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8432 IRB Asbury HospitalINDEX TO ORDINANCE NO. 8432 OF THE CITY OF SALINA, KANSAS TABLE OF CONTENTS Page Section 1. Authority to Construct and. Purchase Facility--- 2 Section 2. Authorization of and Security for the Bonds---- 2 ection 3. Description and Details of the Bonds, Paying Agent------------------------------------------- 3 Section 4. Redemption and Payment of Bonds Prior to Maturity, Notice of Redemption ------------------ 4 Section 5. -Execution of Bonds------------------------------ 5 Section 6. Form of Bond ------------------------------------- 6 Section 7. Delivery of Bonds, Deposit of Proceeds with Fiscal Agent ------------------------------------ 11 ection 8. Construction Fund-------------------------------.- 11 Section ection 9. 10. Principal and Interest Account------------------- Bond Reserve Account 12 --------------------------- 13 Section 11. Surplus Account -------------------------------- 15 ection 12. Investments------- _________________--________--_ .a l0 Section 13. Particular Covenants of the City_______________ 16 `ection 14. Amendments --------------------------------------- 22 'ection 15. Enforcement ------------------------------------- �3 Section 16. Acceleration in the Event of Default ------------ 24 Section 17. Defeasance -------------------------------------- 24 Section 18. Authorization of I -ease------------------------- 25 Section 19. Conveyance of Facility to the Hospital------- 26 Section 20. Severability----------------------------------- 26 ection Schedule 21. I. Effective Date --------------------------------- Description of Property --------- 26 28 .-______________ 1 ORDINANCE NO. 8432 A ORDINANCE AUTHORIZING THE CITY OF SALINA, KANSAS, TO CONSTRUCT A I) PURCHASE BUILDINGS, IMPROVEMENTS, MACHINERY AND EQUIPMENT TO B LOCATED ON REAL PROPERTY DESCRIBED HEREIN TO BE LEASED TO THE A BURY HOSPITAL ASSOCIATION; AUTHORIZING AND DIRECTING THE ISSUANCE 0 $1,750,000 PRINCIPAL AMOUNT OF HOSPITAL REVENUE BONDS, SERIES 0 MAY 1, 1975, OF SAID CITY FOR THE PURPOSE Oi PROVIDING FUNDS TO P Y THE COST OF CONSTRUCTING AND PURCHASING BUILDINGS, IMPROVEMENTS, M CHINERY AND EQUIPMENT TO BE LEASED TO THE ASBURY HOSPITAL ASSOCI- A ION; PRESCRIBING THE FORM AND AUTHORIZING THE EXECUTION OF A LEASE B AND BETWEEN SAID CITY AND THE ASBURY HOSPITAL ASSOCIATION. WHEREAS, the City of Salina, Kansas, a city of the s Gond class, hereinafter sometimes referred to as the "City", dt,sires to promote, stimulate and develop the general economic w lfare and prosperity of the City of Salina, Kansas, and its evirons and thereby to further promote, stimulate and develop tie general economic welfare and prosperity of the State of as; and WHEREAS, pursuant to the provisions of K.S.A. 12-1740 t 12-1749, said City is authorized to issue industrial revenue b nds of the City, and it is hereby found and determined to be a visable and in the interest and for the welfare of the City and its inhabitants that industrial revenue bonds of the City be authorized and issued, for the purpose of providing funds to pay 4e cost of constructing and purchasing buildings, improvements, finery and equipment to be leased to The Asbury Hospital Associ- a4ion, a not-for-profit corporation organized under Kansas law for spital purposes, hereinafter sometimes referred to as the 110ospital", and WHEREAS, the total cost of constructing; and purchasing s4id buildinvs, imbrovements, machinery and ecr.ainment for use by 1 1 The Asbury Hospital Association is estimated at $3,072,438, and th City will have transferred to it by the Hospital prior to or con- currently with the issuance of the Bonds herein authorized the real property hereinafter described; NOW, THEREFORE, BE IT ORDAINED BY THE GOVERNING BODY OF THE CITY OF SALINA, KANSAS: Section 1. Authority to Construct and Purchase Facility. The City of Salina, Kansas, is hereby authorized to have transferre to it by the Hospital the real property described and set forth on Schedule I attached hereto and made a part hereof and to con- struct and purchase buildings, improvements, machinery and equip- ment thereon, said real property and the buildings, improvements, machinery and equipment identified being sometimes hereinafter referred to as the "Facility", in accordance with the provisions of the Lease dated as of May 1, 1975, herein authorized, between said City and said The Asbury Hospital Association, hereinafter sometimes referred to as the "Lease's, at an amount which will not exceed the maximum cost of $1,750,000 to said City, to be paid out of the proceeds of the bonds herein authorized: Section 2. Authorization of and Security for the Bonds. For the purpose of providing funds to pay the cost of constructing and purchasing buildings, improvements, machinery and equipment on the real property described in Schedule I attached hereto to be leased to The Asbury Hospital Associations a not-for-profit corporation organized under Kansas law for hospital purposes, there shall be issued and hereby are authorized and directed to be issued Hospital Revenue Bonds, Series of May 1, 1975, of the City of Salina, Kansas, in the principal amount of $1,750,000. The Bonds herein authorized, hereinafter sometimes refcnred to as the "Bonds" -2- Y Section 3. Describtion and Details of the Bonds, Paying Agent. Said Revenue Bonds shall be designated Hospital Revenue Bonds, Series of May 1, 1975, and shall consist -of 350 Bonds, numbered from 1 to 350, inclusive, each of said Bonds being iri the denomination of $5,000. All of said Bonds shall be dated May 1, 1975, and said Bonds shall be numbered, shall become due on February 1 in each year and shall bear interest as follows: or the "Revenue Bonds", and all interest thereon shall be paid MATURITY solely from the money and revenue received from the fees charged AMOUNT and rental received for the use of the Facility and not from any 1 other fund or source. The City hereby pledges the Facility and 7% the net earnings therefrom to the payment of the Bonds and the 100,000 interest thereon. 