83-8956 IRB Mowery ClinicCRDINANCE NO. 83-8956 OF THE CITY OF SALINA, KANSAS
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citals--------------------------------------------------
ction
1.
Authority to Acquire Real Property and to
Construct and Purchase Facility ------------------
ction
2.
Authorization of and Security for the Bonds ------
ction
3.
Description and Details of the Bonds,
Designation of Paying Agent ----------------------
ction
4.
Redemption and Payment of Bonds Prior
toMaturity --------------------------------------
ction
5.
Notice of Redemption -----------------------------
etion
6.
Method of Execution of Bonds ---------------------
ction
7.
Form of Bond -------------------------------------
ction
8.
Execution and Delivery of the Bonds, Deposit of
Bond Proceeds, Designation of Fiscal Agent-------
ction
9.
Construction Fund --------------------------------
ction
10.
Principal and Interest Account -------------------
etion
11.
Covenant to Redeem Bonds -------------------------
etion
12.
Investments --------------------------------------
ction
13.
Particular Covenants of the City -----------------
ction
14.
Amendments ---------------------------------------
ction
15.
Enforcement --------------------------------------
ction
16.
Declaration of Maturity of Bonds in the
Event of Default ---------------------------------
ction
17.
Accelerated Maturity of Bonds in the
Event of Taxability ------------------------------
ction
18.
Defeasance ---------------------------------------
ction
19.
List of Bondholders ------------------------------
20.
Provisions Relating to the Fiscal Agent----------
ction
21.
Waiver of Tax Exemption --------------------------
Iction
ction
22.
Bond Purchasers ----------------------------------
ction
23.
Authorization of Lease ---------------------------
ction
24.
Severability -------------------------------------
E
ction
25.
Conveyance of Facility ---------------------------
ction
26.
Effective Date -----------------------------------
ibit
"A"
Description of Property
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ORDINANCE NO. 83-8956
N ORDINANCE AUTHORIZING THE CITY OF SALINA, KANSAS, TO AC-
UIRE FOR DEVELOPMENT PURPOSES THE REAL PROPERTY HEREINAFTER
ESCRIBED AND TO CONSTRUCT AND PURCHASE BUILDINGS, IMPROVE-
ENTS , MACHINERY AND EQUIPMENT TO BE LEASED TO MOWERY CLINIC
UILDING, INC.; AUTHORIZING AND DIRECTING THE ISSUANCE OF
1,450,000 PRINCIPAL AMOUNT OF REVENUE BONDS, MOWERY CLINIC
UILDING, INC. SERIES OF 1983, OF SAID CITY FOR THE PURPOSE OF
ROVIDING FUNDS TO PAY THE COST OF ACQUIRING THE REAL PROP-
RTY HEREINAFTER DESCRIBED AND TO CONSTRUCT AND PURCHASE
UILDINGS, IMPROVEMENTS, MACHINERY AND EQUIPMENT TO BE LEASED
O MOWERY CLINIC BUILDING, INC.; AND PRESCRIBING THE FORM AND
UTHORIZING THE EXECUTION OF A LEASE BY AND BETWEEN SAID CITY
ND SAID COMPANY.
WHEREAS, the City of Salina, Kansas, hereinafter sometimes
i-eferred to as the "City," desires to promote, stimulate and develop the
eneral welfare and economic prosperity of the City of Salina, Kansas, and
its environs and thereby to further promote, stimulate and develop the
eneral welfare and economic prosperity of the State of Kansas; and
WHEREAS, pursuant to the provisions of K.S.A. 12-1740 to
-1749a, as amended, said City is authorized to issue revenue bonds of the
ity, and it is hereby found and determined to be advisable and in the
interest and for the welfare of the City and its inhabitants that revenue
nds of the City be authorized and issued for the purpose of providing
funds to pay the cost of acquiring real property hereinafter described and
t construct and purchase buildings, improvements, machinery and equipment
t be leased to Mowery Clinic Building, Inc., a Kansas corporation, herein -
ter sometimes referred to as "Company"; and
WHEREAS, the City will acquire prior to or concurrently with the
i suance of the Bonds herein authorized the real property hereinafter de-
s
sribed;
NOW, THEREFORE, BE IT ORDAINED BY THE GOVERNING BODY
THE CITY OF SALINA, KANSAS:
Section 1.
Authority to Acquire Real Property and to
nstruct
and Purchase
Facility. The City of Salina, Kansas, is hereby
alithorized
to acquire the
real property described and set forth in Exhibit
"A"
attached
hereto and
made a part hereof and to construct and purchase
buildings,
improvements,
machinery and equipment described in said Exhibit
(said
real property,
buildings, improvements, machinery and equipment
being
sometimes hereinafter
described collectively as the "Facility") , in
a
cordance
with the provisions
of the Lease dated as of March 1, 1983 be-
t
een said
City and said
Company (hereinafter sometimes referred to as the
"Lease") , said Lease being authorized by the provisions of Section 23 of this
Ordinance, all at an amount which will not exceed the cost of $1,450,000 to
said City.
