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8709 IRB Salina NursingFinal Draft ORDINANCE NO. 8709 o f the CITY OF SALINA, KANSAS Authorizing the Issuance of $1,400,000.00 City of Salina, Kansas Salina Nursing Center, Inc., Industrial Revenue Bonds Series of 1979 DATED AS OF APRIL 1, 1979 (Published in `�Ot.urnu-I ORDINANCE NO. ?70'7- ' � 2- , 19 7 9 ) AN ORDINANCE AUTHORIZING THE CITY OF SALINA, KANSAS, TO ACQUIRE THE REAL PROPERTY HEREINAFTER DESCRIBED AND TO ACQUIRE, PURCHASE, CONSTRUCT AND EQUIP A 100 -BED NURSING HOME FACILITY LOCATED AND TO BE LOCATED THEREON TO BE LEASED TO SALINA NURSING CENTER, INC., FOR COMMERCIAL PURPOSES; AUTHORIZING AND DIRECTING THE ISSUANCE OF $1,400,000 PRINCIPAL AMOUNT OF INDUSTRIAL REVENUE BONDS, SALINA NURSING CENTER, INC., SERIES OF 1979, OF SAID CITY FOR THE PURPOSE OF PROVIDING FUNDS TO PAY THE COST OF ACQUIRING, PURCHASING, CONSTRUCTING AND EQUIPPING SAID NURSING HOME FACILITY TO BE LEASED TO SALINA NURSING CENTER, INC.; PRESCRIBING THE FORM AND AUTHORIZING THE EXECUTION OF A LEASE BY AND BETWEEN SAID CITY AND SALINA NURSING CENTER, INC.; AND PRESCRIBING THE FORM AND REQUIRING THE EXECUTION OF A SEPARATE GUARANTY AGREEMENT BY SALINA NURSING CENTER, INC. AND BY JOE W. CARMICHAEL, JOSAILLE CARMICHAEL, LEONARD E. STOLZ, ELIZABETH C. STOLZ, CLIFFORD K. LEDOUX, ELLA L. LEDOUX, WILLIAM S. BRADLEY AND BETTY K. BRADLEY, AS GUARANTORS. WHEREAS, the City of Salina, Kansas, a city of the first class, hereinafter sometimes referred to as the "City", desires to promote, stimulate and develop the general economic welfare and prosperity of the City of Salina, Kansas, and its environs and thereby to further promote, stimulate and develop the general economic welfare and prosperity of the State of Kansas; and WHEREAS, pursuant to the provisions of K.S.A. 12-1740 to 12-1749a, as amended (hereinafter referred to as the "Act"), said City is authorized to issue Industrial Revenue Bonds of the City, and it is hereby found and determined to be advisable and in the interest and for the welfare of the City and its inhabitants that Industrial Revenue Bonds of the City in the principal amount of $1,400,000 be authorized and issued, for the purpose of providing funds to pay the cost of acquiring the real property hereinafter described and of purchasing, constructing and equipping thereon a 100 -bed nursing home facility pursuant to the Act, and �s willing to lease the real property hereinafter described together with the improvements located and to be located thereon for said purposes, to Salina Nursing Center, Inc., a Kansas corporation, hereinafter sometimes referred to as "Tenant"; and WHEREAS, Joe. W. Carmichael, JoSaille Carmichael, Leonard E. Stolz, Elizabeth C. Stolz, Clifford K. LeDoux, Ella L. LeDoux, William S. Bradley and Betty K. Bradley, directly or beneficially, own all of the issued and outstanding capital stock of Tenant and are willing, in order to induce the City to issue said Industrial Revenue Bonds and enter into the other transactions contemplated hereby, to enter into a separate Guaranty Agreement with respect to said Industrial Revenue Bonds; and WHEREAS, the City will acquire the real property hereinafter described, together with the existing improvements located thereon prior to or concurrently with the issuance of the Industrial Revenue Bonds herein authorized; and WHEREAS, the City and Tenant desire to reserve the right to finance the purchase, construction and equipping of additional buildings and improvements on said real property out of the proceeds of other Industrial Revenue Bonds issued pursuant to the provisions of this Ordinance or out of other funds obtained by the Tenant for said purpose. NOW, THEREFORE, BE IT ORDAINED BY THE GOVERNING BODY OF THE CITY OF SALINA, KANSAS: SECTION 1: Authority to Acquire, Purchase, Construct and Equi the Facility. The City of Salina, Kansas, is hereby authorized to acquire the real property described in paragraph (a) of Schedule 1 attached to this Ordinance and made a part hereof, together with such of the buildings, improvements, machinery and equipment de- scribed in paragraph (b) of Schedule 1 as are complete and in place at the time of said acquisition, and to purchase, construct, equip and install the said buildings, improvements, machinery and equipment described in paragraph (b) of Schedule 1, all of the property, both real and personal, described in paragraphs (a) and (b) of Schedule I being sometimes hereinafter referred to as the "Facility", in accord- ance with the provisions contained herein and in the Lease dated as of April 1, 1979, between said City and the Tenant, hereinafter referred to as the "Lease", which Lease is authorized by Section 29 of this Ordinance, all at a cost to be paid by the City from the -2- proceeds of the Industrial Revenue Bonds herein authorized not in excess of $1,400,000. SECTION 2. Authorization of and Security for the Bonds. For the purpose of providing funds to pay the cost of acquiring, pur- chasing, constructing and equipping the Facility, there shall be issued and hereby are authorized and directed to be issued a series of City of Salina, Salina Nursing Center, Inc., Industrial Revenue Bonds, Series of 1979, of the City of Salina, Kansas, in the prin- cipal amount of $1,400,000 (hereinafter sometimes referred to as the "Bonds"). The Bonds and all interest thereon shall be paid solely from the money and revenue received from the fees charged and rental received for the use of the Facility and not from any other fund or source (except to the extent paid out of the moneys attributable to Bond proceeds or the income from the temporary investment thereof and, under certain circumstances as hereinafter and in the Lease provided, proceeds of insurance, sale and condemnation awards) and the City hereby pledges the Facility and the net earnings therefrom to the payment of the Bonds and the interest thereon. SECTION 3. Description and Details of the Bonds, Designation of Paying Agent. The Bonds shall be dated April 1, 1979, and each of said Bonds shall be coupon bonds, numbered from 1 to 280, inclu- sive. The Bonds shall be in denominations of $5,000.00 as set forth below. Each of said Bonds shall become due serially on. April 1 in each of the following years and shall bear interest from date at the respective rates as follows: SERIAL BONDS BOND NUMBERS AMOUNT INTEREST RATE MATURITY DATE 1 - 6, incl. $30,000 7.25% April 1, 1984 7 14, incl. 40,000 7.30% April 1, 1985 15 - 22, incl. 40,000 7.40% April 1, 1986 23 - 30, incl. 40,000 7.50% April 1, 1987 31 - 40, incl. 50,000 7.75% April 1, 1988 41 - 50, incl. 50,000 8.00% April 1, 1989 51 - 60, incl. 50,000 8.10% April 1, 1990 61 - 70, incl. 50,000 8.20% April 1, 1991 71 - 80, incl. 50,000 8.20% April 1, 1992 81 - 92, incl. 60,000 8.40% April 1, 1993 93 - 106, incl. 70,000 8.50% April 1, 1994 107 - 122, incl. 80,000 8.60% April 1, 1995 123 - 140, incl. 90,000 8.75% April 1, 1996 TERM BONDS 141 - 280, incl. 700,000 9.00% April 1, 1999 -3- The Bonds shall bear interest from their date. Interest on the Bonds shall be payable October 1, 1979, and thereafter semiannually on April 1 and October 1 in each year. The Bonds and the interest thereon shall be payable to bearer in lawful money of the United States of America upon presentation and surrender of such Bonds or interest coupons as they respectively become due at Highland Park Bank and Trust, in the City of Topeka, Kansas, such bank being hereby designated as the City's paying agent for the payment of the principal of and interest on the Bonds herein authorized and sometimes referred to herein as the "Paying Agent". The Bonds shall be subject to redemption and payment prior to the stated maturity thereof only as provided in Section 4 of this Ordinance. SECTION 4. Redemption and Payment of Bonds Prior to Maturity. The Bonds shall be subject to redemption and payment prior to the stated maturity thereof, after the notice specified in Section 5 hereof, as follows: (a) Each of the Bonds shall be subject to redemption and payment at the option of the City upon instructions from the Tenant at any time upon the occurrence of any of the following conditions or events, provided all of said Bonds are so redeemed and paid according to their terms: (1) if title to or the permanent use or use for a limited period of substantially all of the Facility be condemned by any authority having the power of eminent domain; or (2) if substantially all of the Facility be damaged or destroyed by fire or other casualty; or (3) if as a result of any changes in the Constitution of the State of Kansas, or legislative or administrative action by the State of Kansas or any political subdivision thereof, or by the United States, or by reason of action instituted in any court, the Lease shall have become void or unenforceable or impos- sible of performance without unreasonable delay or in any other way by reason of such change of circumstances, unreasonable burdens or excessive liabilities shall have been imposed on the Tenant, includ- ing without limitation Federal, state or other ad valorem, pro- perty, income or other taxes not being imposed on the date of the Lease. If called for redemption in any of such events, the Bonds shall be subject to redemption at the principal amount thereof, plus accrued interest thereon to the date fixed for redemption and payment, together with a premium of One and one-half (11,2%) percent of the principal amount of the Bonds so called for redemption and payment. (b) Each of said Bonds maturing on or after April 1, 1987, shall also be subject to redemption and payment at the option of said City upon instructions from the Tenant, as a whole on