7% Section 3. Describtion and Details of the Bonds, Paying Agent. Said Revenue Bonds shall be designated Hospital Revenue Bonds, Series of May 1, 1975, and shall consist -of 350 Bonds, numbered from 1 to 350, inclusive, each of said Bonds being iri the denomination of $5,000. All of said Bonds shall be dated May 1, 1975, and said Bonds shall be numbered, shall become due on February 1 in each year and shall bear interest as follows: Said Bonds shall bear interest from date payable February 1, 1976, 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 heret.,! designated as the City's Paying; Agent for the payment of the p:c°incipal of and inter- est on the Revenue Bonds herein authorized and herein sometimes referred to as the "Paying Agent". -3- MATURITY ANNUAL RATE NUMBERS AMOUNT FEBRUARY 1 OF INTEREST 1 - 19 $ 95,000 1979 7% 20 - 39 100,000 1980 7% 40 - 61 110,000 1981 7% 62 - 85 120,000 1982 7 1/11% 86 111 - 110 137 125,000 135,000 1983 7 1/4' - 1984 7 1/4% 138 - 166 145,000 1985 7 1/4% 167 - 198 1605000 1986 7'1/2% 199 - 232 170,000 1987 7 1/2% 233 - 269 185,000 1988 7 1/2% 270 - 308 195,000 1989 7 1/2% 309 - 350 210,000 .1990 7 1/2% Said Bonds shall bear interest from date payable February 1, 1976, 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 heret.,! designated as the City's Paying; Agent for the payment of the p:c°incipal of and inter- est on the Revenue Bonds herein authorized and herein sometimes referred to as the "Paying Agent". -3- Section 4. Redemption and Payment of Bonds Prior to M,Iturity,.Notice of Redemption. Each of said Bonds becoming d e in the years 1979 to 1990, inclusive, shall be subject to re- d mption and payment at the option of The Asbury Hospital Associa- tj Jon on any interest payment date upon any of the following con- d tions or events, provided all of said Bonds are redeemed and p id according to their terms: (1) if title to, or the use for a limited period of, substantially all of the Facility subject to s id Lease, be condemned by any authority having the power of eiiinent 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- 1 tive or administrative action by the State of Kansas, or any p litical subdivision thereof, or by the United States, or by r ason of any action instituted in any court, the Lease herein a thorized shall become void or unenforceable, or impossible of p rformance without unreasonable delay, or in any other way, b reason of such change of circumstances, unreasonable burdens oi, excessive liabilities, including Federal, State or other taxes n t now being imposed are imposed on the Hospital or the City. e redemption price for Bonds redeemed pursuant to this paragraph s all be the principal amount of Bonds so redeemed, plus accrued i terest thereon to and including the date fixed for redemption d payment, together with a premium of 3% of the principal amount the Bonds so redeemed and paid. Each of said Bonds becoming due in the years 1986 to 1.990, i elusive, shall also-be subject to redemption and payment at the tion of said City, in whole or in'part, in inverse numerical der on February 1, 1985, or on any interest payment date there- ter at the principal amount thereof plus accrued interest thereon Lo date fixed for redemption and payment, together with a premium hich shall be 3% of the principal amount of the bonds so redeemed nd paid.. Notice of any redemption provided for by this Ordinance hall be given in the name of the City by the City, the Hospital r the Fiscal Agent by United States registered mail to the Paying gent herein designated, and to First Securities Company of Kansas, ne., such notice to be mailed at least 30 days prior to the date ixed for redemption and payment and to specify the numbers of the onds to be redeemed and paid. Notice of any such redemption shall lso be published once not less than 30 days or more than 90 days rior to the date fixed for redemption in the official state news - aper of the State of Kansas and in some financial journal publishe nd of general circulation in New York, New York. Interest shall ease on any of said Bonds so called for redemption and payment s of the redemption date, provided funds are deposited with the aying Agent to pay the same according to their terms. The City hall give notice of any redemption as herein provided only upon itten instructions from the Hospital. Section 5. Execution of Bonds. Said Bonds and each of them shall be executed for and on behalf of the City by the 11facsimile signature of its Mayor and attested by the facsimile signature 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 facsimile signatures of the Mayor and CiLar