Section 2. Authorization of and Security for the Bonds. For
the purpose of providing funds to pay the cost of acquiring the real prop-
erty described in said Exhibit "A" and to construct and purchase buildings,
improvements, machinery and equipment to be leased to the Company, there
shall be issued and hereby are authorized and directed to be issued a series
of Revenue Bonds, Mowery Clinic Building, Inc. Series of 1983, of the City
of Salina, Kansas, in the principal amount of $1,450,000. Said Bonds herein
authorized, hereinafter sometimes referred to as the "Bonds," and all inter-
est thereon shall be paid solely from the money and revenue received from
the fees charged and rental received for the use of the Facility and not from
any other fund or source. The City hereby pledges the Facility and the net
earnings therefrom to the payment of the Bonds and the interest thereon.
Section 3. Description and Details of the Bonds, Designation
of Paying Agent. Said Revenue Bonds, Mowery Clinic Building, Inc. Series
f 1983, of the City of Salina, Kansas, shall consist of 29 Bonds, numbered
from 1 to 29, inclusive. Each of the said Bonds shall be in the denomination
f $50,000.00. All of said Bonds shall be dated as of March 1, 1983, and
shall bear interest from date at a rate equal to seventy-five percent (75%) of
he base lending interest rate in effect at The National Bank of America at
Salina, Salina, Kansas, as of March 1, 1983, which rate of interest shall be
adjusted July 1, 1.983 and annually, on each July 1 thereafter, so that such
ate of interest payable for the ensuing year will equal seventy-five percent
(75%) of the base lending interest rate then prevailing and chargeable at The
National Bank of America at Salina, Salina, Kansas as of said date. Said
onds shall become due as follows:
2
Aggregate
Bond Principal
Numbers Amount Maturi ty
The interest on said Bonds shall be payable semiannually on July 1
and January 1 in each year, beginning on July 1, 1983 until maturity or
called for redemption.
Said Bonds shall be payable to bearer in lawful money of the
United States of America at The National Bank of America at Salina, in the
City of Salina, Kansas, hereby designated as the City's paying agent for the
ayment of the principal of and interest on the Bonds and herein sometimes
referred to as the "Paying Agent."
Section 4. Redemption and Payment of Bonds Prior to
Maturity. Said Bonds and each of them shall be subject to redemption and
ayment at the option of the City, upon instructions from the Company, in
hole or in part, on July 1, 1983, or on any interest payment date
hereafter, at the par value thereof plus accrued interest to the date fixed
or redemption and payment, without premium. Bonds to be redeemed and
aid pursuant to this Section shall be redeemed in inverse numerical order.
Section 5. Notice of Redemption. Notice of any redemption
rovided by this Ordinance shall be published once not less than 30 days
rior to the date fixed for redemption in the official city paper of the City.
otice of any such redemption shall also be given by the Fiscal Agent by
nited States certified or registered mail to any bondholder who files his
ame with the Fiscal Agent pursuant to Section 19 of the Ordinance, pro-
ded that the failure to give any notice by mail as herein specified shall not
ffect the validity of any such call for redemption. Interest shall cease on
ny of said Bonds so called for redemption and payment as of the redemption
ate, provided funds are available to pay the same according to their terms.
otice of any redemption as herein provided shall be given upon, but only
Pon, written instructions from the Company, as long as the Company is not
n default in the payment of Basic Rent due under the Lease.
3
1-2
$100,000
7-1-84
3-4
100,000
7-1-85
5-6
100,000
7-1-86
7-8
100,000
7-1-87
9-10
100,000
7-1-88
11-12
100,000
7-1-89
13-14
100,000
7-1-90
15-16
100,000
7-1-91
17-18
100,000
7-1-92
19-20
100,000
7-1-93
21-22
100,000
7-1-94
23-24
100,000
7-1-95
25-26
100,000
7-1-96
27-28
100,000
7-1-97
29
50,000
7-1-98
The interest on said Bonds shall be payable semiannually on July 1
and January 1 in each year, beginning on July 1, 1983 until maturity or
called for redemption.
Said Bonds shall be payable to bearer in lawful money of the
United States of America at The National Bank of America at Salina, in the
City of Salina, Kansas, hereby designated as the City's paying agent for the
ayment of the principal of and interest on the Bonds and herein sometimes
referred to as the "Paying Agent."
Section 4. Redemption and Payment of Bonds Prior to
Maturity. Said Bonds and each of them shall be subject to redemption and
ayment at the option of the City, upon instructions from the Company, in
hole or in part, on July 1, 1983, or on any interest payment date
hereafter, at the par value thereof plus accrued interest to the date fixed
or redemption and payment, without premium. Bonds to be redeemed and
aid pursuant to this Section shall be redeemed in inverse numerical order.
Section 5. Notice of Redemption. Notice of any redemption
rovided by this Ordinance shall be published once not less than 30 days
rior to the date fixed for redemption in the official city paper of the City.
otice of any such redemption shall also be given by the Fiscal Agent by
nited States certified or registered mail to any bondholder who files his
ame with the Fiscal Agent pursuant to Section 19 of the Ordinance, pro-
ded that the failure to give any notice by mail as herein specified shall not
ffect the validity of any such call for redemption. Interest shall cease on
ny of said Bonds so called for redemption and payment as of the redemption
ate, provided funds are available to pay the same according to their terms.
otice of any redemption as herein provided shall be given upon, but only
Pon, written instructions from the Company, as long as the Company is not
n default in the payment of Basic Rent due under the Lease.
