8581 IRB Asbury HospitalORDINANCE NO. 8581
AN ORDINANCE AUTHORIZING THE CITY OF SALINA, KANSAS, TO REMODEL
EXISTING BUILDINGS AND IMPROVEMENTS LOCATED ON REAL PROPERTY
DESCRIBED HEREIN TO BE LEASED TO THE ASBURY HOSPITAL ASSOCIATION;
AUTHORIZING AND DIRECTING THE ISSUANCE OF $2,090,000 PRINCIPAL
AMOUNT OF HOSPITAL REFUNDING AND IMPROVEMENT REVENUE BONDS, SERIES
OF AUGUST 15, 1977, OF SAID CITY FOR THE PURPOSE OF PROVIDING FUNDS,
TOGETHER WITH OTHER FUNDS WHICH ARE OR WILL BECOME AVAILABLE, TO
REFUND $1,750,000 PRINCIPAL AMOUNT OF HOSPITAL REVENUE BONDS,
SERIES OF MAY 1, 1975, OF SAID CITY, AND FOR THE PURPOSE OF PROVID-
ING FUNDS TO PAY THE COST OF REMODELING EXISTING BUILDINGS AND IM-
PROVEMENTS TO BE LEASED TO THE ASBURY HOSPITAL ASSOCIATION; PRESCRIB-
ING THE FORM AND AUTHORIZING THE EXECUTION OF A LEASE BY AND BETWEEN
SAID CITY AND THE ASBURY HOSPITAL ASSOCIATION.
WHEREAS, the City of Salina, Kansas, a city of the second
class, hereinafter sometimes referred to as the "City", desires to
promote, stimulate and develop the general economic welfare and
prosperity of the City of Salina, Kansas, and its environs and
thereby to further promote, stimulate and develop the general
economic welfare and prosperity of the State of Kansas; and
WHEREAS, The Asbury Hospital Association, a not-for-
profit corporation organized under Kansas law for hospital purposes
(the "Hospital") has operated the hospital and related facilities
i
for years on the real estate described in Schedule 1 attached
hereto, said facilities being hereinafter referred to as the
"Existing Buildings and Improvements"; and
WHEREAS, the City has outstanding $1,750,000 principal
amount of Hospital Revenue Bonds, Series of May 1, 1975 (the "Series
1975 Bonds"), maturing, bearing interest and subject to redemption
as set forth in Ordinance No. 8432 of the City authorizing the
Series 1975 Bonds (the "1975 Ordinance"); and
WHEREAS, pursuant to the provisions of K.S.A. 12-1740 to
12-1749a and K.S.A. 10-116, the City is authorized to issue indus-
trial revenue bonds to refund the Series 1975 Bonds of the City
E X h - I bI t
and the City and the Hospital desire to issue $1,840,000 principal.
amount of industrial revenue bonds of the City for the purpose of
providing funds, together with other funds which are or will become
available, to refund the Series 1975 Bonds; and
WHEREAS, the City will give due and proper notice of re-
demption and payment of the Series 1975 Bonds numbered from 167 to
350, inclusive, and maturing on February 1, 1986 to February 1, 1990,
inclusive, which Series 1975 Bonds will be called for redemption on
February 1, 1985; and
WHEREAS, there will always be, on any date of calculation
sufficient cash and Escrowed Securities in the hands of the Escrow
Trustee to pay the principal of, and interest and redemption premium
on, the Series 1975 Bonds, as required by the 1975 Ordinance to
defease the lien created by the 1975 Ordinance; and
WHEREAS, pursuant to the provisions of K.S.A. 12-1740 to
12-1749x, said City is authorized to issue industrial revenue bonds
of the City, and the City desires to issue $250,000 principal amount
of industrial revenue bonds of the City for the purpose of providing
funds to pay the cost of remodeling existing buildings and improve-
ments to be leased to The Asbury Hospital Association; and
WHEREAS, it is hereby found and determined to be advis-
able and in the interest and for the welfare of the City and its
inhabitants to issue industrial revenue bonds of the City in the
amount of $2,090,000, $1,840,000 principal amount of said industrial
revenue bonds to be issued for the purpose of providing funds, to-
gether with other funds which are or will become available, to
refund $1,750,000 principal amount of Series 1975 Bonds, and
$250,000 principal amount of said industrial revenue bonds to be
issued for the purpose of providing funds to pay the cost of remodel-
ing existing buildings and improvements to,be leased to The Asbury
Hospital Association;
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NOW, THEREFORE, BE IT ORDAINED BY THE GOVERNING BODY
OF THE CITY OF SALINA, KANSAS:
Section 1. Definitions. In addition to the words, terms
and phrases elsewhere defined in this Ordinance, the following words,
terms and phrases as used herein shall have the following meanings
unless the context or use indicates another or different meaning
or intent:
The term "Escrow Trust Agreement" shall mean
the Escrow Trust Agreement, dated as of August 15,
1977, between the City and the Escrow Trustee.
