Loading...
02-10084 IRB Issue KASAGILMORE & BELL, P.C. June 6, 2002 ORDINANCE NO. 02-10084 OF THE CITY OF SALINA, KANSAS AUTHORIZING THE ISSUANCE OF $3,500,000 INDUSTRIAL REVENUE BONDS SERIES 2002 (KASA INDUSTRIAL CONTROLS, INC.) PCL\402326.01 \ORDIN.2 I coma�Wye (Published in the The Salina Journal, June 19, 2002) ORDINANCE NO. 02-10084 AN ORDINANCE AUTHORIZING THE CITY OF SALINA, KANSAS TO ISSUE ITS INDUSTRIAL REVENUE BONDS, SERIES 2002 (KASA INDUSTRIAL CONTROLS, INC.) IN THE AGGREGATE PRINCIPAL AMOUNT OF $3,500,000 FOR THE PURPOSES OF REFUNDING CERTAIN OF THE CITY'S OUTSTANDING INDUSTRIAL REVENUE BONDS AND PAYING THE COSTS OF ACQUIRING AN EXISTING INDUSTRIAL FACILITY AND REMODELING AND FURTHER EQUIPPING SUCH FACILITY; AUTHORIZING EXECUTION OF A TRUST INDENTURE BY AND BETWEEN THE CITY AND SUNFLOWER BANK, N.A., SALINA, KANSAS, AS TRUSTEE; AUTHORIZING THE CITY TO LEASE SUCH FACILITY TO KASA INDUSTRIAL CONTROLS, INC. AND AUTHORIZING EXECUTION OF A LEASE BETWEEN SAID CITY AND KASA INDUSTRIAL CONTROLS, INC.; APPROVING THE FORM OF A GUARANTY AGREEMENT BY AND BETWEEN THE TENANT AND SUNFLOWER BANK, N.A., AS TRUSTEE; AND AUTHORIZING THE EXECUTION OF A BOND PURCHASE AGREEMENT FOR THE BONDS BY AND AMONG THE CITY, KASA INDUSTRIAL CONTROLS, INC. AND DAVIDSON SECURITIES, A DIVISION OF GOLD CAPITAL MANAGEMENT, INC., AS PURCHASER OF THE BONDS. THE GOVERNING BODY OF THE CITY OF SALINA, KANSAS HAS FOUND AND DETERMINED: A. The City of Salina, Kansas (the "Issuer") is authorized by the Kansas Economic Development Revenue Bond Act, as amended, as codified in K.S.A. 12-1740 et seq. (the "Act"), to acquire, construct, improve and equip certain facilities (as defined in the Act) for commercial, industrial and manufacturing purposes, to enter into leases and lease -purchase agreements with any person, firm or corporation for such facilities, and to issue revenue bonds for the purpose of paying the costs of such facilities and to issue revenue bonds for the purpose of refunding such bonds; and B. The Issuer's governing body has heretofore by resolution determined that it is desirable in order to promote, stimulate and develop the general economic welfare and prosperity of the Issuer and the State of Kansas that the Issuer issue its Industrial Revenue Bonds, for the purpose of paying the costs of acquiring, remodeling and further equipping certain manufacturing facilities in an amount not to exceed $3,500,000; and C. Pursuant to Ordinance No. 00-9976 of the Issuer passed April 17, 2000 (the "Original Ordinance") and a Supplemental Trust Indenture No. 1 dated as of April 15, 2000 between the Issuer and Sunflower Bank, N.A., as Trustee (the "Supplemental Indenture"), which amends and supplements a Trust Indenture dated as of March 1, 1991 (the "Original Indenture"), the Issuer previously issued its Industrial Revenue Bonds, Series 2000 (KASA Industrial Controls, Inc.) dated April 15, 2000 (the "Refunded Bonds"), in the original principal amount of $750,000, of which $688,057.25 remains outstanding, for the purpose of expanding and further equipping an existing industrial facility (the "Original Project"); and D. The Original Project was leased to KASA Industrial Controls, Inc., a Kansas corporation (the "Tenant"), pursuant to the provisions of a certain Supplemental Lease No. 1 dated as of April 15, 2000 between the Issuer and the Tenant (the "Supplemental Lease"), which amends and supplements a Lease dated as of March 1, 1991 (the "Original Lease"); and E. In order to gain certain financial advantages presently available, the Tenant desires that the Issuer issue its Industrial Revenue Bonds, Series 2002 (KASA Industrial Controls, Inc.) dated June 15, 2002 in the aggregate principal amount of $3,500,000 (the "Series 2002 Bonds") for the purpose of providing approximately $688,000 to refund the Refunded Bonds in advance of their maturities, by providing for the early redemption thereof, and providing approximately $2,812,000 to pay the costs of acquiring, remodeling and further equipping an existing manufacturing facility as more fully provided in the Indenture hereinafter authorized; and PCL\402326.01\ORDIN.2 canawareasar�aa F. The Issuer's governing body has determined that since the adoption of its resolution of intent the costs of the Project to be financed with bonds have increased by approximately $62,000, such that it is now deemed desirable that the Issuer issue its Industrial Revenue Bonds, Series 2002 (KASA Industrial Controls, Inc.) dated June 15, 2002 in the aggregate principal amount of $3,500,000 (the "Series 2002 Bonds"), for the purpose of providing funds to refund the Refunded Bonds, to fund a debt service reserve, and paying the costs of acquiring, remodeling and further equipping an existing manufacturing facility (the "Project"), as more fully described in the Indenture and in the Lease authorized in this ordinance