3
1
Section 6. Method of Execution of bonds. Said Bonds and
each of them shall be executed for and on behalf of the City by the signa-
ture of its Mayor and attested. by the signature of its City Clerk, with the
seal of the City affixed. Said Bonds and each of them shall be registered in
the office of the City Clerk, which registration shall be evidenced by a .
certificate on the reverse side thereof bearing the signature of the City
Clerk.
Section 7. Form of Bond. Each of said Bonds and the
rtificate attached thereto shall be in substantially the following form:
4
No. $50,000
UNITED STATES OF AMERICA
STATE OF KANSAS
COUNTY OF SALINE
CITY OF SALINA
REVENUE BOND
MOWERY CLINIC BUILDING, INC.
SERIES OF 1983
KNOW ALL MEN BY THESE PRESENTS: That the City of Salina,
the County of Saline, State of Kansas, for value received, hereby prom-
s to pay, solely out of the revenues hereinafter specified, to the bearer,
e sum of
FIFTY THOUSAND DOLLARS
in lawful money of the United States of America, on the first day of
19_, and to pay interest thereon from the date hereof at a rate
equal to seventy-five percent (75%) of the base lending interest rate in
effect at The National Bank of America at Salina, Salina, Kansas on March 1,
1983, which rate of interest shall be adjusted on July 1, 1983 and annually
n July 1 in each year after date hereof so that such rate of interest
payable for the ensuing year will equal seventy-five percent (75%) of the
ase lending interest rate then prevailing and chargeable at The National
ank of America at Salina, Salina, Kansas as of said date. The interest on
his Bond shall be payable semiannually on July 1 and January 1 in each
year after the date hereof, beginning on July 1, 1983, until the said
rincipal sum shall have been paid, both principal of and interest on this
Bond being payable at The National Bank of America at Salina, in the City
f Salina, Kansas (hereinafter sometimes referred to as the "Paying Agent"
r the "Fiscal Agent") .
THIS BOND is one of an authorized series -of 29 Bonds aggregating
he principal amount of $1,450,000 authorized by Ordinance of said City (the
"Ordinance") for the purpose of providing funds to pay the cost of ac-
quiring real property and constructing and purchasing buildings, improve-
ments, machinery .and equipment (hereinafter sometimes referred to as the
'Facility," said Facility being further identified in the Ordinance) to be
eased to Mowery Clinic Building, Inc., a Kansas corporation having its
rincipal place of business in Salina, Kansas, (the "Company"), pursuant to
Lease dated March 1, 1983 (the "Lease") , by and between said City and
he Company, by the authority of and in conformity with the provisions,
estrictions and limitations of the Constitution and statutes of the State of
Kansas, including K.S.A. 1.2-1740 to 12-1749a, and all amendments thereof
nd acts siipplemental thereto, and all other provisions of the laws of said
tate applicable thereto, and this Bond and all interest hereon are to be
aid by said City of Salina, Kansas, solely and only from the money and
91
ATTEST:
City Clerk
6
Mayor
revenue received from the fees charged and rental received for the use of
the Facility under said Lease and not from any other fund or source.
Pursuant to the provisions of said statute, the governing body of the City
has pledged said Facility and the net earnings therefrom to the payment of
the series of Bonds of which this Bond is a part and the interest thereon.
This Bond does not constitute a debt of the City within the meaning of any
Constitutional or statutory limitations. Reference is hereby made to the
Ordinance and to the Lease for a description of the covenants of the City
with respect to the payment, collection, segregation and application of the
revenues derived from said Facility, the nature and .extent of the security
for the Bonds, the rights, duties and obligations of the City and the Fiscal
Agent with respect thereto, and the rights of the holders of this Bond.
Each of the Bonds of the series of which this Bond is one is
subject to redemption and payment in whole or in part, on July 1, 1983, or
on any interest payment date thereafter, at the par value thereof plus
accrued interest to the redemption and payment date, without premium.
Bonds to be redeemed pursuant to this paragraph shall be redeemed in
inverse numerical order.
Notice of the City's intention to redeem and pay said Bonds pursu-
ant to the redemption provision aforesaid, specifying the numbers of the
Bonds to be redeemed and paid, shall be published once not less than 30
days prior to the date fixed for redemption and payment in the official city
paper of the City.
AND IT IS HEREBY DECLARED AND CERTIFIED that all acts,
conditions and things required to be done and to exist precedent to and in
the issuance of this Bond have been properly done and 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 of Salina, Kansas, by its govern-
ing body, has caused this Bond to be signed by the signature of its Mayor
and attested by the signature of its City Clerk, and its corporate seal to be
hereto affixed to be signed with the signatures of said officers, and this
Bond to be dated this first day of March, 1983.
