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85-9114 IRB Smoky Hill11 II ORDINANCE NO. 85-9114 OF CITY OF SALINA, KANSAS AUTHORIZING THE ISSUANCE OF $13,300,000 MULTIFAMILY HOUSING REVENUE BONDS (SMOKY HILL TERRACES ACRES PROJECT) (Summary Published in The Salina Journal, 'DeC,.1,-), 1985) ORDINANCE NO. 85-9114 AN ORDINANCE AUTHORIZING THE CITY OF SALINA, KANSAS TO ISSUE ITS MULTIFAMILY HOUSING REVENUE BONDS, (SMOKY HILL TERRACES PROJECT) IN THE AGGREGATE PRINCIPAL AMOUNT OF $13,300,000 FOR THE PURPOSES OF PURCHASING, ACQUIRING, CONSTRUCTING AND INSTALLING MULTIFAMILY RESIDENTIAL RENTAL UNITS FOR THE ELDERLY; AUTHORIZING EXECUTION OF A TRUST INDENTURE BY AND BETWEEN THE CITY AND SECURITY BANK OF KANSAS CITY, AS TRUSTEE; AUTHORIZING THE CITY TO LEASE SAID PROJECT TO INDEPENDENT LIVING CENTER OF SALINA, A LIMITED PARTNERSHIP AND AUTHORIZING EXECUTION OF A LEASE BETWEEN SAID CITY AND INDEPENDENT LIVING CENTER OF SALINA, A LIMITED PARTNERSHIP; AND AUTHORIZING THE EXECUTION OF THE BOND PURCHASE AGREEMENT FOR THE BONDS BY AND AMONG THE CITY, INDEPENDENT LIVING CENTER OF SALINA, A LIMITED PARTNERSHIP AND 14ATTHEWS & WRIGHT, INC., AS PURCHASER OF THE BONDS AND AUTHORIZING THE EXECUTION OF THE LAND USE RESTRICTION AGREEMENT AMONG THE CITY, THE TRUSTEE AND INDEPENDENT LIVING CENTER OF SALINA, A LIMITED PARTNERSHIP. WHEREAS, the City of Salina, Kansas (the "City") is thorized by K.S.A. 12-1740 to 12-1749a, inclusive, as amended he "Act"), to acquire, construct and improve and equip certain cilities (as defined in the Act) for commercial, industrial and nufacturing purposes, and to enter into leases and lease- rchase agreements for said agreements with any person, firm or rporation for said facilities, and to issue revenue bonds for e purpose of paying the cost of any such facilities; and WHEREAS, pursuant to the provisions of the Act, the City authorized to issue revenue bonds of the City, and does hereby f.nd and determine that it is desirable in order to promote, imulate and develop the general economic welfare and prosperity the City and the State of Kansas that the City issue its Mfiltifamily Housing Revenue Bonds (Smoky Hill Terraces Project) ted December 1, 1985 in the aggregate principal amount of 3,300,000 (the "Bonds"), for the purposes of paying the costs purchasing, acquiring, constructing and installing multifamily sidential rental units for the elderly (the "Project"), as more lly described in the Indenture and in -the Lease hereinafter thorized and which Project shall be leased by the City to dependent Living Center of Salina, a limited partnership (the ' enant"); and WHEREAS, the City further finds and determines that it A necessary and desirable in connection with the issuance of sid Bonds to execute and deliver a Trust Indenture dated as of D cember 1, 1985, (the "Indenture"), with Security Bank of Kansas C ty, Kansas City, Kansas as trustee (the "Trustee"), for the p rpose of issuing and securing the Bonds as provided therein and t enter into a Lease dated as of December 1, 1985 (the "Lease"), w th the Tenant pursuant to which the City shall cause the P oject to be purchased and constructed and leased to the Tenant i consideration of rental and other payments (the "Rentals") p ovided for therein. The City shall also enter into a Land Use R striction Agreement dated as of December 1, 1985 with the T ustee and the Tenant (the "Land Use Restriction Agreement") imposing restrictions on the use of the Project. NOW, THEREFORE, BE IT ORDAINED BY THE GOVERNING BODY OF THE CITY OF SALINA, KANSAS AS FOLLOWS: Section 1. Definition of Terms. All terms and phrases n t otherwise defined herein shall have the respective meanings sit forth in the Indenture and Lease herein authorized. Section 2. Authority to Acquire the Project. The City i hereby authorized to acquire the real property described in p ragraph (a) of Schedule I attached to this Ordinance and made a p rt hereof, together with the buildings, improvements, machinery Mid equipment described in paragraph (b) of Schedule I, all of t e property, both real and personal, described in paragraphs (a) a d (b) of Schedule I being sometimes hereinafter referred to as t e "Project", in accordance with the provisions contained herein a d in the Lease, which Lease is authorized by this Ordinance, all at a cost to be paid by the City from the proceeds of the Binds herein authorized. Section 3. Authorization of and Security for the Bonds. The Bonds are being issued for the purpose of providing funds to pay the cost of acquiring, purchasing, constructing and i stalling the Project. The Bonds shall be dated and bear i terest, shall mature and be payable at such times, shall be in s ch form, shall be subject to redemption and payment prior to t e maturity thereof, and shall be issued in the manner p escribed and subject to the provisions, covenants and areements set forth in the Indenture. The Bonds shall be p yable solely from the revenues derived by the City pursuant to t e Lease, or otherwise in connection with the Project. The B nds shall not be general obligations of or constitute a pledge o the faith and credit of the City within the meaning of a c nstitutional or statutory provision and shall not be payable in arky manner from tax revenues. Section 4. Authorization of.Indenture. The City is h reby authorized to enter into the Indenture under which the C ty shall pledge and assign to the Trustee, for the benefit of L 1 1 holders of the Bonds, the Trust Estate created thereby, all n the terms and conditions set forth in the Indenture. Section S. Description and Details of the Bonds. There all be initially issued and secured pursuant to this Ordinance d the Indenture a series of bonds in the aggregate principal ount of $13,300,000 for the purpose of providing funds to able the Issuer to acquire, construct, install and equip ltifamily residential rental units for the elderly. The Bonds all be designated the "City of Salina, Kansas Multifamily using Revenue Bonds (Smoky Hill Terraces Project)". The Bonds all be dated December 1, 1985, and shall bear interest from cember 1, 1985 until December 1, 1988 or until an Credit cility Effective Date as hereinafter provided in Section 10. terest on the Bonds is payable June 1, 1986 and semiannually on ch June 1 and December 1 thereafter (the "Interest Payment tes"). Payment of the principal and premium, if any, on all nds will be payable at the principal office of the Trustee by eck or draft upon presentation and surrender of such Bonds as e same respectively become due and payable at the principal rporate trust office of the Trustee. Interest on the Bonds 11 be payable by check or draft mailed by the Trustee to the gistered Owners thereof as of the record date for such payment. The Bonds shall be subject to redemption as provided in ction 6 of this Ordinance; provided, however, commencing on cember 1, 1988 or an Credit Facility Effective Date prior ereto those Bonds subject to mandatory sinking fund redemption y be remarketed with fixed maturities which correspond to such ndatory sinking fund redemptions. The Bonds are subject to Special Remarketing Tender at r on December 1, 1988; provided, however, each Owner shall have e right to have his Bonds excluded from the Special Remarketing nder by providing written notice of such election to the ustee. After each Credit Facility Effective Date, the Bonds 11 bear at such fixed or variable rate or rates of interest and all have such tender, redemption and other terms and provisions shall be set forth in the Notice of Credit. Facility Tender as ovided in Section 9. The Bonds are subject to an initial Credit Facility nder at par on an Credit Facility Effective Date on or prior to cember 1, 1988, and on each Credit Facility Effective Date bsequent thereto, all as provided in the Indenture; provided, wever, that the Owner of each Bond has the right to have his nd excluded from each such Credit Facility Tender by providing itten notice of such election to the Trustee as provided in ction 10. The proceeds of the Bonds shall be invested initially in certificate(s) of deposit, an investment agreement(s) or other 3. 1 1 i strument(s) of guarantee (the "Initial Investments") and held ais security by the Trustee in amounts and at yields sufficient to p ovide revenues to pay principal of and interest on the Bonds t rough December 1, 1988, including the price on Special Rmarketing Tender. The Tenant must provide Credit Facility to t e Trustee as a condition precedent to liquidating and utilizing a 1 or a portion of the Initial Investments and subsequently p ying Construction Costs of the Project. Payments of Rentals u der the Lease, together with investment income on the Funds h ld under the Indenture, pending any disbursements, are s heduled to be sufficient to pay principal of, premium, if any, aid interest on the Bonds. Sction 6. Initial Investments - Credit Facility. Initially, t e proceeds of the Bonds, after payment of Financing Costs (as d fined in the Indenture) and certain Project development costs, s all be invested in the Initial Investments in amounts and at y elds sufficient to provide revenues to pay principal of, p emium, if any, and interest on the Bonds up to and including D cember 1, 1988, including the price on Special Remarketing Tinder. The Initial Investments may not be transferred, 1quidated or sold by the Trustee until such time as the payment o principal of, premium, if any, and interest on the Bonds is s cured by an investment agreement, letter of credit, insurance P licy, guarantee or other credit enhancement device ("Credit F cility") provided to the Trustee; provided, however, that C edit Facility may be accepted by the Trustee only if prior t ereto, the Trustee and the Issuer has received (i) a written o inion of Bond Counsel that the interest paid on the Bonds to be r marketed after the Credit Facility is received will be exempt f om federal income taxation; (ii) a written opinion of B nkruptcy Counsel that the Credit Facility and the Bonds secured t ereby are not and will not constitute an "avoidable preference" u der the United States Bankruptcy Code; and (iii) written confirmation from a nationally recognized rating agency that the Credit Facility has at least an "A" rating. At the time an Credit Facility has been provided to the Trustee, the Bonds will be subject to an Credit Facility Tender; ovided, however, that the Owner of each Bond has the right to hve his Bonds excluded from such Credit Facility Tender by oviding written notice of such election to retain to the T ustee. The Initial Investments will, in case Credit Facility is t provided, generate sufficient Revenues, together with other neys held in the Bond Fund available therefor, to make all Bond terest and principal payments through December 1, 1988. The Bonds are subject to Special Remarketing