or in part April 1, 1986, or on any interest payment date thereafter, at the redemption prices set forth below (expressed as a percentage of the principal amount plus accrued interest thereon to the date fixed for redemption and payment: Redemption Period Redemption Price April 1, 1986, to March 31, 1996 101.50% April 1, 1996, and thereafter 100% Bonds to be redeemed and paid pursuant to this paragraph shall be redeemed in inverse numerical order. (c) Each of the Bonds then outstanding shall be redeemed and paid on a redemption date established by the City in the event the interest on the Bonds is includable in the gross income of the recipients thereof for Federal income tax purposes by reason of the failure of the Bonds to qualify for the exemption provided in Section 103(b)(6)(D) of the Internal Revenue Code of 1954, as amended, at the principal amount thereof, plus accrued interest thereon to the date fixed for redemption and payment, together with a premium which shall be Five (5%) percent of the principal amount of such outstanding Bonds for each full year or fraction of a year which elapsed between the date on which interest on such Bonds became taxable and the date fixed for redemption and payment, but in no event shall the date fixed for redemption and payment be later than One Hundred Twenty (120) days after the Internal Revenue Service, the Tenant or the Fiscal Agent hereinafter designated shall give written notice to the City of the failure of the Bonds to qualify for such exemption. As and for a sinking fund for the retirement of the Bonds maturing April 1, 1999, but subject to the provisions of the -5- next paragraph of this Section 4, the rent payments specified in the Lease which are to be deposited in the Principal and Interest Account created by Section 12 of this Ordinance commencing on April 1, 1996, (the "Sinking Fund Deposits"), shall be sufficient to redeem (after credit as hereinafter provided) and the City hereby agrees to redeem the following principal amounts of Bonds maturing April 1, 1999, on April 1 in each of the following years: YEAR PRINCIPAL AMOUNT 1997 $125,000 1998 225,000 The Bonds maturing on April 1, 1999, to be redeemed and paid pur- suant to the operation of the Sinking Fund shall be selected by lot by the Bond Registrar in such equitable manner as it may designate. The Bond Registrar shall each year in which the Bonds are to be redeemed pursuant to the terms of said Sinking Fund make timely selection of Bonds to be so redeemed and shall give or cause the Fiscal Agent to give notice thereof as provided in Section 5 of this Ordinance without further instructions from the City or the Tenant. The Fiscal Agent may, at any time after April 1, 1996, upon instructions from the Tenant use moneys on hand in the Principal and Interest Account to purchase Bonds maturing on April 1, 1999, in the open market at a price not in excess of the then applicable re- demption price specified above in subsection (b) of this Section 4 and each Bond so purchased shall be credited at 100% of the principal amount thereof on the obligation of the City on the next Sinking Fund redemption date for such Bonds and the principal amount of Bonds to be redeemed by operation of the Sinking Fund shall be reduced accordingly. At its option, to be exercised on or before the Forty-fifth (45) day next preceding any April 1 in the years 1997 to 1998, inclusive, the City or the Tenant may: (i) deliver to the Fiscal Agent designated by Section 10 of this Ordinance, for cancellation of such Bonds maturing on April 1, 1999, in any aggregate principal amount desired, with all unmatured coupons attached if such Bonds be coupon Bonds; or (ii) furnish the Fiscal Agent with funds together with appropriate instructions, for the purpose o,f purchasing any of said Bonds maturing on April 1, 1999, from any holder or owner thereof whereupon said Fiscal Agent shall expend such funds for such purpose to such extent as may be practical; or (iii) receive a credit in respect to the Sinking Fund obligation of the City under the second preceding paragraph of this Section for any Bonds maturing on April 1, 1999, which prior to such date have been redeemed (other than through the operation of the Sinking Fund requirements of the second preceding paragraph) and cancelled by the Fiscal Agent and not theretofore applied as a credit against any redemption obligation under said paragraph. Each Bond maturing on April 1, 1999, so delivered or purchased or previously redeemed shall be credited at 100% of the principal amount thereof on the obligation of the City on such redemption date, and any excess of such amount shall be credited on future sinking fund obligations for such Bonds in chronological order and the principal amount of Bonds to be redeemed by operation of the sinking fund shall be accordingly reduced. If the City or the Tenant intends to exercise the option granted by the provisions of sub -provisions (i), (ii) or (iii) of the next preceding paragraph, the City or the Tenant will on or before the Forty-fifth (45) day next preceding each April 1 in the years from 1997 to 1998, inclusive, furnish the Fiscal Agent and the Bond Registrar with a certificate signed by the City Clerk or City Trea- surer or an appropriate officer of the Tenant indicating to what extent the provisions of said sub -provisions (i), (ii) and (iii) are to be complied with in respect to such Sinking Fund payment. SECTION 5. Notice of Redemption. Notice of the call for any redemption provided for by this Ordinance identifying the Bonds to be redeemed shall be given by the Fiscal Agent in the name of the City by publication at least once in the official state paper of the State of Kansas, not less than Thirty (30) days prior to the redemp- tion date. Notice of any such redemption shall also be given by registered or certified mail to the Paying Agent herein designated -7- and to the Original Underwriter of the Bonds at least Thirty (30) days prior to the date fixed for redemption and payment. Notice of any such redemption shall also be given to any holders of Bonds who have placed their names on file with the Fiscal Agent pursuant to Section 26 hereof, upon mailing a copy of the redemption notice in the manner hereinbefore specified at least Thirty (30) days prior to the date fixed for redemption to the owner of each Bond to be redeemed at the address shown on the books maintained by the Fiscal Agent; provided, however, that failure to give such notice by mailing as aforesaid, or any defect therein, shall not affect the validity of any proceedings for the redemption of Bonds. If, because of the temporary or permanent suspension of the publication or general circulation of any newspaper or for any other reason, it is impossible or impractical to publish such notice of call for redemption in the manner herein provided, then such publication in lieu thereof as shall be made with the approval of the Fiscal Agent shall constitute a sufficient publication of notice. Interest shall cease on any of said Bonds so called for redemption and payment as of the redemption date, provided funds are available in the hands of the Paying Agent to pay the same in ac- cordance with their terms. SECTION 6. Method of Execution and Authentication of Bonds. The Bonds and each of them shall be executed for and on behalf of the City by the facsimile signature of the Mayor, attested by the facsimile signature of the City Clerk and the seal of said City shall be affixed thereto. Interest coupons shall be attached to said Bonds representing the interest to mature thereon, and said interest coupons shall bear the facsimile signatures of said Mayor and City Clerk. The Bonds and each of them shall be registered in the office of the City Clerk, which registration shall be evidenced by a manually executed certificate of registration on the reverse face of each Bond. In the event either the Mayor or City Clerk should cease to hold such office before the bonds and coupons bearing their facsimile signatures have been issued and delivered said bonds may be issued 1 as though said officers had not ceased to hold office and such signatures appearing on said Bonds and coupons and registration certificate shall be valid and sufficient for all purposes as if they had remained in office with such issuance and delivery. The Bonds shall not be valid obligations under the provisions of this Ordinance until authenticated by the Fiscal Agent by the execution of an appropriate certificate appearing on each such Bond. SECTION 7. Form of Bonds. The Bonds and the interest coupons attached thereto and the certificates relating thereto shall be in substantially the following form: MOM No. UNITED STATES OF AMERICA STATE OF KANSAS COUNTY OF SALINE CITY OF SALINA INDUSTRIAL REVENUE BOND, SERIES of 1979 (Salina Nursing Center, Inc.) $5,000 KNOW ALL MEN BY THESE PRESENTS: That the City of Salina, in the County of Saline, State of Kansas, a municipal corporation, for value received, hereby promises to pay the bearer hereof, solely out of the revenues hereinafter referred to, the sum of FIVE THOUSAND DOLLARS in lawful money of the United States of America, on the first day of April, 19 , except as the provisions hereinafter set forth with respect to redemption prior to maturity may become applicable hereto, and to pay interest thereon from the date hereof at the rate of ( %) percent per annum, payable October 1, 1979, and thereafter semiannually on April 1 and October 1 in each year, until the said principal sum shall have been paid, upon presentation and surrender of the interest coupons hereto attached, bearing the facsi- mile signatures of the Mayor and City Clerk of said