ATTEST:
City Clerk
6
Mayor
STATE OF KANSAS, COUNTY OF SALINE, ss:
I, the undersigned, City Clerk of the City of Salina, Salina,
Kansas, hereby certify that the within Revenue Bond, Mowery Clinic Build-
ing, Inc. Series of 1983 of the City of Salina, Kansas, has been duly regis-
tered in my office according to law.
WITNESS my hand and official seal this day of ,
1983.
City Clerk
Section 8. Execution and Delivery of the Bonds, Deposit of
Bond Proceeds, Designation of Fiscal Agent. The Mayor and City Clerk are
hereby authorized and directed to prepare and execute, in the manner
hereinbefore specified, the Bonds herein authorized, and to deliver said
Bonds to the purchasers thereof on payment of the purchase price. The
proceeds of said Bonds shall be deposited with The National Bank of America
at Salina, in the City of Salina, Kansas, hereby designated as the City's
Fiscal Agent and herein referred to as the "Fiscal Agent," the rights and
duties of said Fiscal Agent being further specified in Section 20 of this
Ordinance.
7
Section 9. Construction Fund. There is hereby authorized
and ordered to be established in the hands of the Fiscal Agent a separate
fund or account designated as "City of Salina, Kansas, Mowery Clinic Build-
ing, Inc. Construction Fund," hereinafter referred to as the "Construction
Fund." The Fiscal Agent shall, first, promptly pay from the proceeds of
the sale of said Bonds into the Principal and Interest Account, the amount of
any accrued interest and premium, if any, received from such sale. Fur-
ther, the Fiscal Agent is authorized to pay fiscal and legal fees and other
expenses relating to the issuance of said Bonds. The balance of the pro-
ceeds of the sale of said Bonds shall be deposited in said Construction
Fund. Said Construction Fund shall be used for the purpose of providing
funds to pay the construction and acquisition costs of the Facility to be
leased to the Company as provided in said Lease, and the Fiscal Agent shall
make disbursements from said Construction Fund in accordance with this
Ordinance and the Lease. Any moneys not required for said purpose shall,
when the Facility is complete as provided in the Lease, be deposited by the
Fiscal Agent in said Principal and Interest Account.
7
Section 10. Principal and Interest Account. There is hereby
authorized and ordered to be established in the hands of the Fiscal Agent an
additional separate account to be known as the "City of Salina, Kansas,
Principal and Interest Account for Revenue Bonds, Mowery Clinic Building,
Inc. Series of 1983, dated March 1, 1983," hereinafter referred to as the
"Principal and Interest Account." The City covenants and agrees that from
and after the delivery of any of the Revenue Bonds herein authorized and
continuing so long as any of said Bonds shall remain outstanding, said City
will maintain said Account with the Fiscal Agent. All payments of Basic Rent
and Additional Rent due under said Lease between the City and the Company
intended to pay the principal of and interest on the Bonds shall be applied
and allocated by the Fiscal Agent to said Principal and Interest Account.
All amounts credited to and deposited in said Principal and Interest Account
shall be used by the Fiscal Agent and forwarded to the Paving Agent for the
sole purpose of paying the principal of and interest on the Revenue Bonds
herein authorized as and when the same become due or are called for re-
demption and payment. Any balance remaining in said Principal and Interest
Account, including interest earned on deposits made into said Account as
prepayments of rent due under Article II of said Lease, shall, when said
Bonds have been paid, or payment provided for, be paid to the Company.
Section 11. Covenant to Redeem Bonds. When moneys accu-
mulated in said Principal and Interest Account shall aggregate an amount
sufficient to pay the principal of all of the Bonds then outstanding, and all
interest accrued to date fixed for redemption and payment, and redemption
premium, if any, and when said Bonds become subject to redemption, said
City shall, upon receipt of instructions from the Company, proceed to give
notice of such redemption in the manner herein specified, and said Fiscal
Agent shall use such funds for said purpose.
Section 12. Investments. Subject to the provisions of para-
graph (A) of Section 13 of the Ordinance, moneys in the Construction Fund
and the Principal and Interest Account shall, upon instructions from the
Company, be invested by the Fiscal Agent in obligations of the United States
Government or any agency or instrumentality thereof, or in Certificates of
Deposit or other savings or time deposits of a state or national bank, includ-
ing the Fiscal Agent, in such amounts and maturing at such times as shall
reasonably provide for monies to be available when required in said Con-
struction Fund and Principal and Interest Account. All income from invest-
ment of the Construction Fund and Principal and Interest Account shall
accrue to and become a part of and be transferred to the Principal and.
Interest Account.