Tender on cember 1, 1988; provided, however, each Owner shall have the ght to have his Bonds excluded from the Special Remarketing 4. M Tinder by providing written notice of such election to retain to t e Trustee. Section 7. Redemption and Payment of Bonds Prior to M turit . The Bonds shall be subject to extraordinary mandatory r demption prior to maturity at the principal amount thereof plus a crued interest, if any, to the date of redemption, and, without p emium, as follows: (a) In whole upon default of any Rentals under the Lase, on the first Bond Interest Payment Date occurring after D cember 1, 1988 and which is at least (60) days after such f reclosure or acceleration. (b) At the option of the Bank, in whole on any Interest P yment Date immediately following an event of default under the C edit Facility Agreement. (c) In whole, on any Interest Payment Date, on or after t e earlier of the December 1, 1988 or the Credit Facility E fective Date, upon the damage, destruction or condemnation of t e Project to the extent any insurance or condemnation proceeds a e not applied to repair or restore the Project and the Company d termines it will not be feasible to repair or restore the P oject to operation in an economically viable manner within t elve (12) months after the damage, destruction or condemnation. (d) In whole in the event of a Determination of T xability which occurs after December 1, 1988. "Determination ol Taxability" shall be defined as the issuance of a statutory n tice of deficiency by the Internal Revenue Service, or a ruling o the National Office or any District Office of said Service, or a final decision by any court of competent jurisdiction that i terest on the Bond is includable in the gross income of the r cipient under Section 103 of the Internal Revenue Code of 1954, a amended (the "Code"") as in effect at the date of issuance of de Bonds, and regulations thereunder for any reason other than t at the Owner of the Bond is a "substantial user" or a "related p rson" within the meaning of Section 103 (b) (13) of the Code. (e) Upon the expiration of the Credit Facility to the e tent that the Credit Facility has not been renewed or extended or another Credit Facility has not been provided to the Trustee. (f) Title to, or the temporary use for a period of six ( ) consecutive months or more of, all or substantially all the P oject, or such part thereof as shall materially interfere, in t e Trustee's judgment, with the operation of the Project for the rpose of a "residential rental project" within the meaning of S ction 103 (b) (4) (A) of the Code, shall have been taken under t e exercise of the power of eminent domain by any governmental b dy or by and person acting under governmental authority ( ncluding such a taking or takings as results in the Tenant Jb ing thereby prevented from carrying on its normal operations at t e Project for a period of six (6) consecutive months or more). 5. 1 1 Section 8. Mandatory Redemption. The Bonds maturing on Jd after December 1, 1989 shall be subject to Mandatory Sinking f nd redemption as follows: December 1 of the Year 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Principal Amount $180,000 195,000 210,000 220,000 240,000 255,000 270,000 290,000 310,000 330,000 335,000 10,445,000 Section 9. Special Remarketing Tender. The Bonds are s bject to a Special Remarketing Tender on December 1, 1988; p ovided, however, each Owner shall have the right to have his Binds excluded from the Special Remarketing Tender by providing w itten notice of such election to retain to the Trustee. The Ntice of Special Remarketing Tender will be sent to all r gistered Owners of the Bonds on November 1, 1988. Such Notice o Special Remarketing Tender shall state that Credit Facility h s not been provided, the name of the Tender Agent to which B nds must be delivered pursuant to the Indenture and that the t en existing rating on the Bonds will not be maintained after D cember 1, 1988, the interest rate, tender, redemption and other p ovisions as shall apply to the Bonds after the Special R marketing Tender Date. Bonds not excluded from the Special R marketing Tender shall be deemed tendered at par on December 1, 1 88. Section 10. Credit Facility Tender. The Bonds are S bject to an Credit Facility Tender on each Credit Facility E fective Date at par plus accrued interest through the Credit F cility Effective Date; provided, however, the Owner of each B nd has the right to have his Bonds excluded from such Credit F cility Tender by providing written notice of such election to r tain to the Trustee. The Notice of Credit Facility Tender will b sent to all registered Owners of the Bonds upon delivery of t e Credit Facility to the Trustee, which date shall be at least t irty (30) days prior to the Credit Facility Effective Date. S ch Notice of Credit Facility Tender shall state the nature and a ount of the Credit Facility, the fixed or variable rate or r tes of interest the Bonds will bear up to and including the i ediately subsequent Credit Facility Effective Date, the date o such Credit Facility Effective Date, the redemption, tender a d other provisions as shall apply to the Bonds up to and i cluding such Credit Facility Effective Date, the name of the 6. 7. T nder Agent to which Bonds must be delivered pursuant to the I denture and that the then existing rating on the Bonds will not bd effective after such Credit Facility Effective Date. Written n tice of each registered Owners intention to be included or ecluded from the Credit Facility Tender must be received in w iting by the Trustee or, if other than the Trustee, the Tender A ent, at least seven (7) days prior to the Credit Facility E fective Date. The Credit Facility together with other funds m de available by the Developer must be sufficient to pay all B nds remarketed on December 1, 1988 and on each Credit Facility Effective Date thereafter. Section 11. Partial Redemption. If less than all of t e Outstanding Bonds are called for redemption at one time, if t ere is more than one maturity, the Bonds shall be called in s ch manner as is requested by the Tenant (with the consent of t e provider of Credit Facility which consent shall not be withheld unreasonably) and if less than all of the Outstanding B nd of one maturity are to be redeemed, or if there is only one m turity, the selection of such Bonds, or portions thereof in a ounts of the minimum denomination or any integral multiple t ereof, of such maturity to be called shall be made by lot the T ustee in such manner as the Trustee may determine. In the case o a partial redemption of Bonds when Bonds of denominations g Wit eater than the minimum denomination are then Outstanding, each of face value of the minimum denomination thereof shall be t eated as though it were a separate Bond of the minimum d nomination. If it is determined that one or more, but not all o the minimum denomination units represented by any such Bond a e to be called for redemption, then upon notice of intention to r deem such minimum denomination unit or units, the Holder of s ch Bond shall surrender such Bond to the Trustee (a) for p yment of the redemption price (including the premium, if any, a d accrued interest to the date fixed for redemption) of the u it or units of face value of the minimum denomination called Ur redemption, and (b) for exchange, without charge to the H lder thereof, for a new Bond or Bonds of the same interest rate a d the same maturity and of any authorized denomination or d nominations in the aggregate principal amount of the unredeemed b lance of such Bond. Section 12. Purchase in Lieu of Redemption. Wholly or p rtially in lieu of any tender or mandatory redemption of the B nds, the Trustee may apply moneys on deposit in the Bond Fund t the purchase of Outstanding Bonds of the maturity or mturities to be redeemed at a price not exceeding the tender or r demption price of the Bonds purchased, including interest and p emium, if any, to the tender or redemption date, all in such m nner as the Trustee shall determine at any time prior to the gi.ving of a notice of tender or redemption. Section 13. Notice of Redemption. Under the Indenture, n tice of the call for redemption is to be given by mailing a c py of the redemption notice not less than thirty (30) days 7. p for to the date fixed for redemption to the registered owner of e ch of the Bonds to be redeemed. Neither a failure to give n tice nor any defect therein will affect the validity of any p oceeding for redemption. Notices will be conclusively deemed to be duly given, whether or not received. Section 14. Transfer and Exchange and Ownership of Bnds. So long as any of the Bonds remain Outstanding, the City w 11 cause to be maintained and kept, at the Principal Office of t e Trustee as Bond Registrar, books for the registration and t ansfer of Bonds as provided in this Indenture. The Trustee a cepts the aforementioned obligations and duties pursuant to the t rms of this Indenture. 8. Bonds, upon presentation and surrender thereof at the p incipal office of the Trustee as Bond Registrar or the d signated office of any Authenticating Agent, together with an a signment duly executed by the Owner or his duly authorized a torney in such form as shall be satisfactory to the Bond R gistrar or Authenticating Agent, may, at the option of the 0 ner, be exchanged for Bonds of any authorized denomination in t e aggregate principal amount not exceeding the unmatured and u redeemed principal amount of such Bonds, and bearing interest a the same rate and maturing on the same date. Any Bond may be transferred only upon the Bond Register, upon presentation and surrender thereof at the principal office A the Trustee as Bond Registrar or, at the option of the Owner, at the designated office of any Authenticating Agent, together w th an assignment duly executed by the Owner or his duly a thorized attorney in such form as shall be satisfactory to the B nd Registrar or Authenticating Agent, the City shall execute in t e name of the transferee, and the Bond Registrar or any other A thenticating Agent shall authenticate and deliver, a new Bond o Bonds of any authorized denomination, in aggregate principal a ount equal to the unmatured and unredeemed principal amount of s ch Bond, and bearing interest at the same rate and maturing on the same date. In all cases in which Bonds shall be exchanged or t ansferred hereunder, the City shall execute and the Bond R gistrar or any other Authenticating Agent shall authenticate a d deliver Bonds in accordance with the provisions of this I denture. Such exchange or transfer shall be without charge, e cept that the City and Bond Registrar or Authenticating Agent y make a charge for every such exchange or transfer of Bonds s fficient to reimburse them for any tax, fee or other g vernmental charge required to be paid with respect to such e change or transfer and such charge or charges shall be paid fore any such new Bond shall be delivered. Charges of the T ustee or any other Authenticating Agent incurred in connection th the transfer of any Bonds shall be billed to the Tenant. 