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-B Bonds (the 1990-A Bonds and the 1990-B Bonds being collectively referred to as the "1990 Bonds"), to refund and defease the 1984 Bonds, the 1987 Bonds and the 1988 Bonds (as those terms are hereinafter defined), and WHEREAS, except for the 1977 Bonds and the 1990 Bonds, the City has no other combined water and sewage system revenue bonds outstanding which have not been defeased, and WHEREAS, under the provisions of the 1977 Ordinance, the City may issue additional bonds payable out of the revenues of the Water and Sewage Utility which are junior and subordinate to the 1977 Bonds provided the conditions set forth in Section 16 of the 1977 Ordinance are met, and WHEREAS, the governing body of the City hereby finds and determines that the issuance of the revenue bonds herein authorized will conform and comply in all respects with the conditions set forth in the 1977 Ordinance; and WHEREAS, under the provisions of the 1990 Ordinance, the City may issue additional bonds payable out of the revenues of the Water and Sewage Utility which are on a parity with the 1990 Bonds provided that the conditions set forth in Section 21 of the 1990 Ordinance are 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 will conform and comply in all respects with the conditions set forth in the 1990 Ordinance. NOW, THEREFORE, BE IT ORDAINED BY THE GOVERNING BODY OF THE CITY OF SALINA, KANSAS: Section 1. Definitions. In addition to the words and terms otherwise defined herein, unless the context shall clearly indicate some other meaning, the words and terms defined in this Section shall for all 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 City 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 Register. "Bond Register" means the register and all accompanying records kept by the Bond Registrar evidencing the registration, transfer and exchange of Bonds. -3- Kuhn -Co. Priming — Salina. Kansas "Bond Registrar" means the Treasurer of the State of Kansas, Topeka, Kansas, and its successors when acting in the capacity as registrar and transfer agent for the registration, transfer and exchange of Bonds, and any successors thereto. "Bonds" or "1992 Bonds" means the $15,000,000 principal amount of combined water and sewage system revenue bonds authorized by this Ordinance. "City" means the City of Salina, Kansas. "Consulting Engineer" means an independent consulting engineer, or firm of engineers, appointed from time to time and having a favorable reputation for skill and experience in the operation of water and sewer utilities retained by the City. "Interceptor Improvements" means construction of a new interceptor sewer as authorized by Resolution No. 90-4246 of the City which was amended by Resolution No. 91-4405. "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 of the Bonds) attached to the City's Closing Certificate to be delivered at the time of issuance and delivery of the Bonds relating to certain matters within the scope of Section 148 of the Code, as the same may 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 due and payable as therein or herein provided, whether at the Stated Maturity of such Bond or by declaration of acceleration, call for redemption or otherwise. "Net Revenues" means the Revenues less that portion of the Revenues expended for operating and maintaining the Water and Sewage Utility (excluding depreciation, amortization, interest chargeable to the income account and other similar payments or charges pursuant to Section 16 of the Ordinance). "1977 Bonds" means the Combined Water and Sewage System Revenue Bonds, Series of 1977, in the original principal amount of $3,000,000, authorized by the 1977 Ordinance, all of which were refunded with a portion of the proceeds of the 1978 Bonds. "1978 Bonds" means the Combined Water and Sewage System Refunding Revenue Bonds, Series of 1978, authorized by the 1978 Ordinance, all of which were refunded and deemed to be paid with a portion of the proceeds of the 1984 Bonds. -4- Huhn -Cox Priming — Sarna, Kansas "1984 Bonds" means the Combined Water and Sewage System Refunding Revenue Bonds, Series of 1984, in the original principal amount of $2,770,000, authorized by the 1984 Ordinance, all of which were 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, in the original principal amount of $2,650,000, authorized by the 1987 Ordinance, all of which were refunded 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 the original principal amount of $3,000,000, authorized by the 1988 Ordinance, all of which were refunded 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, Series 1990-A, in the original principal amount of $5,655,000, which refunded the Series 1984 Bonds, the 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, in the original principal amount of $2,210,000, which were authorized by the 1990 Ordinance. "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. 111990 Ordinance" means Ordinance No. 90-9391 of the City authorizing the 1990 Bonds. "1992 Ordinance" or "this Ordinance" means this Ordinance of the City authorizing the Bonds, as originally executed or as it may be supplemented or amended from time to time. -5- Kuhn -Car Printing — Sabina. Kansas "Operating Expenses" shall mean the City's expenses of operating and maintaining the Water and Sewage Utility and keeping the same in good repair and working order, including all costs due under any type of contractual arrangement with respect to purchases of water and ordinary costs of operation, maintenance, production, transmission, distribution, repairs, replacements, engineering, drilling wells, transportation, materials and supplies, salaries, wages, audit, legal, financial, pension, retirement, health, hospitalization, insurance, taxes and administrative and general expenses and other expenses actually paid or accrued, including without limitation any expenses of the City applicable to the Water and Sewage Utility as recorded on its books pursuant to standard accounting practices. Operating Expenses shall not include any costs or expenses for extending or enlarging the Water and Sewage Utility, charges for depreciation, or payment of debt service on any bonds. "Outstanding" when used with respect to Bonds means, as of the date of determination, all Bonds theretofore 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. "Person" means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization or government or any agency or political subdivision thereof. "Project" means repairing, altering, extending, reconstructing, enlarging and improving the combined water and sewage system, including the Wastewater Treatment Plant Improvements and the Interceptor Improvements. "Record Date" for the interest and principal payable on any Interest Payment Date means the 15th day (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 redemption by or pursuant to this Ordinance. MM Kinn -C,. Priming — Salina. Kansas "Redemption Price" when used with respect to any Bond means the price at which it is to be redeemed pursuant to this Ordinance. "Revenues" shall mean (i) as long as any of the 1977 Bonds are outstanding, all revenues, income and rents accrued by the City from the ownership and operation of the Water and Sewage Utility and the proceeds of any insurance covering business interruption loss relating to the Water and Sewage Utility remaining after the City has provided for the credits and deposits required by the 1977 Ordinance, (ii) after the 1977 Bonds are no longer outstanding, all revenues, income and rents accrued by the City from the ownership and operation of the Water and Sewage Utility and the proceeds of any insurance covering business interruption loss relating to the Water and Sewage Utility, and (iii) at all times interest received on any moneys or securities held pursuant to the 1978 Ordinance including Investment Income (as defined in the 1978 Ordinance), received after February 15, 1991, and available for transfer into the Principal and Interest Account (as defined in the 1978 Ordinance) pursuant to Section 12(e) of the 1978 Ordinance but 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, means 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 means the date specified in Section 3 of this Ordinance as the fixed date on which the principal of such Bond or such installment of interest is due and payable. "Term Bonds" means the Bonds scheduled to mature on October 1, 2012. "Underwriter" shall mean "Wastewater Treatment Plant Improvements" means construction of improvements to the City's wastewater treatment plant as authorized by Resolution No. 90-4169 of the City which as amended by Resolution No. 92-4440. "Water and Sewage Fund" means the fund by that name previously established and reconfirmed by Section 14 of this Ordinance. "Water and Sewage Utility" or the "combined water and sewage system" means the combined water and sewage system of the City including all extensions, enlargements and improvements thereto hereafter constructed or acquired by the City. -7- Kuhr Cox P—t— — Salina. Kansas Section 2. Authorization of and Securitv for the 1990 For the purpose of providing funds to refund the 1987 Bonds and the 1988 Bonds and to pay the cost of the portion of the Project currently under way, there is hereby authorized and directed to be issued the combined water and sewage system revenue bonds of the City in the principal amount of $15,000,000. The 1992 Bonds shall be special obligations of the City, and the principal of, premium, if any, and interest on the 1992 Bonds shall be payable solely from the net revenues of the combined water and