Section 13. Particular Covenants of the City. So long as
any of the principal of and interest on the Bonds herein authorized remain
outstanding and unpaid, or until provisions are made for the payment
thereof, the City covenants with each of the holders and owners of said
Bonds as follows:
(A) The City will use the proceeds of the series of
Bonds herein authorized as soon as practicable and with all reasonable
dispatch for the purpose for which said Bonds are issued as herein-
before set forth. Said proceeds will not be invested in any securities
or obligations except for the temporary period pending such use and
said proceeds will not be used directly or indirectly so as to cause all
or any part of the Bonds herein authorized to be or become "Arbitrage
Bonds" within the meaning of Section 103(c) of the Internal Revenue
Code of 1954, as amended. The City further covenants that the pro-
ceeds of the series of Bonds herein authorized will not be used to
acquire securities or obligations that will produce a yield higher than
the yield of the Bonds herein authorized unless a statute, regulation of
the Treasury Department of the United States, ruling by the Internal
Revenue Service of the United States or a decision by a court of ulti-
mate jurisdiction holds that an acquisition of securities or obligations
producing a yield higher than said Bonds will not cause said Bonds to
be Arbitrage Bonds as defined in said Subsection (c) .
9
(B) The City will comply fully with all the terms,
provisions and conditions of the Lease which require performance by,
or impose duties on, the City and that it will not permit any default to
occur on the part of the City; that it will fully and promptly enforce all
of the terms, provisions and conditions of the Lease which require
performance by, or impose duties on, the Company and in the event of
the occurrence of a default, as defined in the Lease, will exercise all
rights and remedies conferred by the Lease for the full and complete
protection of the security and rights of the bondholders and, to the
extent permitted by the Lease, will use its best efforts to procure a
new tenant or tenants for the leased property under lease provisions
which will provide funds sufficient in amount to make the rental pay-
ments and other charges which the Company is required to make under
the Lease. If the City is unable to procure a new tenant who will
enter into such a lease the City may, with the consent of the holders of
not less than sixty-six and two-thirds percent (66 2/3%) of the Bonds
herein authorized at the time outstanding, sell the Facility leased at a
price not less than the amount of the then outstanding Bonds plus
interest then unpaid.
(C) The City will enforce collection of the rental pay-
ment and other charges in the amounts and at the time set forth in the
Lease authorized hereby and will not reduce or cause or permit to be
9
10
reduced the rental payments and other charges fixed, established and
required by the Lease nor change or alter the time or times when the
same are due and payable under the Lease. The City's obligation to
pay the expenses of such enforcement shall be limited to funds made
available to it for that purpose by the holders of the Bonds or other
interested parties.
(D) Until payment of all the Bonds and interest thereon
has been duly made or provided for, the City will not consent to any
change, amendment, modification or termination of said Lease, except as
provided therein, which will in any manner affect adversely the rights,
remedies or interest of the bondholder.
(E) Any purchase price of the lease property, any
proceeds of condemnation awards or insurance proceeds, any of which
are received by the City pursuant to the termination of the Lease, or
any other funds intended for the purpose of paying the Bonds will be
used solely and exclusively to pay the Bonds herein authorized and the
interest thereon according to their terms or to redeem and pay any of
the Bonds then outstanding and unpaid then subject to redemption and
payment. Upon receipt of any such funds, and as soon as the Bonds
are subject to redemption and payment, the City shall proceed promptly
to call the Bonds for redemption and payment according to their terms
and shall give notice, or cause notice to be given thereof, as provided
for by the terms of this Ordinance. Such funds shall be deposited with
the Fiscal Agent, and the same shall be used solely for the payment of
the Bonds herein authorized, accrued interest thereon, any premium
provided for by this Ordinance and the charges of the Paying Agent
and the Fiscal Agent for paying the same.
(F) The City will not issue any other obligations pay-
able from payments by the Company, pursuant .to the Lease, nor volun-
tarily create or cause to be created any debt, lien, pledge, assignment,
encumbrance, or any other charge on said payments or on the property
subject to said Lease nor will it, unless required by law or by the
terms of said Lease, sell or otherwise dispose of the Facility or any
part thereof; provided, however, that said City may issue from time to
time additional industrial revenue bonds for the purpose of completing
the construction or acquisition thereof on the land herein referred to,
provided the following terms and conditions are met:
(i) The City shall have entered into a lease or agree-
ment with the Company with rentals or payments at least sufficient
to pay the principal of and interest on said additional bonds as the
same become due.
10
(ii) The Company is not in default in the payment of
rent due under the Lease.
(iii) The issuance of said additional bonds shall not
affect the exemption from Federal income taxation of the interest
on the Bonds herein authorized.
In the event of the issuance of any such additional bonds the City
may pledge the Facility and the net earnings therefrom to the payment
of such additional bonds and the interest thereon, provided the City
also pledges the additional construction, fixtures and equipment and the
net earnings therefrom, constructed or purchased out of the proceeds
of such additional bonds, to the payment of the Bonds herein author-
ized and the interest thereon.
(G) The City will cause the Company to keep constantly
insured all buildings and improvements from time to time constituting a
part of the property and premises leased to the Company in the manner
provided for by the Lease herein authorized. The City's share of the
proceeds of any such insurance policies shall be payable to and depos-
ited with the Fiscal Agent as Insurance Trustee. Any of the proceeds
of any such insurance policies shall be used and applied in the manner
set forth in said Lease.