1 Bonds issued upon any transfer or exchange of Bonds shall be t e valid obligations of the City, evidencing the same debt, and 8. eiltitled to the same benefits under this Indenture, as the Bonds s =rendered upon such transfer or exchange. Neither the City, t e Bond Registrar nor any other Authenticating Agent shall be r quired to make any such exchange or transfer of any Bond during a period beginning at the opening of business fifteen (15) days b fore the day of the mailing of a notice of redemption of Bonds a d ending at the close of business on the day of such mailing or U transfer or exchange any Bonds selected for redemption in w ole or in part. Except as provided in Section 3.05 of the Indenture, the p rson in whose name any Bond shall be registered shall be deemed a d regarded as the absolute Owner thereof for all purposes of t is Indenture, and payment of or on account of the principal of, pemium, if any, and interest on any such Bond shall be made only t or upon the order of such person or his duly authorized a torney in such form as shall be satisfactory to the Bond R gistrar, and neither the City, the Bond Registrar nor any other P ying Agent shall be affected by any notice to the contrary, but s ch registration may be changed as hereinabove provided. All - s ch payments shall be valid and effective to satisfy and d scharge the liability upon such Bond, including the interest t ereon, to the extent of the sum or sums so paid. 9. 1b In case any Bond is redeemed in part only, the City, on o after the redemption date and upon presentation and surrender o such Bond, shall cause execution of, and the Trustee or any other Authenticating Agent shall authenticate and deliver, a new B nd or Bonds in authorized denominations and in aggregate p incipal amount equal to the unredeemed principal amount of such B nd, and bearing interest at the same rate and maturing on the s me date. Section 15. Execution and Authentication of Bonds. (a) The Bonds shall be executed on behalf of the City b the manual or facsimile signature of the Mayor, Vice Mayor or Pesident of the Council, as the case may be, and attested by the m nual or facsimile signature of its City Clerk, Deputy or A sistant City Clerk, and shall have the corporate seal of the C ty affixed thereto or imprinted thereon. In case any officer w ose signature or facsimile thereof appears on any Bonds shall c ase to be such officer before the delivery of such Bonds, such s gnature or facsimile thereof shall nevertheless be valid and s fficient for all purposes, the same as if such person had r mained in office until delivery. Any Bond may be signed by s ch persons as at the actual time of the execution of such Bond s all be the proper officers to sign such Bond although on the d to of such Bond such persons may not have been such officers. (b) The Bonds shall have endorsed thereon a Certificate o Authentication, which shall be manually executed by the T ustee. No Bond shall be entitled to any security or benefit u der this Indenture or shall be valid or obligatory for any 9. 1b I I prpose unless and until such Certificate of Authentication shall h ve been duly executed by the Trustee. Such executed C rtificate of Authentication upon any Bond shall be conclusive e idence that such Bond has been duly authenticated and delivered Oder this Indenture. The Certificate of Authentication on any B nd shall be deemed to have been duly executed if signed by any a thorized officer or employee of the Trustee, but it shall not b necessary that the same officer or employee sign the C rtificate of Authentication on all of the Bonds that may be i sued hereunder at any one time. Section 16. Form of Bonds. The Bonds and the C rtificates shall be in substantially the following form: 10. ISTERED EXHIBIT A (BOND FORM) CITY OF SALINA, KANSAS ltifamily Housing Revenue Bonds, (Smoky Hill Terraces Project) I terest Rate Maturity Date: Dated: CUSIP: % December 1, 2000 December 1, 1985 Te City of Salina, Kansas, a municipal corporation (the ofssuer"), organized and existing under the Constitution and laws o the State of Kansas, for value received, hereby promises to p y (but only out of Revenues described in the Trust Indenture h reinafter defined), to the registered Owner hereof (named a ove) or registered assigns on the Maturity Date (set forth a ove), unless this Bond shall be called for earlier redemption o tendered prior to maturity, as provided in the Trust I denture, and to pay from the Revenues interest thereon on each J ne 1 and December 1 commencing June 1, 1986 ("Interest Payment D to") at the rate per annum shown above or such other fixed or v riable rate or rates as specified in the Notice of Credit F cility Tender hereinafter described, until the principal sum is p id or has been provided for. This Bond will bear interest from t e most recent Interest Payment Date to which interest has been p id or duly provided for or, if no interest has been paid, from t e Dated Date (as set forth above). The principal of and p emium, if any, on this Bond shall be paid upon presentation and s rrender hereof at the principal corporate trust office of the T ustee, currently Security Bank of Kansas, Kansas City, Kansas, a trustee (the "Trustee"). The Bonds are subject to mandatory s nking fund redemption, as more fully described in the I denture; provided, however, that those Bonds subject to such m ndatory sinking fund redemption, commencing on the earlier of t e Initial Credit Facility Effective Date, or the Special R marketing Tender Date, may be remarketed with fixed maturities c rresponding to such mandatory sinking fund redemptions. I terest on this Bond will be paid on each Interest Payment Date b check or draft mailed to the person in whose name this Bond is r gistered ("Holder" or "Bondholder") on the registration books o the Issuer maintained by the Trustee and at the address a pearing thereon at the close of business on the fifteenth day p eceding such Interest Payment Date (the "Regular Record Date") o7 at the option of any Holder of $1,000,000 or more in aggregate p incipal amount of Bonds, by wire transfer to the account on f le with the Trustee on such Regular Record Date. Any such 11. REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF IS BOND SET FORTH ON THE REVERSE HEREOF AND SUCH PROVISIONS ALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH It is hereby certified and recited that all acts and c nditions necessary to be done or performed by the Issuer or to hiive happened precedent to and in the issuing of the Bonds in order to make them legal, valid and binding special obligations o the Issuer in accordance with their terms, and precedent to and in the execution and delivery of the Indenture and the Agreement, have been performed and have happened in regular and e form as required by law; that payment in full for the Bonds s been received; and that the Bonds do not exceed or violate y constitutional or statutory limitation. IN WITNESS WHEREOF, the Issuer has caused this Bond to executed in its name by the manual or facsimile signature of Us Mayor and its Clerk and has caused this Bond to be imprinted with its seal or a facsimile thereof. ssuer Seal] nald L. Harrison, Cler CITY OF SALINA By: Merle A. Hodges, Mayor 12. i terest not so timely paid or duly provided for shall cease to b payable to the person who is the Holder hereof as of the R gular Record Date, and shall be payable to the person who is t e Holder at the close of business on a Special Record Date for te payment of such defaulted interest. Such Special Record Date s all be fixed by the Trustee whenever moneys become available f r payment of the defaulted interest, and notice of the Special R cord Date shall be given to Bondholders not less than ten days p for thereto. The principal of and premium, if any, and i terest on this Bond are payable in lawful money of the United S ates of America without deduction for the services of the P ying Agent. THE BONDS ARE PAYABLE SOLELY FROM REVENUES (AS DEFINED D AS PROVIDED IN THE TRUST INDENTURE) AND ARE NOT IN ANY SPECT A GENERAL OBLIGATION OF THE ISSUER OR THE STATE OF KANSAS R ARE THE BONDS PAYABLE IN ANY MANNER FROM REVENUES RAISED BY T XATION. REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF IS BOND SET FORTH ON THE REVERSE HEREOF AND SUCH PROVISIONS ALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH It is hereby certified and recited that all acts and c nditions necessary to be done or performed by the Issuer or to hiive happened precedent to and in the issuing of the Bonds in order to make them legal, valid and binding special obligations o the Issuer in accordance with their terms, and precedent to and in the execution and delivery of the Indenture and the Agreement, have been performed and have happened in regular and e form as required by law; that payment in full for the Bonds s been received; and that the Bonds do not exceed or violate y constitutional or statutory limitation. IN WITNESS WHEREOF, the Issuer has caused this Bond to executed in its name by the manual or facsimile signature of Us Mayor and its Clerk and has caused this Bond to be imprinted with its seal or a facsimile thereof. ssuer Seal] nald L. Harrison, Cler CITY OF SALINA By: Merle A. Hodges, Mayor 12. Certificate of Authentication This Bond is one of the Bonds described in the within - m ntioned Indenture. D to of Registration a d Authentication: Uj SECURITY BANK OF KANSAS CITY, as Trustee By: Authorized Officer 13. (FORM OF REVERSE OF BOND) This Bond is one of an issue of Bonds in an aggregate p incipal amount of $13,300,000, authorized and issued pursuant t a trust indenture, dated as of December 1, 1985 (the ndenture") between the Issuer and the Trustee, for the purpose o providing funds to lend to enable the Issuer to finance the c sts of acquisition, construction, installation and equipping of a multifamily residential rental project within the meaning of Sction 103(b)(4)(A) of the Internal Revenue Code of 1954, as a ended, consisting of a continuing care retirement complex (the ofroject"). The Project shall then be leased to Independent L ving Center of Salina, a Kansas and Kentucky limited p rtnership (the "Company") pursuant to a certain Lease Agreement d ted as of December 1, 1985 (the "Lease Agreement") between the I suer and the Company. Pursuant to the Lease Agreement, the C mpany has agreed to make or cause to be made payments s fficient to pay the principal of, premium, if any, and interest o all Bonds issued under the Indenture. The term "Trustee" as used herein