8286 IRB School Specialty1
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Int btis►�ed Rka-" 11, 160 �)
ORDINANCE NO. 8286 OF THE CITY OF SALINA, KANSAS
Recitals
Section 1.
Section 2.
Section 3.
Section 4.
Section
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Section
5.
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23.
Schedule 1
INDEX
------------------------------------------------
Authority to Acquire Real Property and to Con-
struct and Purchase Facility -------------------
Authorization of and Security for the Bonds ----
Description and Details of the Bonds,
Designation of Paying Agent --------------------
Redemption and Payment of Bonds Prior to
Maturity---------------------------------------
Notice of Redemption ---------------------------
Method of Execution of Bonds -------------------
Form of Bond -----------------------------------
Execution and Delivery of the Bonds, Deposit
of Bond Proceeds, Designation of Fiscal Agent --
Construction Fund ------------------------------
Principal and Interest Account -----------------
Covenant to Redeem Bonds-----------------------
Investments------------------------------------
Particular Covenants of the City---------------
Amendments-------------------------------------
Enforcement------------------------------------
Declaration of Maturity of Bonds in the Event
of Default-------------------------------------
Defeasance-------------------------------------
List of Bondholders ----------------------------
Provisions Relating to the Fiscal Agent --------
Authorization of Lease-------------------------
Severability-----------------------------------
Conveyance of Facility -------------------------
Effective Date ---------------------------------
Description of Property
Pale
Ml
1
2
2
3
5
6
6
13
13
13
14
15
15
21
22
22
23
24
24
27
27
27
28
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ORDINANCE NO. 8286
AN ORDINANCE AUTHORIZING THE CITY OF SALINA, KANSAS, TO ACQUIRE THE
REAL PROPERTY HEREINAFTER DESCRIBED AND TO CONSTRUCT AND PURCHASE
BUILDINGS, IMPROVEMENTS, MACHINERY AND EQUIPMENT TO BE LEASED TO
SCHOOL SPECIALTY SUPPLY, INC., AUTHORIZING AND DIRECTING THE ISSUANCE
OF $950,000 PRINCIPAL AMOUNT OF INDUSTRIAL REVENUE BONDS, SERIES
OF 1973, OF SAID CITY FOR THE PURPOSE OF PROVIDING FUNDS TO PAY
THE COST OF ACQUIRING THE REAL PROPERTY HEREINAFTER DESCRIBED AND TO
CONSTRUCT AND PURCHASE BUILDINGS, IMPROVEMENTS, MACHINERY AND EQUIP-
MENT TO BE LEASED TO SCHOOL SPECIALTY SUPPLY, INC., AND PRESCRIBING
THE FORM AND AUTHORIZING THE EXECUTION OF A LEASE BY AND BETWEEN SAID
CITY AND SAID COMPANY.
WHEREAS, the City of Salina, Kansas, 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, pursuant to the provisions of K.S.A. 12-1740 to 12-
1749, as amended, said City is authorized to issue industrial revenue
bonds of the City, and it is hereby found and determined to be ad-
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 the cost of
acquiring real property and to construct and purchase buildings,
improvements, machinery and equipment to be leased to School Specialty
Supply, Inc., a Kansas corporation, hereinafter sometimes referred
to as the "Company"; and
WHEREAS, the City will acquire prior to or concurrently
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 Acquire Real Property and to Con-
struct and Purchase Facility. The City of Salina, Kansas, is hereby
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authorized to acquire the real property described and set forth
in Schedule 1 attached hereto and made a part hereof and to con-
struct and purchase buildings, improvements, machinery and equipment
described in said Schedule 1, said real estate, buildings, improve-
ments, machinery and equipment being sometimes hereinafter de-
scribed as the "Facility," in accordance with the provisions of
the Lease dated as of May 1, 1973, between said City and said School
Specialty Supply, Inc., hereinafter sometimes referred to as the
"Lease," said Lease being authorized by the provisions of this
Ordinance (said real property being referred to in the Lease as
the "Land" and said Land, buildings, improvements, machinery and
equipment also being referred to in the Lease as the Facility) all
at an amount which will not exceed the cost of $950,000 to said
City.
Section 2. Authorization of and Security for the Bonds.
For the purpose of providing funds to pay the cost of acquiring the
real property described in said Schedule 1 and to construct and
purchase buildings, improvements, machinery and equipment to be
leased to School Specialty Supply, Inc., a Kansas corporation, there
shall be issued and hereby are authorized and directed to be issued
a series of Industrial Revenue Bonds, Series of 1973, of the
City of Salina, Kansas, in the principal amount of $950,000.