City, as said coupons severally become due. Both principal of and interest on this Bond are payable in lawful money of the United States of America at Highland Park Bank and Trust, in the City of Topeka, Kansas, hereinafter referred to as the "Paying Agent". This Bond is one of a series of 280 coupon Bonds aggregating the principal amount of $1,400,000 issued by said City for the purpose of providing funds to pay the cost of acquiring certain real property and purchasing, constructing and installing certain buildings, improve- ments, machinery and equipment thereon as further described in the Ordinance authorizing this Bond (the "Bond Ordinance") and in the Lease hereinafter and in the Bond Ordinance referred to (the "Lease") and together constituting the "Facility" to be leased to Salina Nursing Center, Inc., a Kansas corporation (the "Tenant"), pursuant to the Lease dated as of April 1, 1979, by and between said City and Tenant for commercial purposes by the authority of and in conformity with the provisions, restrictions and limitations of the Constitution and statutes of the State of Kansas, including K.S.A. 12-1740 to 12-1749a, and all amendments thereof and acts supplemental thereto, and all other provisions of the laws of said State applicable thereto. This Bond and the interest thereon are payable solely from the money and revenue received from the fees charged and rental received for the use of the Facility (except to the extent paid out of the moneys attributable to Bond proceeds or the income from the temporary investment thereof and, under certain circumstances, proceeds of in- surance, sale and condemnation awards or payments received pursuant to the Guaranty Agreement hereinafter referred to) which has been leased by the City to the Tenant, pursuant to the Lease and not from any other fund or source. Pursuant to the provisions of said statute, the governing body of the City has pledged the Facility and the net earn- ings therefrom to the payment of the series of Bonds of which this Bond is a part and the interest thereon. -10- The Tenant and certain individuals, have entered into a separate Guaranty Agreement with the Fiscal Agent whereby they have uncondi- tionally guaranteed, for the benefit of the holders of Bonds of the series of which this Bond is one, the full and prompt payment of the principal of and interest and redemption premium, if any, on each of said Bonds when and as the same become due and payable in accordance with their terms. This Bond does not constitute a debt of said City within the meaning of any constitutional or statutory limitation. Reference is hereby made to the Bond Ordinance and to the Lease for a description of the covenants of the City with respect to the collection, segregation and application of the money and revenue received from the fees charged and rental received for the use of the Facility, the rights, duties and obligations of the City and the Tenant with respect thereto, the right of the City to issue additional Bonds and the rights of the holders of this Bond. Each of the Bonds of the series of which this Bond is one is subject to redemption and payment at the option of the City upon in- structions from the Tenant, at any time, upon the occurrence of any of the following conditions or events, provided all Bonds are so redeemed and paid according to their terms: (1) if title to, or the permanent use or use for a limited period of, substantially all of the Facility be condemned by any authority having the power of eminent domain; or (2) if substantially all of the Facility be damaged or destroyed by fire or other casualty; or (3) if as a result of any changes in the Constitution of the State of Kansas, or legislative or administrative action by the State of Kansas, or any political subdivision thereof, or by the United States, or by reason of any action instituted in any court, the Lease shall have become void or unenforceable or impossible of performance without unreasonable delay, or in any other way, by reason of such change in circumstances, unreasonable burdens or exces- sive liabilities shall have been imposed on Tenant, including without limitation Federal, state or other ad valorem, property, income or other taxes not being imposed on the date of the Lease. In any of such events, the Bonds shall be subject to redemption at One Hundred (100%) percent of the principal amount thereof, plus accrued interest to the date fixed for redemption and payment, together with a premium of one and one-half (i1�2%) percent of the principal amount of the Bonds so called for redemption and payment. Each of the Bonds of the series of which this Bond is one, ma- turing on or after April 1, 1987, is also subject to redemption and payment at the option of said City, upon instructions from the Tenant, as a whole or in part on April 1, 1986, or on any interest payment date thereafter, in inverse numerical order, at the redemption prices set forth below (expressed as a percentage of the principal amount plus accrued interest thereon to the date fixed for redemption and payment: Redemption Period Redemption Price April 1, 1986, to March 31, 1996 101.50% April 1, 1996, and thereafter 100.00% Each of the Bonds of the series of which this Bond is one then outstanding shall be redeemed and paid on a redemption date estab- lished by the City in the event the interest on the Bonds is includ- able in the gross income of the recipients thereof for Federal income tax purposes by reason of the failure of the Bonds to qualify for the exemption provided in Section 103(b)(6)(D) of the Internal Revenue Code of 1954, as amended, at the principal amount thereof, plus ac- crued interest thereon to the date fixed for redemption and payment, together with a premium which shall be Five (5%) percent of the prin- cipal amount of such outstanding Bonds for each full year or fraction of a year which elapsed between the date on which interest on such Bonds became taxable and the date fixed for redemption and payment, but in no event shall the date fixed for redemption and payment be -11- later than One Hundred Twenty (120) days after the Internal Revenue Service, the Tenant or the Fiscal Agent hereinafter designated shall give written notice to the City of the failure of the Bonds to qualify for such exemption. Each of the Bonds of the series of which this Bond is one matur- ing on April 1, 1999, is also subject to mandatory redemption in specified annual amounts, pursuant to the terms of the sinking fund provided for in the Bond Ordinance on April 1, 1997, and on April 1, 1998, at the redemption prices set out above, plus accrued interest to the redemption date. All Bonds so called for redemption will cease to bear interest on the specified redemption date provided funds for their redemption are on deposit with the Paying Agent prior to the redemption date. Notice of the call for any redemption provided for by this Ordinance identi- fying the Bonds to be redeemed shall be given by publication at least once in the official state paper of the State of Kansas not less than Thirty (30) days prior to the redemption date. Notice of any such redemption shall also be given by registered or certified mail to the Paying Agent herein designated and to the Original Underwriter of the Bonds at least Thirty (30) days prior to the date fixed for redemption and payment. Notice of any such redemption shall also be given to any holders of Bonds who have placed their names on file with the Fiscal Agent pursuant to Section 26 of the Bond Ordinance, upon mailing a copy of the redemption notice in the manner hereinbefore specified at least Thirty (30) days prior to the date fixed for redemption to the owner of each Bond to be redeemed at the address shown on the books maintained by the Fiscal Agent; provided, however, that failure to give such notice by mailing as aforesaid, or any defect therein, shall not affect the validity of any proceedings for the redemption of Bonds. If, because of the temporary or permanent suspension of the pub- lication or general circulation of any newspaper or for any other reason, it is impossible or impracticable to publish such notice of call for redemption in the manner herein provided, then such publica- tion in lieu thereof as shall be made with the approval of the Fiscal Agent shall constitute a sufficient publication of notice. This Bond shall not be valid or binding on said City until this Bond shall have been authenticated by the execution by the Fiscal Agent of the Certificate of Authentication hereon. It is hereby declared and certified that all acts, conditions and things required to be done, to have happened and to be performed and to exist precedent to and in the issuance of this Bond, and of the issue of which this Bond is one, have been properly done and per- formed, and have happened and do exist in due and regular form and manner as required by the Constitution and laws of the State of Kansas. IN WITNESS WHEREOF, the City of Salina, Kansas, has caused this Bond to be signed by the facsimile signature of its Mayor, attested by the facsimile signature of its City Clerk and its corporate seal to be affixed hereto and the interest coupons hereto attached to be signed with the facsimile signatures of said officers and this Bond to be dated this first day of April, 1979. (facsimile) Attest: Mayor (facsimile) City Clerk -12- Coupon No. (FORM OF COUPON) All coupons for 6 months due April 1 and October 1 On the first day of , 19 , unless the Bond to which this coupon is attached shall have been called for redemption and payment duly made or pro- vided for, the City of Salina, Kansas, will pay bearer, solely from the money and revenue