sewage system and not from any other fund or source. The 1992 Bonds constitute a lien on the net revenues. The taxing power of the City is not pledged to the payment of the 1992 Bonds either as to principal or interest. The 1992 Bonds shall not be or constitute a general obligation of the City, nor shall they constitute an indebtedness of the City within the meaning of any constitutional, statutory or charter provision, limitation or restriction. The 1992 Bonds shall be junior and subordinate with respect to the payments of principal and interest out of the Revenues of the Water and Sewage Utility of the City and in other respects to the 1977 Bonds. In the event of any default in the payment of either interest on or principal of any of the 1977 Bonds, the City shall make no payments of either principal of or interest on the 1992 Bonds until such default be cured. The City has duly provided for the payment of the 1977 Bonds in accordance with the terms of an Escrow Trust Agreement dated as of May 1, 1978, between the City and the escrow trustee named therein with the proceeds of the Series 1978 Bonds. The Bonds shall stand on a parity and are equally and ratably secured with respect to the payment of principal and interest from the net revenues derived by the City from the operation of the combined water and sewage system and in all other respects with the 1990 Bonds. The covenants and agreements of the City contained herein and in the Bonds shall be for the equal benefit, protection, and security of the legal Holders of any or all of the Bonds, all of which Bonds shall be of equal rank and without preferene or priority of one Bond over any other Bond in the application of the funds herein pledged to the payment of the principal of and the interest on the Bonds, or otherwise, except 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 Bonds shall consist of fully registered Bonds, without coupons, transferable to subsequent owners only in the Bond Register maintained by the Bond Registrar as hereinafter provided. Each Bond shall be in the denomination of $5,000 or any integral multiple thereof not exceeding the principal amount of Bonds becoming due on the 2-1M KuM1-Cox Printing — Salina. -- Stated Maturity of such Bond, as specified by the Holder of such Bond. The Bonds shall be numbered in a manner determined by the Bond Registrar. The Bonds shall be dated July 1, 1992. The Bonds shall have the Stated Maturities and shall bear interest at the rates per annum as follows: The Bonds shall bear interest from the most recent Interest Payment Date to which interest has been paid in full or, if no interest has been paid, from July 1, 1992. Interest on the Bonds at the rates aforesaid shall be payable semiannually on April 1 and October 1 in each year, beginning April 1, 1993 (the "Interest Payment Dates"). The Treasurer of the State of Kansas, Topeka, Kansas, is hereby designated as the Paying Agent and as the Bond Registrar for the Bonds. Section 4. Method and Place of Payment of Princioal of and Interest on the Bonds. The principal of, redemption premium, if any, and interest (computed on the basis of a 360 -day year of twelve 30 -day months) on the Bonds shall be payable in such coin or currency of the United States of America as at the time I= SERIAL BONDS Stated Annual Rate Maturity Principal of October 1 Amount Interest 1993 $ 385,000 % 1994 415,000 % 1995 445,000 % 1996 475,000 % 1997 510,000 % 1998 545,000 % 1999 575,000 % 2000 605,000 % 2001 640,000 % 2002 680,000 % 2003 725,000 % 2004 765,000 % 2005 815,000 % 2006 870,000 % 2007 925,000 % 2008 985,000 % 2009 1,050,000 % 2010 1,120,000 % 2011 1,195,000 % 2012 1,275,000 % [TERM BONDS] 0 The Bonds shall bear interest from the most recent Interest Payment Date to which interest has been paid in full or, if no interest has been paid, from July 1, 1992. Interest on the Bonds at the rates aforesaid shall be payable semiannually on April 1 and October 1 in each year, beginning April 1, 1993 (the "Interest Payment Dates"). The Treasurer of the State of Kansas, Topeka, Kansas, is hereby designated as the Paying Agent and as the Bond Registrar for the Bonds. Section 4. Method and Place of Payment of Princioal of and Interest on the Bonds. The principal of, redemption premium, if any, and interest (computed on the basis of a 360 -day year of twelve 30 -day months) on the Bonds shall be payable in such coin or currency of the United States of America as at the time I= K— Con Printing — Salina, Kansas of payment is legal tender for the payment of public and private debts. Payment of the interest on each Bond shall be made by the Paying Agent on each Interest Payment Date to the Person appearing as the Holder thereof in the Bond Register at the close of business on the Record Date next preceding said Interest Payment Date, by check or draft mailed to such Holder at the Holder's address as it appears in the Bond Register. The principal of and redemption premium, if any, for each Bond shall be payable to the Holder thereof upon the presentation of such Bond for payment and cancellation at its Maturity at the principal office of the Paying Agent. Notwithstanding any of the foregoing provisions of this Section to the contrary, any interest on the 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 close of business on a Special Record Date. The Special Record Date shall be fixed in the following manner: (1) the City shall notify the Bond Registrar in writing of the amount of Defaulted Interest proposed to be paid on the Bonds and the date of the proposed payment, which proposed payment date shall be at least 30 days after receipt by the Bond Registrar of such notice from the City; (2) at the same time the City shall deposit with the Paying Agent an amount of money equal to the aggregate amount to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Paying Agent for 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 and at the expense of the City, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, first class postage prepaid, to the Holder of each Bond at such Holder's address as it appears in the Bond Register, not less than 10 days prior to such Special Record Date. Notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor having been mailed as aforesaid, such Defaulted Interest shall be paid to the Persons in whose names 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 such other method of transferring funds as may be requested by the Holder of the Bond, provided that the Paying Agent shall first receive a written request from such Holder (i) specifying the method and route for transferring funds and (ii) providing for the Paying Agent to be reimbursed by the Holder for all expenses incurred in connection with such fund transfers. -10- Kuhn Cox Priming — Sabina Kansas _ Subject to the foregoing provisions of this Section, each Bond delivered under this Ordinance upon transfer of or in exchange for or in lieu of any other Bond shall carry the rights to interest accrued and 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 on behalf of the City by the facsimile signature of the Mayor, attested by the facsimile signature of the City Clerk, with the facsimile seal of the City affixed. In the event any officer whose signature or facsimile thereof appears on any Bond shall cease to be such officer before the delivery of such Bond, such signature or facsimile thereof shall nevertheless be valid and sufficient for all purposes, the same as if such person had remained in office until delivery. Any Bond may be executed by such persons as at the actual time of the execution of such Bond shall be the proper officers to sign such Bond although at the original date of such Bond such persons may not have been such officers. The Bonds shall have endorsed thereon a Certificate of Authentication substantially in the form hereinafter set forth and which shall have the date of registration inserted and shall be manually executed by the Bond Registrar. No Bond shall be entitled to any security or benefit under this Resolution or shall be valid or obligatory for any purpose unless and until such Certificate of Authentication shall have been duly executed by the Bond Registrar by manual signature. Such executed Certificate of Authentication upon any Bond shall be conclusive evidence that such Bond has been duly authenticated and delivered under this Resolution and that such registered owner has been entered of record in the Bond Register kept by the Bond Registrar. The Certificate of Authentication shall be deemed to have been duly executed if signed and dated by any authorized officer or employee of the Bond Registrar, but it shall not be necessary that the same officer or employee sign the Certificate of Authentication on all of the Bonds that may be issued hereunder at any one time. The Mayor and City Clerk are hereby authorized and directed to prepare and execute the Bonds in the manner hereinbefore specified, to register the Bonds in the office of the City Clerk, and to cause the Bonds to be registered in the office of the State Treasurer of Kansas as provided by law, and when the Bonds have been duly registered with the Bond Registrar, to deliver the Bonds to the Underwriter, upon the payment of the purchase price of 100% of the principal amount of the Bonds plus accrued interest to the date of payment and delivery together with any premium. -11- Kinn -Cox Priming — Salina, Kansas Section 6. Registration, Transfer and Exchange of Bonds. So long as any of the Bonds remain outstanding, the City shall cause the Bond Register to be kept at the principal office of the Bond Registrar and all of the