Said Bonds herein authorized, hereinafter sometimes referred to as
the "Bonds," 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.
Section 3. Description and Details of the Bonds,
Designation of Paying Agent. Said Industrial Revenue Bonds, Series
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of 1973, of the City of Salina, Kansas, shall consist of 190 coupon
Said Bonds shall bear interest from date payable semi-
annually on May 1 and November 1 in each year, beginning on
November 1, 1973.
Said Bonds and the interest coupons to be attached thereto
shall be payable in lawful money of the United States of America at
The National Bank of America at Salina, in the City of Salina, Kansas,
hereby designated as the City's paying agent for the payment
of the principal of and interest on the Bonds and herein sometimes
referred to as the "Paying Agent."
Section 4. Redemption and Payment of Bonds Prior to
Maturity. Said Bonds shall be subject to redemption and payment
prior to the stated maturity thereof, after the notice specified in
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Bonds, numbered from 1 to 190,
in the denomination of $5,000.
inclusive, each of said Bonds being
All of said Bonds shall be dated
May 1, 1973, and said
Bonds shall become due serially
on May 1, in
each year, and shall
bear interest from date as follows:
Maturity
Annual Rate
Numbers
Amount
May 1
of Interest
1-9
$45,000
1974
5 1/2%
10-19
50000
1975
5 1/2%
20-28
45,000
1976
5 1/2%
29-38
50,000
1977
5 1/2%
39-47
45,000
1978
5 1/2%
48-57
50,000
1979
5 3/4%
58-66
45,000
1980
5 3/4%
67-76
50,000
1981
5 3/4%
77-85
45,000
1982
5 3/4%
86-95
50,000
1983
5 3/4%
96-105
50,000
1984
6%
106-114
45,000
1985
6%
115-123
45,000
1986
6%
124-133
50,000
1987
6%
134-142
45,000
1988
6%
143-152
50,000
1989
6 1/4%
153-161
45,000
1990
6 1/4%
162-171
50,000
1991
6 1/4%
172-180
45,000
1992
6 1/4%
181-190
50,000
1993
6 1/4%
Said Bonds shall bear interest from date payable semi-
annually on May 1 and November 1 in each year, beginning on
November 1, 1973.
Said Bonds and the interest coupons to be attached thereto
shall be payable in lawful money of the United States of America at
The National Bank of America at Salina, in the City of Salina, Kansas,
hereby designated as the City's paying agent for the payment
of the principal of and interest on the Bonds and herein sometimes
referred to as the "Paying Agent."
Section 4. Redemption and Payment of Bonds Prior to
Maturity. Said Bonds shall be subject to redemption and payment
prior to the stated maturity thereof, after the notice specified in
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Section 5 of this Ordinance, as follows:
A. Each of said Bonds shall be subject
to redemption and payment at the option of the City,
upon instructions from the Company, on any interest
payment date 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 subject to said Lease be condemned
by any authority having the power of eminent domain;
(2) if substantially all of the Facility be 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 sub-
division 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 with-
out unreasonable delay, or in any other way, by
reason of such change of circumstances, unreasonable
burdens or excessive liabilities are imposed on
the Company 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 date fixed for redemption
and payment, without premium.
B. Each of said Bonds maturing in the year
1984 and thereafter shall also be subject to redemption
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and payment at the option of the City, upon instruc-
tions from the Company in whole or in part, on
May 1, 1983, or on any interest payment date
thereafter at the principal amount thereof plus
accrued interest to the redemption date, together
with a premium of 4% of the principal amount of
bonds so redeemed. Bonds to be redeemed and paid
pursuant to this paragraph of this Ordinance shall
be redeemed in inverse order of maturity, Bonds of
less than a full maturity to be selected by lot
in such equitable manner as may be selected by the
Fiscal Agent hereinafter designated.
Section 5. Notice of Redemption. Notice of any redemp-
tion provided for by this Ordinance shall be given in the name of
the City by the City, the Company or the Fiscal Agent by United States
registered mail to the Paying Agent herein designated, 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 some financial journal published and of general
circulation in New York, New York. Notice of any such redemption
shall also be given by mail in the manner hereinbefore specified
to any bondholder who files his name with the Fiscal Agent pursuant
to Section 18 of this Ordinance, provided that the failure to give
any notice by mail as herein specified shall not affect the validity
of any such call for redemption. Interest shall cease on any of
said Bonds so called for redemption and payment as of the redemption
date, provided funds are available to pay the same according to their
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terms. Notice of any redemption as herein provided shall be given upon,
but only upon, written instructions from the Company, as long as
the Company is not in default in the payment of Basic Rent due
under the Lease.