Clerk of said City. Said Bonds and each of them shall be registered in the office of the City Clerk which registration shall be e,..idenced by a certifi- tate on the reverse face thereof bearing; the Manual signature of the City Clerk. In the event either said May,)r or Clerk or beth aid officers shall cease to hold such office before the Bonds nd coupons, if any, bearing their signatures shall have been ssued and delivered, said Bonds may be issued and delivered, as hough said officers had not ceased to hold office and such sig- atures appearing on said Bonds, coupons and registration certifi- ates shall be valid and sufficient for all purposes as if they remained in office until such issuance and delivery. Section 6. Form of Bond. Each of said Bonds, the terest coupons, and the Certificate of Registration on the Bonds hall be in substantially the following form: (FORM OF BOND) No. $5,000 UNITED STATES OF AMERICA STATE OF KANSAS COUNTY OF SALINE CITY OF SALINA HOSPITAL REVENUE BOND SERIES OF MAY 1, 1975 KNOW ALL MEN BY THESE PRESENTS: That the City of Salina, in the County of Saline, State of Kansas, for value re- ceived, 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, 1976, and thereafter semiannually on August 1 and February 1 in ery:h year after the date hereof until the said principal sum shall have been paid, upon presentation and. surrender of the inter -:;t coupons hereto attached, bearing the facsimile signatures of the Mayor and City Clerk of said City as said coupons severally '-)L-come due, both -6- rincipal of and interest on this Bond being payable at the irst State Bank and Trust Company, in the City of Salina, Kansas. THIS BOND is one of an authorized series of 350 Bonds ggregating the principal amount of $1,750,000 numbered from 1 to 50, inclusive, authorized by ordinance of said City for the pur- ose of providing funds to pay the cost of constructing and pur- hasing buildings, improvements, machinery and equipment, the real roperty, buildings, improvements, machinery and equipment herein- fter sometimes referred to as the "Facility", said Facility being urther identified in the Ordinance authorizing this Bond to be eased to The Asbury Hospital Association, a not-for-profit corpora ion organized under Kansas law for hospital purposes, pursuant to Lease dated May 1, 1975, by and between said City and said Hospit y the authority of and in conformity with the provisions, restric- hereof and acts supplemental thereto, and all other provisions of he laws of said State applicable thereto, and this Bond and all nterest hereon are to be paid by said City of Salina,,Kansas, solely and only from the money and revenue received from the fees barged 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- ion of the City, nor shall they be payable in any manner by taxa - ion. 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 -cnd to said Lease for a description of the Facility and the covenants of the City --7- ions and limitations of the Constitution and statutes of the State f Kansas, including K.S.A. 12-1740 to 12-1749, and all amendments hereof and acts supplemental thereto, and all other provisions of he laws of said State applicable thereto, and this Bond and all nterest hereon are to be paid by said City of Salina,,Kansas, solely and only from the money and revenue received from the fees barged 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- ion of the City, nor shall they be payable in any manner by taxa - ion. 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 -cnd to said Lease for a description of the Facility and the covenants of the City --7- ith respect to the collection, segregation and application of Each of the Bonds of the series of which this Bond is ne is subject to redemption and payment prior to maturity on any nterest payment date at the option of The Asbury hospital Associa- ion upon any of the following conditions or events, provided all f said Bonds are redeemed and paid according to their terms: 1) if title to, or the use for a limited period of, substantially 11 of the Facility be condemned by any authority having the power f eminent domain; (2) if substantially all of the Facility is amaged or destroyed by fire or other casualty; or (3) if as a result of changes in the Constitution of the State of Kansas or f legislative or administrative action by the State of Kansas or ny political subdivision thereof, or by the United States, or by eason of any action instituted in any court, the Lease shall be - tome void or unenforceable or impossible of performance without nreasonable delay, or in any other way by reason of such circum- tances, unreasonable burdens or excessive lit.bilities, including ederal, State or other taxes not now being ir:posed are imposed the Hospital or the City. The redemption ;rice for Bonds edeemed pursuant to this paragraph shall be i1he principal amount f Bonds so redeemed, plus.accrued interest ti-zereon to and in- luding the date fixed for redemption and payx::ont, together with premium of 3% of the principal amount of the Bonds so redeemed and aid IMM ne money and revenue received from the fees charged and rental received for the use of the Facility, the rights, duties and bligations of the City and the Hospital with respect thereto, he right of the City to issue additional bonds and the rights Df the