(H) The City will cause the Fiscal Agent to maintain
adequate records and accounts relating to the Facility, separate and
apart from all other records of accounts of the City or the Fiscal
Agent, and such records and accounts shall be maintained in accordance
with generally accepted principles of accounting and shall include
complete details of all financial transactions related to the Bonds au-
thorized herein and the leased facilities. Such records and accounts
shall be specifically designed and maintained to show whether or not the
provisions of this Ordinance and the Lease referred to herein are being
complied with. Such books and records shall be available for inspection
by the Company or its agents or any of the holders of the Bonds
authorized herein during the regular business hours of the City or the
Fiscal Agent.
Section 14. Amendments. The provisions of the Bonds
authorized by this Ordinance and the provisions of this Ordinance may be
modified or amended at any time by the City with the written consent of the
holders of notless than sixty-six and two-thirds percent (66-2/30) in aggre-
gate principal amount of the Bonds herein authorized at the time outstand-
ing, provided that no such modification or amendment shall permit or be
construed as permitting: (a) the modification of any duties or respnnsibil-
'ties of the Fiscal Agent unless it consents thereto, (b) the extension of the
maturity of the principal of any of the Bonds issued hereunder, or the
11
extension of the maturity of the interest on any Bonds issued hereunder,
(c) a reduction in the principal amount of any Bonds or the rate of interest
thereon, or (d) a reduction in the aggregate principal amount of Bonds, the
consent of the holder of which is required for any such amendment or modi-
fication. 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 omissions or ambiguities or which add to the security of the bond-
holders may be made by the City when agreed to by the Company. Every
amendment or modification of a provision of the Bonds or of this Ordinance
to which the written consent of the bondholders is given as above provided
shall be expressed in an ordinance of the City amending or supplementing
the provisions of this Ordinance and shall be deemed to be a part of this
Ordinance. It shall not be necessary to note on any of the outstanding
Bonds any reference to such amendment or modification, if any. Upon
payment of the reasonable cost of preparing the same, a certified copy of
every such amendatory or supplemental ordinance, if any, and a certified
copy of this Ordinance will be sent by the City Clerk to any such bond-
holder or prospective bondholder requesting the same.
The Lease herein authorized may be amended by the City and the
Company as provided therein, except as to rent or certain other matters
which may be made only with the consent of a specified percentage of the
holders of the then outstanding Bonds.
Section 15. Enforcement. The provisions of this Ordinance
shall constitute a contract between the City and the holders of the Bonds
erein authorized, and the holder of any one or more of said Bonds may sue
o recover interest or principal which has not been paid according to the
terms of said Bond. The holders of twenty-five percent (250) of the princi-
al amount of Bonds then outstanding may sue in any action, in mandamus,
injunction or other proceedings, either at law or in equity, to enforce or
compel performance of all duties and obligations required by this Ordinance
o be done or performed by said City or by the Company. Nothing con-
ained in this Ordinance shall, however, be construed to impose on said City
ny duty or obligation to levy any taxes either to meet any obligation con-
ained herein or to pay the principal of or interest on the Bonds of the City
erein authorized.
Section 16. Declaration of Maturity of Bonds in the Event of
Default. In the event the principal of or interest on the Bonds herein
uthorized is not paid according to the terms thereof either on maturity or
pon call for redemption, then the holders of twenty-five percent (257-0) of
he principal amount of Bonds then outstanding may, by written notice given
o the Fiscal Agent, declare the principal of all the Bonds herein authorized
12
then outstanding to be due and payable immediately, and upon such declara-
tion given as aforesaid, all of said Bonds shall be immediately due and
payable, anything in said Bonds or in the Ordinance contained to the con-
trary notwithstanding. Upon receipt of any such written notice from such
Bondholders, the Fiscal Agent shall immediately notify the City in writing of
the receipt of such notice. This provision, however, is subject to the
condition that if at any time thereafter, all arrears of interest, except
interest accrued but not yet due, and all arrears of principal shall have
been paid in full, then in every such case, the holders of a majority in
principal amount of the Bonds then outstanding, by written notice to the
Fiscal Agent, 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. The Fiscal Agent shall
immediately notify the City in writing in the event of such rescission or
annulment.
Section 17. Accelerated Maturity of Bonds in the Event of
Taxability. In the event the interest on the Bonds is includible in the gross
income of the Bondholders for federal income tax purposes by reason of the
failure of such Bonds to qualify for the exemption provided in Section
103(b)(6)(D) of the Internal Revenue Code of 1954, as amended, or by
reason of the termination of such exemption, then in either of such events
all of such Bonds then outstanding shall mature and be due and payable at
he principal amount thereof, plus accrued interest to the maturity date,
together with a premium which shall be, on each Bond then outstanding,
equal to thirty-three and one-third percent (33-1/3%) of the interest other-
ise . paid or payable on such Bond for each year the interest on such Bond
�s includible in the gross income of the Bondholders for federal income tax
urposes. The date of maturity shall be 60 days after the Internal Revenue
ervice, the Company or the Fiscal Agent shall give written notice to the
ity of the inclusion of the interest on the Bonds in the gross income of the
ondholders .