The term "1975 Investments" shall mean in-
vestments made pursuant to Section 12 of the 1975
Ordinance.
The term "1975 Construction Fund" shall mean
the City of Salina, Kansas, The Asbury Hospital
Association Construction Fund, authorized and
established pursuant to the 1975 Ordinance.
The term "1975 Principal and Interest
Account" shall mean the City of Salina, Kansas
Principal and Interest Account for Hospital
Revenue Bonds, Series of May 1, 1975 - Account
No. 1, authorized and established pursuant to
the 1975 Ordinance.
The term "1975 Bond Reserve Account" shall
mean the City of Salina, Kansas Bond Reserve
Account for Hospital Revenue Bonds, Series of
May 1, 1975 — Account No. 2, authorized and
established pursuant to the 1975 Ordinance.
The term "1975 Surplus Account" shall mean
the City of Salina, Kansas Surplus Account for The
Asbury Hospital Association - Account No. 3,
authorized and established pursuant to the 1975
Ordinance.
Section 2. Authority to Construct and Purchase Facility.
The City of Salina, Kansas, is hereby authorized to have trans-
ferred to it by the Hospital the real property, with the buildings
and improvements thereon, described and set forth on Schedule I
attached hereto and made a part hereof and to remodel existing
buildings and improvements, said real property and existing buildings
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and improvements being sometimes hereinafter referred to as the
"Facility", in accordance with the provisions of the Lease dated
as of August 15, 1977, herein authorized, between said City and
said The Asbury Hospital Association, hereinafter sometimes referred
to as the "Lease".
Section 3. Authorization of and Securitv for the Bonds.
There shall be issued and hereby are authorized and directed to
be issued an issue of negotiable, interest bearing Hospital Refund-
ing and Improvement Revenue Bonds, Series of August 15, 1977, of the
City of Salina, Kansas in the principal amount of $2,090,000 (the
"Bonds" or the "Revenue Bonds"), $1,840,000 principal amount of
the Bonds being issued for the purpose of providing funds, together
with other funds which are or will become available, to refund the
Series 1975 Bonds, and $250,000 principal amount of the Bonds being
issued for the purpose of providing funds to pay the cost of re-
modeling existing buildings and improvements on the real property
described in Schedule I attached hereto,to be leased to The Asbury
Hospital Association, a not-for-profit corporation organized under
Kansas law for hospital purposes. The Bonds herein authorized and
all interest 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. The Hospital has also guar-
anteed to the Fiscal Agent hereinafter referred to the payment of
all principal, premium, if any, and interest on the Bonds for the
benefit of the holders of the Bonds through a Guaranty Agreement
dated as of August 15, 1977.
Section 4. Description and Details of the Bonds, Paying
Agent. Said Revenue Bonds shall consist of 418 Bonds, numbered
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from 1 to 418, inclusive, each of said Bonds being in the denomina-
tion of $5,000. All of said Bonds shall be dated August 15, 1977,
and said Bonds shall be numbered, shall become due on February 1
in each year and shall bear interest as follows:
MATURITY ANNUAL RATE
NUMBERS AMOUNT FEBRUARY 1 OF INTEREST
1 - 17 $ 85,000 1979 6 3/4%
18 - 35 90,000 1980 6 3/4%
36 - 54 95,000 1981 6 3/4%
55 - 75 105,000 1982 6 3/4%
76 - 97 110,000 1983 6 3/4%
98 - 120 115,000 1984 6 3/4%
121 - 145 125,000 1985 6 3/4%
146 - 172 135,000 1986 6 3/40
173 - 201 145,000 1987 6 3/4%
202 - 232 155,000 1988 6 3/4%
233 - 265 165,000 1989 6 1/2%
266 - 300 175,000 1990 6 1/2%
301 - 337 185,000 1991 6 1/2s
338 - 376 195,000 1992 6 1/2%
377 - 418 210,000 1993 6 1/2%
Said Bonds shall bear interest from date payable February
1, 1978, and thereafter semiannually on August 1 and February 1.