holders of the series of Bonds of which this Bond is one. Each of the Bonds of the series of which this Bond is ne is subject to redemption and payment prior to maturity on any nterest payment date at the option of The Asbury hospital Associa- ion upon any of the following conditions or events, provided all f said Bonds are redeemed and paid according to their terms: 1) if title to, or the use for a limited period of, substantially 11 of the Facility be condemned by any authority having the power f eminent domain; (2) if substantially all of the Facility is amaged or destroyed by fire or other casualty; or (3) if as a result of changes in the Constitution of the State of Kansas or f legislative or administrative action by the State of Kansas or ny political subdivision thereof, or by the United States, or by eason of any action instituted in any court, the Lease shall be - tome void or unenforceable or impossible of performance without nreasonable delay, or in any other way by reason of such circum- tances, unreasonable burdens or excessive lit.bilities, including ederal, State or other taxes not now being ir:posed are imposed the Hospital or the City. The redemption ;rice for Bonds edeemed pursuant to this paragraph shall be i1he principal amount f Bonds so redeemed, plus.accrued interest ti-zereon to and in- luding the date fixed for redemption and payx::ont, together with premium of 3% of the principal amount of the Bonds so redeemed and aid IMM 0 Each of the Bonds of the series of which this Bond is one becoming due in the years 1986 to 1990, inclusive, is subject o redemption and payment at the option of said City, in whole or Ln part, in inverse numerical order on February 1, 1985, or on any nterest payment date thereafter, at the principal amount thereof lus accrued interest thereon to date fixed for redemption and ayment, together with a premium which shall be 3% of the principal ount of the bonds so redeemed and paid. Notice of any redemption pursuant to any of the redemp- ion provisions aforesaid, specifying the numbers of the Bonds to De redeemed and paid, shall be given by United States registered ail to the Paying Agent named herein not less than 30 days prior o the date fixed for redemption and payment. Notice of any such ademption shall also be published once not less than 30 days or ore than 90 days prior to the date fixed for redemption in the £ficial state newspaper of the State of Kansas and in some finan- ial*journal published and of general circulation in New York, New York. AND IT IS HEREBY DECLARED AND CERTIFIED that all acts, onditions and things required to be done and to exist precedent o and in the issuance of this Bond have been properly done and erformed 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 facsimile signature of its City Clerk, and its corporate: seal to be hereto affixed and the interest coupons hereto attached to be -signed th the facsimile signatures of said officers, and this Bond to dated this First day of May, 1975• (facsimile) Mayor TEST: facsimile) ity Clerk (FORM OF COUPON) -10- oupon No. ' February, )February 1 On the'First day of August, 19_, unless )August 1, 19_ he Bond to which this coupon is attached be )--------------------- alled for redemption and payment duly made )City of Salina, Kansa r provided for, the City of Salina, Kansas, )Hospital Revenue )Bond ill pay bearer, solely from the money and )Series of May 1, 1975 evenue received from the fees,charged and )--------------------- ental received for the use of the Facility )$ escribed in the Bond to which this coupon ) ) Js attached, and not from any other fund or ) ource, the amount shown hereon, in lawful ) oney of the United States of America, at the ) irst State Bank and Trust Company, Salina, ) ansas, being interest due on its Hospital ) } evenue Bond, Series of May 1, 1975, dated ) ay 1, 1975, No. ) TTEST: ) (facsimile) ) Mayor ) (facsimile) City Clerk ) ) �.------------------------------------------ -------------------- -10- 1 ATE OF KANSAS ) ) SS. UNTY OF SALINE ) I, the undersigned, City Clerk of the City of Salina, ansas, hereby certify that the within Hospital Revenue Bond, eries of May 1, 1975, of the City of Salina, Kansas, has been my registered in my office according to law. WITNESS my hand and official seal this SEAL) City Clerk Section 7. Delivery of Bonds, Deposit of Proceeds with Fiscal Agent. The Mayor and City Clerk are hereby authorized and irected to prepare and execute in the manner hereinbefore speci- ied the Hospital Revenue Bonds, Series of May 1, 1975, of the ity herein authorized and to deliver said Bonds to First Securi- ies Company of Kansas, Inc., the representative of the purchasers hereof, on payment of the purchase price. The proceeds of said onds shall be deposited with First State Bank and Trust Company, n the City of Salina, Kansas, hereby designated as the City's fiscal Agent and hereinafter referred to as the "Fiscal Agent". Section 8. Construction Fund. There is hereby authorized Ind 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 Construction Fund", hereinafter sometimes referred to as the "Construction Fund". The Fiscal Agent hall first pay out of the proceeds of said bond issue any and all xpenses of whatever nature incurred by the City in connection lth the issuance and sale of the Bonds, the payment of said expense