Section 18. Defeasance. When all of the Bonds of the City
erein authorized shall have been paid and discharged, then the require-
ents contained herein and the pledge of revenues made hereunder and all
ther rights granted hereby, shall cease and determine. Bonds shall be
eemed to have been paid and discharged within the meaning of this Ordi-
ance when there shall have been deposited with the Fiscal Agent at or prior
o the maturity or redemption date of said Bonds in trust for and irrevo-
ably appropriated thereto, sufficient moneys for the payment of the princi-
al thereof and interest accrued to the date of maturity or redemption, as
he case may be, or if default in such payment shall have occurred on such
13
date, then to the date of the tender of such payments; provided, always,
that if any such Bonds shall be redeemed prior to the maturity thereof, the
City shall have elected to redeem such Bonds and notice of such redemption
shall have been given. Any moneys which at any time shall be deposited
with the said Fiscal Agent by or on behalf of the City, for the purpose of
paying and discharging any of the Bonds, shall be, and are hereby, as-
signed, transferred and set over to such Fiscal Agent in trust for the
respective holders of the Bonds and such moneys shall be and are hereby
irrevocably appropriated to the payment and discharge thereof. If, through
lapse of time or otherwise, the holders of said Bonds shall no longer be
entitled to enforce payment of their obligations, then, in such event, it shall
be the duty of said bank forthwith to return said funds to the City. All
moneys deposited with such Fiscal Agent shall be deemed to be deposited in
accordance with and subject to all of the provisions contained in this Ordi-
nance.
Section 19. List of Bondholders. To the extent that such
information shall be made known to the Fiscal Agent under the terms of this
Section 19, the Fiscal Agent will keep on file at its principal office a list of
names and addresses of the last known holders of all Bonds payable to
Barer and believed to be held by each of such last known holders. Any
bondholder may request that his name and address be placed on said list by
filing a written request with the Fiscal Agent, which request shall include a
statement of the principal amount of Bonds held by such holder and the
umbers of such Bonds. The Fiscal Agent shall be under no responsibility
with regard to the accuracy of said list. At reasonable times and under
reasonable regulations, established by the Fiscal Agent, said list may be
nspected and copied by the Company or by the holders and owners (or a
esignated representative thereof) of twenty-five percent (25%) or more in
rincipal amount of Bonds then outstanding, such ownership and the author-
ty of any such designated representative to be evidenced to the satisfaction
Df the Fiscal Agent.
Section 20. Provisions Relating to the Fiscal Agent.
(A) Prior to the receipt of the Bond proceeds pursuant
to the provisions of Section 8 hereof, the Fiscal Agent shall file with
the City Clerk its written acceptance of the duties specified in this
Ordinance and in the Lease and its agreement to act in said capacity.
(B) The Fiscal Agent's duties and responsibilities shall
be limited to those expressly set forth in this Ordinance and under the
Lease, and shall further include those duties, responsibilities and
obligations which are imposed upon the City under this Ordinance and
the Lease, excepting only such of those duties, responsibilities and
14
15
obligations as may only be properly and lawfully exercised by or acted
upon by the City.
(C) All resolutions, opinions, certificates and other
instruments referred to or provided for herein or in the Lease may be
accepted by the Fiscal Agent as conclusive evidence of the facts,
t. .
opinions and conclusions stated therein and shall be full warrant,
protection and authority to the Fiscal Agent for any action reasonably
taken pursuant thereto. The Fiscal Agent shall be under a duty to
examine any such resolutions, opinions, certificates and other instru-
ments to determine whether or not they conform to the requirements of
this Ordinance and the Lease.
(D) The Fiscal Agent shall not be liable with respect to
any action taken or omitted to be taken by it in good faith and, if
appropriate, upon advice of counsel who may be counsel for the Fiscal
Agent or the City or the Company.
(E) No provision contained in this Section shall be
construed to relieve the Fiscal Agent from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct,
except that this subsection shall not be construed to limit the effect of
subsections (B), (C) and (D) of this Section and the Fiscal Agent shall
not be liable for any error of judgment made in good faith unless it
shall be proved that the Fiscal Agent was negligent in ascertaining the
pertinent facts.
(F) The Fiscal Agent shall have the right to buy, sell,
own, deal or trade in the Bonds without giving notice thereof to the
City or the Company or any bondholder and without incurring any
liability whatsoever with respect thereto.
(G) The Fiscal Agent may resign by an instrument in
writing delivered to the City and the Company _to take effect riot sooner
than 90 days after its delivery, whereupon the City, with the consent
of the Company, shall immediately, in writing, designate a successor
fiscal agent. Such successor fiscal agent shall be a bank, trust com-
pany or national banking association which is a member of the Federal
Reserve System and has a capital stock and surplus aggregating at
least that of the Fiscal Agent at the time of its designation hereunder.
Such successor fiscal agent shall be subject to the same duties and
obligations and shall have the same rights, privileges and immunities
specified in this Ordinance and in the Lease for the Fiscal Agent. Any
such successor fiscal agent shall file an acceptance in the form referred
to in subparagraph (A) hereof with the City Clerk within 10 (leys of its
appointment.