refers to said Trustee o any successor Trustee appointed pursuant to the Indenture. Tie Indenture and the other documents herein described are on H61e in the offices of the Issuer and the Trustee. Reference is h reby made to the Indenture for a more complete description of te provisions, among others, with respect to the nature and e tent of the security, the rights, duties and obligations of the I suer, the Trustee and the Holders of the Bonds, and the terms a d conditions upon which the Bonds are issued and secured, to a 1 of the provisions of which Indenture, each Holder, by the a ceptance hereof, assents. The Bonds are issued pursuant to the laws of the State Kansas, and to an Ordinance duly adopted by the Issuer. The incipal of, premium, if any, and interest on the Bonds are yable solely from the Revenues as defined and as provided in e Indenture and are not in any respect a general obligation of e Issuer nor are the Bonds payable in any manner from revenues ised by taxation. The City of Salina, Kansas shall not in any ent be liable for the payment of the principal of, premium, if y, or interest on the Bonds, or for the performance of any edge, mortgage, obligation or agreement of any kind whatsoever ich may be undertaken by the Issuer, and none of the Bonds or y of the Issuer's agreements or obligations thereunder shall be nstrued to constitute an indebtedness of the City of Salina, nsas within the meaning of any constitutional or statutory ovision whatsoever. The Bonds are issuable solely as fully registered bonds ii the denominations of $5,000 and any integral multiple thereof -aid are exchangeable for fully registered Bonds of other nominations in equal aggregate principal amounts and -in thorized denominations at the aforesaid office of the Trustee, 14. bit only in manner, subject to the limitations and on payment of the charges provided in the Indenture. This Bond is transferable by the Holder in person or by h s attorney duly authorized in writing at the principal ccirporate trust office of the Trustee as Bond Registrar upon presentation and surrender hereof to the Trustee, all subject to the terms and conditions provided in the Indenture. Extraordinary Mandatory Redemption. The Bonds are subject to extraordinary mandatory redemption at the principal ariount,thereof plus accrued interest thereon to the date of redemption, and without premium, as described below: (a) In whole upon default in the payment of rentals under the Lease, on the first Interest Payment Date occurring after the Special Remarketing Tender Date and which is at least (60) days after such foreclosure or acceleration. (b) At the option of the institution furnishing Credit Facility, in whole on any Interest Payment Date immediately following an event of default under the applicable agreement between the Company and such institution. (c) In whole, on any Bond Interest Payment'Date, on or after the earlier of the Special Remarketing Tender Date or an Credit Facility Effective Date, as defined in the Indenture, upon the damage, destruction or condemnation of the Project to the extent any insurance or condemnation proceeds are not applied to repair or restore the Project to the extent any insurance of condemnation proceeds are not applied to repair or restore the Project and the Company determines it will not be feasible to repair or restore the Project to operation in an economically viable manner within twelve (12) months after the damage, destruction or condemnation. (d) In whole or in part, as applicable, upon the expiration of the Credit Facility to the extent the Credit Facility has not been renewed or extended or another substitute Credit Facility has not been accepted by the Trustee. (e) In whole, in the event of a Determination of Taxability, as defined in the Indenture, which occurs after December 1, 1988. (f) In whole, in the event title to, or the temporary use for a period of six (6) consecutive months or more of, all or substantially all the Project, or such part thereof as shall materially interfere, in the 15. Trustee's judgment, with the operation of the Project for the purpose of a multifamily "residential rental project" within the meaning of Section 103(b)(4)(A) of the Code, shall have been taken under the exercise of the power of eminent domain by any governmental body or by any person, firm or corporation acting under governmental authority (including such a taking or takings as results in the Company being thereby prevented from carrying on its normal operations at the Project for a period of six (6) consecutive months or more). Optional Redemption. The Bonds are subject to r demption and payment prior to maturity, at the option of the I suer, upon instruction from the Developer, and after the S ecial Tender Date, as a whole at any time, or in part on any I terest Payment Date, at the principal amount thereof, plus a crued interest thereon to the date fixed for redemption and p yment without premium. If the Bonds are remarketed at a fixed r to of interest, the Bonds are subject to optional redemption in t e manner described above five (5) years after the date of such r marketing at the principal amount thereof, plus accrued i terest thereon to the date fixed for redemption, plus a premium n t in excess of six percent (6%) of the principal amount of the B nds so redeemed, which premium shall be reduced by one half of o e percent (2 of 1%) for every full year after the first year. T e amount of Bonds to be redeemed shall be equal to the amount o the optional prepayment of the Developer Note. The Trustee, u on instructions from the Issuer, shall apply moneys in the R serve Fund applicable to such Bonds so redeemed. Rights of redemption of the Bonds shall be exercised by n tice, specifying the Bonds or portions thereof to be called, tie redemption price to be paid, the date fixed for redemption aid the place or places where the amounts due upon such r demption are payable. Such notice, subject to the provisions the Indenture therefor, will be sent by first class mail, stage prepaid, not less than thirty (30) days prior to the date f.xed for redemption to the Holder of each Bond to be redeemed at e address shown on the registration books kept by the ustee. Reference is made to the Indenture for provisions as to ilure to give, or any defect in, such mailed notice. The ustee will not be required to transfer or exchange (i) any Bond ring a period beginning at the opening of business fifteen (15) ys before the day of the mailing of a notice of redemption of nds and ending at the close of business on the day of such fling, or (ii) any Bonds so selected for redemption in whole or ia part. If less than all the Bonds are called for redemption at e time, if there is more than one maturity, they shall be 9lled in such manner as is requested by the Company, as nditioned in the Indenture, and if less than all Outstanding 16. Credit Facility Tender. The Bonds are subject to Credit F cility Tender on each Credit Facility Effective Date, as d fined in the Indenture; provided, however, that the Owner of e ch Bond has the right to have his Bonds excluded from such C B nds of one maturity are called, of if there is only one ection to retain to the Trustee. The Notice of Credit Facility T m turity, the selection of such Bonds, or portions thereof in livery of the Credit Facility, which date shall be at least t a ounts of $5,000 or any integral multiple thereof, to be ch Notice of Credit Facility Tender shall state the nature and r deemed shall be made by lot by the Trustee in such manner as terest the Bonds will bear up to and including the immediately t e Trustee may determine. If the Bonds or portions thereof are bsequent Credit Facility Effective Date, the redemption, tender d ly called for redemption and if on such redemption date moneys e date of such subsequent Credit Facility Effective Date, the f r the redemption thereof, together with interest thereon to the rsuant to the Indenture and that the existing rating on the r demption date, shall be held by the Trustee so as to be Written notice of each registered Owner's intention to be a ailable therefor, then from and after such redemption date such ceived in writing by the Trustee at least ten (10) days prior B nds or portions thereof shall cease to bear interest, and such ection to retain is not in effect will be remarketed by the B nds or portions thereof no longer shall be protected by, and s all not be deemed to be outstanding under the Indenture. Special Remarketing Tender. The Bonds are subject to Secial Remarketing Tender on December 1, 1988; provided, h wever, each Owner shall have the right to have his Bonds e cluded from the Special Remarketing Tender by providing written n tice of such election to retain. Notice of Special Remarketing Tinder will be sent to all registered Owners of the Bonds on N vember 1, 1988. Such Notice of Special Remarketing Tender s all state that Credit Facility has not been provided, that the e isting rating on the Bonds will not be maintained after D cember 1, 1988, the name of the Tender Agent to which Bonds m t st be tendered pursuant to the Indenture, the interest rate, nder redemption interest and other provisions as shall apply to t e Bonds after the Special Remarketing Tender Date. Such Bonds n t tendered on the Special Remarketing Tender Date shall be d emed tendered at par on December 1, 1988. Credit Facility Tender. The Bonds are subject to Credit F cility Tender on each Credit Facility Effective Date, as d fined in the Indenture; provided, however, that the Owner of e ch Bond has the right to have his Bonds excluded from such C edit Facility Tender by providing written notice of such e ection to retain to the Trustee. The Notice of Credit Facility T nder will be sent to all registered Owners of the Bonds upon d livery of the Credit Facility, which date shall be at least t irty (30) days prior to each Credit Facility Effective Date. ch Notice of Credit Facility Tender shall state the nature and ount of Credit Facility, the fixed or variable rate or rates of i terest the Bonds will bear up to and including the immediately bsequent Credit Facility Effective Date, the date of such bsequent Credit Facility Effective Date, the redemption, tender d other terms and provisions as shall apply to the Bonds up to e date of such subsequent Credit Facility Effective Date, the me of the Tender Agent, to which Bonds must be tendered rsuant to the Indenture and that the existing rating on the nds will not be maintained after the Credit Facility Effective late. Written notice of each registered Owner's intention to be cluded from or included in the Credit Facility Tender must be ceived in writing by the Trustee at least ten (10) days prior the Credit Facility Effective Date. All Bonds for which an ection to retain is not in effect will be remarketed by the marketing Agent pursuant to the Indenture. The Credit Facility 17. 