i 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 9, su h deposit to be made at such time as the Project Manager desig- ns ed in the Lease shall certify that the Facility is complete, or to be made in accordance with the City's written instructions to termination of the the 1iiiscal Agent approved by an appropriate officer of The Asbury Hospital Association and specifying the amounts to be disbursed Interest Account. There is arid the persons to whom such disbursements are to be made. The eby authorized Fi cal Agent shall, next, promptly pay from the proceeds of the sale of said Bonds into the Principal and Interest Account for a separate account to be known as the "City of and Interest Account for Hospital H spital Revenue Bonds, Series of May 1, 1975 - Account No. 1, hE einafter created, the amount of any accrued interest and premium, if any, received from such sale, together with such additional a unt as will aggregate the interest becoming due on the Bonds or February 1, 1976, August 1, 1976 and February 1, 1977, represent- irg interest due during the construction of the Facility. The bal- .aroe of the proceeds of the sale of said Bonds shall be deposited in sa d Construction Fund. Said Construction Fund shall be used for t purchasing purpose of providing funds to pay the cost of constructing and the buildings, improvements, machinery and equipment to be located on the real property described in Schedule I attached he eto 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 9, su h deposit to be made at such time as the Project Manager desig- ns ed in the Lease shall certify that the Facility is complete, or nue Bonds, Series of May 1, 1975 - Account No. 111, hereinafter -12- up n the earlier termination of the Lease. Section 9. Principal and Interest Account. There is he eby authorized and ordered to be established in the hands of th Sa Fiscal Agent ina, Kansas, Principal a separate account to be known as the "City of and Interest Account for Hospital nue Bonds, Series of May 1, 1975 - Account No. 111, hereinafter -12- 1 metimes referred to as the "Principal and Interest Account". e City covenants and agrees that from and after.the delivery of y of the Revenue Bonds herein authorized and continuing so long any of said Bonds shall remain outstanding, said City will main - in said account with the Fiscal Agent. The Fiscal Agent shall, ginning February 1, 1977 .and each month thereafter first pay d deposit from the monthly rental payments in the amount of 9,125 due under the Lease, into the Principal and Interest count an amount not less than one-sixth of the amount payable interest on the Bonds on the next interest payment date, and e -twelfth of the amount payable as principal on the Bonds on the xt principal payment date; provided that payments on account of incipal shall not be commenced until February 1, 1978• Section 10. Bond Reserve Account. There is hereby thorized and ordered to be established in the hands of the seal Agent a separate account to be known as the "City of Salina, nsas, Bond Reserve Account for Hospital Revenue Bonds, Series May 1, 1975 - Account No. 211, hereinafter sometimes referred as the "Bond Reserve Account". The City covenants and agrees at from and after the delivery of any of the Revenue Bonds herein thorized and continuing so long as any of said Bonds shall remain tstanding, said City will maintain said Br,;:",. Reserve Account th the Fiscal Agent. The Fiscal Agent shalt, prior to the de - very of the bonds to the purchaser, deposit. '6.0 the "Bond Reserve count" from funds furnished to it by the Ii ';>ital, the amount One Hundred Thirty Thousand Dollars ($130,'-0). The Fiscal ent further covenants and agrees that begin :.1ng on February 1, 77, and continuing on or before the first c y of each month ereafter, the Fiscal Agent shall, after mai .-,.?,,g the deposits -13- 1 f1 1 uired by Section 9 of this Ordinance, pay and deposit each th from said monthly rental payments into the "Bond Reserve count!', the amount of Seven Thousand Eighty-five Dollars ($7,085) til said monthly deposits, along with the deposit of One Hundred arty Thousand Dollars ($130,000) and earnings on investments in aid Account, shall aggregate the amount of Two Hundred Twenty-five housand Dollars ($225,000), said amount being herein sometimes ailed the "Maximum Bond Reserve Amount". Said "Bond Reserve ccount" shall be used by the Fiscal Agent solely to prevent any efault in the payment of the principal of or interest on the bonds erein authorized if at any time the moneys in the "Principal and nterest Account" are insufficient to pay the principal of or inter- st on said bonds as the same become due. So long as said "Bond .eserve Account" shall aggregate said "Maximum Bond Reserve Amount" o further payments or credits to said account shall be required, ut if at any time or from time to time the Fiscal Agent shall be ompelled to use and expend any part of said "Bond Reserve Account" or the purpose of paying the interest on or principal of the Bonds erein authorized and such use shall reduce the amount.of said ccount below said "Maximum Bond Reserve Amount", then the Fiscal gent, from rental payments or other funds made available by the ospital, will resume monthly payments of Se,,• 1. 