Bonds and transfers and/or exchanges thereof shall be fully registered as to both principal and 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 duly endorsed for transfer or accompanied by a written 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. Upon any such transfer, the City shall execute and the Bond Registrar shall authenticate and deliver in exchange for such Bond a new Bond or Bonds, registered in the name of the transferee, of any denomination or denominations authorized by this Ordinance in an aggregate principal amount equal to the principal amount of such Bond, of the same Stated Maturity, bearing interest at the same rate and of the same series. Bonds, upon surrender thereof at the principal office of the Bond Registrar, together with a written 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 exchanged for an equal aggregate principal amount of Bonds of the same Stated Maturity, of any denomination or denominations authorized by this Ordinance, bearing interest at the same rate and of the same series. In all cases in which Bonds shall be exchanged or transferred hereunder, the City shall execute and the Bond Registrar shall authenticate and deliver at the earliest practicable time Bonds in accordance with the provisions of this Ordinance. All Bonds surrendered in any such exchange or transfer shall forthwith be cancelled by the Bond Registrar. No service charge shall be made to any Bondholder for registration, transfer or exchange of Bonds, but the City or the Bond Registrar may make a charge for every transfer or exchange of Bonds sufficient to reimburse it or them for any tax or other governmental charge required to be paid with respect to such transfer or exchange, and such charges shall be paid before 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 during a period beginning at the opening of business 15 days preceding a mailing of a notice of redemption for Bonds selected for redemption pursuant to Section 10 and ending at the close of business on the date of such mailing; (ii) to transfer or exchange any Bond so selected for redemption in whole or in part, or (iii) to issue, transfer or exchange any Bond during -12- Kinn -Cox Pri ming — S—. K— the period beginning at the opening of business on the day after receiving written notice from the City of its intent to pay Defaulted Interest and ending at the close of business on the date fixed for the payment of Defaulted Interest pursuant to Section 4 of this Ordinance. Section 7. Persons Deemed Owners of Bonds. The Person in whose name any Bond shall be registered shall be deemed and regarded by the City, the Bond Registrar and the Paying Agent as the absolute owner thereof, whether such Bond shall be overdue or not, for the purpose of receiving payment therefor or on account thereof and for all purposes, and neither the City, the Bond Registrar nor the Paying Agent shall be affected by notice to the contrary. Payment of or on account of the principal of, premium, if any, and interest on any Bond shall be made only to or upon the order of the Holder thereof or his legal representative. All such payments shall be valid and effectual to satisfy and discharge the liability 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 mutilated, or be lost, stolen or destroyed, the City shall, if necessary, execute and the Bond Registrar shall authenticate and shall deliver a new Bond of like date and tenor as the Bond mutilated, lost, stolen or destroyed; provided that, in the case of any mutilated Bond, such mutilated Bond shall first be surrendered to the Bond Registrar, and in the case of any lost, stolen or destroyed Bond, that the requirements of K.S.A. 84-8-405 are met and that an indemnity bond and affidavit of loss are provided to the Bond Registrar and the City at the expense of the Holder. Such indemnity bond and affidavit of loss must be sufficient, in the judgment of the Bond Registrar and the City, to protect the Bond Registrar and the City from any loss which either of them might suffer if the Bond is replaced. In the event any such Bond shall have matured, instead of issuing a substitute Bond the City may pay or authorize the payment of the same without surrender thereof. Upon the issuance of any substitute Bond, the City and the Bond Registrar may require the payment of an amount sufficient to reimburse the City and the Bond Registrar for any tax or other governmental charge that may be imposed in relation thereto and any other reasonable fees and expenses incurred in connection therewith. The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, lost, stolen or destroyed Bonds. Section 9. Cancellation and Destruction of Bonds Upon Payment. All Bonds surrendered for payment, transfer or exchange shall be delivered to the Bond Registrar and, if not already cancelled, the Bond Registrar shall cancel such Bonds and record such cancellation in the Bond Register. Thereafter, such cancelled Bonds shall be delivered to the City. -13- Kuh, C,. P—T,,g — Sauna K—, Section 10. Redemption of Bonds Prior to Maturity. (a) Optional Redemption. At the option of the City, Bonds maturing on October 1, 2001, and thereafter may be called for redemption and payment prior to maturity in whole or in part (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 October 1, 2000, or on any Interest Payment Date thereafter, at a Redemption Price equal to 100% of the principal amount of the Bonds so redeemed and paid, plus accrued interest thereon to the Redemption Date, without premium. (b) Mandatory Redemption. Each of the Term Bonds shall also be subject to mandatory redemption and payment on October 1, or on any October 1 thereafter, pursuant to the redemption schedule hereinafter set out, at a Redemption Price equal to 100% of the principal amount thereof, plus accrued interest thereon to the Redemption Date, without premium. The City hereby agrees to redeem the following principal amounts of the Term Bonds in each of the following years: PRINCIPAL YEAR AMOUNT OCTOBER 1 * * Final Maturity (c) Redemption Provisions. The Bond Registrar shall call Bonds for redemption and payment pursuant to paragraph (a) as herein provided upon mailing to the Bond Registrar at least 45 days prior to the Redemption Date of a written request of the City, such request to be mailed by United States registered mail, postage prepaid, and a copy of such notice shall be sent to the Underwriter, but no such request shall be required for Bonds being redeemed pursuant to paragraph (b). Such request shall specify the principal amount of Bonds and their maturities to be called for redemption, the applicable Redemption Price or Prices and the Redemption Date. Bonds shall be redeemed in the principal amount of $5,000 or any integral multiple thereof. In the case of a partial redemption of Bonds of the same maturity the Bonds to be redeemed shall be selected by the Bond Registrar from the Outstanding Bonds of that maturity by such method as the Bond Registrar shall deem equitable and which may provide for the selection for redemption of portions of the principal of Outstanding Bonds of that maturity of a denomination larger than $5,000. The portions of the principal of Outstanding Bonds so selected for partial redemption shall be equal to $5,000 or integral multiples thereof. Any Bond which is to be redeemed only in part shall be submitted to the Paying Agent -14- KuttnGor Panting — Selina. Kensas and delivered to the Bond Registrar, who shall authenticate and deliver to the Holder of such Bond, without service charge, a new Bond or Bonds of the same series, of any authorized denomination as requested by such Holder in an aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Bond so surrendered. If the Holder of any such Bond of a denomination greater than $5,000 shall fail to present such Bond to the Paying Agent for payment and exchange as aforesaid, such Bond shall, nevertheless, become due and payable on the Redemption Date to the extent of the 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 thereof, the Bond Registrar shall give written notice in the name of the City of its intention to redeem and pay such Bonds at the office of the Paying Agent. Notice of Redemption shall be given by first class United States mail, postage prepaid, mailed not less than 30 days prior to the Redemption Date, to each Holder of Bonds to be redeemed, at his address appearing in the Bond Register. All notices of redemption 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 of 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 each 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 (which 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 hereto shall not affect or invalidate the redemption of said Bond. The Bond Registrar is also directed to comply with any mandatory or voluntary standards for processing redemptions of municipal securities established by the Securities and Exchange Commission. Failure to comply with such standards shall not affect or invalidate the redemption of said Bonds being redeemed. (d) Effect of Redemption. If any Bond is called for redemption and payment as aforesaid, all interest on such Bond shall cease from and after the date for which such call is made, provided funds are made available to the Paying Agent for its payment on the Redemption Date at the Redemption Price. -15- Minn -Cox Printing — Salina, —111 Section 11. Form of Bonds. Th registered form shall be substantially The REGISTERED NUMBER Interest Rate Bonds issued in fully as follows: REGISTERED UNITED STATES OF AMERICA STATE OF KANSAS COUNTY OF SALINE CITY OF SALINA COMBINED WATER AND SEWAGE SYSTEM REVENUE BOND