received for the use of the Facility described in the Bond to which this coupon is attached, and not from any other fund or source, the amount shown hereon, in lawful money of the United States of America at Highland Park Bank and Trust, in the City of Topeka, Kansas, being interest then due on its Industrial Revenue Bond, Series of 1979, dated April 1, 1979, No. (facsimile) Mayor Attest: _ (facsimile) City Clerk 1, 19 City of Salina, Kansas Industrial Revenue Bond, Series of 1979 S --------------------------------------------------------------------- CERTIFICATE OF AUTHENTICATION This Bond is one of the Bonds described in the within mentioned Bond Ordinance. Highland Park Bank and Trust Topeka, Kansas By: Authorized Officer STATE OF KANSAS ) ) ss: COUNTY OF SALINE ) I, the undersigned, City Clerk of the City of Salina, Kansas, hereby certify that the within Industrial Revenue Bond, Series of 1979, of the City of Salina, Kansas, has been duly registered in my office according to law. WITNESS MY HAND and official seal this (Seal) City Clerk -13- SECTION 8. Authentication, Execution and Delivery of the Bonds. The Mayor and City Clerk are hereby authorized and directed to prepare and execute the Bonds herein authorized, in the manner hereinbefore specified, and to obtain their authentication by the Fiscal Agent and to cause said Fiscal Agent to deliver said Bonds to United Securities, Inc., the purchasers thereof, on payment of the purchase price therefor. The Fiscal Agent shall authenticate said Bonds in the principal amount of $1,400,000 and deliver the same as provided above. SECTION 9. Designation of Fiscal Agent, Creation of Construction Fund. First National Bank and Trust Company, in the City of Salina, Kansas, is hereby designated as the City's Fiscal Agent under the provisions of this Ordinance and of said Lease, and the proceeds of the said Bonds shall be deposited with said Fiscal Agent. There is hereby authorized and ordered to be established in the custody of said Fiscal Agent a separate fund or account designated "City of Salina, Kansas, Salina Nursing Center, Inc. Construction Fund" (hereinafter referred to as the "Construction Fund"), which the Fiscal Agent shall hold in trust pursuant to the terms hereof. SECTION 10. Disposition of Bond Proceeds. The Fiscal Agent shall first pay from the proceeds of the sale of said Bonds any accrued interest and any premium received therefrom together with the sum of $179,632 which shall be used to pay interest on the Bonds during the Construction of the Facility into the "City of Salina, Kansas, Principal and Interest Account for Salina Nursing Center, Inc., Industrial Revenue Bonds, Series of 1979, dated April 1, 1979" hereinafter created by Section 12 of this Ordinance. The balance of the proceeds of the sale of said Bonds shall be deposited in the Construction Fund. Section 11. Acquisition, Purchase, Construction and Equipping of FACILITY, Use of Construction Fund. The Fiscal Agent shall make disbursements from the Construction Fund for the acquisition, pur- chase and construction of the Facility as provided in the Lease. Any amount remaining in the Construction Fund after the Facility has been fully completed and paid for, lien free, as pro- vided in Section 4.10 of the Lease shall be deposited by the Fiscal -14- Agent in the Principal and Interest Account created by Section 12 of this Ordinance. The City covenants and agrees that it will neither make nor permit the Fiscal Agent or the Tenant to make any use of the proceeds of the Bonds which, if such use had been reasonably expected on the date of issuance of the Bonds, would have caused the Bonds to be arbitrage bonds within the meaning of Section 103(c) of the Internal Revenue Code of 1954, as amended, and the City will comply with, and will take all necessary action to cause the Fiscal Agent and the Tenant to comply with, all applicable requirements of said Section 103(c) and the rules and regulations of the United States Treasury Department thereunder for so long as any of the Bonds remain outstanding and unpaid. SECTION 12. Creation of Various Other Accounts. There are hereby authorized and ordered to be established in the hands of the Fiscal Agent two separate funds or accounts to be designated as follows: (1) "City of Salina, Kansas, Principal and Interest Account for Salina Nursing Center, Inc., Industrial Revenue Bonds, Series of 1979, dated April 1, 1979" herein sometimes referred to as the "Principal and Interest Account"; (2) "City of Salina, Kansas, Bond Reserve Account for Salina Nursing Center, Inc., Industrial Revenue Bonds, Series of 1979, dated April 1, 1979", herein sometimes referred to as the "Bond Reserve Account". The City covenants and agrees that from and after the delivery of any of the Revenue Bonds herein authorized and continuing so long as any of said Bonds shall remain outstanding, said City will maintain said Accounts with the Fiscal Agent. All payments of Basic Rent received by the Fiscal Agent from Tenant pursuant to the Lease shall be allocated and transferred by the Fiscal Agent as follows: (a) The Fiscal Agent shall first allocate and deposit to the credit of the Principal and Interest Account the full amount set -15- forth in Columns A and B of Schedule II attached hereto and made a part hereof; provided, however, that in no event shall the amounts allocated to the Principal and Interest Account in any month be less than a pro rata portion of the principal of and interest on the Bonds becoming due on the next succeeding principal or interest payment date. (b) Prior to or concurrently with issuance and delivery of the Bonds, Tenant shall deliver to Fiscal Agent the sum of $50,000 in the form of cash or certificates of deposit, which shall be deposited by the Fiscal Agent to the credit of the Bond Reserve Account. Commencing October 1, 1980, and on the first day of each month thereafter, after providing for the transfer and deposit set forth in subparagraph (a) above the Fiscal Agent shall set aside and deposit to the credit of the Bond Reserve Account the amount set forth in Column C of Schedule II attached hereto and made a part hereof, until there is deposited to and on hand in said Bond Reserve Account the sum of $145,000 which sum is hereinafter referred to as the "Maximum Bond Reserve Account Deposit". When there has been accumulated and is on hand in the Bond Reserve Account the Maximum Bond Reserve Account Deposit, no further deposits to said Account shall be required. However, in the event funds deposited to the credit of said Bond Reserve Account shall be expended for any pur- pose herein authorized thereby reducing the balance therein to an amount less than the Maximum Bond Reserve Account Deposit, Tenant shall deliver to the Fiscal Agent, immediately upon written demand therefore, such sum as shall be necessary to restore the balance in the Bond Reserve Account to the Maximum Bond Reserve Account Deposit. All amounts credited to and deposited in the Principal and Interest Account shall be used by the Fiscal Agent for the sole purpose of paying the principal of and interest on the Bonds herein authorized as and when the same become due or are called for redemp- tion and payment. (d) All amounts credited to and deposited to the credit of Bond Reserve Account shall be used by the Fiscal Agent for the purpose of paying the principal of and interest on the Bonds when -16- funds are not otherwise available. In addition, amounts credited to and deposited in Bond Reserve Account may be used by the Fiscal Agent for the purpose of paying a like amount of the principal of Bonds maturing in 1999, either at maturity or upon earlier redemption provided that all of the then outstanding Bonds are called for redemption and prepayment and further provided Tenant is not then in default under this Ordinance or the Lease. SECTION 13. Investments. Moneys credited to the Construction Fund, the Principal and Interest Account and the Bond Reserve Account shall be invested by the Fiscal Agent, in such amounts and at such times as shall reasonably provide for moneys to be available when required, in direct obligations of the United States Government or agencies or instrumentalities thereof or in obligations guaranteed by the United States Government or agencies or instrumentalities thereof, or in certificates of deposit or other savings or time deposits of any state or national bank, including the Fiscal Agent, which are either insured by an agency of the United States Govern- ment or are secured by direct obligations of the United States Government. No investment shall be made pursuant to this Section beyond the time the Fiscal Agent shall determine that said funds will be required. All interest and profits on investments held in the Construction Fund, Principal and Interest Account and the Bond Reserve Account shall be accrued to and become a part thereof and expended and applied by the Fiscal Agent for the purposes and in the manner set forth in Section 12. SECTION 14. Payment of Balance in Accounts to Tenant. After payment in full of the Bonds and the applicable fees, charges and expenses of the Fiscal Agent and Paying Agent and other amounts re- quired to be paid hereunder, all amounts remaining in any fund or account created by this Ordinance shall be paid to the Tenant as provided in Section 28.2 of the Lease. SECTION 15. Covenant to Pay Principal and Interest and Make Other Payments. The City covenants that it will promptly pay, or cause to be paid, from funds available for such purposes, the prin- cipal of and interest and redemption premium, if any, on the Bonds -17- issued under this Ordinance and apply the payments of Basic