for lease to KASA Industrial Controls, Inc. (the "Tenant"); and G. The Issuer's governing body finds that it is necessary and desirable in connection with the issuance of the Series 2002 Bonds to execute and deliver the following documents (collectively, the "Bond Documents"): (i) a Trust Indenture (the "Indenture"), with Sunflower Bank, N.A., Salina, Kansas, as Trustee (the "Trustee"), setting forth the final principal amounts, maturities and interest rates, and prescribing the terms and conditions of issuing and securing the Series 2002 Bonds; (ii) a Lease (the "Lease"), with the Tenant, under which the Issuer will acquire, remodel and further equip the Project and lease it to the Tenant in consideration of Basic Rent and other payments; and (iii) a Bond Purchase Agreement (the "Bond Purchase Agreement") providing for the sale of the Series 2002 Bonds by the Issuer to Davidson Securities, a division of Gold Capital Management, Inc., Wichita, Kansas. H. The Issuer's governing body has found that under the provisions of K.S.A. 79-201a Second, the Project purchased or constructed with the proceeds of the Series 2002 Bonds is eligible for exemption from ad valorem property taxes for up to 10 years, commencing in the calendar year following the calendar year in which the Bonds are issued, if proper application is made. The Issuer's governing body has further found that the Project should be exempt from ad valorem property taxes for a period of 10 years, subject to a payment in lieu of taxes for each year of the exemption, as more particularly described in the Agreement for Payment in Lieu of Taxes. Prior to making this determination, the governing body of the Issuer has conducted the public hearing and reviewed the analysis of costs and benefits of such exemption required by K.S.A. Supp. 12-1749d. NOW, THEREFORE, BE IT ORDAINED BY THE GOVERNING BODY OF THE CITY OF SALINA, KANSAS: Section 1. Definition of Terms. All terms and phrases not otherwise defined in this ordinance will have the meanings set forth in the Indenture and the Lease. Section 2. Authority to Cause the Project to be Purchased and Constructed. The Issuer is authorized to cause the Project to be acquired, remodeled and further equipped in the manner described in the Indenture and the Lease. Section 3. Authority to Cause the Refunded Bonds to be Redeemed. The Issuer is hereby authorized to cause the Refunded Bonds to be redeemed on or about June 20, 2002, in accordance with the provisions of the Supplemental Indenture and the Trustee is authorized to give notice of such redemption in accordance with the provisions of the Supplemental Indenture. Section 4. Authorization of and Security for the Bonds. The Issuer is authorized and directed to issue the Series 2002 Bonds, to be designated "City of Salina, Kansas Industrial Revenue Bonds, Series 2002 (KASA Industrial Controls, Inc.)" in an aggregate principal amount of $3,500,000. The Series 2002 Bonds will bear interest at various stated rates, and mature in principal installments with a final maturity not later than April 1, 2022, will be subject to optional redemption upon the direction of the Tenant beginning not later than April 1, 2007, at a redemption price not exceeding 100% of the principal amount thereof plus accrued interest, and will have such other redemption provisions, including premiums, will be in such forms and will be issued according to the provisions, covenants, agreements and other terms as are set forth in the Indenture and the Bond Purchase Agreement. The Series 2002 Bonds are being issued for the purpose of providing funds to refund the Refunded Bonds and to pay the costs of acquiring, remodeling and further equipping the Project. The Series 2002 Bonds will be special limited obligations of the Issuer payable solely from PCL\402326.01 \ORDIN.2 2 cmm�anea�s�nre the Trust Estate under the Indenture, including revenues from the Lease of the Project. The Series 2002 Bonds will not be general obligations of the Issuer, nor constitute a pledge of the full faith and credit of the Issuer, and will not be payable in any manner by taxation. Section 5. Authorization of Indenture. The Issuer is authorized to enter into the Indenture with the Trustee in the form approved in this Ordinance. The Issuer will pledge the Trust Estate described in the Indenture to the Trustee for the benefit of the owners of the Series 2002 Bonds on the terms and conditions in the Indenture. Section 6. Authorization of Lease of the Project. The Issuer is authorized to enter into the Lease with the Tenant in the form approved in this Ordinance. The Issuer will acquire, remodel and further equip the Facility and lease it to the Tenant according to the provisions of the Lease. Section 7. Approval of the Guaranty Agreement. The form of the Guaranty Agreement between the Tenant and the Trustee, for the benefit of