Said Bonds and the interest coupons to be attached
thereto shall be payable in lawful money of the United States
of America at the First State Bank and Trust Company, in the
City of Salina, Kansas, the same being hereby designated as the
City's Paying Agent for the payment of the principal of and inter-
est on the Revenue Bonds herein authorized and herein sometimes
referred to as the "Paying Agent".
Section 5. Redemption and Payment of Bonds Prior to
Maturity, Notice of Redemption. Each of said Bonds becoming
due in the years 1979 to 1993, inclusive, shall be subject to re-
demption and payment at the option of The Asbury Hospital Associa-
tion on any interest payment date upon any of the following con-
ditions or events, provided all of said Bonds are redeemed and
paid according to their terms: (1) if title to, or the use for
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a limited period of, substantially all of the Facility subject to
said Lease, be condemned by any authority having the power of
eminent domain; (2) if substantially all of the Facility is damaged
or destroyed by fire or other casualty; or (3) if as a result of
changes in the Constitution of the State of Kansas, or of legis-
lative or administrative action by the State of Kansas, or any
political subdivision thereof, or by the United States, or by
reason of any action instituted in any court, the Lease herein
authorized shall become void or unenforceable, or impossible of
performance without unreasonable delay, or in any other way,
by reason of such change of circumstances, unreasonable burdens
or excessive liabilities, including Federal, State or other taxes
not now being imposed are imposed on the Hospital or the City.
The redemption price for Bonds redeemed pursuant to this paragraph
shall be the principal amount of Bonds so redeemed, plus accrued
interest thereon to and including the date fixed for redemption
and payment, together with a premium of 3% of the principal amount
of the Bonds so redeemed and paid.
Each of said Bonds becoming due in the years 1989 to 1993,
inclusive, shall also be subject to redemption and payment at the
option of said City, in whole or in'part, in inverse numerical
order on February 1, 1988, or on any interest payment date there-
after at the principal amount thereof plus accrued interest thereon
to date fixed for redemption and payment, together with a premium
which shall be 3% of the principal amount of the bonds so redeemed
and paid.
Notice of any redemption provided for by this Ordinance
shall be given in the name of the City by the City, the Hospital
or the Fiscal Agent by United States registered mail to the Paying
Agent herein designated, to First Securities Company of Kansas, Inc.,
and to Stern Brothers & Co., such notice to be mailed at least 30
days prior to the date fixed for redemption and payment and to
specify the numbers of the Bonds to be redeemed and paid. Notice
of any such redemption shall also be published once not less than
30 days prior to the date fixed for redemption in the official state
newspaper of the State of Kansas and in some financial journal pub-
lished and of general circulation in New York, New York. Interest
shall cease on any of said Bonds so called for redemption and pay-
ment as of the redemption date, provided funds are deposited with
the Paying Agent to pay the same according to their terms. The City
shall give notice of any redemption as herein provided only upon
written instructions from the Hospital.
Section 6. Execution of Bonds. Said Bonds and each
of them shall be executed for and on behalf of the City by the
facsimile signature of its Mayor and attested by the manual signa-
ture of its City Clerk, with the seal of the City affixed. Interest
coupons shall be attached to the Bonds representing the interest
to mature thereon, and said interest coupons shall bear the fac-
simile signatures of the Mayor and City Clerk of said City. In
the event either said Mayor or Clerk or both said officers shall
cease to hold such office before the Bonds and coupons, if any,
bearing their signatures shall have been issued and delivered,
said Bonds may be issued and delivered as though said officers
had not ceased to hold office and such signatures appearing on
said Bonds, coupons and registration certificates shall be valid
and sufficient for all purposes as if they had remained in office
until such issuance and delivery.
Section 7. Form of Bond. Each of said Bonds, the
interest coupons, and the Certificate of Registration on the Bonds
shall be in substantially the following form:
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(FORM OF BOND)
No. $5,000
UNITED STATES OF A14ERICA
STATE OF KANSAS
COUNTY OF SALINE
CITY OF SALINA
HOSPITAL REFUNDING AND IMPROVEMENT REVENUE BOND
SERIES OF AUGUST 15, 1977
KNOW ALL MEN BY THESE PRESENTS: That the City of Salina,
in the County of Saline, State of Kansas (the "City"), for value
received, hereby promises to pay, out of the revenues hereinafter
specified, to the bearer, the sum of
FIVE THOUSAND DOLLARS
in lawful money of the United States of America, on the first day
of February, 19_, and in like manner to pay interest thereon from
the date hereof at the rate of percent ( %) per
annum, payable February 1, 1979, and thereafter semiannually on
August 1 and February 1
in each year after the
date hereof
until the
said principal sum shall
have been paid, upon
presentation
and
surrender of the interest coupons hereto attached, bearing the fac-
simile signatures of the Mayor and City Clerk of said City as said
coupons severally become due, both principal of and interest on this
Bond being payable at the First State Bank and Trust Company, in
the City of Salina, Kansas.