Rent and Additional Rent provided for in the Lease at the places, on the dates and in the manner provided herein and in the Lease and in said Bonds and in the coupons appertaining thereto according to the true intent and meaning thereof. The principal, interest and redemption premium, if any, are payable solely from the revenues received from the fees charged and rental received for the use of the Facility (except to the extent paid out of the moneys attributable to Bond proceeds or the income from the temporary investment thereof and, under certain circumstances, proceeds of insurance, sale and con- demnation awards or payments received pursuant to the Guaranty Agreement hereinafter referred to); the Facility and the net earn- ings therefrom, are pledged to the payment of the Bonds and the interest thereon as provided in Section 2 hereof. The City further covenants that it will make, or cause to be made, all other payments and deposits required hereunder from funds made available for such purpose under the Lease. SECTION 16. Covenant to Redeem Bonds and to Give Notice Thereof. Any moneys received by said City or the Fiscal Agent for the purpose of, or which may be used for the purpose of, paying said Bonds prior to their stated date of maturity shall be deposited in said Principal and Interest Account and shall be applied solely for the purpose of paying the principal of and interest and redemption premium, if any, on said Bonds. On receipt of any such funds by said City or the Fiscal Agent for said purpose, and on receipt of instructions from the Tenant to call said Bonds, the City will cause the Fiscal Agent to, and said Fiscal Agent shall, in the name of the City, immediately call such Bonds for redemption and payment, when the same are subject to redemption, giving notice thereof in the manner specified as provided in Section 5 hereof. SECTION 17. Particular Covenants of the City. So long as any of the principal of and interest on the Bonds herein authorized remain outstanding and unpaid, or until payment thereof has been provided for, the City covenants with each of the holders and owners of said Bonds as follows: (a) The City will in good faith comply fully with all the terms, provisions and conditions of the Lease which require perform- ance by, or impose duties on, the City and the City will not knowingly permit any default in said Lease to occur on the part of the City; it will in good faith fully and promptly enforce all of the terms, provisions and conditions of the Lease which require performance by, or impose duties on, the Tenant and in the event of the occurrence of a default, as defined in the Lease, will in good faith exercise all rights and remedies conferred by the Lease and the laws of the State of Kansas necessary for the full and complete protection of the security and rights of the bondholders and will use its best efforts to procure a new tenant or tenants for the Facility under provisions which will provide funds sufficient in amount to make the rental payments and other payments which the Tenant is required to make under the Lease, and will deposit the same in the Principal and Interest Account. If the City is unable to procure a new tenant who will enter into such a lease, the City may take such good faith action as shall be in the best interests of the bondholders which may include the sale of the Facility, and if the Facility is sold, after deducting all costs of the sale, any moneys derived from such sale shall be used for the purpose of paying the principal of and interest and redemption premium, if any, on the Bonds. (b) The City will in good faith enforce collection of the rental payments and other charges in the amounts and at the times set forth in the Lease and will not reduce or cause or permit to be reduced the rental payments and other charges fixed, established and required by the Lease nor change or alter the time or times when the same are due and payable under the Lease, all as provided in the Lease. The City, however, shall have no obligation to pay the expenses incurred in connection with such enforcement from its own funds and its obligation to pay such expenses shall be limited to funds made available for such purposes by bondholders or other interest parties. (c) The City will not permit or consent to any change, amendment, modification, termination or any assignment of the Lease, Ii= except to the extent provided therein, and no such change, amendment, modification, termination or assignment, if permitted by the Lease, shall violate the City's obligation under Subsection (b) of this Section. (d) The City will not consent to any dissolution, liqui- dation, consolidation or merger of the Tenant, except to the extent provided in the Lease. (e) Any purchase price of the Facility, any proceeds of condemnation awards, insurance proceeds or other funds intended for the purpose of paying said Bonds and the interest thereon as provided in the Lease shall be deposited with the Fiscal Agent and used solely and exclusively for said purpose. Upon receipt of any such funds, to the extent deemed feasible by the Fiscal Agent and upon instructions from the Tenant to call said Bonds, if such instructions are necessary under the provisions of Section 4 hereof, if said Bonds then be subject to redemption and payment or as soon thereafter as said Bonds become subject to redemption, the Fiscal Agent shall call said Bonds in the name of the City according to their terms and shall give notice of such redemption as provided in this Ordinance. Any such funds shall be used for the payment of the principal of the Bonds herein authorized, accrued interest thereon, any redemption premium provided for by this Ordinance and for the charges of the Fiscal Agent and the Paying Agent for.paying the same. (f) The City will not, except to the extent permitted by Section 18 hereof, issue any other obligations payable from payments made by the Tenant pursuant to the Lease, or otherwise, nor volun- tarily create or cause to be created any debt, lien, pledge, assign- ment, encumbrance, or any other charge on said payments or on the Facility, except as provided therein, nor will it, unless provided for by the terms of said Lease or of this Ordinance, sell or other- wise dispose of the Facility or any part thereof. (g) The City will in good faith cause the Tenant to keep constantly insured all buildings and improvements from time to time constituting a part of the Facility and obtain other insurance and bonds in the manner and to the extent provided in the Lease. The -20- proceeds of any insurance policies payable to the City shall be paid to and deposited with the Fiscal Agent as Insurance Trustee. Any of the proceeds of such policies shall be used and applied in the manner set forth in said Lease. (h) The City will use reasonable efforts to cause the Fiscal Agent to keep adequate books and records relating to the Fa- cility, which shall be separate and apart from all other books, records and accounts of the City or the Fiscal Agent in which com- plete and correct entries shall be made in accordance with standard principles of accounting of all transactions relating to the Bonds and the Facility, and the Fiscal Agent shall annually prepare a statement of all rentals received and funds expended. Any bondholder or the Tenant or the Original Underwriters, or their agents, shall have the rights at all reasonable times to inspect all books, records, accounts and data of the City or the Fiscal Agent relating to the Facility or the Bonds. SECTION 18. Additional Bonds. The City may issue from time to time additional industrial revenue bonds to pay for all or a portion of the cost of purchasing, constructing and equipping improvements, additions or extensions to the Facility, which additional bonds shall be in all respects on a parity with the Bonds herein authorized, and all such bonds shall be equally and ratably secured by the .pledge and covenants contained in this Ordinance, provided the following terms and conditions are met: (a) The City shall have entered into a lease or agreement with the Tenant with rentals or payments at least sufficient to pay the principal of and interest on such additional bonds as the same become due, on substantially the same terms and conditions as the Lease herein authorized; and (b) The City and the Tenant shall have pledged the Facility, including the additions, improvements and extensions thereto to be financed by said additional bonds, to the payment of the Bonds herein authorized and the interest thereon; and (c) The Tenant is not in default (i) in the payment of Basic Rent or Additional Rent due under the Lease, or (ii) in per- formance of any other duty or covenant under the Lease; and -21- (d) The issuance of the additional bonds shall not affect the exemption from Federal income taxation of the interest on the Bonds herein authorized; and (e) The obligations of the Tenant assumed in connection with the issuance of the additional bonds do not violate any provi- sions of the Lease; and (f) The Fiscal Agent and the Original Underwriter of the Bonds herein authorized, shall have given their express written consent to the issuance of such additional bonds, which consent shall not be unreasonably withheld. SECTION 19. Amendments. The provisions of the Bonds authorized by this Ordinance and provisions of this Ordinance may be modified or amended at any time by the City with the written consent of the Tenant, unless the Tenant is in default hereunder or under the provisions of the Lease, in which event such consent shall not be necessary, and the consent of the holders of not less than Sixty -Six and Two -Thirds (66 2/3%) percent