Section 6. Method of Execution of Bonds. Said Bonds and
each of them shall be executed for and on behalf of the City by
the facsimile 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 City Clerk of said City.
Said Bonds and each of them shall be registered in the office of
the City Clerk which registration shall be evidenced by a certificate
on the reverse face thereof bearing the manual signature of the
City Clerk. In the event either said Mayor or City Clerk or both
of said officers shall cease to hold such office before the Bonds
and coupons bearing their signatures shall have been issued and
delivered, said Bonds may be issued 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.
Section 7. Form of Bond. Each of said Bonds and interest
coupons and the certificate attached thereto shall be in substantially
the following form:
1
No.
0
UNITED STATES OF AMERICA
STATE OF KANSAS
COUNTY OF SALINE
CITY OF SALINA
INDUSTRIAL REVENUE BOND
SERIES OF 1973
$5,000
KNOW ALL MEN BY THESE PRESENTS: That the City of
Salina, in the County of Saline, State of Kansas, 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 May, 1g_, and to pay interest thereon from the date hereof at
the rate of per cent ( %) per annum,
payable semiannually on May 1 and November 1 in each year after the
date hereof, beginning on November 1, 1973, until the said principal
sum shall have been paid, upon presentation and surrender of the
interest coupons hereto attached, bearing the facsimile 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 National Bank of America at Salina, in the City of Salina,
Kansas.
THIS BOND is one of an authorized series of Bonds
aggregating the principal amount of $950,000 authorized by Ordinance
of said City (the "Ordinance") for the purpose of providing funds
to pay the cost of acquiring real property and constructing and
purchasing buildings, improvements, machinery and equipment
(hereinafter sometimes referred to as the "Facility," said Facility
being further identified in the Ordinance) to be leased to School
Specialty Supply, Inc., a Kansas corporation (the "Company"),
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pursuant to a Lease dated May 1, 1973 (the "Lease"), by and between
said City and said Company, by the authority of and in conformity
with the provisions, restrictions and limitations of the Constitution
and statutes of the State of Kansas, including K.S.A. 12-1740 to
12-1749, 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. 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 and to the Lease for a description of the
Facility and the covenants of the City and the Company with
respect to the payment, collection, segregation and application
of the money and revenue received from the fees charged and
rental received for the use of said Facility, the rights, duties
and obligations of the City and the Company with respect thereto
and otherwise and the rights of the holders of this Bond.
Each of the Bonds of the series of which this Bond is
one is subject to redemption and payment prior to maturity on
any interest payment date at the option of the City upon 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
so
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 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 are imposed on the
Company 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, without premium.
Each of the Bonds of the series of which this Bond is one
maturing in the year 1984 and thereafter is subject to redemption
and payment at the option of the City, in whole or in part, on
May 1, 1983, or on any interest payment date thereafter,
at the principal amount thereof plus accrued interest to the
redemption date, together with a premium of 4% of the principal
amount of bonds so redeemed. Bonds to be redeemed pursuant to
this paragraph shall be redeemed in inverse order of maturity,
Bonds of less than a full maturity to be selected by lot in the
manner specified in the Ordinance authorizing this Bond.
Notice of the City's intention to redeem and pay said
Bonds pursuant to any of the redemption 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
some financial journal published and of general circulation in New
York, New York.
AND IT IS HEREBY DECLARED AND CERTIFIED that all acts,
conditions and things required to be done and to exist precedent
to and in the issuance of this Bond have been properly done and
performed and do exist in due and regular form and manner as
required by the Constitution and laws of the State of Kansas.
IN WITNESS WHEREOF, the City of Salina, Kansas, by its
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 with the facsimile
signatures of said officers, and this Bond to be dated this first
day of May, 1973.
ATTEST:
LI
(facsimile)
City Clerk
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(facsimile)
Mayor
Coupon
No.