SERIES 1992 REGISTERED HOLDER: PRINCIPAL AMOUNT: Maturity Bond Date Date CUSIP July 1, 1992 DOLLARS THE CITY OF SALINA, in the County of Saline, State of Kansas (the "City"), for value received, hereby promises to pay to the Registered Holder identified above, or registered assigns, on the Maturity Date identified above, unless called for redemption prior to maturity, the Principal Amount identified above and to pay interest thereon at the Interest Rate specified above from the most recent Interest Payment Date to which interest has been paid in full or, if no interest has been paid, from July 1, 1992, said interest being payable semiannually on April 1 and October 1 in each year, beginning April 1, 1993 (the "Interest Payment Dates"). AS PROVIDED in the Ordinance (the "Ordinance") of the City authorizing the issuance of this Bond, interest on this Bond will be paid on each Interest Payment Date by check or draft to the person in whose name this Bond (or one or more predecessor Bonds) is registered in the hereinafter referred to Bond Register at the close of business on the fifteenth day (whether or not a business day) of the month next preceding each Interest Payment Date (the "Record Date") to the registered owner hereof at such person's address as it appears in the Bond Register. Interest not punctually paid will be paid as otherwise provided in the Ordinance. The principal of this Bond shall be payable by check or draft to the Registered Holder upon presentation and surrender hereof at the principal office of the Treasurer of the State of Kansas in the City of Topeka, Kansas. -16- -1 Co. Printing — Salina, Kansas REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS BOND SET FORTH ON THE REVERSE HEREOF. SUCH PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH HEREIN. THIS BOND shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Ordinance until the Certificate of Authentication hereon shall have been dated and executed by the Bond Registrar. IT IS HEREBY DECLARED AND CERTIFIED that all acts, conditions and things required to be done and to exist precedent to and in the issuance of the Bonds have been done and performed and do exist in due and regular form and manner as required by the constitution and laws of the State of Kansas. IN WITNESS WHEREOF, the City has caused this Bond to be executed by facsimile signatures of its Mayor and City Clerk and a facsimile of its corporate seal to be hereto affixed and this Bond to be dated July 1, 1992. ATTEST: CITY OF SALINA, KANSAS (facsimile) Mayor (facsimile) City Clerk CERTIFICATE OF AUTHENTICATION This Bond is one of the Bonds described in the within mentioned Ordinance. REGISTRATION DATE: THE TREASURER OF THE STATE OF KANSAS Bond Registrar and Paying Agent By State Treasurer's Registration Number: 0322-085-070192-135 [ON REVERSE SIDE] FURTHER PROVISIONS THIS BOND is one of a duly authorized issue of Bonds of the City aggregating the principal amount of $15,000,000 (the "Bonds"), to be known as the "Combined Water and Sewage System Revenue Bonds, Series 1992." The Bonds are issued for the purpose of repairing, altering, extending, reconstructing, enlarging and improving the combined water and sewage system by -17- Kinn-Cox Printing — Salina, Kansas .. .:. .. •'r 4i .� .v x....+.. ,. ....r:. .' �:. .. ..... �.:.v ....:.�.'� =r–. .r. � _ r.4 �x K.»n)r �-i+i .. urvt'.s-v ' l the authority of and in full compliance with the provisions, restrictions and limitations of the Constitution and statutes of the State of Kansas, including K.S.A. 12-856 to 12-869, inclusive, and all amendments to such statutes and all other provisions of the laws of said State applicable thereto. THIS BOND and all interest hereon are special obligations of the City to be paid by said City solely 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 and as described in the Ordinance and not from any other fund or source. The Bonds constitute a lien on such revenues. The Bonds do not constitute general obligations of the City nor do they constitute an indebtedness of the City within the meaning of any constitutional or statutory provision, and the City is under no obligation to levy any taxes to pay any of the principal of or interest on the Bonds. The Bonds have been authorized and issued under the provisions of the Ordinance to which reference is made for a description of the covenants made by the City with respect to the collection, segregation and application of the revenues of the City's combined water and sewage system, the nature and extent of the security of 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 interest and in other respects to an issue of Combined Water and Sewage System Revenue Bonds, Series of 1977, dated April 1, 1977, in the original principal amount of $3,000,000. The Bonds are on a parity and are equally and ratably secured with respect to the payment of principal and interest and in all other respects to an issue of Combined Water and Sewage System Revenue Refunding Bonds, Series 1990-A, dated July 1, 1990, in the original principal amount of $5,655,000, and an issue of Combined Water and Sewage System Revenue Bonds, Series 1990-B, dated July 1, 1990, in the original principal amount of $2,210,000. The Bonds, said Series 1977 Bonds, said Series 1990-A and said Series 1990-B, as of the Bond Date, constitute the only obligations of the City payable from the net revenues of the combined water and sewage system. The City may issue additional bonds payable from the net revenues produced from the combined water and sewage system of the City as provided in and subject to the restrictions of the Ordinance and may provide 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, Kansas, and in the office or the Treasurer of the State of Kansas. THE BONDS maturing on October 1, 2001, and thereafter, at the option of the City, may be called for redemption and payment prior to maturity in whole or in part (selection of the maturity or maturities of Bonds to be redeemed to be determined -18- KUM1n-Gox Pnniing — S.11— Kansas by the City, selection of the Bonds to single maturity to be determined by the equitable manner as it may determine) on any Interest Payment Date thereafter, equal to 100% of the principal amount of and paid, plus accrued interest thereon redemption and payment, without premium. be redeemed within a Bond Registrar in such October 1, 2000, or on at a redemption price the bonds so redeemed to the date fixed for EACH OF the Bonds of this issue maturing October 1, (the "Term Bonds") shall also be subject to mandatory redemption and payment on October 1, or on any October 1 thereafter (selection of bonds to be made by the Bond Registrar in such manner as it may deem equitable), pursuant to the redemption schedule hereinafter set forth, at the redemption price of 100% (expressed as a percentage of the principal amount), plus accrued interest thereon to the date of redemption: Principal Year Amount October 1 * Final Maturity IN THE EVENT any of the Bonds are called for redemption and payment as aforesaid, written notice thereof will be given by first class United States mail mailed not less than 30 days prior to the date fixed for redemption and payment to each holder of Bonds to be redeemed. All bonds so called for redemption will cease to bear interest on the specified redemption date, provided funds are deposited with the Paying Agent on such redemption date, and will no longer be secured by the Ordinance and will not be deemed to be outstanding under the provisions of the Ordinance. The failure of the holder of any Bond called for redemption to receive written notice mailed pursuant to the above provisions will not invalidate 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 months) on this Bond are payable in such coin or currency of the United States of America as at the time of 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 Register at the office of the Bond Registrar upon surrender of this Bond to the Bond Registrar duly endorsed for transfer or accompanied by a written instrument of transfer satisfactory to the Bond Registrar duly executed by the Registered Holder hereof or his attorney or legal representative, and thereupon a new Bond or -19- Kinn -Cox Priming — Salina, Kansas Bonds of the same series in the same aggregate principal amount shall be issued to the transferee in exchange therefor subject to the conditions provided in the Ordinance. The Bonds for each maturity are issuable only in the form of fully registered bonds, without coupons, in the denomination of $5,000 or any integral multiple thereof. The Registered Holder of any Bond or Bonds may surrender the same in exchange for an equal aggregate principal amount of Bonds of any authorized denomination in the manner and subject to the conditions provided in the Ordinance. No service charge shall be made for any such transfer or exchange, but, prior to any transfer or exchange, the registered owner hereof shall pay to the City or the Bond Registrar an amount sufficient to reimburse it or them for any tax or other governmental charge required to be paid with respect to such transfer or exchange. The City, the Bond Registrar and the Paying Agent may deem and treat the person in whose name this Bond is registered as the absolute owner hereof for the purpose of receiving payment of, or on account of, the principal hereof and interest due hereon and for all other purposes. If the date for making any payment of interest or principal occurs on a Saturday, Sunday or holiday in the City of Topeka, Kansas, then such payment may be made on the next succeeding business day with the same force and