1,i Thousand Eighty-five ollars ($7,085) each to the "Bond Reserve until there hall have accumulated in said "Bond Reserve "ccount" the '"Maximum and Reserve Amount". The obligation of the 21.scal Agent to make aid payments to said "Bond Reserve Account" gall be limited to rental payments and funds made available .o it by the Hospital. Interest earned on investments of '>inds in the "Bond serve Account" until February 1, 1977 shal:1 accumulate and be -111- redited to the "Bond Reserve Account". Earnings on investments the "Bond Reserve Account" after February'l, 1977 shall accrue o the "Bond Reserve Account" until the "Maximum Bond Reserve mount" shall have accumulated in the "Bond Reserve Account". er the accumulation of the "Maximum Bond Reserve Amount", in- ome from investments in the "Bond Reserve Account" shall be ransferred to the "Surplus Account" hereinafter created. Section 11. Surplus Account. There is hereby author - zed and ordered to be established in the hands of the Fiscal gent a separate account to be known as the "City of Salina, Kansas, Surplus Account for The Asbury Hospital Association - Account No. 3", hereinafter sometimes referred to as the "Surplus Account". The City covenants and agrees that from and after the elivery of any of the Revenue Bonds herein authorized and con- tinuing so long as any of said Bonds shall remain outstanding, aid City will maintain said Surplus Account with the Fiscal Agent. he'Fiscal Agent, after making the deposits required by Sections and 10 of this Ordinance, shall deposit the balance of said monthly rental payment of $19,125 into the Surplus Account. Moneys held in the Bond Reserve Account and Surplus Account shall. be used only for the purpose of paying the interest n or principal of the Bonds herein authorize; in the event moneys n the Principal and Interest Account are not 7ufficient for such purpose,, for the payment of fiscal service c1_-,,ges, for the re- iremert of. Bonds of this bond issue prior to a:!a.turity, , for the urchase of Bonds of this bond issue in the c;cia market at fair arket value, or for enlargement and impriovei,,C_i-;t of the Project-, mer€;ency repairs to the Facility, and for no other purpose. -15- 1 Section 12. Investments. Moneys in the Construction And shall be invested by the Fiscal Agent in direct obligations ogIthe United States Government or agencies thereof becoming due wJ hin six months from the date of purchase. Such investments slall be made by the Fiscal Agent without further directions fiDm the City or the Hospital unless the Hospital shall advise the F cal Agent in writing that it shall make such investments only a the direction of the Hospital in which event the Fiscal Agent sl 11 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- eE Account in any amount in excess of the amount necessary to 'pey the amount of principal and interest next becoming due, in t1e Reserve Account and in the Surplus Account shall be invested b the Fiscal Agent, upon instructions from the Hospital, if at tle time permitted by law, in bonds or other direct obligations of the United States Government or agencies thereof having a fixed rE emption value or becoming due without loss of principal not lEter than January 15, 1990. No investment shall be made pursu- art to this section for a period longer than the time the Fiscal AEent shall determine that said funds are not required for the ptrpose for which they are intended. Except as provided for earn- ir s on investments in the Bond Reserve Account, interest on any bcnds or other obligations held in any fund or account created b5 this Ordinance shall accrue to and become a part of such fund ox account. Section 13. Particular Covenants of the City. So long a any of the principal of and interest on the Bonds herein author - i rdremain outstandinv, and unpaid or nrovisioi, made for the payment -16- t ereof, the City covenants with each of the holders and owners 01, 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 May 1, 1975. If the City is unable to procure a new tenant who will enter into such -17- 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 x.11 prem-Plms required. -17- -18- (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 cond<. _Ina_tion awards or insurance proceeds, any of whic:, :1're received by the City pursuant to the termin , ;.i on of the Lease, or any other funds intendec; 'or the purpo'se of paying the revenue bonds Vrill used solely and exclusively to pay the Bonds here,_ authorized and the interest thereon according to '')eir terms or to redeem and pay any of said bonds then outstanding -18- 1 1 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 issue any other obligations payable from payments by the Hospital, pursuant to the Lease, nor voluntarily create or cause to be created any debt, lien, pledge, assign- ment, 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 time to time additional industrial revenue '.:onds in an aggregate principal amount not to t;<-ceed Two Hundred Fifty Thousand Dollars ( 4%21 �- , 000 ) for the purpose of completing the construc:'_on or acquisi- tion thereof on the land herein re`•.rred to, provided the following terms and co:iditions are met: -1�- (i) The City shall have entered into a lease or agreement with the Hospital with rentals or payments at least sufficient to pay the principal of and interest on said additional bonds as the same become due. (ii) The Hospital 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 authorized and the interest thereon. (f) The City will not volunta.