(FORM OF COUPON)
All Coupons for 6 Months due
May 1 and November 1
Bonds 1-47 $137.50
48-95 143.75
96-142 150.00
143-190 156.25
May,
On the First day of November, 19_
unless the Bond to which this coupon is attached
be called for redemption and payment duly made or
provided for, the City of Salina, Kansas, will
pay bearer, solely from the money and revenue re-
ceived 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 National Bank of America at Salina, in the City
of Salina, Kansas, being interest due on its
Industrial Revenue Bond, Series of 1973, dated
May 1, 1973, No.
(facsimile)
Mayor
ATTEST:
(facsimile)
City Clerk
----------------- I
City of Sal
Kansas
Industrial
Revenue Bond,
Series of 1973
----------------
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STATE OF KANSAS )
) SS.
COUNTY OF SALINE )
I, the undersigned, City Clerk of the City of Salina,
Kansas, hereby certify that the within Industrial Revenue Bond,
Series of 1973, of the City of Salina, Kansas, has been duly
registered in my office according to law.
WITNESS my hand and official seal this day of
, 1973.
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City Clerk
Section 8. Execution and Delivery of the Bonds, Deposit
of Bond Proceeds, Designation of Fiscal Agent. The Mayor and City
Clerk are hereby authorized and directed to prepare and execute, in
the manner hereinbefore specified, the Bonds herein authorized, and
to deliver said Bonds to The National Bank of America at Salina, in
the City of Salina, Kansas, the purchaser thereof, on payment of the
purchase price. The proceeds of said Bonds shall be deposited with
The National Bank of America at Salina, in the City of Salina, Kansas,
hereby designated as the City's Fiscal Agent and herein referred
to as the "Fiscal Agent," the rights and duties of said Fiscal
Agent being further specified in Section 19 of this Ordinance.
Section 9. Construction Fund. There is hereby authorized
and ordered to be established in the hands of the Fiscal Agent a
separate fund or account designated as "City of Salina, Kansas,
School Specialty Supply, Inc. Construction Fund," hereinafter
referred to as the "Construction Fund." The Fiscal Agent shall,
first, promptly pay from the proceeds of the sale of said Bonds into
the Principal and Interest Account for Industrial Revenue Bonds,.
Series of 1973, dated May 1, 1973, hereinafter created, the
amount of any accrued interest and premium, if any, received from
such sale. The balance of the proceeds of the sale of said Bonds
shall be deposited in said Construction Fund. Said Construction
Fund shall be used for the purpose of providing funds to pay the
cost of acquiring real property and to construct buildings,
improvements, machinery and equipment to be leased to School
Specialty Supply, Inc., as provided in said Lease. Any moneys not
required for said purpose shall, when the Facility is complete as
provided in the Lease, be deposited by the Fiscal Agent in said
Principal and Interest Account.
Section lb. Principal and Interest Account. There is
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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 Industrial
Revenue Bonds, Series of 1973, dated May 1, 1973," hereinafter
referred to as the "Principal and Interest Account." The City
covenants and agrees that from and after the delivery of any of
the Revenue Bonds herein authorized and continuing so long as any
of said Bonds shall remain outstanding, said City will maintain
said Account with the Fiscal Agent. All payments of Basic Rent
and Additional Rent due under said Lease between the City and the
Company intended to pay the principal of and interest on the Bonds
shall be applied and allocated by the Fiscal Agent to said Principal
and Interest Account. All amounts credited to and deposited in said
Principal and Interest Account shall be used by the Fiscal Agent
and forwarded to the Paying 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 School Specialty Supply, Inc.
Section 11. Covenant to Redeem Bonds. When moneys accumu-
lated in said Principal and Interest Account shall aggregate an amount
sufficient to pay the principal of all of the Bonds then outstanding,
and all interest accrued to date fixed for redemption and payment,
and redemption premium, if any, and when said Bonds become subject
to redemption, said City shall, upon receipt of instructions from
the Company, proceed to give notice of such redemption in the manner
herein specified, and said Fiscal Agent shall use such funds for
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said purpose.
Section 12. Investments. Moneys in the Construction Fund
shall, upon instructions from the Company, be invested by the Fiscal
Agent in direct obligations of the United States Government, or
agencies thereof, becoming due within twelve months from the date of
purchase. Moneys allocated and credited to and deposited in the
Principal and Interest Account in any amount in excess of the
amount necessary to pay the amount of principal and interest next
becoming due shall be invested by the Fiscal Agent, upon instructions
from the Company, in direct obligations of the United States Govern-
ment, or agencies thereof, becoming due not later than April 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.
All interest on investments held in the Construction Fund shall be
deposited in the Principal and Interest Account. Interest in invest-
ments in any other fund or account shall accrue to and become a part
of such fund or account so invested.