the owners of the Series 2002 Bonds is approved. Section 8. Authorization of Bond Purchase Agreement. The Issuer is authorized to sell the Series 2002 Bonds to Davidson Securities, a division of Gold Capital Management, Inc., Wichita, Kansas, according to the terms and provisions of the Bond Purchase Agreement, in the form approved in this ordinance, among the Issuer, the Tenant and Davidson Securities, a division of Gold Capital Management, Inc., as Purchaser. Section 9. Execution of Bonds and Bond Documents. The Mayor of the Issuer is authorized and directed to execute the Series 2002 Bonds and deliver them to the Trustee for authentication on behalf of the Issuer in the manner provided by the Act and in the Indenture. The Mayor or member of the Issuer's governing body authorized by law to exercise the powers and duties of the Mayor in the Mayor's absence is further authorized and directed to execute and deliver the Bond Documents on behalf of the Issuer in substantially the forms presented for review prior to final passage of this Ordinance, which forms are approved, with such corrections or amendments as the Mayor or other person lawfully acting in the absence of the Mayor may approve, as evidenced by his or her signature. The authorized signatory may also sign and deliver such other documents, or certificates as may be necessary or desirable to carry out the purposes and intent of this ordinance and the Bond Documents. The City Clerk or the Deputy City Clerk of the Issuer is hereby authorized and directed to attest the execution of the Series 2002 Bonds, the Bond Documents and such other documents, certificates and instruments as may be necessary or desirable to carry out the intent of this ordinance under the Issuer's corporate seal. Section 10. Tax Exemption, Payment in Lieu of Taxes. The Project will be exempt from ad valorem property taxes for 10 years, commencing in the calendar year after the calendar year in which the Series 2002 Bonds are issued, subject to the conditions set forth in the Agreement for Payment in Lieu of Taxes. The Tenant must prepare the application for exemption and submit it to the Issuer for its review. After its review, the Issuer will submit the application for exemption to the Saline County Appraiser for review and transmittal to the State Board of Tax Appeals. The Agreement for Payment in Lieu of Taxes dated December 6, 1999 between the Issuer and the Tenant is hereby ratified and confirmed. Section 11. Pledge of the Project and Net Lease Rentals. The Issuer hereby pledges the Project and the net rentals generated under the Lease to the payment of the Series 2002 Bonds in accordance with K.S.A. 12-1744. The lien created by the pledge will be discharged when all of the Series 2002 Bonds are paid or deemed to have been paid under the Indenture. Section 12. Election Under Section 144(a)(4) of the Internal Revenue Code. The Issuer elects that Section 144(a)(4) of the Internal Revenue Code of 1986, as amended, will apply to the Series 2002 Bonds, and the Mayor or City Clerk is hereby authorized and directed to file evidence of said election with any appropriate officer of the United States, including the Secretary of the Treasury or his or her delegate, and to take such other action as may be necessary to make effective such election. Section 13. Approval of Preliminary Official Statement and Official Statement. The Preliminary Official Statement, as submitted for review, and the Official Statement, in substantially the form of the Preliminary Official Statement, are approved. Public distribution of the Preliminary PCL\402326.01\ORDIN.2 3 CansdiEeleE Ulm Official Statement and Official Statement by the Purchaser are approved. The Issuer has not participated in the preparation of the Preliminary Official Statement or the Official Statement and has not verified the accuracy of the information in them (except as respects the Issuer). Accordingly, approval does not constitute a representation by the Issuer as to the completeness or accuracy of the information contained in them. Section 14. Further Authority. The officials, officers, agents and employees of the Issuer are authorized and directed to take whatever action and execute whatever other documents or certificates as may be necessary or desirable to carry out the provisions of this ordinance and to carry out and perform the duties of the Issuer with respect to the Series 2002 Bonds and the Bond Documents. Section 15. Effective Date. This ordinance shall take effect after its final passage by the governing body of the Issuer, signature by the Mayor and publication once in the Issuer's official newspaper. PASSED by the governing body of the City of Salina, Kansas this 10th day of June, 2002. SIGNED by the Mayor of the City of Salina, Kansas this 17th day of June, 2002. [SEAL] ayor Attest: City Clerk PCL\402326.01\ORDIN.2 4