THIS BOND is one of an authorized series of 418 Bonds
aggregating the principal amount of $2,090,000 (the "Bonds") num-
bered from 1 to 418, inclusive, authorized by ordinance of said
City, $1,840,000 principal amount of the Bonds being issued for the
purpose of providing funds, together with other funds which are or
will become available, to refund the $1,750,000 principal amount
of the City's Hospital Revenue Bonds, Series 1975, and $250,000
principal amount of the Bonds being issued for the purpose of
providing funds to pay the cost of remodeling existing buildings
and improvements, the real property and existing buildings and
improvements hereinafter seomtimes referred to as the "Facility",
said Facility being further identified in the Ordinance authorizing
this Bond,to be leased to The Asbury Hospital Association, a not-
for-profit corporation organized under Kansas law for hospital
purposes (the "Hospital"), pursuant to a Lease dated August 15,
1977, by and between said City and said Hospital, by the authority
of and in conformity with the provisions, restrictions and limita-
tions of the Constitution and statutes of the State of Kansas, includ-
ing K.S.A. 12-1740 to 12-1749a and K.S.A. 10-116, and all amendments
thereof and acts supplemental thereto, and all other provisions of
the laws of said State applicable thereto, and this Bond and all
interest hereon are to be paid by said City of Salina, Kansas,
solely and only from the money and 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. The principal of and
interest on this Bond shall not in any respect be a general obliga-
tion of the City, nor shall they be payable in any manner by taxa-
tion. 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. Reference is -hereby
made to the ordinance authorizing this Bond and to said Lease
for a description of the Facility and the covenants of the City
with respect to the collection, segregation and application of
the money and revenue received from the fees charged and rental
received for the use of the Facility, the rights, duties and
obligations of the City and the Hospital with respect thereto,
the right of the City to issue additional bonds and the rights
of the holders of the series of Bonds of which this Bond is one.
The Hospital has also guaranteed to the Fiscal Agent hereinafter
referred to the payment of all principal, premium, if any, and
interest on the Bonds for the benefit of the holders of the Bonds
through a Guaranty Agreement dated as of August 15, 1977.
Each of the Bonds of the series of which this Bond is
one is subject to redemption and payment prior to maturity on any
interest payment date at the option of The Asbury Hospital Associa-
tion upon any of the following conditions or events, provided all
of said Bonds are redeemed and paid according to their terms:
(1) if title to, or the use for a limited period of, substantially
all of the Facility be condemned by any authority having the power
of eminent domain; (2) if substantially all of the Facility is
damaged or destroyed by fire or other casualty; or (3) if as a
result of changes in the Constitution of the State of Kansas or
of legislative or administrative action by the State of Kansas or
any political.subdivision thereof, or by the United States, or by
reason of any action instituted in any court, the Lease shall be-
come void or unenforceable or impossible of performance without
unreasonable delay, or in any other way by reason of such circum-
stances, unreasonable burdens or excessive liabilities, including
Federal, State or other taxes not now being imposed are imposed
on the Hosnital or the City. The redemption price for Bonds
redeemed pursuant to this paragraph shall be the principal amount
of Bonds so redeemed, plus.accrued interest thereon to and in-
cluding the date fixed for redemption and payment, together with
a premium of 3% of the principal amount of the Bonds so redeemed and
paid.
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Each of the Bonds of the series of which this Bond is
one becoming due in the years 1989 to 1993, inclusive, is subject
to redemption and payment at the option of said City, in whole or
in part, in inverse numerical order on February 1, 1988, or on any
interest payment date thereafter, at the principal amount thereof
plus accrued interest thereon to date fixed for redemption and
payment, together with a premium which shall be 3% of the principal
amount of the bonds so redeemed and paid.
Notice of any redemption pursuant to any of the redemp-
tion provisions aforesaid, -specifying the numbers of the Bonds to
be redeemed and paid, shall be given by United States registered
mail to the Paying Agent named herein not less than 30 days prior
to the date fixed for redemption and payment. Notice of any such
redemption shall also be published once not less than 30 days
prior to the date fixed for redemption in the official state
newspaper
of the
State of
Kansas and
in
some financial
journal
,uniisPied
and of
general
circulation
in
New York, New
`fork.