Section 13. Particular Covenants of the.City. So long as
any of the principal of and interest on the Bonds herein authorized
remain outstanding and unpaid, or until provisions are made for the
payment thereof, the City covenants with each of the holders and
owners of said Bonds as follows:
(A) The City will use the proceeds of the
series of Bonds herein authorized as soon as practi-
cable and with all reasonable dispatch for the pur-
pose for which said Bonds are issued as herein-
before set forth. Said proceeds will not be in-
vested in any securities or obligations except for
the temporary period pending such use and said
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proceeds will not be used directly or indirectly
so as to cause all or any part of the Bonds herein
authorized to be or become "Arbitrage Bonds" within
the meaning of Section 103(d) of the Internal Revenue
Code of 1954, as amended. The City further covenants
that the proceeds of the series of Bonds herein au-
thorized will not be used to acquire securities or
obligations (other than obligations described in Sub-
section (a)(1) of such Section) that will produce a
yield higher than the yield of the Bonds herein au-
thorized unless a statute, regulation of the Treasury
Department of the United States, ruling by the Inter-
nal Revenue Service of the United States or a deci-
sion by a court of ultimate jurisdiction holds that
an acquisition of securities or obligations producing
a yield higher than said Bonds will not cause said
Bonds to be Arbitrage Bonds as defined in said Sub-
section W.
(B) The City will comply fully with all the
terms, provisions and conditions of the Lease
which require performance by, or impose duties
on, the City and that it will not permit any de-
fault to occur on the part of the City; that it
will fully and promptly enforce all of the terms,
provisions and conditions of the Lease which
require performance by, or impose duties on, the
Company and in the event of the occurrence of a
default, as defined in the Lease, will exercise
all rights and remedies conferred by the Lease
for the full and complete protection of the
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security and rights of the bondholders and, to
the extent permitted by the Lease, will use its
best efforts to procure a new tenant or tenants
for the leased property under lease provisions
which will provide funds sufficient in amount
to make the rental payments and other charges
which the Company is required to make under the
Lease. If the City is unable to procure a new
tenant who will enter into such a lease the City
may, with the consent of the holders of not less
than sixty-six and two-thirds per cent (66 2/3%)
of the Bonds herein authorized at the time out-
standing, sell the Facility leased at a price
not less than the amount of the then outstanding
Bonds plus interest then unpaid.
(C) The City will enforce collection of the
rental payment and other charges in the amounts
and at the time set forth in the Lease authorized
hereby and will not reduce or cause or permit to
be reduced the rental payments and other charges
fixed, established and required by the Lease nor
change or alter the time or times when the same
are due and payable under the Lease. The City's
obligation to pay the expenses of such enforcement
shall be limited to funds made available to it for
that purpose by the holders of the Bonds or other
interested parties.
(D) Until payment of all the Bonds and interest
thereon has been duly made or provided for, the City
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dissolution or liquidation by the Company, except
to the extent provided in the Lease.
(E) Any purchase price of the lease property,
any proceeds of condemnation awards or insurance
proceeds, any of which are received by the City
pursuant to the termination of the Lease, or any
other funds intended for the purpose of paying the
Bonds will be used solely and exclusively to pay
the Bonds herein authorized and the interest thereon
according to their terms or to redeem and pay any
of the Bonds then outstanding and unpaid then subject
to redemption and payment. Upon receipt of any such
funds, and as soon as the Bonds are subject to re-
demption and payment, the City shall proceed promptly
to call the Bonds for redemption and payment according
to their terms and shall give notice, or cause notice
to be given thereof, as provided for by the terms of
this Ordinance. Such funds shall be deposited with the
Fiscal Agent, and the same shall be used solely for
the payment of the Bonds herein authorized, accrued
interest thereon, any premium provided for by this
Ordinance and the charges of the Paying Agent and the
Fiscal Agent for paying the same.
(F) The City will not issue any other obligations
payable from payments by the Company, pursuant to the
will not consent to
any
change, amendment, modifica-
tion or termination
of
said Lease, except as provided
therein, which will
in
any manner affect adversely
the rights, remedies
or
interest of the bondholder,
nor will it consent
to
any merger, consolidation,
dissolution or liquidation by the Company, except
to the extent provided in the Lease.