1 t gether with other funds made available by the Company must be s fficient to pay all Outstanding Bonds as of each Credit F cility Effective Date and if not so sufficient the Credit Fcility will not be accepted and such Tender will not be made. T e Bonds tendered on the initial Credit Facility Effective Date w 11 be purchased with the Initial Investments and proceeds of t e remarketing of the Bonds, and on each subsequent Credit F cility Effective Date, if any, such Bonds shall be purchased w th proceeds of the contemporaneous remarketing of the Bonds and a ounts drawn under the expiring Credit Facility. The Indenture permits certain amendments or supplements t the Agreement and various related documents not prejudicial to t e Bondholders to be made with the consent of the Trustee, but without the consent of or notice to the Bondholders and other amendments or supplements thereto (with certain exceptions as povided in the Indenture) to be made with the consent of the H lders of not less than 66-2/3% in aggregate principal amount of tie Bonds at the time outstanding. If an Event of Default, as defined in the Indenture, s all occur, the principal of Bonds then outstanding may be d clared due and payable in the manner and with the effect p ovided by the Indenture, but subject to waiver of such Event of D fault or annulment of such declaration as provided in the I denture. The Bonds shall not constitute the personal obligation, e ther jointly or severally, of the members of the governing body or any other officer, official, employee or agent of the Issuer. This Bond shall not be entitled to any security or nefit under the Indenture or become valid or obligatory for any rpose until the certificate of authentication hereon shall have en signed by the Trustee. 18. I (FORM OF ASSIGNMENT) Assignment For value received, the undersigned hereby sells, a signs and transfers unto the within B nd and does hereby irrevocably constitute and appoint , attorney to transfer the said Bond o the books kept for registration of the within Bond and all r ghts hereunder, with full power of substitution in the p emises. D ted: S gnature Guaranteed: tice: The assignor's signature to this assignment must correspond with the name as it appears upon the face of the within Bond in every particular, without alteration or any change whatever. 19. (1) Bond Fund - an amount equal to interest accrued, if on the Bonds. (2) Reserve Fund - an amount equal to the Reserve R quirement. (3) Construction Fund - the remainder of the proceeds and all other moneys from time to time deposited with the T ustee. Section 19. Operations of Funds Construction Fund (A) Disbursements. The moneys in the nstruction Fund shall be disbursed as follows: (1) In the case of Financing Costs, the Trustee shall disburse moneys in the Construction Fund only upon receipt by the Trustee of a requisition signed by the Tenant setting forth the amounts to be disbursed for payment or reimbursement of Financing Costs and the persons to whom said amounts are to be disbursed, stating that the amounts to be disbursed are for Financing Costs properly chargeable to the Construction Fund. (2) Until Credit Facility has been provided to the Trustee, no disbursements may be made for Construction Costs; provided, however, if on the date of calculation by the Trustee, moneys in the Reserve Fund together with the income thereon; plus other moneys available in the Bond Fund, are in excess of the amount required to pay principal of and interest on the Bonds up to and including the Special Remarketing Tender Date, such excess moneys 20. Section 17. Authentication, Execution and Delivery of tie Bonds. The Mayor and City Clerk are hereby authorized and directed to prepare and execute the Bonds herein authorized, in tie manner hereinbefore specified, and to obtain their a thentication by the Trustee and to cause said Trustee to d liver said Bonds to the Matthews & Wright, Inc., on payment of t e purchase price therefor. The Trustee shall authenticate the B nds and deliver the same as provided above. Section 18. Funds and Revenues; Creation of Funds and T eir Application. The Indenture creates the following Funds w ich are to be held by the Trustee: (a) Bond Fund; (b) Reserve Find; and (c) Construction Fund. The following is a summary of s ch Funds and the operation thereof. Application of Funds Proceeds: The proceeds from the s le of the Bonds shall be applied and held by the Trustee in the F nds as follows: (1) Bond Fund - an amount equal to interest accrued, if on the Bonds. (2) Reserve Fund - an amount equal to the Reserve R quirement. (3) Construction Fund - the remainder of the proceeds and all other moneys from time to time deposited with the T ustee. Section 19. Operations of Funds Construction Fund (A) Disbursements. The moneys in the nstruction Fund shall be disbursed as follows: (1) In the case of Financing Costs, the Trustee shall disburse moneys in the Construction Fund only upon receipt by the Trustee of a requisition signed by the Tenant setting forth the amounts to be disbursed for payment or reimbursement of Financing Costs and the persons to whom said amounts are to be disbursed, stating that the amounts to be disbursed are for Financing Costs properly chargeable to the Construction Fund. (2) Until Credit Facility has been provided to the Trustee, no disbursements may be made for Construction Costs; provided, however, if on the date of calculation by the Trustee, moneys in the Reserve Fund together with the income thereon; plus other moneys available in the Bond Fund, are in excess of the amount required to pay principal of and interest on the Bonds up to and including the Special Remarketing Tender Date, such excess moneys 20. may be disbursed for Construction Costs. The Initial Investment and income thereon shall be applied to pay principal of and interest, on the Bonds up to and including December 1, 1988 and to the extent in excess thereof, such excess moneys may be disbursed for Construction Costs. (3) After Credit Facility has been provided to the Trustee, the Trustee shall liquidate the Initial Investment and shall disburse the proceeds thereof from time to time upon receipt by the Trustee of a requisition signed by the Tenant and approved by the provider of Credit Facility (a) states with respect to each disbursement to be made: (i) the requisition number, (ii) the name and address of the Person to whom payment is due, which may be the City on behalf of the Tenant, in the case of a requisition requesting reimbursement for Construction Costs previously paid by the City on behalf of the Tenant, (iii) the amount to be disbursed, (iv) that each obligation mentioned therein has been properly incurred, and is a proper charge against the Construction Fund and has not been the basis of any previous disbursement; (v) that at least 90% of the amount of such disbursement, together with all other disbursements theretofore made from the Construction Fund, has been used (a) for payment of amounts incurred after the Date of Official Action, for the acquisition of land or properly of a character subject to the allowance for depreciation incurred after the Date of Official Action, which are, for federal income tax purposes, chargeable to the Projects capital account or would be so chargeable either with a proper election or but for a proper election to deduct such amounts; and; and (b) specifies in reasonable detail the nature of the obligation; and (c) is accompanied by bill or statement of account for each obligation and that no more than 25% of the amount of such disbursement, together with all other disbursements theretofore made from the Construction Fund, has been used to acquire the Project Realty. (4) Credit Facility is provided to the Trustee on or prior to December 1, 1988, all of the proceeds received by the Trustee from a remarketing of the Bonds and net used to purchase Bonds tendered or deemed tendered will be deposited in the Construction Fund and used to construct the Project. 21. (B) Transfers of Unexpended Proceeds. Upon the earlier of (1) of the Completion Date, or (2) December 1, 1988, the Trustee shall retain in the Construction Fund such amount as shall be specified in written notice filed with the Trustee by the Tenant to be required to pay Construction Costs incurred but not yet paid, and the Trustee shall withdraw and transfer to the Bond Fund the balance of moneys in the Construction Fund. Thereafter all amounts so retained in the Construction Fund but not subsequently used and the notice of such failure of use of which shall be given to the Tenant by the Trustee, shall be transferred to the Bond Fund and applied to redeem Bonds. However, only such amounts may be so retained after December 1, 1988 that are not required to pay the principal of an interest on the Bonds due on said date. Upon filing with the Trustee of an opinion of Bond Cunsel to the effect that the tax-exempt status of the Bonds w 11 not be affected thereby, the construction period specified a ove can extend beyond December 1, 1988. In that case, all r ferences in the Indenture to that period shall be deemed e panded to such longer period; provided, however, in no event s all this language be construed to permit a Special Remarketing T nder Date subsequent to December 1, 1988. Bind Fund.' A. Application of Moneys. Except to the extent prmitted under the Indenture regarding Surplus Funds, all a ounts in the Bond Fund shall be used and withdrawn by the T ustee solely for the purpose of paying principal of, premium, i any, and interest on the Bonds. B. Initial Investments. The Initial Investments shall be liquidated by the Trustee on such date deemed appropriate by the Trustee, in an amount equal to the principal of and the interest on the Bonds which are tendered on the Special Remarketing Tender Date or an Credit Facility Effective Date prior thereto for which proceeds from the remarketing of the Bonds is not available. The Initial Investments and income thereon shall be transferred to the Bond Fund prior to each Interest Payment Date. C. Rentals. All Rentals by the Tenant under the Lease Agreement shall be deposited in the Bond Fund and used to pay the principal of, premium, if any, and interest on the Bonds. D. Drawing on the Credit Facility Agreement. The Trustee shall on the date set forth in the Credit Facility Agreement draw money under such Agreement in an amount equal to the amount due on each Interest Payment Date or Mandatory Sinking Fund Payment Date and an 22. 