1
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 re-
quired by the Constitution and laws of the State of Kansas.
IN WITNESS WHEREOF, the City of Salina, Kansas, by
Its governing body, has caused this Bond to be signed by the
facsimile signature of its Mayor and attested by the manual
signature of its City Clerk, and its corporate seal to be hereto
affixed and the interest coupons hereto attached to be signed
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with the facsimile signatures of said officers, and this Bond to
be dated this Fifteenth day of August, 1977.
(facsimile
Mayor
ATTEST:
City Clerk
(FORM OF COUPON)
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Coupon No.
February,
)February 1
On the First day of August, 19 , unless
)August 1, 19�
the Bond to which this coupon is attached be
)-----------------------
called for redemption and payment duly made
)City of Salina, Kansas
or provided for, the City of Salina, Kansas,
)Hospital Refunding and
)Improvement Revenue Bond
will pay bearer, solely from the money and
)Series of August 15, 1977
revenue received from the fees charged and
)------------------------
rental received for the use of the Facility
)$
described in the Bond to which this coupon
)
is attached, -and not from any other fund or
;
source, the amount shown hereon, in lawful
)
money of the United States of America, at'the
)
First State Bank and Trust Company, Salina,
)
Kansas, being interest due on its Hospital Re-
)
funding and Improvement Revenue Bond, Series of
)
August 15, 1977, dated August 15, 1977, No.
)
ATTEST:
)
(facsimile)
)
Mayor
)
(facsimile)
)
City Clerk
--------------------------------------------
-----------------------
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Section 8. Delivery of Bonds, Deposit of Proceeds with
Fiscal Agent. The Mayor and City Clerk are hereby authorized and
directed to prepare and execute in the manner hereinbefore specified
the Hospital Refunding and Improvement Revenue Bonds, Series of
August 15, 1977, of the City herein authorized and to delivery said
Bonds to First Securities Company of Kansas, Inc., the representa-
tive of the purchasers thereof, on payment of the purchase price.
The proceeds of said Bonds shall be deposited with First State Bank
and Trust Company, in the City of Salina, Kansas, hereby designated
as the City's Fiscal Agent and hereinafter referred to as the "Fiscal
Agent".
Section 9. Authorization of Escrow Trust Agreement and
Disposition of Bond Proceeds and Moneys Remaining From 1975 Ordinance.
The Escrow Trust Agreement dated August 15, 1977 substantially
in the form attached to this Ordinance and marked Exhibit A,
is hereby approved and authorized and the Mayor and City Clerk
are hereby authorized and directed to execute the same for and
on behalf of and as the act and deed of the City. Any moneys
and 1975 Investments held for the credit of the 1975 Construct-
ion Fund, the 1975 Principal and Interest Account, the 1975
Bond Reserve Account and the 1975 Surplus Account shall be
withdrawn by the City and deposited simultaneously with the delivery
of the Bonds in the Bond Reserve Account hereinafter created by
Section 12 of this Ordinance, and thereupon said 1975 Construction
Fund, 1975 Principal and Interest Account, 1975 Bond Reserve Account
and 1975 Surplus Account shall be closed.
The proceeds (including accrued interest) of the Bonds
shall be applied simultaneously with the delivery of the Bonds, as
follows:
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(a) There shall be deposited in the Principal
and Interest Account hereinafter Created by Section
11 of this Ordinance the amount of accrued interest
and premium, if any, received upon the sale of the
Bonds.
(b) The sum of $1,840,000 shall be deposited
in the Escrow Trust Account as provided in Section
4 of the Escrow Trust Agreement for the purpose
of refunding the Series 1975 Bonds, and the lien
of the 1975 Bonds upon the revenues of the Facility
shall be released thereby.
(c) The remaining balance of such proceeds
shall be deposited in the Construction Fund here-
inafter created by Section 10 of this Ordinance.
Saci-i nn 1 n _ Cnngt-rnni-inn Fnnrl _
There is hereby authorized
and ordered to be established in the hands of the Fiscal Agent, a
separate fund or account designated as the "City of Salina, Kansas,
The Asbury Hospital Association 1977 Construction Fund", hereinafter
sometimes referred to as the "Construction Fund". Said Construction
Fund shall be used for the purpose of providing funds to pay the
cost of remodeling existing buildings and improvements located
on the real property described in Schedule I attached hereto to be
leased to The Asbury Hospital Association, as provided in said Lease.