(E) Any purchase price of the lease property,
any proceeds of condemnation awards or insurance
proceeds, any of which are received by the City
pursuant to the termination of the Lease, or any
other funds intended for the purpose of paying the
Bonds will be used solely and exclusively to pay
the Bonds herein authorized and the interest thereon
according to their terms or to redeem and pay any
of the Bonds then outstanding and unpaid then subject
to redemption and payment. Upon receipt of any such
funds, and as soon as the Bonds are subject to re-
demption and payment, the City shall proceed promptly
to call the Bonds for redemption and payment according
to their terms and shall give notice, or cause notice
to be given thereof, as provided for by the terms of
this Ordinance. Such funds shall be deposited with the
Fiscal Agent, and the same shall be used solely for
the payment of the Bonds herein authorized, accrued
interest thereon, any premium provided for by this
Ordinance and the charges of the Paying Agent and the
Fiscal Agent for paying the same.
(F) The City will not issue any other obligations
payable from payments by the Company, pursuant to the
L�
Lease, nor voluntarily create or cause to be created
any debt, lien, pledge, assignment, encumbrance, or
any other charge on said payments or on the property
subject to said Lease nor will it, unless required by
law or by the terms of said Lease, sell or otherwise
dispose of the Facility or any part thereof; provided,
however, that said City may issue from time to time
additional industrial revenue bonds for the pur-
pose of completing the construction or acquisition
thereof on the land herein referred to, provided
the following terms and conditions are met:
(i) The City shall have entered
into a lease or agreement with the Com-
pany 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 Company is not in default
in the payment of rent due under the
Lease.
(iii) The issuance of said additional
bonds shall not affect the exemption from
Federal income taxation of the interest
on the Bonds herein authorized.
In the event of the issuance of any such addi-
tional 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
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or purchased out of the proceeds of such additional
bonds, to the payment of the Bonds herein authorized
and the interest thereon.
(G) The City will cause the Company to keep
constantly insured all buildings and improvements from
time to time constituting a part of the property and
premises leased to the Company in the manner provided
for by the Lease herein authorized. The City's share
of the proceeds of any such insurance policies
shall be payable to and 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 relating
to the Facility, separate and apart from all
other records or accounts of the City or the Fiscal
Agent, and such records and accounts shall be main-
tained 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 Company or any of the holders of the
Bonds authorized herein during the regular business
hours -of the City or the Fiscal Agent.
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• 0
Section 14. Amendments. The provisions of the Bonds
authorized by this Ordinance and the provisions of this Ordinance
may be modified or amended at any time by the City with the written
consent of the holders of not less than sixty-six and two-thirds
per cent (66 2/3%) in aggregate principal amount of the Bonds
herein authorized at the time outstanding, provided that no such
modification or amendment shall permit or be construed as per -
matting: (a) the modification of any duties or responsibilities
of the Fiscal Agent unless it consents thereto, (b) the extension
of the maturity of the principal of any of the Bonds issued here-
under, or the extension of the maturity of the interest on any
Bonds issued hereunder, (c) a reduction in the principal amount
of any Bonds or the rate of interest thereon, or (d) a reduction
in the aggregate principal amount of Bonds, the consent of the
holder of which is required for any such amendment or modification.
Any provision of the Bonds or of this Ordinance may, however, be
modified or amended in any respect with the written consent of the
holders of all of the Bonds then outstanding. Amendments to this
Ordinance which correct omissions or ambiguities or which add to
the security of the bondholders may be made by the City when
agreed to by the Company. Every amendment or modification of a
provision of the Bonds or of this Ordinance to which the written
consent of the bondholders is given as above provided shall be
expressed in an ordinance of the City amending or supplementing
the provisions of this Ordinance and shall be deemed to be a part
of this Ordinance. It shall not be necessary to note on any of the
outstanding Bonds any reference to such amendment or modification,
if any. Upon payment of the reasonable cost of preparing the same,
a certified copy of every such amendatory or supplemental ordinance,
if any, and a certified copy of this Ordinance will be sent by the
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0 •
City Clerk to any such bondholder or prospective bondholder request-
ing the same.
The Lease herein authorized may be amended by the City
and the Company as provided therein, except as to rent or certain
other matters which may be made only with the consent of a specified
percentage of the holders of the then outstanding Bonds.
Section 15. Enforcement. The provisions of this Ordinance
shall constitute a contract between the City and the holders of the
Bonds herein authorized, and the holder of any one or more of said
Bonds may sue to recover interest or principal which has not been paid
according to the terms of said Bond. The holders of twenty-five per
cent (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 Company. 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 Bonds of the
City herein authorized.
