00-9976 Issue IRBC—Vida,, aline
ORDINANCE NO. 00-9976
OF THE
CITY OF SALINA, KANSAS
AUTHORIZING THE ISSUANCE OF
$750,000 INDUSTRIAL REVENUE BONDS
SERIES 2000
(KASA INDUSTRIAL CONTROLS, INC.)
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(Published in The Salina Journal, April 40, 2000)
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ORDINANCE NO. 00-9976
AN ORDINANCE AUTHORIZING THE CITY OF SALINA, KANSAS TO
ISSUE ITS INDUSTRIAL REVENUE BONDS, SERIES 2000 (KASA
INDUSTRIAL CONTROLS, INC.) IN THE AGGREGATE PRINCIPAL
AMOUNT OF $750,000 FOR THE PURPOSES OF EXPANDING AND
FURTHER EQUIPPING AN EXISTING MANUFACTURING FACILITY;
AUTHORIZING EXECUTION OF SUPPLEMENTAL TRUST INDENTURE
NO. 1 AMENDING AND SUPPLEMENTING THE TRUST INDENTURE
DATED AS OF MARCH 1, 1991 BY AND BETWEEN THE CITY AND FIRST
NATIONAL BANK AND TRUST, SALINA, KANSAS (NOW SUNFLOWER
BANK, N.A., SALINA, KANSAS), AS TRUSTEE; AUTHORIZING THE CITY
TO LEASE SUCH FACILITIES TO KASA INDUSTRIAL CONTROLS, INC.
AND AUTHORIZING EXECUTION OF AN AMENDED AND RESTATED
LEASE BETWEEN SAID CITY AND KASA INDUSTRIAL CONTROLS, INC.;
APPROVING THE FORM OF A GUARANTY AGREEMENT BY AND
AMONG KASA INDUSTRIAL CONTROLS, INC., KARL R. STUTTERHEIM
AND CONNIE L. STUTTERHEIM AND SUNFLOWER BANK, N.A., AS
TRUSTEE; AND AUTHORIZING THE EXECUTION OF A BOND
PURCHASE AGREEMENT FOR THE BONDS BY AND AMONG THE CITY,
KASA INDUSTRIAL CONTROLS, INC. AND SUNFLOWER BANK, N.A., AS
PURCHASER OF THE BONDS.
THE GOVERNING BODY OF THE CITY OF SALINA, KANSAS HAS FOUND AND
DETERMINED:
A. The City of Salina, Kansas (the "Issuer") is authorized by the Kansas Economic
Development Revenue Bond Act, as amended, as codified in K.S.A. 12-1740 et seq. (the "Act"), to
acquire, construct, improve and equip certain facilities (as defined in the Act) for commercial,
industrial and manufacturing purposes, to enter into leases and lease -purchase agreements with any
person, firm or corporation for such facilities, and to issue revenue bonds for the purpose of paying the
costs of such facilities; and
B. The Issuer has heretofore pursuant to Ordinance No. 91-9426 and a Trust Indenture
dated as of March 1, 1991 (the "Original Indenture") between the Issuer and First National Bank and
Trust, Salina, Kansas (now Sunflower Bank, N.A.) as trustee (the "Trustee") issued its Industrial
Revenue Bonds, Series 1991 (Kasa Industrial Controls, Inc.) (the "Series 1991 Bonds"), the proceeds
of which were used to expand and further equip an existing manufacturing facility located within the
environs of the Issuer, and the Original Indenture permits the Issuer to issue additional revenue bonds
on a parity of lien basis with the Series 1991 Bonds subject to certain conditions as set forth in Section
209(b) of the Original Indenture; and
C. The Issuer's governing body has determined that it is desirable in order to promote,
stimulate and develop the general economic welfare and prosperity of the Issuer and the State of
Kansas that the Issuer issue its Industrial Revenue Bonds, Series 2000 (Kasa Industrial Controls, Inc.)
dated April 15, 2000 in the aggregate principal amount of $750,000 (the "Series 2000 Bonds"), for the
purpose of paying the costs of further expanding and equipping (the "Project") a certain existing
manufacturing facility, as more fully described in Supplemental Trust Indenture No. 1 and in the
Amended and Restated Lease authorized in this ordinance for lease to Kasa Industrial Controls, Inc.