Any moneys not required for said purpose shall, when the Facility
is complete, be deposited by the Fiscal Agent in said Principal and
Interest Account established in Section 11, such deposit to be made
at such time as the Project Manager designated in the Lease shall
certify that the Facility is complete, or upon the earlier termina-
tion of the Lease.
Section 11. Principal and Interest Account. There is
hereby authorized and ordered to be established in the hands of
the Fiscal Agent a separate account to be known as the "City of
Salina, Kansas, Principal and Interest Account for Hospital Re-
funding and Improvement Revenue Bonds, Series of August 15, 1977 -
Account No. 1", hereinafter sometimes referred to as the "Principal
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1
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 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 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 redemption 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 Hospital.
Section 12. Bond Reserve Account. There is hereby
authorized and ordered to be established in the hands of the Fiscal
Agent a separate account to be known as the "City of Salina, Kansas,
Bond Reserve Account for Hospital Refunding and Improvement Revenue
Bonds, Series of August 15, 1977 - Account No. 2", hereinafter some-
times referred to as the "Bond Reserve 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 Bond Reserve
Account with the Fiscal Agent. The Fiscal Agent further covenants
and agrees that beginning on September 1, 1977, and continuing on
or before the first day of each month thereafter, the Fiscal Agent
shall, after making the deposits required by Section 11 of this
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Ordinance, pay and deposit each month from said monthly rental pay-
ments into the "Bond Reserve Account", the amount of Seven Thousand
Eighty-five Dollars ($7,085) until said monthly deposits, along.with
the deposit of the moneys provided for in Section 8 of this Ordinance
and the earnings on investments in said Account, shall aggregate the
amount of Two Hundred Twenty-five Thousand Dollars ($225,000), said
amount being herein sometimes called the "Maximum Bond Reserve
Amount". Said "Bond Reserve Account" shall be used by the Fiscal
Agent solely to prevent any default in the payment of the principal
of or interest on the bonds herein authorized if at any time the
moneys in the "Principal and Interest Account" are insufficient to
pay the principal of or interest on said bonds as the same become
due. So long as said "Bond Reserve Account" shall aggregate said
"Maximum Bond Reserve Amount" no further payments or credits to said
account shall be required, but if at any time or from time to time
the Fiscal Agent shall be compelled to use and expend any part of
said "Bond Reserve Account" for the purpose of paying the interest
on or principal of the Bonds herein authorized and such use shall
reduce the amount of said account below said "Maximum Bond Reserve
Amount", then the Fiscal Agent, from rental payments or other funds
made available by the Hospital, will resume monthly payments of
Seven Thousand Eighty-five Dollars ($7,085) each to the "Bond
Reserve Account" until there shall have accumulated in said "Bond
Reserve Account" the "Maximum Bond Reserve Amount". The obligation
of the Fiscal Agent to make said payments to said "Bond Reserve
Account" shall be limited to the rental payments and funds made
available to it by the Hospital. Interest earned on investments
of funds in the "Bond Reserve Account" shall accumulate and be
credited to the "Bond Reserve Account".
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Santinn 11_ TnvaGtmPntc_
Moneys in the Construction
Fund shall be invested by the Fiscal Agent in direct obligations
of the United States Government or agencies thereof becoming due
within six months
from the date of
purchase. Such
investments
shall be made by
the Fiscal Agent
without further
directions
1
from the City or the Hospital unless the Hospital shall advise the
Fiscal Agent in writing that it shall make such investments only
at the direction of the Hospital in which event the Fiscal Agent
shall invest said moneys in such obligations upon receipt of in-
structions from an appropriate officer of the Hospital. Moneys
allocated and credited to and deposited in the Principal and Inter-
est Account in any amount in excess of the amount necessary to
pay the amount of principal and interest next becoming due, and
in the Reserve Account shall be invested by the Fiscal Agent, upon
instructions from the Hospital, if at the time permitted by law,
in bonds or other direct obligations of the United States Government
or agencies thereof having a fixed redemption value or.becoming
due without loss of principal not later than January 15, 1993. No
investment shall be made pursuant to this section for a period
longer than the time the Fiscal Agent shall determine that said
funds are not required for the purpose for which they are intended.
Interest on any bonds or other obligations held in any fund or
account created by this Ordinance shall accrue to and become a
part of such fund or account.