effect. ---------------------------------------------------------------- (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.) the bond to which this assignment is affixed in the outstanding principal amount of $ standing in the name of the undersigned on the books of the Treasurer of the State of Kansas, Topeka, Kansas. The undersigned does (do) hereby revocably constitute and appoint attorney to transfer the said bond, on the books of said Treasurer of the State of Kansas, with full power of substitution in the premises. -20- Kuhn -Cox Pnminq — S.11— Kansas Dated Signature (Sign Here Exactly as Name or Names Appear on the Face of the Certificate) Signature Guaranteed: (Bank, Trust Company or Firm) By Authorized Officer ---------------------------------------------------------------- (FORM OF CITY CLERK'S CERTIFICATE) STATE OF KANSAS ) ) SS. COUNTY OF SALINE ) I, the undersigned, City Clerk of the City of Salina, Kansas, do hereby certify that this Bond has been duly registered in my office according to law. WITNESS my hand and official seal. [FACSIMILE 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 the proceedings leading up to the issuance of this Bond has been filed in my office and that this Bond was registered in my office according to law on , 1992. WITNESS my hand and official seal. [FACSIMILE SEAL] Kansas SALLY THOMPSON Treasurer of the State of By Assistant State Treasurer ---------------------------------------------------------------- -21- Kinn -Cox Priming — Salina. Kansas Section 12. Uncertificated Bonds. There will be no uncertificated bonds. Section 13. Disposition of Proceeds. All accrued interest and premium, if any, received from the sale of the Bonds shall be credited to and deposited in the 1992 Principal and Interest Account hereinafter created by Section 15 of this Ordinance. There shall next be deposited in the 1992 Reserve Account hereinafter created by Section 15 of this Ordinance, the sum of The remaining proceeds received from the sale of the Bonds shall be deposited in a separate fund hereby created in the treasury of the City to be known as the "Combined Water and Sewage Utility Construction Fund of 1992" (herein called the "Construction Fund") and shall be used by the City for the sole purpose of paying the cost of the portion of the Project currently under way in accordance with the plans and specifications therefor prepared by the City's engineers heretofore approved by the governing body of the City and on file in the office of the City Clerk, including any alterations in or amendments to said plans and specifications deemed advisable by the City's engineers and approved by the governing body of the City. Withdrawals from the Construction Fund shall be made only on duly authorized and executed warrant or check therefor approved by the governing body of the City upon its determination that such payment is being made for a purpose within the scope of this Ordinance and that the amount of such payment represents only the contract price of the property, equipment, labor, materials or service being paid for, or if such payment is not being made pursuant to an express contract, that such payment is not in excess of the reasonable value thereof. Nothing hereinbefore contained shall prevent the payment out of the Construction Fund of all costs and expenses incident to the issuance of the Bonds without a determination from the City's governing body. Upon completion of the Project as hereinbefore provided, any surplus remaining in the Construction Fund shall be deposited in the 1992 Principal and Interest Account created by Section 15 of this Ordinance. Section 14. Water and Sewage Fund. The City covenants and agrees that so long as any of the 1992 Bonds remain outstanding and unpaid all of the Revenues derived by the City from the operation of its Water and Sewage Utility, including all Revenues from improvements, extensions and enlargements in and to the Water and Sewage Utility, will be paid and deposited in the City's "Water and Sewage Fund" and that said Revenues will not be mingled with the other funds of the City and shall be administered and used solely as hereinafter in this Ordinance provided. -22- Hutt n -Cox Punting — Salina, Kansas Section 15. Ratification and Creation of Funds and Accounts. The prior establishment of the two 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") be, and the same is, hereby ratified and confirmed, and in addition to the accounts aforesaid there were created and established by the 1977 Ordinance of the City two separate accounts known respectively as the (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" and the same are hereby ratified and confirmed, and in addition to the accounts aforesaid, there were created and established by the 1990 Ordinance of the City two separate accounts know respectively as the (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") and the same are hereby ratified and confirmed, and in addition to the accounts aforesaid, there are hereby created and established in the treasury of the City the following two separate accounts (g) "Principal and Interest Account for Combined Water and Sewage System Revenue Bonds, Series 1992" (the "1992 Principal and Interest Account"), and (h) "Reserve Account for Combined Water and Sewage System Revenue Bonds, Series 1992" (the "1992 Reserve Account"). The accounts referred in (a), (c) and (d) aforesaid shall be maintained and administered by the City in accordance with the provisions of the 1977 Ordinance so long as any of the 1977 Bonds remain outstanding and unpaid. The accounts referred to in (e) and (f) aforesaid shall be maintained and administered by the City in accordance with the provisions cf the 1990 -23- Kuhn Co. P—,m g — Salina, Kansas Ordinance so long as any of the 1990 Bonds remain outstanding and unpaid. The accounts referred to in paragraphs (b), (g) and (h) aforesaid shall be maintained and administered by the City as hereinafter provided in this Ordinance so long as any of the Bonds remain Outstanding. Section 16. Application of Moneys in Funds and Accounts. Moneys paid and deposited in the "Water and Sewage Fund" heretofore established by the City and hereinbefore referred to shall be administered and disposed of by the City so long as any of the Bonds remain outstanding, in the following order, to wit: (a) The City each month shall pay or make provision for the payment of the reasonable and proper Operating Expenses for the current month. So long as the 1977 Bonds remain outstanding and unpaid, no moneys in the Water and Sewage Fund shall be used for the purpose of extending or enlarging the City's Water and Sewage Utility, except as provided in paragraph (g) of this Section 16; thereafter, the 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 proper expenses of operating and maintaining the City's Water and Sewage Utility for the current month, the City shall next pay or credit from time to time from the Water and Sewage Fund to the Bond and Interest Account for Combined Water and Sewage System Revenue Bonds, Series of 1977, so long as any of the 1977 Bonds remain outstanding, amounts (if any) at the time required to be paid or credited by 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 required 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 the provisions of paragraphs (a), (b) and (c) aforesaid, the City shall next pay or credit from the Water and Sewage Fund to the 1992 Principal and Interest Account, to the extent necessary to meet at the Stated Maturity thereof the interest on and principal of the Bonds, the following amounts: (i) 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 March 1, 1993, an equal pro rata portion of the amount of interest that will become due on the Bonds on April 1, -24- K- -C,. P--9 — S,[,,, Kansas 1993, and beginning on April 1, 1993, 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 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 September 1, 1993, an equal pro rata portion of the principal amount of the Bonds that will become due on October 1, 1993; and beginning on October 1, 1993, and continuing on the first day of each month thereafter, an amount not less than onetwelfth (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 1992 Principal and Interest Account shall be used and expended by the City for the sole purpose of paying the interest on and principal of the Bonds as and when 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 payments and credits at the time required to be made by the City to the principal and interest accounts established by the City to pay the principal of and interest on the outstanding revenue bonds of the City, including only the Bonds and any other combined water and sewage system revenue bonds of the City hereafter issued and standing on a parity with the Bonds, the available moneys in the Water and Sewage Fund shall be divided among such principal and interest accounts in proportion to the respective principal amounts of said series of combined water and sewage system revenue bonds of the City 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 1992 Principal and Interest Account pursuant to this paragraph (d) shall be made at the same time and on a parity with the amounts at the time required to be paid and credited to the 1990 Principal and Interest Account. (e) Prior to or concurrently with the issuance and delivery of the Bonds, there shall be paid and credited to the 1992 Reserve Account from the proceeds of the Bonds, the sums referred to in the second paragraph of Section 13 in the aggregate sum of $ (the "Reserve Requirement"). -25- Kuhn Cox Printing — Sauna, Kansas