4& 1 t t r r s 1 amount equal to any redemption or tender price on the Bonds. Such amounts shall be deposited into the Bond Fund. Reserve Fund. If on any Mandatory Sinking Fund Payment ite or Interest Payment Date, the moneys available in the Bond tnd do not equal the amount of the principal of and interest on ie Bonds then coming due and payable, the Trustee shall apply ie moneys available in the Reserve Fund to make the delinquent rntal payment on behalf of the Developer by transferring the Count necessary for said purpose to the Bond Fund. Upon receipt any payment pursuant to the Credit Facility Agreement with aspect to which moneys have been advanced from the Reserve Fund, [ch payment shall be deposited in the Reserve Fund in an amount rual to such advance. Section 20. Investment of Funds. Moneys in the Funds all be initially invested in the Initial Investments by the ustee. The Initial Investment may not be withdrawn, ansferred, liquidated or sold prior to the Special Remarketing nder Date or an Credit Facility Effective Date prior thereto; d provided further, that all interest earned on the Initial vestments, to the extent not transferred to pay the interest on e Bonds on each Interest Payment Date up to and including cember 1, 1988 shall be reinvested by the Trustee until cember 1, 1988. At all times thereafter, moneys in the Funds all be invested and reinvested by the Trustee in Eligible vestments at the oral (promptly confirmed in writing) direction the Developer. The Trustee may from time to time sell such igible Investments and reinvest the proceeds therefrom in igible Investments. Any such Eligible Investments may be rchased for or sold to the Trustee or any commercial bank filiated with the Trustee. The Trustee shall sell or redeem igible Investments deposited in the respective Funds to produce fficient moneys applicable under the Indenture to and at the mes required for the purposes of paying principal of, premium, any, and interest on the Bonds when due, and shall do so thout necessity for any order on behalf of the Issuer and thout restriction by reason of any such order. An investment de from moneys credited to a Fund shall constitute part of that nd and such Fund shall be credited with all proceeds of sale om such Eligible Investments. 23. Section 21. Covenant to Pay Principal and Interest and ke Other Payments. The City covenants that it will promptly p3ly, or cause to be paid, from funds available for such purposes, e principal of and interest and redemption premium if any, on e Bonds issued under this Ordinance. Section 22. Covenant to Redeem Bonds and to Give ce. Any moneys received by said City or the Trustee for the ose of, or which may be used for the purpose of, paying said rndsprior to their stated date of maturity shall be deposited et forth in the Indenture, as authorized herein. 23. Section 23. Particular Covenants of the City. So long as any of the principal of and interest on the Bonds herein a thorized remain outstanding and unpaid, or until payment t ereof has been provided for, the City covenants with each of t e owners of said Bonds as follows: a. The City as provided herein will, solely from the sources herein provided, pay or cause to be paid all principal of, premium, if any, and interest on the Bonds on the dates, at the places and in the manner provided in the Indenture. b. The City will not pledge or assign the Revenues so as to create or permit to be created any debt, lien or charge thereon on a parity with or superior to the pledge and assignment thereof under the Indenture. C. The Trustee will cause the Indenture and all related documents or instruments relating to the pledge and assignment made by it under the Indenture to secure the Bonds, to be recorded and filed in such manner and in such places as may be required by law in order to fully preserve and protect the security of the Owners of the Bonds and the rights of the Trustee under the Indenture. d. All books and documents in the City's possession relating to the Project and the Revenues shall, at reasonable times and upon due notice, be open to inspection by such accountants or other agents of the Trustee as the Trustee may from time to time designate. e. At reasonable times and under reasonable regulations established by the Trustee, the Bond Register of the City held by the Trustee may be inspected and copied by the Tenant, Bank, the City, the Remarketing Agent or by Owners (or a designated representative thereof) of twenty-five percent (25%) or more in principal amount of Outstanding Bonds. f. The Trustee, in its name or in the name of the 24. City may, for and on behalf of the Bondowners enforce all rights of the City, except for the City's rights to notice or indemnity, and all obligations of the Tenant and Bank under and pursuant to the Financing Documents, whether or not the City is in default in the pursuit or enforcement of such rights and obligations. However, the Tenant shall do all things and take all actions on its part necessary to comply with obligations, duties and responsibilities on its part under the City Documents and will take all actions within its authority 24. to keep the Financing Documents in effect in accordance with the terms thereof. g. Notwithstanding any other provision hereof or of any other instrument, neither the City nor the Tenant will knowingly make an investment or other use of the proceeds of the Bonds or other moneys held hereunder which would cause the Bonds to be arbitrage bonds under Section 103(c) of the Code. h. The City, the Trustee and the Tenant hereby covenant that in accordance with the Land Use Restriction Agreement, the Project will continuously comply with all of the requirements of Section 103(b)(4)(A) of the Code and the limitations applicable to the expenditure and investment of the proceeds of the Bonds and that the City will, in accordance with the terms and conditions set forth in the Land Use Restriction Agreement, provide the Trustee with the information necessary to enable it to ensure continuing compliance with said Section 103(b)(4)(A). The City, the Trustee and the Tenant covenant in a cordance with the Land Use Restriction Agreement to take all 1 wful action, subject to prior approval by the City, as is n cessary in the opinion of Bond Counsel to comply fully with all a plicable requirements affecting the Federal tax exemption on de Bonds under Section 103(b)(4)(A) of the Code. As used in this Section, all words and terms shall have t e same meaning as such words are given for the purpose of S ction 103(b)(4)(A) of the Code. Section 24. Amendments. Under the Indenture, the City a d the Trustee may, without the consent of or notice to the O ner of the Bonds, consent to any amendment, change or m dification of the Financing Documents, other than the Indenture a may be required (a) by the provisions of the Financing D cuments, (b) for the purpose of curing any ambiguity, i consistency or formal defect or omission in the Financing D cuments, (c) to obtain or maintain the highest rating possible o the Bonds or (d) in connection with any other change therein w ich, in the judgment of the Trustee is not to the prejudice of te Trustee or the Bond Owners; provided, however, the Tenant and t e provider of Credit Facility consents thereto, including any c ange necessary in the opinion of Bond Counsel to comply fully w th applicable Kansas law•or regulations promulgated or proposed b the Department of the Treasury or the Internal Revenue Service w ich pertain or may pertain to the Bonds. Under the Indenture, except as provided in the imnediately preceding paragraph, neither the City nor the Trustee stall consent to (a) any amendment to, change or modification of t e Financing Documents which would change the amount or time as 25. which rental or other payments under the Lease are required to be made without the giving of notice of such proposed amendment, change or modification and receipt of the written approval or nsent thereto of the holders of all the Outstanding Bonds or ()) any other amendment, change or modification of the Financing cuments without the giving of notice of such proposed amendment, change or modification and receipt of the written proval or consent thereto of the holders of not less than 66- 3% in aggregate principal amount of the Bonds Outstanding. Notwithstanding the foregoing, every amendment or modification of a provision of the Bonds or of this Ordinance all be expressed in an ordinance of the City amending or pplementing the provisions of this Ordinance and prior to the option of such Ordinance by the execution of the Mayor of the I denture, the Lease, the Land Use Restriction Agreement, and the rchase Contract. and shall be deemed to be a part of this dinance. It shall not be necessary to note on any of the tstanding Bonds any reference to such amendment or aidification, if any. A certified copy of every such amendatory supplemental ordinance, if any, and a certified copy of this dinance shall be kept on file in the Office of the City Clerk d shall be made available for inspection by the Owner of any nd authorized by this Ordinance, and upon payment of the r asonable cost of preparing the same, a certified copy of any s ch amendatory or supplemental ordinance or of this Ordinance w 11 be sent by the City Clerk to any such Bondowner or ospective Bondowner. The Lease herein authorized may be amended by the City d the Tenant as provided therein. Section 25. Default, Events of Default. If any of the llowing events occur, it is hereby defined as and declared to and to constitute an "event of default" within the meaning of is Ordinance: Any of the following events constitutes an event of fault under the Indenture: (a) failure in the payment of any interest on any nd when and as the same shall become due and payable; (b) failure in the payment of the principal or emium, if any, on any Bond when and as the same shall become e and payable, whether at stated maturity or upon acceleration, demption or otherwise; (c) failure by the City or the Tenant to perform or observance of any covenant, agreement or condition on the part 0. the City or Tenant contained in the Indenture or in the Bonds and failure to remedy the default after notice thereof pursuant to the Indenture; 26. (d) certain events relating to bankruptcy or i solvency of the Tenant of the Security Provider. Section 26. Enforcement. The provisions of this Ordinance shall constitute a contract between the City of Salina, Kansas, and the owners of the Bonds herein authorized, and the Her of any one or more of said Bonds may sue to recover interest or principal which has not been paid according to the rms of said Bond. Notwithstanding any provisions of this dinance to the contrary, nothing in this Ordinance shall be so nstrued as to authorize or permit the City to make any contract to incur any obligation of any kind or nature except such as all be payable solely out of the rentals from the leased cilities. The owners of Twenty -Five percent (25%) of the incipal amount of Bonds then outstanding may sue in any action, ii mandamus, injunction or other proceedings, either at law or in uity, to enforce or compel performance of all duties and ligations required by this Ordinance to be done or performed by t e City or by the Tenant; provided, however, in no event shall tie City be responsible for the costs or expenses of any such tion. 