Section 14. Particular Covenants of the City. So long
as any of the principal of and interest on the Bonds herein author-
ized remain outstanding and unpaid or provision made for the payment
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thereof, the City covenants with each of the holders and owners
of said Bonds as follows:
(a) 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 give notice of
any default provided for by the Lease; that it will
fully and promptly enforce all of the terms, pro-
visions and conditions of the Lease which require
performance by, or impose duties on the Hospital,
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 Facility under lease
provisions which will provide funds sufficient in
amount to make the rental payments and other charges
which the Hospital is required to make under the
Lease dated August 15, 1977. 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 a majority of the Bonds
herein authorized sell the property then covered
by the Lease at a price not less than the amount
of said outstanding revenue bonds, plus interest
then unpaid, together with all nremiums required.
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(b) The City will enforce collection of
the rental payments and other charges in the amounts
and at the time set forth in the Lease herein author-
ized and will not reduce or cause or permit to be
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 said 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 bondholders or other interested parties.
(c) Until payment of all the Bonds and inter -
est 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
bondholders, nor will it consent to any merger,
consolidation, dissolution or liquidation by the
Hospital except to the extent provided therein.
(d) Any purchase price of the property covered
by the Lease, 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 revenue bonds will be used solely and
exclusively to pay the Bonds herein authorized and
the interest thereon 4ccording to their terms or
to redeem and pay any of said bonds then outstanding
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and unpaid then subject to redemption and payment.
Upon receipt of any such funds, and as soon as
said bonds are subject to redemption and payment,
the City shall proceed promptly to call said reve-
nue bonds for redemption and payment according to
their terms and shall give notice thereof 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 said
revenue bonds, accrued interest thereon, any premi-
um provided for by this Ordinance and the charges
of the Fiscal Agent for paying the same.
(e) The City will not voluntarily create
or cause to be created any debt, lien, pledge,
assignment, encumbrance, or any other charge,
on the payments provided for by the Lease or on
the property covered by said Lease, nor will it,
unless required by law or the terms of said
Lease, sell or otherwise dispose of the Facility
or any part thereof.
(f) The City's share of the proceeds of
any insurance policies provided for by the Lease
shall be payable to and deposited with the
Fiscal Agent as Insurance Trustee. Any of the.
proceeds of such policies shall be used and applied
in the manner set forth in said Lease.
(g) The City will cause the Fiscal Agent
to maintain adequate records and accounts,
separate and apart from all other records or
accounts of the Fiscal Agent, and such records
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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
authorized 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 agents of the City, the
Hospital or any of the holders of the Bonds
authorized herein during the regular business
hours of the Fiscal Agent. Once each year the
City shall cause the Fiscal Agent to prepare a
report covering all such financial transactions
for the preceding twelve months to be mailed to
the City, the Hospitdl, First Securities Company
of Kansas, Inc., Stern Brothers & Co. and to any bond-
holder requesting the same.
Section 15. 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 not less than sixty-six and two-thirds
percent (66 2/3%) in aggregate principal amount of the Bonds herein
authorized at the time outstanding, provided that no such modifica-
tion or amendment shall permit or be construed as permitting: (a)
the extension of the maturity of any payment of the principal of or
the interest on any Bonds issued hereunder, (b) an increase or re-
duction in the principal amount of any Bonds, or the redemption
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premium, or the rate of interest thereon, (c) the creation of a
lien upon or a pledge of revenue other than the pledge created by
this Ordinance except as herein provided, (d) permitting a prefer-
ence or priority of any bond or bonds over any other bond or bonds,
or (e) a reduction in the percentage of 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. Any amendment to this Ordinance which-
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cures ambiguities or omissions herein, adds to the security of
the holders of the Bonds herein authorized or adds to the City's
covenants and agreement may be made without the consent of said
bondholders. As long as the Hospital is not in default under the
Lease no amendment to the Bonds or this Ordinance which violates
the Hospital's contractual rights under the Lease or this Ordinance
shall become effective unless consented to by the Hospital.
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.
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 bondholder requesting the same.
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The Lease herein authorized may be amended by the City
and the Hospital as provided therein except as to rent or certain
other matters as specifically enumerated in the Lease which may
be amended only with the consent of the specified percentage of
the holders of the then outstanding Bonds set out in said Lease.