,s
15
(H) The Fiscal Agent shall be entitled to payment or
reimbursement for reasonable fees for its ordinary services and all
advances, counsel fees and other ordinary expenses reasonably and
necessarily made or incurred by it in connection with its ordinary
services, all such fees and expenses to be paid by the Company as
Additional Rent as specified in Article II of the Lease.
Section 21. Waiver of Tax Exemption. These revenue bonds
re issued under the conditions that the provisions of the Lease will provide
that the Company will waive any ad valorem property tax exemption which
ould otherwise be available to the project under the provisions of K.S.A.
9-201(a) Second, as amended.
Section 22. Bond Purchasers. The Bonds are issued on the
ondition that the purchasers of the Bonds, prior to the issuance thereof,
each represents and certifies that:
(a) The Bonds to be acquired by the purchaser are
acquired for investment purposes only and not for resale or further dis-
ribution to any person other than a bank and such Bonds shall not be
ffered for resale in a public offering without obtaining the prior written
consent of the City or an opinion of counsel acceptable to the City. At the
time of the execution and delivery of each Bond, the purchaser thereof shall
ertify that it has no present intention, agreement or arrangement for dis-
ribution, transfer, assignment, resale or division of its interest in such
and in a manner inconsistent with the provisions hereof.
(b) All materials and information requested by the
urchaser or its counsel or others representing its interests, including any
nformation requested to verify any such information furnished, has been
urnished and there has been direct communication between the Company and
Ineen
s representatives on the one hand and the purchaser of such Bonds and its
epresentatives and advisers on the other hand in connection with all of the
formation furnished hereunder and otherwise requested and the terms of
he acquisition of the Bonds from the City as set forth herein. There has
made available to the satisfaction of the purchaser and its advisers
dequate opportunity to ask questions of and receive answers from the
ompany and its representatives thereof concerning the terms and conditions
f the Bonds to obtain all additional information desired or necessary to
erify the accuracy of the information furnished.
(c) The City shall be released from any requirement,
uty, obligation or commitment, express or implied, to furnish the purchaser
Jr any subsequent holder of any Bond issued hereunder any financial infor-
ation concerning the Company or to investigate and furnish such purchaser
r any subsequent holder with any information concerning the financial
tatus of the Company. Each purchaser shall represent that it is relying
16
pon its own resources and expertise to obtain and evaluate all such infor-
ation .
Section 23. Authorization of Lease. The tract of land herein
eferred to and the buildings and improvements to be acquired and con-
tructed thereon pursuant to this Ordinance shall be leased -to Mowery Clinic
Building, Inc. under and pursuant to a Lease dated as of March 1, 1983,
substantially in the form attached to this Ordinance and incorporated herein
y reference, which Lease the Mayor and City Clerk are hereby authorized
d directed to execute for and on behalf of and as the act and deed of the
City.
Section 24. Severability. If any one or more of the cove -
ants, agreements or provisions of this Ordinance, or of the Lease, should
e held contrary to any express provision of law or contrary to the policy of
press law, though not expressly prohibited, or against public policy, or
ould for any reason whatsoever be held invalid, then such covenants,
reements or provisions shall be null and void and shall be deemed separate
om the remaining covenants, agreements or provisions, and shall in no way
fect the validity of the other provisions of this Ordinance or of the Bonds
issued hereunder, or of the Lease.
Section 25. Conveyance of Facility. Upon receipt by the
'ty of the purchase price of the property subject to said Lease, title to
'd property shall be transferred and conveyed to the Company as provided
ill the Lease and the Mayor and other appropriate officers of said City are
7reby authorized and directed to execute such deeds, bills of sale and
her instruments as may be necessary to effect such conveyance and trans -
Section 26. Effective Date. This Ordinance shall take effect
.d be in force from and after its passage and publication in the official
ty paper.
PASSED AND APPROVED by the governing body of the City of
lina, Kansas, this 28th day of February 1983.
Ma
"TEST
ty Cler
G
17
EXHIBIT "A" TO LEASE DATED MARCH 1, 1983
BETWEEN THE CITY OF SALINA, KANSAS, AND
MOWERY CLINIC BUILDING, INC.
AND TO ORDINANCE NO. 83-8956 OF SAID
CITY RELATING THERETO
(a) The East Two Hundred Five Feet (E 205.01) of the South One
11undred Ten Feet (S 1101) of Block Five (5), in Replat of Blocks Four (4),
ive (5) and Six (6) , of the Replat of Lots One (1) to Fifteen (15) , both
elusive, Garden Home Addition to the City of Salina, Saline County,
ansas; and
Three (3), Four (4), Five (5), Six (6), Seven (7), Eight (8), Nine (9)
Ten (10) in Block Eight (8) in Replat of Lots 1 to 15, Garden Home
:ion to the City of Salina, Kansas.
Subject to: (i) easements, restrictions and reservations now of
Mrd, (ii) the rights of the public in and to any part of the premises lying
being in public roads, alleys or highways, and (iii) taxes and assess -
its, general and special, not now due or payable; and
(b) All buildings and improvements and machinery and equipment
strutted or located thereon pursuant to Article IV of said Lease.
I]
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