- ly create or cause to be created any debt, 11.,-,n, pledge, assignment, encumbrance, or any otr�'--- charge, on the payments provided for by th-, Lease or on the property covered by said Leasc nor will it, unless required by law or the terms of said Lease, sell or otherwise dispose G" the Facility or any part thereof. -2p_ u I (g) 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. (h) 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 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 C -"Cy, the Hospital or any of the holders of the Bonds authorized herein during the r.egt:,.:_,r business hours of the Fiscal Agent. Once ac;h year the City shall cause the Fiscal Agee'_ ;.o prepare a report covering all such financir, transactions for the preceding twelve months oe mailed to the City, the Hospital, First- Se:— cities Company of Kansas, Inc., and to any bond,;-;1.der requesting the same. -21- _%:V ss than sixty-six and two-thirds percent (66 2/3%) in aggregate inpIpal amount of the Bonds herein authorized at the time out- nding, provided that no such modification or amendment shall mit or be construed as permitting: (a) the extension of the turity of any payment of the principal of or the interest on Bonds issued hereunder, (b) an increase or reduction in the incipal amount of any Bonds, or the redemption premium, or the to of interest thereon, (c) the creation of a lien upon or a edge of revenue other than the pledge created by this Ordinance cept as herein provided, (d) permitting a preference or priority any bond or bonds over any other bond or bonds, or (e) a duction in the percentage of the aggregate principal amount of nds, the consent of the holders of which is required for any ch amendment or modification. Any provision of the Bonds or this Ordinance may, however) be modified or amended in any spect with the written consent of the holders of all of the nds then outstanding. Any amendment to this Ordinance which res. ambiguities or omissions herein, adds to the security of e holders of the Bonds herein authorized or adds to the City's venants and agreement may be made without the consent of said ndholders. As long as the Hospital is not in default under the ase no amendment to the Bonds or this OrdinaInce which violates trie Hospital's contractual rights under the Lease or this Ordinance all become effective unless consented to by the Hospital. -22- Section 14. Amendments. Except as provided in paragraph (11.) of Section 13 of this Ordinance and as hereinafter provided t e provisions of the Bonds authorized by this Ordinance and the p ovisions of this Ordinance may be modified or amended at any t me by the City with the written consent of the holders of not ss than sixty-six and two-thirds percent (66 2/3%) in aggregate inpIpal amount of the Bonds herein authorized at the time out- nding, provided that no such modification or amendment shall mit or be construed as permitting: (a) the extension of the turity of any payment of the principal of or the interest on Bonds issued hereunder, (b) an increase or reduction in the incipal amount of any Bonds, or the redemption premium, or the to of interest thereon, (c) the creation of a lien upon or a edge of revenue other than the pledge created by this Ordinance cept as herein provided, (d) permitting a preference or priority any bond or bonds over any other bond or bonds, or (e) a duction in the percentage of the aggregate principal amount of nds, the consent of the holders of which is required for any ch amendment or modification. Any provision of the Bonds or this Ordinance may, however) be modified or amended in any spect with the written consent of the holders of all of the nds then outstanding. Any amendment to this Ordinance which res. ambiguities or omissions herein, adds to the security of e holders of the Bonds herein authorized or adds to the City's venants and agreement may be made without the consent of said ndholders. As long as the Hospital is not in default under the ase no amendment to the Bonds or this OrdinaInce which violates trie Hospital's contractual rights under the Lease or this Ordinance all become effective unless consented to by the Hospital. -22- FM Every amendment or modification of a provision of the ds or of this Ordinance to which the written consent of the ndholders is given as above provided shall be expressed in an dinance of the City amending or supplementing the provisions of is Ordinance and shall be deemed to be as of this Ordinance. t shall not be necessary to note on any of the outstanding nds_any reference to such amendment or modification, if any. certified copy of every such amendatory or supplemental finance, if any, and a certified copy of this Ordinance will e sent by the City Clerk to any bondholder requesting the same. The Lease herein authorized may be amended by the ity and the Hospital as provided therein -and as provided in aph (e) of Section 13 of this Ordinance, except as to ent or certain other matters as specifically enumerated in the ease which may be amended only with the consent of the specified ercentage of the holders of the then outstanding Bonds set out n said Lease. Section 15. Enforcement. The provisions of this dinance shall constitute