in aggregate principal amount of the Bonds herein authorized at the time outstanding; provided, that no such modification or amendment shall permit or be construed as permitting: (a) the extension of the maturity of the principal of any of the Bonds issued hereunder, or the extension of the maturity of any interest on any Bonds issued hereunder, or (b) a reduction in the principal amount of any Bonds or the rate of interest thereon, or (c) a privilege or priority of any Bond or Bonds, or (d) a reduc- tion in the aggregate principal amount of Bonds, the consent of the holders of which is required for any such amendment or modification. Any provision of the Bonds or of this Ordinance may, however, be modified or amended in any respect with the written consent of the holders of all of the Bonds then outstanding. Amendments to this Ordinance which correct omissions or ambiguities or which add to the security of the bondholders may be made by the City when agreed to by the Tenant without the necessity of consent of the holders of any of the Bonds. Every amendment or modification of a provision of the Bonds or of this Ordinance shall be expressed in an ordinance of the City amending or supplementing the provisions of this Ordinance and -22- shall be deemed to be a part of this Ordinance. It shall not be necessary to note on any of the outstanding Bonds any reference to such amendment or modification, if any. A certified copy of every such amendatory or supplemental ordinance, if any, and a certified copy of this Ordinance shall be kept on file in the Office of the City Clerk and shall be made available for inspection by the holder of any Bond authorized by this Ordinance, and upon pyament of the reasonable cost of preparing the same, a certified copy of any such amendatory or supplemental ordinance or of this Ordinance will be sent by the City Clerk to any such bondholder or prospective bond- holder. The Lease herein authorized may be amended by the City and the Tenant as provided therein. SECTION 20. Default, Events of Default. If any of the follow- ing events occur, it is hereby defined as and declared to be and to constitute an "event of default" within the meaning of this Ordinance: (a) Default in the due and punctual payment of any interest on any Bond; (b) Default in the due and punctual payment of the prin- cipal of or redemption premium, if any, on any Bond, whether at the stated maturity thereof, or upon any prior redemption thereof, or upon the maturity thereof by declaration under the provisions of Section 22 hereof; (c) Default in the performance or observance of any other of the covenants, agreements or conditions on the part of the City in this Ordinance or in the Bonds contained or default on the part of the Tenant under the Lease herein authorized in failing to pay or cause to be paid the rentals provided in the Lease or in connection with the matters referred to in Section 17(g) and (h) hereof, and the continuance thereof for a period of thirty (30) days after written notice given to the City by the Fiscal Agent or by the holders of not less than Ten (10%) percent of the aggregate prin- cipal amount of Bonds then outstanding. SECTION 21. Enforcement. The provisions of this Ordinance shall constitute a contract between the City of Salina, Kansas, and -23- the holders of the Bonds herein authorized, and the holder of any one or more of said Bonds may sue to recover interest or principal which has not been paid according to the terms of said Bond. Not- withstanding any provisions of this Ordinance to the contrary, nothing in this Ordinance shall be so construed as to authorize or permit the City to make any contract or to incur any obligation of any kind or nature except such as shall be payable solely out of the rentals from the leased facilities. The holders of Twenty -Five (25%) percent of the principal amount of Bonds then outstanding may sue in any action, in mandamus, injunction or other proceedings, either at law or in equity, to enforce or compel performance of all duties and obligations required by this Ordinance to be done or performed by the City or by the Tenant or to compel the City to cure any default as defined in Section 20 hereof. 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 obliga- tion contained herein or to pay the principal of or interest on the Bonds of the City herein authorized. SECTION 22. Acceleration in the Event of Default. In the event the Tenant fails to pay when due any installments of Basic Rent or Additional Rent required under the Lease or the principal of or interest on the Bonds herein authorized is not paid according to the terms thereof on the stated maturity date or on the prior redemp- tion date, or on any interest payment date, as the case may be, the Fiscal Agent may and upon the written request of the holders of Twenty -Five (25%) percent of the principal amount of Bonds then outstanding, shall by written notice given to the Mayor or City Clerk of the City and to the Tenant, declare the principal of and interest on all the Bonds herein authorized then outstanding to be due and payable immediately and upon such declaration given as aforesaid, said principal and interest shall be immediately due and payable, anything in said Bonds or in the Ordinance contained to the contrary notwithstanding. This provision, however, is subject to the condition that if at any time thereafter, all arrears of Basic Rent or Additional Rent or of interest, except interest accrued but -24- not yet due, and all arrears of principal shall have been paid in full, as the case may be then in every such case, the holders of a majority in principal amount of the Bonds then outstanding, by written notice to the Mayor or City Clerk of the City and to the Tenant, may rescind and annul such declaration and its consequences, but no such rescission or annulment shall extend to or affect any subsequent default or impair any rights consequent thereon. With regard to nonpayment of the principal of or interest on the Bonds concerning which notice is given to the Tenant under the provisions of this Section, the City hereby grants the Tenant full authority for the account of the City to make such payments forthwith in the name and stead of the City, and if such payments are so made by the Tenant for the account of the City, then and in that event, the declaration shall be deemed to be rescinded and annulled, but no such rescission or annulment shall extend to or affect any subsequent default or impair any rights consequent thereon. SECTION 23. Defeasance. When the principal of and all interest and redemption premiums, if any, on the Bonds herein authorized shall have been paid and discharged, then the requirements contained and the pledge of revenues and other pledges made hereunder and all other rights granted hereby, shall cease and terminate. Said prin- cipal, interest and redemption premium, if any, shall be deemed to have been paid and discharged within the meaning of this Ordinance and within the meaning of the Lease authorized by this Ordinance when there shall have been deposited with the Fiscal Agent at or prior to the maturity or redemption date of said Bonds, in trust for and irrevocably appropriated thereto, sufficient moneys, including investments authorized by this Section, for the payment of the principal thereof and interest to the date of maturity or redemp- tion, as the case may be, and premium, if any, or if default in such payment shall have occurred on such date, then to the date of the tender of such payments, and provision shall also have been made for all other sums payable under the provisions of this Ordinance; provided, always, that if any such Bonds shall be redeemed prior to the maturity thereof, the City shall have elected to redeem such -25- Bonds and the Tenant shall have given in the manner provided for by this Ordinance, the instructions necessary therefor under the provi- sions of Section 4 hereof and notice of such redemption shall have been given in the manner provided by this Ordinance. Any moneys or investments which at any time shall be deposited with said Fiscal Agent by or on behalf of the City, for the purpose of paying and discharging any of the Bonds and coupons, shall be, and are hereby assigned, transferred and set over to such Fiscal Agent in trust for the respective holders of the Bonds and coupons, and such moneys and investments shall be and are hereby irrevocably appropriated to the payment and discharge thereof. Investments, as used in this Section, shall mean bills, certificates of indebtedness, notes, bonds or similar securities which are direct obligations of, or the principal and interest of which are unconditionally guaranteed by, the United States of America. Investments shall become due prior to the respec- tive times on which the proceeds thereof shall be required, in accordance with a schedule established and agreed upon among the City, the Tenant and the Fiscal Agent at the time of the creation of such escrow or trust, or the investments shall be subject to redemp- tion at the.option of the holders thereof to insure such availability as so needed to meet such schedule. If, through lapse of time, or otherwise, the holders of said Bonds or coupons shall no longer be entitled to enforce payment of their obligations, then, in such event, it shall be the duty of said Fiscal Agent forthwith to return said funds to the City. All moneys so deposited with the Fiscal Agent shall be deemed to be deposited in accordance with and subject to all of the provisions contained in this Ordinance. SECTION 24. Payments Due on Sundays and Holidays. In any case where the date of maturity of interest on