(the "Tenant"); and
D. The Issuer's governing body finds that it is necessary and desirable in connection with
the issuance of the Series 2000 Bonds to execute and deliver the following documents (collectively,
the "Bond Documents"):
(i) Supplemental Trust Indenture No. 1 dated as of April 15, 2000 (the "Supplemental
Indenture"), with Sunflower Bank, N.A., Salina, Kansas, as Trustee (the "Trustee"), which
amends and supplements the Original Indenture, prescribing the terms and conditions of
issuing and securing the Series 2000 Bonds;
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(ii) an Amended and Restated Lease dated as of April 15, 2000 (the "Amended Lease"), with
the Tenant, which amends and restates a Lease dated as of March 1, 1991 (the "Original
Lease") under which the Issuer will acquire, construct and install the Project and lease it and
the property pledged to secure payment of the Series 1991 Bonds under the Original Indenture
to the Tenant in consideration of Basic Rent and other payments; and
(iii) a Bond Purchase Agreement (the "Bond Purchase Agreement") providing for the sale of
the Series 2000 Bonds by the Issuer to Sunflower Bank, N.A., and
(iv) an Agreement for Payment in Lieu of Taxes (the "Agreement for Payment in Lieu of
Taxes") with the Tenant, under which the Tenant will make certain payments in lieu of taxes
for each year after issuance of the Bonds that the Project is exempt from ad valorem taxation.
E. The Issuer's governing body has found that under the provisions of K.S.A. 79-201a
Second, the Project purchased or constructed with the proceeds of the Series 2000 Bonds is eligible for
exemption from ad valorem property taxes for up to 10 years, commencing in the calendar year
following the calendar year in which the Bonds are issued, if proper application is made. The Issuer's
governing body has further found that the Project should be exempt from ad valorem property taxes
for a period of 10 years, subject to a payment in lieu of taxes for each year of the exemption, as more
particularly described in the Agreement for Payment in Lieu of Taxes. Prior to making this
determination, the governing body of the Issuer has conducted the public hearing and reviewed the
analysis of costs and benefits of such exemption required by K.S.A. Supp. 12-1749d.
NOW, THEREFORE, BE IT ORDAINED BY THE GOVERNING BODY OF THE
CITY OF SALINA, KANSAS:
Section 1. Definition of Terms. All terms and phrases not otherwise defined in this ordinance
will have the meanings set forth in the Original Indenture, as amended and supplemented by the
Supplemental Indenture (collectively, the "Indenture") and the Amended Lease.
Section 2. Authority to Cause the Project to be Purchased and Constructed. The Issuer is
authorized to cause the Project to be acquired, constructed and installed in the manner described in the
Supplemental Indenture and the Amended Lease.
Section 3. Authorization of and Security for the Bonds. The Issuer is authorized and
directed to issue the Series 2000 Bonds, to be designated "City of Salina, Kansas Industrial Revenue
Bonds, Series 2000 (Kasa Industrial Controls, Inc.)" in the aggregate principal amount of $750,000.
The Series 2000 Bonds will bear interest at 6.875% per annum, and mature in principal installments
with a final maturity not later than May 1, 2015, will be subject to optional redemption upon the
direction of the Tenant at any time at par, plus accrued interest, and will have such other redemption
provisions, including premiums, will be in such forms and will be issued according to the provisions,
covenants, agreements and other terms as are set forth in the Original Indenture, the Supplemental
Indenture and the Bond Purchase Agreement. The Series 2000 Bonds are being issued for the purpose
of providing funds to pay the costs of acquiring, constructing and installing the Project. The Series
2000 Bonds will be special limited obligations of the Issuer payable solely from the Trust Estate under
the Original Indenture, as amended and supplemented by the Supplemental Indenture, including
revenues from the lease of the Project. The Series 2000 Bonds will not be general obligations of the
Issuer, nor constitute a pledge of the faith and credit of the Issuer, and will not be payable in any
manner by taxation.
Section 4. Authorization of Supplemental Indenture. The Issuer is authorized to enter into
the Supplemental Indenture dated as of April 15, 2000 with the Trustee in the form approved in this
ordinance. The Issuer will pledge the Trust Estate described in the Original Indenture and the Trust
Estate Additions described in the Supplemental Indenture to the Trustee for the benefit of the owners
of the Series 1991 Bonds and the Series 2000 Bonds, on a parity of lien basis, on the terms and
conditions in the Original Indenture and the Supplemental Indenture.