Section 16. Declaration of Maturity of Bonds in the Event
of Default. In the event the principal of or interest on the Bonds
herein authorized is not paid according to the terms thereof either
on maturity or upon call for redemption, then the holders of twenty-
five per cent (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 afore-
said, all of said Bonds shall be immediately due and payable, anything
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0 •
in 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 17. 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 contained
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 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, shall be, and are hereby, assigned,
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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 dis-
charge thereof. If, through lapse of time or otherwise, the holders
of said Bonds or coupons shall no longer be entitled to enforce pay-
ment of their obligations, then, in such event, it shall be the duty
of said bank forthwith to return said funds to the City. All moneys
deposited with such Fiscal Agent shall be deemed to be deposited in
accordance with and subject to all of the provisions contained in
this Ordinance.
Section 18. List of Bondholders. To the extent that such
information shall be made known to the City under the terms of this
Section 18, it will keep on file at the principal office of the Fiscal
Agent a list of names and addresses of the last known holders of all
Bonds payable to bearer and believed to be held by each of such last
known holders. Any bondholder may request that his name and address
be placed on said list by filing a written request with the City
or with the Fiscal Agent, which request shall include a statement
of the principal amount of Bonds held by such holder and the numbers
of such Bonds. The Fiscal Agent shall be under no responsibility
with regard to the accuracy of said list. At reasonable times and
under reasonable regulations, established by the Fiscal Agent, said
list may be inspected and copied by the Company or by the holders
and/or owners (or a designated representative thereof) of twenty-five
per cent (25%) or more in principal amount of Bonds then outstanding,
such ownership and the authority of any such designated representative
to be evidenced to the satisfaction of the Fiscal Agent.
Section 19. Provisions Relating to the Fiscal Agent.
(A) Prior to the receipt of the Bond proceeds
pursuant to the provisions of Section 8 hereof,
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•
the Fiscal Agent shall file with the City Clerk
its written acceptance of the duties specified in
this Ordinance and in the Lease and its agreement
to act in said capacity.
(B) The Fiscal Agent's duties and responsi-
bilities shall be limited to those expressly set
forth in this Ordinance and under the Lease.
(C) All resolutions, opinions, certificates
and other instruments referred to or provided for
herein or in the Lease may be accepted by the
Fiscal Agent as conclusive evidence of the facts,
opinions and conclusions stated therein and shall
be full warrant, protection and authority to the
Fiscal Agent for any action reasonably taken
pursuant thereto. The Fiscal Agent shall be under
a duty to examine any such resolutions, opinions,
certificates and other instruments to determine
whether or not they conform to the requirements
of this Ordinance and the Lease.
(D) The Fiscal Agent shall not be liable
with respect to any action taken or omitted to
be taken by it in good faith and, if appropriate,
upon advice of counsel who may be counsel for the
Fiscal Agent or the City or the Company.
(E) No provision contained in this Section
shall be construed to relieve the Fiscal Agent
from liability for its own negligent action, its
own negligent failure to act, or its own willful
misconduct, except that this subsection shall not
be construed to limit the effect of subsections
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9 •
(B), (C) and (D) of this Section and the Fiscal
Agent shall not be liable for any error of judgment
made in good faith unless it shall be proved that
the Fiscal Agent was negligent in ascertaining the
pertinent facts.
(F) The Fiscal Agent shall have the right to
buy, sell, own, deal or trade in the Bonds or the
coupons relating thereto without giving notice
thereof to the City or the Company or any bondholder
and without incurring any liability whatsoever with
respect thereto.
(G) The Fiscal Agent may resign by an instrument
in writing delivered to the City and the Company to
take effect not sooner than 90 days after its delivery,
whereupon the City, with the consent of the Company,
shall immediately, in writing, designate a successor
fiscal agent. Such successor fiscal agent shall be a
bank, trust company or national banking association
which is a member of the Federal Reserve System and
has a capital stock and surplus aggregating at least
that of the Fiscal Agent at the time of its designation
hereunder. Such successor fiscal agent shall be sub-
ject to the same duties and obligations and shall have
the same rights, privileges and immunities specified
in this Ordinance and in the Lease for the Fiscal
Agent. Any such successor fiscal agent shall file an
acceptance in the form referred to in subparagraph (A)
hereof with the City Clerk within 10 days of its
appointment.