a contract between the City of Salina, Kansas, and the holders of the Revenue Bonds herein uthorized, and the holder of any one or more of said Bonds may ue to recover interest or principal or premium, if any, which as not been paid according to the terms of said Bond. The holders f 25% of the principal amount of Bonds then outstanding may sue n any action, in mandamus, injunction or other proceedings, either t law or in equity, to enforce or compel per:'ormance of all n this Ordinance shall, however, be construed to impose on said ty any duty or obligation to levy any taxes either to meet any -23- uties and obligations required by this Ordin�.nce to be done or erformed by said City or by said Hospital. Nothing contained n this Ordinance shall, however, be construed to impose on said ty any duty or obligation to levy any taxes either to meet any -23- 0iligation contained herein or to pay the principal of or interest oil the Revenue Bonds of the City herein authorized. standing. • Section 16. Acceleration in the Event of Default. In � I 0iligation contained herein or to pay the principal of or interest nc ice 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, of of said Bonds shall be immediately due and payable, anything in sa oil the Revenue Bonds of the City herein authorized. standing. Section 16. Acceleration in the Event of Default. In that the event the principal of or interest on the Bonds herein i authorized is not paid according to the terms thereof either on Ish m turity or upon call for redemption, then the holders of 25% of o the -principal amount of Bonds then outstanding may, by written nc ice 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, of of said Bonds shall be immediately due and payable, anything in sa d 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 i erest accrued but not yet due, and all arrears of principal Ish 11 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 su h declaration and its consequences, but no such rescission or annulment shall extend to or affect any subsequent default or im air any rights consequent thereon. Section 17. Defeasance. When all of the Bonds of the Ci y herein authorized and all coupons representing interest thereon shall have been paid and discharged, then the requirements con- ta ned herein and the pledge of revenues made hcreunder and all otter rights granted hereby shall cease and detc'.rrline. Bonds and coupons shall be deemed to have been paid and da.scharged within tht meaning of this Ordinance and within the me,,,n ing of the Lease authorized by this Ordinance when there shall ht, -:)re been deposited wi h the Fiscal Agent at or prior to the maturity/ or redemption -24- ate, of said Bonds and coupons, in trust for and irrevocably ppropriated thereto, sufficient moneys for the payment of the rincipal thereof and interest accrued to the date of maturity redemption, as the case may be, or if default in such payment 11 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 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 -.hall be deemed to be deposited in accordance with and subject to ,, 1 of the provisions contained in this Ordinance. Section 18. Authorization of Leas.:. The tract of land herein referred to and the buildings, impro,, :-:cents, machinery and equipment to be acquired, installed and ,:,.�--nstructed thereon pursuant to this Ordinance shall be leased Ia The Asbury Hospital Association under and pursuant to a Lease d:.ed May 1, 1975, sub- stantially in the form attached to this Ord'`.,�ance and marked -25- U 1 xhibit A, which Lease the Mayor and City Clerk are hereby author - zed and -directed to execute for and on behalf of and as the act deed of the City. Section 19. Conveyance of Facility to the Company. Pon receipt by the City of the purchase price of the property ubject to said Lease, as set out in Article XVII of said Lease, itle to said property shall be transferred and conveyed to the ompany as provided in the Lease and the Mayor and other appro- iate officers of said City are hereby authorized and directed o execute such deeds and other instruments as may be necessary o effect such conveyance and transfer. Section 20. Severability. If any one or more of the ovenants, agreements or provisions of this Ordinance or of said ,ease should be held contrary to any express provision of law r contrary to the policy of express law, though not expressly rohibited, or against public policy, or shall for any reason hatsoever beheld invalid, then such covenants, agreements or rovisions shall be null and void and shall be deemed separate rom the remaining covenants, agreements or provisions, and hall in no way affect the validity of the other provisions of his Ordinance or of the Bonds or coupons issued hereunder, or he Lease. Section 21. Effective Date. This C•dinance shall take ffect and be in force from and after its pa.s,1ge and publication n the official City paper. -26- PASSED by the Governing; Body of the City of Salina, Kansas, t is 5th• day of May , 1977, APPROVED by the Mayor this 5th day of May 1 75. A TEST: ty Clerk -27- 1 1 SCHEDULE I TO LEASE DATED 14AY 1, 1975, BY AND BETWEEN THE CITY OF SALINA, KANSAS, AND THE ASBURY HOSPITAL ASSOCIATION AND TO ORDINANCE NO. 8432 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 (u) 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