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 contractual obligation contained herein or to pay any judgment for damages or to pay the principal of or interest on the Bonds of the City herein authorized. Section 27. Acceleration. A. Declaration. Upon the occurrence of any Event of fault, the Trustee may, and upon the written request of the Hers of not less that twenty-five percent (25%) in aggregate incipal amount of the Outstanding Bonds, the Trustee shall, by notice in writing delivered to the City, the Tenant and the S curity Provider or the Bank, as appropriate, declare the incipal of, and premium, if any, on all Bonds then outstanding (.f not then due and payable) and the interest accrued therein to be due and payable immediately, and, upon such declaration, that incipal and premium, if any, and interest shall become and be immediately due and payable. Interest on the Bonds shall accrue the date determined by the Trustee for the tender of payments the Bondowners pursuant to such declaration. The Trustee all immediately draw moneys under the Initial Investments or edit Facility to the extent available thereunder to pay the incipal of, and premium, if any, on the Bonds and interest crued on the Bonds pursuant to the immediately previous ntence. Notwithstanding anything to the contrary contained rein, neither the Trustee nor the Bondowners shall have the ght, prior to the earlier of (i) the Special Remarketing Tender to and (ii) the initial Credit Facility Effective Date, to Clare the principal of, premium, if any, or accrued interest on e Bonds immediately due and payable. B. Annulment. Subject to the immediately succeeding o sentences, at any time after the principal of, premium, if 27. W 28. y, or interest on the Bonds shall have been so declared to be e and payable and before the entry of final judgment or decree ii any suit, action or proceeding instituted on account of such default, or before the completion of the enforcement of any other remedy hereunder, the Trustee may, with the consent of Owners of majority in aggregate principal amount of the Outstanding Bonds, annul such declaration and its consequences with respect t any Bonds not then due by their terms, which annulment shall binding on all Bondowners if (i) moneys shall have been posited in the Bond Fund sufficient to pay all matured i stallments of principal, premium, if any, and interest then due ()ther than the principal then due only because of such claration) of the Outstanding Bonds; (ii) moneys shall have en deposited with the Trustee sufficient to pay the charges, mpensation, expenses, disbursements, advances and liabilities the Trustee directly or indirectly incurred or made in nnection with such default; (iii) all other amounts then yable by the City hereunder shall have been paid or a sum fficient to pay the same shall have been deposited with the ustee, (iv) every other default (other than a default in the yment of the principal, premium, if any, or interest of such Fond then due only because of such declaration) shall have been r medied to the satisfaction of the Trustee; and (v) the Trustee s received the express prior written consent of the Bank to the a nulment of such declaration and written notice from the Bank t at the Credit Facility has been reinstated to the amount c vered thereby immediately preceding such declaration. The ustee shall not annul any declaration if the Credit Facility is ii effect at the time of such declaration and if, prior to a nulment of such declaration, sufficient moneys are drawn under tie Credit Facility Agreement to pay the Bonds in full on the to the Bonds are to be paid. No such annulment shall extend to o affect any subsequent event of default or impair any right c nsequent thereon. In addition, the Trustee may annul such claration and its consequences with respect to any Bonds not t en due by its terms, which annulment shall be binding by its t rms, if the Bank notifies the Trustee of its election to purchase such Bond or to pay all amounts due under subparagraphs ( ), (ii), (iii) and (iv), inclusive, of paragraph B. above. Section 28. Defeasance. If the City or the Tenant all pay or cause to be paid and discharged all the Outstanding nds, or there shall otherwise be paid to the Owners of the tstanding Bonds all principal, premium, if any, and interest e or to become due thereon, observed all their covenants ntained in the Bonds and in the Financing Documents, and ovision shall also be made for paying all other sums payable reunder or under the Financing Documents, then and only in that ent the Indenture (except for Sections 5.07, 5.08 and 9.02 ereof) shall cease, determine and become null and void, and the venants, agreements and other obligations of the City ereunder shall be discharged and satisfied. The Trustee then release the Indenture and execute and deliver to the City Pall the Tenant such instruments in writing as shall be necessary 28. Section 29. Payments Due on Non -Business Days. In any se where the date of maturity of principal of, premium if any, interest on the Bonds or the date fixed for redemption of any nds shall not be a Business Day, then payment of principal, emium if any, or interest need not be made on such date but may made on the next succeeding Business Day with the same force d effect as if made on the date of maturity or the date fixed r redemption, and no interest shall accrue for the period after ch date. Section 30. Consents of Bondowners. (a) Any consent, request, direction, approval, objection or other instrument required by the Indenture to be s gned and executed by the Bondowners may be in any number of c ncurrent writings of similar tenor and may be signed or e ecuted by such Bondowners in person or by agent appointed in witing. Proof of the execution of any such instrument or of the w iting appointing any such agent and of the ownership of Bonds, i made in the following manner, shall be sufficient for any of t e purposes of this Indenture, and shall be conclusive in favor o the Trustee with regard to any action taken, suffered or o fitted under any such instrument, namely: (1) The fact and date of the execution by any person of any such instrument may be proved by the certificate of any officer in any jurisdiction who by law has power to take acknowledgments within such jurisdiction that the person signing such instrument acknowledged before him the execution thereof, or by affidavit of any witness to such execution. (2) The fact of ownership of Bonds and the amount or amounts, number and other identification of such Bonds, and the date of holding the same shall be proved by the registration books of the Issuer maintained by the Trustee. (b) In determining whether the Owners of the requisite incipal amount of Bonds Outstanding have given any request, mand, authorization, direction, notice, consent or waiver under t is Indenture, Bonds owned by the Tenant or any affiliate of the pant shall be disregarded and deemed not to be Outstanding der the Indenture, except that, in determining whether the 29. t evidence the release and discharge as may be reasonably r quired by either of them, and the Trustee and any other Paying A ent shall assign and deliver to the City any property at the tme subject to the lien of the Indenture which may then be in t eir possession, except amounts in the Funds required to be paid t the Tenant under Article V of the Indenture or to be held by t e Trustee and Paying Agent under Section 5.07 of the Indenture o otherwise for the payment of principal of, premium, if any and i terest. Section 29. Payments Due on Non -Business Days. In any se where the date of maturity of principal of, premium if any, interest on the Bonds or the date fixed for redemption of any nds shall not be a Business Day, then payment of principal, emium if any, or interest need not be made on such date but may made on the next succeeding Business Day with the same force d effect as if made on the date of maturity or the date fixed r redemption, and no interest shall accrue for the period after ch date. Section 30. Consents of Bondowners. (a) Any consent, request, direction, approval, objection or other instrument required by the Indenture to be s gned and executed by the Bondowners may be in any number of c ncurrent writings of similar tenor and may be signed or e ecuted by such Bondowners in person or by agent appointed in witing. Proof of the execution of any such instrument or of the w iting appointing any such agent and of the ownership of Bonds, i made in the following manner, shall be sufficient for any of t e purposes of this Indenture, and shall be conclusive in favor o the Trustee with regard to any action taken, suffered or o fitted under any such instrument, namely: (1) The fact and date of the execution by any person of any such instrument may be proved by the certificate of any officer in any jurisdiction who by law has power to take acknowledgments within such jurisdiction that the person signing such instrument acknowledged before him the execution thereof, or by affidavit of any witness to such execution. (2) The fact of ownership of Bonds and the amount or amounts, number and other identification of such Bonds, and the date of holding the same shall be proved by the registration books of the Issuer maintained by the Trustee. (b) In determining whether the Owners of the requisite incipal amount of Bonds Outstanding have given any request, mand, authorization, direction, notice, consent or waiver under t is Indenture, Bonds owned by the Tenant or any affiliate of the pant shall be disregarded and deemed not to be Outstanding der the Indenture, except that, in determining whether the 29. Under the Indenture, the Trustee is not required to take tice or be deemed to have notice of any default under the denture except failure by the Issuer to cause to be made any of e payments to the Trustee required to be made unless the ustee is specifically notified in writing of such default by e Issuer or the Owners of at least 25% in aggregate principal ount of all Bonds Outstanding. Before taking any action at the quest or direction of the Owners of Bonds, the Trustee may quire that an indemnity bond satisfactory to the Trustee be rnished by the Owners of the Bonds for the reimbursement of all penses to which it may be put and to protect it against all ability, except liability which is adjudicated to have resulted om its negligence or willful default in connection with an tion so taken. Section 32. Conveyance of Project to Tenant. Upon ceipt by the City of the purchase price of the Project, title the Project shall be transferred and conveyed to the Tenant as ovided in the Lease, and the Mayor and other appropriate ficers of said City are hereby authorized and directed to 0e cutesuch deeds and other instruments as may be necessary to fect such conveyance and transfer. 30. Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Bands which the Trustee knows to be so owned shall be so d sregarded. For purposes of this paragraph, the word " ffiliate" means any person directly or indirectly controlling o controlled by or under direct or indirect common control with t e Tenant; and for the purposes of this definition, "control" m ans the power to direct the management and policies of such p rson, directly or indirectly, whether through the ownership of v ting securities, by contract or otherwise. Notwithstanding the f regoing, Bonds so owned which have been pledged in good faith s all not be disregarded as aforesaid if the pledgee establishes t the satisfaction of the Trustee the pledgee's right so to act with respect to such Bonds and that the pledgee is not the Tenant o any affiliate of the Tenant. Section 31. Provisions Relating to the Trustee. The T ustee's duties and responsibilities shall include those epressly set forth in this ordinance, the Trust Indenture, the L ase and the Guaranty Agreement and shall further include those r ghts, duties, responsibilities and obligations which are r served to or imposed upon the City under this ordinance, Trust I denture and the Lease excepting only such of those rights, d ties, responsibilities and obligations as may only be properly a p d lawfully exercised by or imposed upon the City. The rmissive right of the Trustee to do things enumerated in the I denture shall not be construed as a duty. The Trustee is not liable in the performance of its obligations under the Indenture e cept for its negligence or willful default. Under the Indenture, the Trustee is not required to take tice or be deemed to have notice of any default under the denture except failure by the Issuer to cause to be made any of e payments to the Trustee required to be made unless the ustee is specifically notified in writing of such default by e Issuer or the Owners of at least 25% in aggregate principal ount of all Bonds Outstanding. Before taking any action at the quest or direction of the Owners of Bonds, the Trustee may quire that an indemnity bond satisfactory to the Trustee be rnished by the Owners of the Bonds for the reimbursement of all penses to which it may be put and to protect it against all ability, except liability which is adjudicated to have resulted om its negligence or willful default in connection with an tion so taken. Section 32. Conveyance of Project to Tenant. Upon ceipt by the City of the purchase price of the Project, title the Project shall be transferred and conveyed to the Tenant as ovided in the Lease, and the Mayor and other appropriate ficers of said City are hereby authorized and directed to 0e cutesuch deeds and other instruments as may be necessary to fect such conveyance and transfer. 30. Section 33. Authorization of Lease. The Project to be rchased pursuant to this Ordinance and said Lease shall be ased to the Tenant under and pursuant to the Lease which Lease i cluding any changes necessary to correct omissions or ambiguities therein, which the officers executing the same are hereby authorized to make, the Mayor and City Clerk are hereby thorized and directed to execute for and on behalf of and as e act and deed of the City. Section 34. Waiver of Ad Valorem Tax Exemption. The nds of the Issuer as authorized by this Ordinance shall be sued upon the express condition that the Tenant will waive any valorem property tax exemption which would or might otherwise available with respect to the Project and all provisions ereof under the provisions of K.S.A. 79-201(a) Second, as ended. Section 35. Severability. If any one or more of the venants, agreements or provisions of this Ordinance, the denture or the Lease should be held contrary to any express ovision of law or contrary to the policy of express law, though t expressly prohibited, or against public policy, or shall for y reason whatsoever be held invalid, then such covenants, reements or provisions shall be null and void and shall be emed separate from the remaining covenants, agreements or ovisions of this Ordinance or of the Bonds issued hereunder, e Indenture or of the Lease. Section 36. Agreements of the City. All.covenants, stipulations and obligations of the City contained in this dinance and contained in the Lease shall be deemed to be the venants, stipulations, obligations and agreements of the City the full extent authorized or permitted by the Act, and all ch covenants, stipulations, obligations and agreements shall be nding upon the City and its successors from time to time and on any board, body or agency to which any powers or duties, fecting such covenants, stipulations, obligations and reements, shall be transferred by or in accordance with law, thing contained in this Ordinance shall, however, be construed to require the City to perform such covenants, stipulations, ligations or agreements unless the costs and expenses thereof re advanced by or on behalf of the Bondholders, to impose on the ity any duty or obligation to levy any taxes either to meet any ntractual obligation contained herein or to pay any judgment If r damages or to pay the principal of or interest on the Bonds the City herein authorized. Except as otherwise provided in is Ordinance, all rights, powers and privileges conferred and ties and liabilities imposed upon the City or any officials ereof by the provisions of this Ordinance or the Lease shall be ercised or performed by the City or by such officers as may be quired by law to exercise such powers and to perform such ties. No covenant, stipulation, obligation or agreement herein ntained or contained in the Lease shall be deemed to be a venant, stipulation, obligation or agreement of any official, 31. o ficer, agent or employee of the City in his individual c pacity, and neither the officials of the City nor any officer e ecuting the Bonds shall be liable personally on the Bonds or i cur any personal liability or accountability by reason of the i suance thereof. Section 37. Performance of Acts. All acts, conditions Md things required by the Constitution and laws of the State of K nsas, relating to the passage of this Ordinance, to the i suance of the Bonds or to the execution of the Lease, to h ppen, exist and be performed precedent to and in the enactment o this Ordinance, and precedent to the issuance of the Bonds and p ecedent to the execution of the Lease have happened, exist and h ve been performed as so required by law. Section 38. Further Authority. The City shall, and the 32. o ficers, agents and employees of the City are hereby authorized a d directed to, take such action, expend such funds and execute s ch other documents, certificates and instruments as may be n cessary or desirable to carry out and comply with the p ovisions of this Ordinance and to carry out, comply with and p rform the duties of the City with respect to the Bonds, the I denture and the Lease all as necessary to carry out and give effect to the transaction contemplated hereby and thereby. Section 39. No Personal Liability. Notwithstanding a ything to the contrary contained herein or in any of the Trust I denture, Bonds, or the Agreement, or in any other instrument or d current executed by or on behalf of City in connection herewith, n stipulation, covenant, agreement or obligation contained h rein or therein shall be deemed or construed to impose on the C ty any duty or obligation to levy or impose any taxes either tc m et any obligation contained herein or to pay the principal of p emium, if any, and interest on the Bonds or to be construed as a stipulation, obligation or covenant, agreement or obligation of a y present or future elect, official, commissioner, officer, e ployee or agent of City, the City Attorney, or of any i corporator, trustor, member, director, trustee, elect, officer, o ficial, employee or agent of any successor to City, i dividually, in such official capacities and no such person, in s ch capacity, shall be liable personally for any breach or non - o servance of or for any failure to perform, fulfill or comply th any such stipulations, covenants, agreements or obligations, n r shall any recourse be had for the payment of the principal o , premium, if any, or interest on any of the Bonds or for any c aim based thereon or on any such stipulation, covenant, a reement or obligation, against any such person, in such c pacity, either directly or through City or any successor, under a y rule of law or equity, statute or constitution or by the e forcement of any assessment or penalty or otherwise, and all s ch liability of any such person, in such capacity, is hereby e pressly waived and released. 32. Section 40. Effective Date. This Ordinance shall take e fect and be in full force from and after its adoption by the Cj.ty Commission and publication once in the official newspaper of tie City. ADOPTED by the Governing Body of the City of Salina, nsas this �PMy day of AWO;tW, 1985. 2nd December CITY OF SALINA, KANSAS Merle A. Hodges, MAyor N test: DL. Harrison, City Cler ( eal) 1 33. SCHEDULE I Schedule I TO THE INDENTURE OF TRUST OF THE CITY OF SALINA, KANSAS, AND SECURITY BANK OF KANSAS CITY, TRUSTEE, DATED AS OF DECEMBER 1, 1985 AND TO THE LEASE DATED AS OF DECEMBER 1, 1985, BY AND BETWEEN THE CITY AND INDEPENDENT LIVING CENTER OF SALINA, A LIMITED PARTNERSHIP PROPERTY SUBJECT TO LEASE (a) The following described real estate located in the City of Salina, Saline County, Kansas, to wit: Lots One (1), Two (2), Three (3), Four (4), Five (5), Nine (9), Ten (10), Eleven (11), Twelve (12) and Thirteen (13), Block Four (4); All of Lots Two (2), Three (3), Four (4), Five (5), Six (6), Seven (7), Eight (8), Nine (9) and Ten (10) and Lot Eleven (11), except the Northwesterly Twenty (20) feet thereof, Block Eight (8); and Lots One (1), Two (2), Three (3), Four (4), Five (5), Six (6), Seven (7), Eight (8), Nine (9), Ten (10) and Eleven (11), Block Ten (10), all in the REPLAT OF FAITH ADDITION to the City of Salina, Saline County, Kansas. said real property constituting the "Land" as referred to in said Lease. (b) All buildings, improvements, machinery and equipment now or hereafter constructed, located or installed on the Land pursuant to said Lease, constituting the "Improvements" as referred to in said Lease and said Indenture, and more specifically described as follows: 1 the property described in paragraphs (a) and (b) of this Schedule I together constituting the "Project" as referred to in said Lease and said Indenture. 1