(H) The'Fiscal Agent shall be entitled to payment
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•
or reimbursement for reasonable fees for its ordinary
services and all advances, counsel fees and other
ordinary expenses reasonably and necessarily made or
incurred by it in connection with its ordinary services,
all such fees and expenses to be paid by the Company
as Additional Rent as specified in Article II of the
Lease.
Section 20. Authorization of Lease. The tract of land
herein referred to and the buildings and improvements to be acquired
and constructed thereon pursuant to this Ordinance shall be leased
to School Specialty Supply, Inc., under and pursuant to a Lease dated
May 1, 1973, 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 21. Severability. If any one or more of the cove-
nants, agreements or provisions of this Ordinance, or of the 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 should 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 issued hereunder,, or of the Lease.
Section 22. Conveyance of Facility. Upon receipt by
the City of the purchase price of the property subject to said
Lease, title to said property 'shall be transferred and conveyed to
the Company as provided in the Lease and the Mayor and other
appropriate officers of said City are hereby authorized and directed
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to execute such deeds, bills of sale and other instruments as may
be necessary to effect such conveyance and transfer.
Section 23. Effective Date. This Ordinance shall take
effect and be in force from and after its passage and publication
in the official City paper.
PASSED AND APPROVED by the governing body of the City of
Salina, Kansas, this 7th day of MaY , ]973•
ATTEST:
City Clerk
IRE
�r
Mayo ,
n
LJ
SCHEDULE 1 TO LEASE DATED MAY 1, 1973,
BY AND BETWEEN THE CITY OF SALINA,
KANSAS, AND SCHOOL SPECIALTY SUPPLY, INC.,
AND TO ORDINANCE NO. 8286 OF SAID
CITY RELATING THERETO.
(a) A TRACT OF LAND IN THE SOUTHWEST QUARTER (SW 1/4)
OF SECTION ONE (1) , TOWNSHIP FIFTEEN (15 ) SOUTII,
RANGE THREE (3) WEST OF THE SIXTH PRINCIPAL MERIDIAN
IN SALINE COUNTY, KANSAS, MORE PARTICULARLY DESCRIBED
AS FOLLOWS: STARTING FROM THE SOUTHWEST CORNER OF
SAID SOUTHWEST QUARTER (SW 1/4), THENCE N0000710611E
ALONG THE WEST LINE OF SAID SOUTHWEST QUARTER (SW 1/4)
A DISTANCE OF THIRTEEN HUNDRED FIFTY-NINE AND NINETY-
EIGHT HUNDREDTHS (1359.98) FEET; THENCE S89°40152"E
PARALLEL WITH THE SOUTH LINE OF SAID SOUTHWEST QUARTER
(SW 1/4) A DISTANCE OF ONE HUNDRED SIXTY-FOUR AND
FIFTY-SEVEN HUNDREDTHS (164.57) FEET TO THE POINT OF
BEGINNING; SAID POINT OF BEGINNING BEING A POINT ON
THE NORTH LINE OF AN EXISTING PUBLIC RIGHT-OF-WAY
EIGHTY AND THIRTY-SEVEN HUNDREDTHS (80.37) FEET EAST
OF ITS INTERSECTION WITH THE EAST RIGHT-OF-WAY LINE
OF U.S. HIGHWAY EIGHTY-ONE (81):
THENCE N05044'25"E PARALLEL WITH SAID EAST RIGHT-OF-
WAY LINE A DISTANCE OF FIVE HUNDRED (500.00) FEET:
THENCE S89040152"E PARALLEL WITH THE SOUTH LINE OF
SAID SOUTHWEST QUARTER A DISTA14CE OF EIGHT HUNDRED
FIFTY AND FIFTY-SIX HUNDREDTHS (850.56) FEET: THENCE
S00003'57"W PARALLEL WITH THE WEST LINE OF THE UNION
PACIFIC RAILROAD RIGHT-OF-WAY A DISTANCE OF FOUR
HUNDRED NINETY-SEVEN AND SEVENTY-SEVEN HUNDREDTHS
(497.77) FEET; THENCE N89°40'52"W PARALLEL WITH THE
SOUTH LINE OF SAID SOUTHWEST QUARTER (SW 1/4) A
DISTANCE OF NINE HUNDRED (900.00) FEET TO THE POINT
OF BEGINNING. SAID TRACT OF LAND CONTAINING TEN
(10.00) ACRES.
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; and
(b) All buildings and improvements and machinery
and equipment constructed or located thereon pursuant
to Article IV of said Lease.