All amounts paid or credited to the 1992 Reserve Account shall be used and expended solely to prevent any default in the payment of interest on or principal of the Outstanding Bonds of the City if the moneys in the 1992 Principal and Interest Account hereinbefore created are insufficient to pay the interest on or principal of the Bonds as they become due. No part of said 1992 Reserve Account shall ever be expended or used by the City to call any Bonds for payment prior to their ultimate maturity unless all of the Outstanding Bonds be called for payment and funds are available to pay the same according to their terms. So long as the amount on hand in the 1992 Reserve Account aggregates the Reserve Requirement, no further payments into the 1992 Reserve Account shall be required, but if the City shall ever be compelled to use and expend any part of the 1992 Reserve Account for the purpose of paying the interest on or principal of Bonds of the City and such expenditure shall reduce the amount of the 1992 Reserve Account below the Reserve Requirement, then the City, after making all payments or credits at the time required to be made by the City under the provisions of paragraphs (a), (b), (c) and (d) hereof, will thereafter, each month, pay or credit on the first day of each month from the Water and Sewage Fund to the 1992 Reserve Account the sum of $47,200 each month until the Reserve Account aggregates the Reserve Requirement. At no time shall the balance of moneys on hand in the 1992 Bond Reserve Account exceed the sum of $ If at any time the moneys in the Water and Sewage Fund shall be insufficient to make in full the payments and credits at the time required to be made by the City to the bond reserve accounts established by the City to protect the payment of the outstanding combined water and sewage system revenue bonds of the City, including only the Bonds and any other combined water and sewage system revenue bonds of the City hereafter issued and standing on a parity with the Bonds, the available moneys in the Water and Sewage Fund shall be divided among such bond reserve accounts in proportion to the respective principal amounts of said series of combined water and sewage system revenue bonds of the City at the time outstanding which are payable from the moneys in such bond reserve accounts. The amounts required to be paid and credited to the 1992 Reserve Account pursuant to this paragraph (e) shall be made at the same time and on a parity with the amounts at the time required to be paid and credited to the 1990 Reserve Account. (f) After making all payments and credits at the time required to be made by the City under the provisions of paragraphs (a), (b), (c), (d) and (e) aforesaid, the City shall next pay or credit from time to time from the Water and Sewage Fund to the Combined Water and Sewage System Depreciation and Emergency Replacement Account, so long as any of the 1977 Bonds remain outstanding and unpaid, any amounts at the time required -26- K— Cox P—,�g — 5,1 a, Kan to be paid or credited by the provisions of the 1977 Ordinance, said Depreciation and Emergency Replacement Account to be administered in accordance with the 1977 Ordinance. At no time shall the balance of monies on hand in said Depreciation and Emergency Replacement Account exceed the sum of $125,000. From and after the time there are no longer any 1977 Bonds remaining outstanding and unpaid, the City shall transfer all amounts then on hand in said Depreciation 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 and Sewage Fund to the accounts hereinbefore named in paragraphs (a) (b), (c), (d), (e) and (f) of this Section shall have been so paid or credited, and if at the time the City shall not be in default in the performance of any covenant or agreement contained in this Ordinance, all moneys remaining in the Water and Sewage Fund shall be credited monthly to the Extension and Bond Retirement Account so long as any of the 1977 Bonds remain outstanding and unpaid, and all moneys in the Extension and Bond Retirement Account shall be used as provided in Section 10(f) of the 1977 Ordinance and the City shall comply with the covenants and agreements set forth in said Section 1O(f) so long as any of the 1977 Bonds remain outstanding and unpaid. From and after the time there are no longer any 1977 Bonds remaining outstanding and unpaid, the City shall change the name of the Extension and Bond Retirement Account to the Combined Water and Sewage System Surplus Account (the "Surplus Account"). Thereafter, after all payments and credits required at the time to be made by the City under the provisions of paragraphs (a), (b), (c), (d), (e) and (f) of this Section have been made, all moneys remaining in the Water and Sewage Fund shall be paid and credited to the Surplus Account. Moneys in the Surplus Account may be expended and used for the following 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 described in Section 18; (iii) paying the cost of improving the System; defaults as hereinafter extending, enlarging or (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- KlhmC.. Printing — Saline, 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 Surplus Account shall be diverted to the general governmental or municipal functions of the City. Section 17. Deficiency in Payments or Credits into Funds or Accounts. If at any time the revenues derived by the City from the operation of its Water and Sewage Utility shall be insufficient to make any payment or credit on the date or dates hereinbefore specified, the City shall make good the amount of such deficiency by making payments or credits out of the first available revenues thereafter received by the City from the operation of its Water and Sewage Utility, such payments and credits being made 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 1992 Principal and Interest Account and in the 1992 Reserve Account are not sufficient to pay the principal 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 Account, 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 shall 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 period of thirty days. Section 19. Investments. Any moneys held in any fund or account which are not immediately needed for the purposes of such fund or account may be invested as provided in Section 13 of the 1977 Ordinance so long as any of the 1977 Bonds remain outstanding and unpaid. From and after the time there are no longer any 1977 Bonds remaining outstanding and unpaid, any moneys held in any fund or account which are not immediately needed for the purposes of such fund or account may be invested in obligations in which public funds are permitted to be invested under Kansas law; provided, however, that no such investment shall be made for a period extending longer than to the date when the moneys invested may be needed for the purpose for which such fund or account was created. Cash moneys in each of the funds and accounts herein created or established -28- Kuhl — Salina, Kansas shall be deposited in a bank or banks in the City of Salina, Kansas, which are members of the Federal Deposit Insurance Corporation, and all such bank deposits shall be adequately secured by the banks holding such deposits. Except as to interest accumulated in the Bond and Interest Account and in the Reserve Account relating to the 1977 Bonds, which interest shall be deposited in the escrow account for the 1977 Bonds, 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 in the 1992 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 Sewage Fund and used and applied for the purposes and in the order hereinbefore specified in Section 16 of this Ordinance. In determining the amount held in any fund or account under any of the provisions of this Ordinance, obligations in which moneys are invested shall be valued at the market value thereof. Section 20. Particular Covenants of the City. The City covenants that it will comply with the covenants and agreements set forth in the 1977 Ordinance so long as any of the 1977 Bonds remain outstanding and unpaid. From and after the time there are no longer any 1977 Bonds remaining outstanding and unpaid, the 1977 Ordinance shall be of no force or effect. The City covenants with each of the purchasers and owners of any of the Bonds that so long as any of said Bonds remain outstanding and 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 during such fiscal year, including reserves, if any, provided for in the annual budget for such fiscal year; (ii) an amount equal to at least 125% of the amount required to be paid in the current fiscal year on account of principal of and interest on all obligations payable from the Revenues at the time outstanding (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); (iii) an amount, if any, to be paid during such fiscal year into the 1992 Reserve Account; (iv) to the extent not otherwise provided for, an amount equal to debt service on the 1977 Bonds for such fiscal year; (v) an amount, if any, to be paid into the reserve account for the 1977 Bonds and into the Depreciation and Emergency Replacement Account during such fiscal year; and (vi) any and all charges or liens whatsoever payable out of Revenues during such fiscal year. -29- Kinn Cox Printing — Sabina, Kansas (b) No Free Service: Service to City. None of the facilities or services afforded by the Water and Sewage Utility will be furnished to any user without a reasonable charge being made therefor. The City will require the prompt payment of accounts and will discontinue water and sewage service to any customer delinquent in the payment of his account for a period