or principal of the Bonds or the date fixed for redemption of any Bonds shall be a Sunday or a legal holiday or a day on which banking institutions are authorized by law to close, then payment of interest or principal and premium, if any, need not be made on such date in such city but may be made on the next succeeding business day not a Sunday or a legal holiday or a day upon which banking institutions are authorized by law to -26- close with the same force and effect as if made on the date of maturity or the date fixed for redemption, and no interest shall accrue for the period after such date. SECTION 25. Consents, Etc. of Bondholders. Any consent, request, direction, approval, objection or other instrument required by this Ordinance or the Lease herein authorized to be signed and executed by the bondholders may be in any number of concurrent writings of similar tenor and may be signed or executed by such bondholders in person or by an agent appointed in writing. Proof of the execution of any such consent, request, directions, approval, objection or other instrument or of the writing appointing any such agent and of the ownership of Bonds, if made in the following manner, shall be sufficient for any of the purposes of this Ordinance and shall be conclusive in favor of the City, the Fiscal Agent, the Paying Agent and the Tenant with regard to any action taken under such request or other instrument, namely: (a) The fact and date of the execution by any person of any such writing 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 writing acknowledged before him the execution thereof, or by affidavit of any witness to such execution. (b) The fact of the holding by any person of Bonds and/or coupons transferable by delivery and the amounts and numbers of such Bonds, and the date of the holding of same, may be proved by a cer- tificate executed by any trust company, bank or bankers, wherever situated, stating that at the date thereof the party named therein did exhibit to an officer of such trust company or bank or to such bankers, as the property of such party, the Bonds and/or coupons therein mentioned if such certificate shall be deemed by the person to whom such consent is addressed to be satisfactory. Such person may, in his or its discretion, require evidence that such Bonds have been deposited with a bank, bankers or trust company, before taking any action based on such ownership. In lieu of the foregoing, such person may accept other proofs of the foregoing as it shall deem appropriate. -27- SECTION 26. List of Bondholders. To the extent that such in- formation shall be made known to the City under the terms of this Section, it -will keep on file at the principal office of the Fiscal Agent a list of names and addresses of the last known holders of all Bonds payable to bearer and believed to be held by each of such last known holders. Any bondholder may request that his name and address be placed on said list by filing a written request with the City or with the Fiscal Agent which request shall include a statement of the principal amount of Bonds held by such holder and the numbers of such Bonds. The Fiscal Agent shall be under no responsibility with regard to the accuracy of said list. At reasonable times and under reasonable regulations established by the Fiscal Agent said list may be inspected and copied by the Tenant or by the holders and/or owners (or a designated representative thereof) of Twenty -Five (25%) percent or more in principal amount of Bonds then outstanding, such ownership and the authority of any such designated representative to be evidenced to the satisfaction of the Fiscal Agent. SECTION 27. Provisions Relating to the Fiscal Agent. (a) Prior to the receipt of the Bond proceeds pursuant to the provisions hereof, the Fiscal Agent shall file with the City Clerk its written acceptance of the duties specified in this Ordi- nance and in the Lease and its agreement to act in said capacity. (b) The Fiscal Agent duties and responsibilities shall be limited to those expressly set forth in this Ordinance and under the Lease. .(c) All resolutions, opinions, certificates and other instruments referred to or provided for herein or in the Lease may be accepted by the Fiscal Agent as conclusive evidence of the facts, opinions and conclusions stated therein and shall be full warrant, protection and authority to the Fiscal Agent for any action reason- ably taken pursuant thereto. The Fiscal Agent shall be under a duty to examine any such resolutions, opinions, certificates and other instruments to determine whether or not they conform to the require- ments of this Ordinance and the Lease. W (d) The Fiscal Agent shall not be liable with respect to any action taken or omitted to be taken by it in good faith and, if appropriate, upon advice of counsel who may be counsel for the Fiscal Agent or the City or the Tenant. (e) No provision contained in this Section shall be con- strued to relieve the Fiscal Agent from liability for its own negli- gent action, its own negligent failure to act, or its own willful misconduct, except that this subsection shall not be construed to limit the effect of subsections (b), (c) and (d) of this Section. (f) The Fiscal Agent shall have the right to buy, sell, own, deal or trade in the Bonds or the coupons relating thereto without giving notice thereof to the City, the Tenant or any bond- holder and without incurring any liability whatsoever with respect thereto. (g) The Fiscal Agent may resign by an instrument in writing delivered to the City and the Tenant to take effect not sooner than Ninety (90) days after its delivery, whereupon the City, with the consent of the Tenant, shall immediately, in writing, designate a successor Fiscal Agent. Such successor Fiscal Agent shall be a bank, trust company or national banking association which is a member of the Federal Reserve System and has a capital stock and surplus aggregating at least Two Million ($2,000,000.00) Dollars. Such successor Fiscal Agent shall be subject to the same duties and obligations and shall have the same rights, privileges and immunities specified in this Ordinance and in the Lease for the Fiscal Agent. Any such successor Fiscal Agent shall file an acceptance in the form referred to in subparagraph (a) hereof with the City Clerk within Ten (10) days of its appointment. (h) The Fiscal Agent shall be entitled to payment or reimbursement for reasonable fees for its ordinary services and all advances, counsel fees and other ordinary expenses reasonably and necessarily made or incurred by it in connection with its ordinary services, all such fees and expenses to be paid by the Tenant as Additional Rent as specified in Section 2.3 of the Lease. -29- (i) The City may, but only with the consent of the Tenant, for any reason, remove the Fiscal Agent or any of its successors hereunder and appoint a new Fiscal Agent in its place and stead, and such new Fiscal Agent shall, when appointed, become successor to the powers, duties and obligations conferred on the Fiscal Agent. SECTION 28. Conveyance of Facility to Tenant. Upon receipt by the City of the purchase price of the Facility as provided in Section 17.2 of the Lease, title to the Facility shall be transferred and conveyed to the Tenant as provided in the Lease, and the Mayor and other appropriate officers of said City are hereby authorized and directed to execute such deeds and other instruments as may be necessary to effect such conveyance and transfer. SECTION 29. Authorization of Lease. The Facility to be pur- chased, constructed and equipped pursuant to this Ordinance and said Lease shall be leased to the Tenant under and pursuant to the Lease dated as of April 1, 1979, substantially in the form attached to this Ordinance, which Lease including any changes necessary to correct omissions or ambiguities therein, which the officers execut- ing the same are hereby authorized to make, the Mayor and City Clerk are hereby authorized and directed to execute for and on behalf of and as the act and deed of the City. SECTION 30. Guaranty Agreement. As and for an express con- dition precedent to the issuance and delivery of the Bonds, there shall be executed and delivered by Tenant and the Fiscal Agent a Guaranty Agreement dated as of April 1, 1979, substantially in the form attached to this Ordinance. SECTION 31. Severability. If any one or more of the covenants, agreements or provisions of this Ordinance or of the Lease should be held contrary to any express provision of law or contrary to the policy of express law, though not expressly prohibited, or against public policy, or shall for any reason whatsoever be held invalid, then such covenants, agreements or provisions shall be null and void and shall be deemed separate from the remaining covenants, agreements or provisions of this Ordinance or of the Bonds issued hereunder, or of the Lease. -30- SECTION 32. Agreements of the City. All covenants, stipulations and obligations of the City contained in this Ordinance and contained in the Lease shall be deemed to be the covenants, stipulations, obligations and agreements of the City to the full extent authorized or permitted by the Act, and all such covenants, stipulations, obligations and agreements shall be binding upon the City and its successors from time to time and upon any board, body or agency to which any powers or duties, affecting such covenants, stipulations, obligations and agreements, shall be transferred by or in accordance with law, nothing contained in this Ordinance shall, however, be construed to impose on said City any duty or obligation contained herein or to pay the principal of or interest on the Bonds