Section 16. Enforcement. The provisions of this
Ordinance shall constitute a contract between the City of
Salina,' Kansas, and the holders of the Revenue Bonds herein
authorized, and the holder of any one or more of said Bonds may
sue to recover interest or principal or premium, if any, which
has not been paid according to the terms of said Bond. The holders
of 25% of the principal 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 to be done or
performed by said City or by said hospital. Nothing contained
in this Ordinance shall, however, be construed to impose on said
City any duty or obligation to levy any taxes either to meet any
obligation contained herein or to pay the principal of or interest
on the Revenue Bonds of the City herein authorized.
Section 17. Acceleration in the Event of Default. In
the event the principal of or interest on the Bonds herein
authorized is not paid according to the terms thereof either on'
maturity or upon call for redemption, then the holders of 25%
of the principal amount of Bonds then outstanding may, by written
notice given to the Mayor or City Clerk, declare the principal of
all the Bonds herein authorized then outstanding to be.due and
payable immediately, and upon such declaration given as aforesaid,
all of said Bonds shall be immediately due and payable, anything in
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said Bonds or in the Ordinance contained to the contrary notwith-
standing. 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 Mayor or City Clerk, 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 18. Defeasance. When all of the Bonds of the
City herein authorized and all coupons representing interest thereon
shall have been paid and discharged, then the requirements con-
tained herein and the pledge of revenues made hereunder and all
other rights granted hereby shall cease and determine. Bonds and
coupons shall be deemed to have been paid and discharged within
the meaning of this Ordinance and within the meaning of the Lease
.authorized by this Ordinance when there shall have been deposited
with the Fiscal Agent at or prior to the maturity or redemption
date of said Bonds and coupons, in trust for and irrevocably
appropriated thereto, sufficient moneys for the payment of the
principal thereof and interest accrued to the date of maturity
or redemption, as the case may be, or if default in such payment
shall have occurred on such date, then to the date of the tender
of such payments; provided, always, that if any such Bonds shall
be redeemed and paid 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 or
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coupons, including the payment of any premium thereon, shall be,
and are hereby, assigned, transferred and set over to such Fiscal
Agent in trust for the respective holders of the Bonds and coupons,
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 or coupons 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 for deposit in the Principal and Interest Account.
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 Ordinance.
Section 19. Authorization of Lease. The tract of land
herein referred to and the existing buildings and improvements
thereon shall be leased to The Asbury Hospital Association under
and pursuant to a Lease dated August 15, 1977, substantially in
the form attached to this Ordinance and marked Exhibit A, which
Lease the Mayor and City Clerk are hereby authorized and directed
to execute for and on behalf of and as the act and deed of the
city.
Section 20. Conveyance of Facility to the Company.
Upon receipt by the City of the purchase price of the property
subject to said Lease, as set out in Article XVII of_said Lease,
title to said property shall be transferred and conveyed to the
Company as provided in the Lease and the Mayor and other appro-
priate officers of said City are hereby authorized and directed
to execute such deeds and other instruments as may be necessary
to effect such conveyance and transfer.
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Section 21. Severability. If any one or more of the
covenants, agreements or provisions of this Ordinance or of said
Lease should be held contrary to any express provision of law
or contrary to the policy of express law, though not expressly
prohibited, or against public policy, or shall for any reason
whatsoever be held invalid, then such covenants, agreements or
provisions shall be null and void and shall be deemed separate
from the remaining covenants, agreements or provisions, and
shall in no way affect the validity of the other provisions of
this Ordinance or of the Bonds or coupons issued herieunder, or
the Lease.
Section 22. Effective Date. This Ordinance shall take
effect and be in force from and after its passage and publication
in the official City paper.
PASSED by the Governing Body of the City of Salina,
Kansas, this % day of CL 1977.
APPROVED by the Mayorthis day of ���_, 1977.
Mayor
ATTEST:
I �
�
City Clerk
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SCHEDULE I TO LEASE DATED AUGUST 15, 1977, BY
AND BETWEEN THE CITY OF SALINA, KANSAS, AND THE
ASBURY HOSPITAL ASSOCIATION AND TO ORDINANCE NO.
OF SAID CITY RELATING THERETO.
Lots One (1), Three (3) and the North 5.9' of
Lot Five (N 5.9' L 5) on Seventh Street in
Holland's Addition to the City of Salina; and
Lots Two (2), Four (4) and the North 5.9' of
Lot 6 (N 5.9' L 6) on Santa Fe Avenue in Holland's
Addition to the City of Salina; Saline County,
Kansas.
Subject to: (i) easements, restrictions and
reservations now of record, (ii) the rights of the
public in and to any part of the premises lying or
being in public roads, alleys or highways and (iii)
taxes and assessments, general and special, not now
due or payable.
Schedule I