which shall not exceed sixty (60) days. The City will pay monthly into the Water and Sewage Fund for the water and sewage service furnished the City in accordance with effective applicable rates, fees and charges. (c) Good Repair. The City will maintain in good repair and working order the City's Water and Sewage Utility and will operate the same in an efficient manner and at reasonable cost. (d) Disposal of Propertv. The City will not mortgage, pledge or otherwise encumber the Water 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. From 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 the Water and Sewage Utility, and such property being leased shall not be treated as part of the Water and Sewage Utility for purposes of this paragraph (d) and may be mortgaged, pledged or otherwise encumbered. (e) Insurance. The City will carry and maintain a reasonable amount of all-risk insurance upon the properties forming a part of the Water and Sewage Utility insofar as they are of an insurable nature, the amount of such insurance being such amount as would normally be insured by a private corporation engaged in a similar type of business. In the event of loss or damage, the City, with all reasonable dispatch, will use the proceeds of such insurance in reconstructing and replacing the property damaged or destroyed, or, if such reconstruction or replacement be unnecessary, then in redeeming or purchasing outstanding bonds of the City, such redemption or purchase being made in accordance with the provisions of the Ordinance authorizing the issuance of the bonds. The City in operating the Water and 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, and the proceeds derived from any such policies shall be used in paying the claims on account of which such proceeds were received, provided, however, that the City may elect to accept the provisions of the Workers Compensation Act of the State MT115 M1n-Cox Printing — Sabina_ Kansas 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 provisions of the statutes of the State of Kansas. The cost of all insurance referred to in this paragraph (f) shall be paid as an Operating Expense out of the revenues of the City's Water and Sewage Utility. (f) Books and Records: Annual Audit. The City will install and maintain proper books, records and accounts (entirely separate from all other records and accounts of the City) in which complete and correct entries will be made of all dealings and transactions of or in relation to the properties, business and affairs of the Water and Sewage Utility of the City. Such accounts shall show the amount of revenue received from said Water and Sewage Utility, the application of such revenue, and all financial transactions in connection therewith. Said books shall be kept by the City according to standard accounting practices as applicable to the operation of water and sewage utilities. The City will operate the Water and Sewage Utility on the basis of a fiscal year beginning on January 1st and ending on December 31st. Annually, as soon as possible following the close of each fiscal year, the City will cause an audit to be made by a competent firm of certified public accountants experienced in public utility accounting of the accounts of its Water and Sewage Utility for the preceding fiscal year. In addition to such matters as are customarily included in the audit report, the accountants shall, without limiting the generality of the foregoing, furnish to the City separately a summary of the accountants' recommendations as to the City's practices and procedures of water and sewage system operations. Within thirty (30) days after the completion of each such audit, said accountants shall file a copy thereof in the office of the City Clerk and shall forward copies of such audit to the Underwriter. If such audit shall disclose that proper provision has not been made for all of the requirements of the law under which the Bonds herein authorized are issued, and of this Ordinance, the City covenants and agrees that it will promptly proceed to cause to be charged for the services rendered by the City's Water 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 the right at all reasonable times to inspect the Water and Sewage Utility and all records, accounts and data relating thereto, and any such Holder shall be furnished by the City all such information concerning said Water and Sewage Utility and the operation thereof which he may reasonably request. -31- Kinn -Cox Printing — Salina. Kansas (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 improvements, 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 Bonds herein authorized remain outstanding and unpaid, said City will not issue any additional bonds or other obligations payable out of the Revenues of its Water and Sewage Utility which have a claim on Revenues superior to the Bonds and that it will not issue any such additional bonds or obligations which stand on a parity or equality with the Bonds herein authorized unless all of the following conditions are met: (a) The issuance of the additional bonds shall be authorized or permitted under the laws of the State of Kansas. (b) The City shall not be in default in the payment of principal of or interest on the Bonds, in making any payment at the time required to be made into the respective funds and accounts created by 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 -32- Kinn -Cor Priming — Salina. 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 Authorized 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 and report made pursuant to subparagraph (ii) or subparagraph (iii) of paragraph (c) is reasonable. An investigation and report made pursuant to subparagraph (ii) or subparagraph (iii) of paragraph (c) above shall 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 the City Clerk. Notwithstanding the restrictions upon the issuance of additional bonds set out above, additional bonds may be issued if it is necessary in the opinion of the Consulting Engineers to repair any damage or loss to the Water and Sewage Utility if the Water and Sewage Utility has been destroyed or damaged by disaster to such an extent that it cannot be operated or if it is necessary to keep the Water and Sewage Utility in good operating condition. Additional bonds of the City issued under the conditions hereinbefore in this section set forth shall stand on a parity with the Bonds herein authorized and shall enjoy complete equality of lien on and claim against the Revenues of the City's Water and Sewage Utility with the Bonds herein authorized, and the City may make equal provision for paying said Bonds and the interest thereon out of the Water and Sewage Fund and may likewise provide for the creation of reasonable reserve accounts out of moneys in said Water and Sewage Fund. -33- Kuhn -Cox Printing — Salina, Kansas Nothing in this section contained shall prohibit or restrict the right of the City to issue additional water and sewage system revenue bonds or other revenue obligations for the purpose of reconstructing, altering, repairing, improving, extending or enlarging the City's Water and Sewage Utility and to provide that the principal of and interest on said revenue bonds or obligations shall be payable out of the revenues of the City's Water and Sewage Utility, provided that such additional revenue bonds or obligations shall be junior and subordinate to the Bonds so that if at any time the City shall be in default in paying either interest on or principal of the Bonds the City shall make no payments of either principal of or interest on said junior and subordinate revenue bonds or obligations until said default or defaults be cured. In the event of the issuance of any such junior and subordinate revenue bonds or obligations, the City, subject to the provisions aforesaid, may make provision for paying the principal of and interest on said revenue bonds or other revenue obligations out of moneys in the Water and Sewage Fund. Section 22. Tax Matters. The City will comply with all applicable provisions of the Internal Revenue Code of 1986 (the "Code"), including Section 103 thereof, and the regulations of the Treasury Department thereunder, from time to time proposed or in effect, in order to maintain the exclusion from gross 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 and with all reasonable dispatch for the purpose for which the Bonds are issued as hereinbefore set forth, and that no part of the proceeds of the Bonds shall be invested in any securities, obligations or other investments except for the temporary period pending such use nor used, at any time, directly or indirectly, in a manner which, if such use had been reasonably anticipated on the date of issuance of the Bonds, would have caused any of the Bonds to be or become "arbitrage bonds" within the meaning of Section 103(b)(2) or Section 148 of the Code and the regulations of the Treasury Department thereunder proposed or in effect at the time of such use and applicable to obligations issued on the date of issuance of the Bonds. The City agrees that there shall be paid from time to time all amounts required to be rebated to the United States pursuant to Section 148(f) of the Code and any temporary, proposed or final Treasury Regulations as may be applicable to the Bonds from time to time. This covenant shall survive payment in full or defeasance of the Bonds. The City specifically covenants to pay or cause to be paid to the United States, at the times and in the amounts determined under this Resolution, the Rebate Amounts as described in the Letter of Instructions. -34- K- -Cl. Priming — Salina, Kansas