of the City herein authorized. Except as otherwise provided in this Ordi- nance, all rights, powers and privileges conferred and duties and liabilities imposed upon the City or any officials thereof by the provisions of this Ordinance or the Lease shall be exercised or performed by the City or by such officers as may be required by law to exercise such powers and to perform such duties. No covenant, stipulation, obligation or agreement herein contained or contained in the Lease shall be deemed to be a covenant, stipulation, obligation or agreement of any official, officer, agent or employee of the City in his individual capacity, and neither the officials of the City nor any officer executing the Bonds.shall be liable personally on the Bonds or incur any personal liability or accountability by reason of the issuance thereof. SECTION 33. Performance of Acts. All acts, conditions and things required by the Constitution and laws of the State of Kansas, relating to the passage of this Ordinance, to the issuance of the Bonds or to the execution of the Lease, to happen, exist and be per- formed precedent to and in the enactment of this Ordinance, and precedent to the issuance of the Bonds and precedent to the execution of the Lease have happened, exist and have been performed as so required by law. SECTION 34. Reports; Original Underwriters. The Original Underwriters, United Securities, Inc., shall not be under any obli- -31- 1 1 1 gation to any bondholder for any action that it or they may or may not take or in respect of anything that it or they may not do by reason of any information contained in any reports or other docu- ments received by it or them under the provisions of this Ordinance or the Lease. The immunities and exemptions from liability of such Original Underwriter hereunder shall extend to its partners, directors, officers, successors, employees and agents. SECTION 35. Further Authority. The officials of the City, its attorneys, engineers and other agents or employees are hereby autho- rized to do all acts and things required of them by this Ordinance and the Lease for the full, punctual and complete performance of all of the terms, covenants and agreements contained in the Bonds, the Lease and this Ordinance. SECTION 36. Effective Date. This Ordinance shall be in full force and effect from and after its passage and publication in the official City paper. PASSED by the Governing Body of the.City of Salina, Kansas, 36tk this day of April, 1979. Attest: D. L. Harrison, City Clerk Karen M. Graves, Mayor -32- SCHEDULE 1 SCHEDULE 1 TO ORDINANCE NO. 8709 OF THE CITY OF SALINA, KANSAS, AND TO THE LEASE DATED APRIL 1, 1979, BY AND BETWEEN SAID CITY AND SALINA NURSING CENTER, INC. AUTHORIZED BY SAID ORDINANCE. PROPERTY SUBJECT TO LEASE (a) The following described real estate located in Saline County, Kansas, to wit: Lot Twenty-five (25) except the East 300 feet thereof on Johnstown Avenue, in Surveyor's Plat G 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 pur- suant to said Lease, constituting the "Improvements" as referred to in said Lease and said Ordinance, and more specifically described as follows: The Improvements will consist of an "x" -shaped structure containing four wings with a centrally -located circular nursing station. The nursing center will provide 6 rooms designed for isolation or single occupancy and 54 rooms for double occupancy. Construction will be of wood frame with brick veneer on a concrete slab on grade. Interior walls will be of wood stud construction with drywall finish. A fire sprinkling system will be provided throughout the building, including attic areas. The building will be completely heated and air conditioned with zone controls. The exterior walls and attic area will be fully insulated to a rating of R-15 or better. Insulated glass or storm windows will be used throughout the structure. Included within the nursing center will be a dietary department and dining area, activity rooms for hobby and crafts work, restorative service area, two solariums, laundry facilities, medical prep rooms and administra- tive and employee lounge area. The Facility will meet all the requirements of applicable building codes and federal regulations necessary for licensing and operation. the property described in paragraphs (a) and (b) of this Schedule 1 together constituting the "Facility" as referred to in said Lease and said Ordinance. 1 1 1 SCHEDULE 1 SCHEDULE 1 TO ORDINANCE NO. 8709 OF THE CITY OF SALINA, KANSAS, AND TO THE LEASE DATED APRIL 1, 1979, BY AND BETWEEN SAID CITY AND SALINA NURSING CENTER, INC. AUTHORIZED BY SAID ORDINANCE. PROPERTY SUBJECT TO LEASE (a) The following described real estate located in Saline County, Kansas, to wit: Lot Twenty-five (25) except the East 300 feet thereof on Johnstown Avenue, in Surveyor's Plat G 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 pur- suant to said Lease, constituting the "Improvements" as referred to in said Lease and said Ordinance, and more specifically described as follows: The Improvements will consist of an "x" -shaped structure containing four wings with a centrally -located circular nursing station. The nursing center will provide 6 rooms designed for isolation or single occupancy and 54 rooms for double occupancy. Construction will be of wood frame with brick veneer on a concrete slab on grade. Interior walls will be of wood stud construction with drywall finish. A fire sprinkling system will be provided throughout the building, including attic areas. The building will be completely heated and air conditioned with zone controls. The exterior walls and attic area will be fully insulated to a rating of R-15 or better. Insulated.glass or storm windows will be used throughout the structure. Included within the nursing center will be a dietary department and dining area, activity rooms for hobby and crafts work, restorative service area, two solariums, laundry facilities, medical prep rooms and administra- tive and employee lounge area. The Facility will meet all the requirements of applicable building codes and federal regulations necessary for licensing and operation. the property described in paragraphs (a) and (b) of this Schedule 1 together constituting the "Facility" as referred to in said Lease and said Ordinance. SCHEDULE II RENTAL PAYMENT SCHEDULE B C DEPOSIT TO INTEREST BOND RESERVE $ 9,997.92(2) 9,997.92(2) 9,997.92(2) 9,997.92 9,997.92 9,997.92 9,997.92 9,997.92 9,997.92 9,997.92 9,816.67 9,816.67 9,573.33 9,573.33 9,326.67 9,326.67 9,076.67 9,076.67 8,753.75 8,753.75 8,420.42 8,420.42 8,082.92 8,082.92 7,741.25 7,741.25 7,395.42 7,395.42 6,975.42 6,975.42 6,479.58 6,479.58 5,906.25 5,906.25 5,250.00 5,250.00 4,312.50 4,312.50 2,625.00 2,625.00 $319,450.90 (1) Deposited into Bond Reserve Account (not included in monthly payment). Interest escrowed in the bond issue. $50,000.00(1) -0- -0- 4,000.00 4,000.00 4,000.00 4,000.00 -0- -0- - 0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0_ $16,000.00 TOTAL MONTHLY BASIC RENT $ 9,997.92( 9,997.92( 9,997.92( 13,997.92 13,997.92 13,997.92 13,997.92 9,997.92 12,497.92 12,497.92 13,150.00 13,150.00 12,906.66 12,906.66 12,660.00 12,660.00 13,243.34 13,243.34 12,920.42 12,290.42 12,587.09 12,587.09 12,249.59 12,249.59 11,907.92 11,907.92 12,395.42 12,395.42 12,808.75 12,808.75 13, 146. 2,5 13,146.2- 13,406.25 3,146.213,406.25 13,406.25 15,666.67 15,666.67 23,062.50 23,062.50 31,791.67 31,791.67 $568,784.26 by the incorporators on date of closing A DATE PRINCIPAL 4-1-79 to 9-1-79 $ -0- 10-1-79 to 3-1-80 -0- 4-1-80 to 9-1-80 -0- 10-1-80 to 3-1-81 -0- 4-1-81 to 9-1-81 -0- 10-1-81 to 3-1-82 -0- 4-1-82 to 9-1-82 -0- 10-1-82 to 3-1-83 -0- 4-1-83 to 9-1-83 2,500.00 10-1-83 to 3-1-84 2,500.00 4-1-84 to 9-1-84 3,333.33 10-1-84 to 3-1-85 3,333.33 4-1-85 to 9-1-85 3,333.33 10-1-85 to 3-1-86 3,333.33 4-1-86 to 9-1-86 3,333.33 10-1-86 to 3-1-87 3,333.33 4-1-87 to 9-1-87 4,166.67 10-1-87 to 3-1-88 4,166.67 4-1-88 to 9-1-88 4,166.67 10-1-88 to 3-1-89 4,166.67 4-1-89 to 9-1-89 4,166.67 -1-89 to 3-1-90 4,166.67 -1-90 to 9-1-90 4,166.67 -1-90 to 3-1-91 4,166.67 4-1-91 to 9-1-91 4,166.67 10--1-91 to 3-1-92 4,166.67 4-1-92 to 9-1-92 5,000.00 10-1-92 to 3-1-93 5,000.00 4-L-93 to 9-1-93 5,833.33 10-1-93 to 3-1-94 5,833.33 4-1-94 to 9-1-94 6,666.67 10-1-94 to 3-1-95 6,666.67 4-1-95 to 9-1-95 7,500.00 10-1-95 to 3-1-96 7,500.00 4-1-96 to 9-1-96 10,416.67 10-1-96 to 3-1-97 10,416.67 4-1-97 to 9-1-97 18,750.00 10-1-97 to 3-1-98 18,750.00 4-1-98 to 9-1-98 29,166.67 10-1-98 to 3-1-99 29,166.67 $233,333.36 B C DEPOSIT TO INTEREST BOND RESERVE $ 9,997.92(2) 9,997.92(2) 9,997.92(2) 9,997.92 9,997.92 9,997.92 9,997.92 9,997.92 9,997.92 9,997.92 9,816.67 9,816.67 9,573.33 9,573.33 9,326.67 9,326.67 9,076.67 9,076.67 8,753.75 8,753.75 8,420.42 8,420.42 8,082.92 8,082.92 7,741.25 7,741.25 7,395.42 7,395.42 6,975.42 6,975.42 6,479.58 6,479.58 5,906.25 5,906.25 5,250.00 5,250.00 4,312.50 4,312.50 2,625.00 2,625.00 $319,450.90 (1) Deposited into Bond Reserve Account (not included in monthly payment). Interest escrowed in the bond issue. $50,000.00(1) -0- -0- 4,000.00 4,000.00 4,000.00 4,000.00 -0- -0- - 0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0_ $16,000.00 TOTAL MONTHLY BASIC RENT $ 9,997.92( 9,997.92( 9,997.92( 13,997.92 13,997.92 13,997.92 13,997.92 9,997.92 12,497.92 12,497.92 13,150.00 13,150.00 12,906.66 12,906.66 12,660.00 12,660.00 13,243.34 13,243.34 12,920.42 12,290.42 12,587.09 12,587.09 12,249.59 12,249.59 11,907.92 11,907.92 12,395.42 12,395.42 12,808.75 12,808.75 13, 146. 2,5 13,146.2- 13,406.25 3,146.213,406.25 13,406.25 15,666.67 15,666.67 23,062.50 23,062.50 31,791.67 31,791.67 $568,784.26 by the incorporators on date of closing