Section 5. Lease of the Project. The Issuer will acquire, construct and install the Project and
lease it to the Tenant according to the provisions of the Amended and Restated Lease in the form
approved in this ordinance.
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Section 6. Approval of the Guaranty Agreement. The form of the Guaranty Agreement
dated as of April 15, 2000 among the Tenant, the other guarantors named therein, and the Trustee, for
the benefit of the owners of the Series 2000 Bonds is approved.
Section 7. Authorization of Bond Purchase Agreement. The Issuer is authorized to sell the
Series 2000 Bonds to Sunflower Bank, N.A., Salina, Kansas, according to the terms and provisions of
the Bond Purchase Agreement, in the form approved in this ordinance, among the Issuer, the Tenant
and Sunflower Bank, N.A., as Purchaser.
Section 8. Execution of Bonds and Bond Documents. The Mayor of the Issuer is authorized
and directed to execute the Series 2000 Bonds and deliver them to the Trustee for authentication on
behalf of the Issuer in the manner provided by the Act and in the Original Indenture and the
Supplemental Indenture. The Mayor or member of the Issuer's governing body authorized by law to
exercise the powers and duties of the Mayor in the Mayor's absence is further authorized and directed
to execute and deliver the Bond Documents on behalf of the Issuer in substantially the forms presented
for review prior to final passage of this ordinance, which forms are approved with such corrections or
amendments as the Mayor or other person lawfully acting in the absence of the Mayor may approve, as
evidenced by his or her signature. The authorized signatory may all sign and deliver other documents,
or certificates as may be necessary or desirable to carry out the purposes and intent of this ordinance
and the Bond Documents. The City Clerk or the Deputy City Clerk of the Issuer is hereby authorized
and directed to attest the execution of the Series 2000 Bonds, the Bond Documents and such other
documents, certificates and instruments as may be necessary or desirable to carry out the intent of this
ordinance under the Issuer's corporate seal.
Section 9. Tax Exemption; Payment in Lieu of Taxes. The Project purchased or
constructed with the proceeds of the Series 2000 Bonds will be exempt from ad valorem property
taxes for 10 years, commencing in the calendar year 2001. The Tenant will prepare the application for
exemption and submit it to the Issuer for its review. After its review, the Issuer will submit the
application for exemption to the Saline County Appraiser for review and transmittal to the State Board
of Tax Appeals. The Agreement for Payment in Lieu of Taxes in substantially the form dated and
signed December 6, 1999 is hereby ratified and confirmed.
Section 10. Pledge of the Project and Net Lease Rentals. The Issuer hereby pledges the
Project and the net rentals generated under the Amended Lease to the payment of the Series 1991
Bonds and the Series 2000 Bonds in accordance with K.S.A. 12-1744. The lien created by the pledge
will be discharged when all of the Series 1991 Bonds and the Series 2000 Bonds are paid or deemed to
have been paid under the Indenture.
Section 11. Further Authority. The officials, officers, agents and employees of the Issuer are
authorized and directed to take whatever action and execute whatever other documents or certificates
as may be necessary or desirable to carry out the provisions of this ordinance and to carry out and
perform the duties of the Issuer with respect to the Series 2000 Bonds and the Bond Documents.
Section 12. Effective Date. This ordinance shall take effect after its final passage by the
governing body of the Issuer, signature by the Mayor and publication once in the Issuer's official
newspaper.
PASSED by the governing body of the City of Salina, Kansas this 17' -day of April, 2000.
SIGNED by the Mayor of the City of Salina, Kansas this 17" day of April, 2000.
[SEAL]
Monte Sh'adwick, Mayor
Attest:
arbara R. Weber, Acting City Clerk
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CERTIFICATE OF COPY
I hereby certify that the attached copy is a true and correct copy of Ordinance No. 00-9976 of
the City of Salina, Kansas duly passed by the governing body, signed by the Mayor and published in
the official City newspaper on the respective dates stated in this ordinance, and that the signed original
of such ordinance is on file in my office.
'?J
[SEAL]
— arbara R. Weber, Acting City Clerk
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