Section 23. Amendments. The provisions of the Bonds authorized by this Ordinance and the provisions of this Ordinance may be modified at any time by the City with the written consent of the Holders of not less than sixty-six and two-thirds percent (66 2/3%) in aggregate principal amount of the Bonds at the time Outstanding; provided, however, that no such modification or amendment shall permit or be construed as permitting (a) the extension of the maturity or the principal of any of the Bonds, or the extension of the maturity of any interest on any Bonds, or (b) a reduction in the principal amount of any Bonds or the rate of interest thereon, or (c) a reduction in the aggregate principal amount of Bonds the consent of the Holders of which is required for any such amendment or modification. Any provision of the Bonds or of this Ordinance may, however, be modified or amended in any respect with the written consent of the Holders of all of the Bonds then Outstanding. Amendments to this Ordinance which correct errors or which add to or supplement the security of the Holders of the Bonds may be adopted by the City without the consent of such Holders. Every amendment or modification of a provision of the Bonds or of this Ordinance to which the written consent of the Holders is given as above provided shall be expressed in an ordinance and shall be deemed to be a part of this Ordinance. It shall not be necessary to note on any of the Outstanding Bonds any reference to such amendment or modification, if any. A certified copy of every such amendatory or supplemental ordinance, if any, and a certified copy of this Ordinance shall always be kept on file in the office of the City Clerk and shall be made available for inspection by the Holder of any Bond or prospective purchaser or Holder of any Bond authorized by this Ordinance, and upon payment of the reasonable cost of preparing the same, a certified copy of any such amendatory or supplemental ordinance or of this Ordinance will be sent by the City Clerk to any such Holder or prospective bondholder. Section 24. Acceleration in the Event of Default. The City agrees that if any of the following events 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 -35- Kinn -Gov Priming — Saline. Ken (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, then, upon the occurrence of any one or more of the above events and at any time thereafter and while such event shall continue, the Holders of twenty-five percent (25%) of the amount of the Bonds then Outstanding may, by written notice to the City filed in the office of the City Clerk or delivered in person to said City Clerk, declare the principal of all Bonds then Outstanding to be due and payable immediately, and upon any such declaration given as aforesaid, all of said Bonds shall become and be immediately due and payable, anything in this Ordinance or in said Bonds contained to the contrary notwithstanding. This provision, however, is subject to the condition that if at any time after the principal of said Bonds shall have been so declared to be due and payable, all arrears of interest upon all of said Outstanding Bonds, except interest accrued but not yet due on such Bonds, and all arrears of principal upon all of said Bonds shall have been paid in full, and all other defaults, if any, by the City under the provisions of this Ordinance and under the provisions of the statutes of the State of Kansas shall have been cured, then, and in every such case, the Holders of a majority in amount of the Bonds then Outstanding, by written notice to the City given as hereinbefore specified, may rescind and annul such declaration and its consequences, but no such rescission or annulment shall extend to or affect any subsequent default or impair any rights consequent thereon. Section 25. Enforcement. The provisions of this Ordinance, including the covenants and agreements hereinbefore contained, shall constitute a contract between the City and the Holders of the Bonds, and the Holder or Holders of not less than ten percent (10%) of the Bonds at the time Outstanding shall have the right, for the equal benefit and protection 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 their rights against the City and its officers, agents and employees, and to require and compel the City and its officers, agents and employees to perform all duties and obligations required by the provisions of this Ordinance or by the Constitution and laws of the State of Kansas. (b) By suit, action or other proceeding in equity or at law to require the City, its officers, agents and employees to account as if they were the trustees of an express trust. -36- Kuhn -Cox Priming — Salina. Kansas (c) By suit, action or other proceeding in equity or at law to enjoin any acts or things which may 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 duty or obligation to levy any taxes either to meet any obligations incurred herein or to pay the principal of or interest on the Bonds. No remedy conferred hereby upon any holder of the Bonds herein authorized is intended to be exclusive of any other remedy, but each such remedy is cumulative and in addition to every other remedy and may be exercised without exhausting and without regard to any other remedy conferred hereby. No waiver of any default or breach of duty or contract by the Holder of any Bond shall extend to or affect any subsequent default or breach of duty or contract or shall impair any rights or remedies thereon. No delay or omission of the Holder to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver of any such default or acquiescence therein. Every substantive right and every remedy conferred upon the Holders of the Bonds may be enforced and exercised from time to time and as often as may be deemed expedient. In case any suit, action or proceeding to enforce any right or exercise any remedy shall be brought or taken and then discontinued or abandoned, or shall be determined adversely to the Holders of the Bonds, then, and in every such case, the City and the Holders of the Bonds shall be restored to their former positions and rights and remedies as 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 requirements contained herein and the pledge of Revenues made hereunder and all other rights granted hereby shall cease and determine. Bonds shall be deemed to have been paid and discharged within the meaning of this Ordinance if there shall have been deposited with the Paying Agent, or with a Kansas bank having full trust powers, at or prior to the maturity or redemption date of such Bonds, in trust for and irrevocably appropriated thereto, moneys and/or direct obligations of, or obligations the principal of and interest on which are guaranteed by, the United States of America, which, together with the interest to be earned on such investments, will be sufficient for the timely payment of the principal of such Bonds, the redemption premium thereon, if any there be, and interest accrued to the date of maturity or redemption, as the case may be; provided, however, always that if any such Bonds shall be redeemed prior to the maturity thereof, the City shall have elected to redeem such Bonds and irrevocable instructions to give notice of such redemption shall have been given. -37- Kuhn -Co. Priming — Sal—, -- Section 27. Approval of Preliminary Official Statement and Official Statement. The Preliminary Official Statement dated June 1, 1992, a copy of which has been submitted to and reviewed by the Governing Body of the City on the date hereof and is attached hereto as Exhibit "A," was final within the meaning of Rule 15c2-12 under the Securities Exchange Act of 1934 and the information therein was accurate and complete. Said Preliminary Official Statement and the final Official Statement, in substantially the form of the Preliminary Official Statement, and the public distribution of the same by the Underwriters is hereby approved. The Mayor of the City is hereby authorized and directed to execute and deliver said final Official Statement on behalf of the City with such changes therein or amendments or supplements thereto as shall be approved by the Mayor, the Mayor's execution thereof to be conclusive evidence of said representative's approval thereof. Section 28. Authorization of Agreement with Bond Registrar and Paying Agent. The agreement between the City and the State Treasurer of Kansas with respect to the duties of the State Treasurer as Bond Registrar and Paying Agent, in the form attached to this Ordinance and marked Exhibit "B", in all respects hereby approved, authorized and confirmed and the Mayor and City Clerk are hereby authorized and directed to execute said agreement for and on behalf of and as the act and deed of the City. Section 29. Severability. If any part of this Ordinance, whether large or small, shall be held invalid, the invalidity thereof shall not affect the other provisions of this Ordinance. Section 30. Effective Date. This Ordinance shall take effect and be in full force from and after its passage and publication once in the official City newspaper. PASSED by the governing body of the City of Salina, Kansas, this 22k,� day of July, 1992. ATTEST: C* City Clerk -38- Kuhn Cox Priming — S111- Kansas Document Id: Document Name: Operator: Author: Comments: OPERATION Created Last Revised Last Printed Last Archived Total Pages: Total Lines: 9231R SALINA DOCUMENT SUMMARY STATISTICS DATE TIME WORKTIME KEYSTR 06/17/86 15:07 3:24 13440 06/17/92 16:07 :00 25 06/17/92 16:34 06/17/86 15:13 onto Diskette OOOOA 40 Total Worktime: 3:48 1892 Total Keystrokes: 15030 Pages to be printed 2 Notify U01 on system VOLS. :S