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93-9613 Assisted Living BondsGILMORE & BELL, P.C. December 8, 1993 (Published in The Salina Journal on December 21, 1993) ORDINANCE NO. 93-9613 AN ORDINANCE AUTHORIZING THE CITY OF SALINA, KANSAS TO ISSUE ITS ASSISTED LIVING RESIDENCE REVENUE BONDS (STERLING GROUP, L.L.C.) SERIES A AND SERIES B, 1993 IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $1,500,000, FOR THE PURPOSE OF ACQUIRING, CONSTRUCTING, INSTALLING AND EQUIPPING AN INDEPENDENT AND ASSISTED LIVING CENTER PROJECT; AUTHORIZING THE EXECUTION OF A TRUST INDENTURE BY AND BETWEEN THE ISSUER AND THE TRUSTEE NAMED THEREIN; AUTHORIZING THE ISSUER TO LEASE SAID PROJECT TO STERLING GROUP, L.L.C.; AUTHORIZING THE EXECUTION OF A LEASE BETWEEN THE ISSUER AND STERLING GROUP, L.L.C.; AND AUTHORIZING THE EXECUTION OF A LAND USE RESTRICTION AGREEMENT AMONG STERLING GROUP, L.L.C., THE ISSUER AND THE TRUSTEE; APPROVING THE FORM OF A GUARANTY AGREEMENT AMONG THE GUARANTORS NAMED THEREIN AND THE TRUSTEE, AND AUTHORIZING THE EXECUTION OF A BOND PURCHASE AGREEMENT FOR THE BONDS AMONG THE ISSUER, STERLING GROUP, L.L.C. AND CHAPMAN SECURITIES, INC., AS THE ORIGINAL PURCHASER OF THE BONDS. WHEREAS, the City of Salina, Kansas (the "Issuer") is authorized by K.S.A. 12-1740 et al., amended (the "Act"), to acquire, construct and improve and equip certain facilities (as defined in the t) for commercial, industrial and manufacturing purposes, and to enter into leases and lease -purchase eements with any person, firm or corporation for said facilities, and to issue revenue bonds for the rpose of paying the cost of any such facilities; and WHEREAS, the Issuer has heretofore and does hereby find and determine that it is desirable in er to promote, stimulate and develop the general and economic welfare and prosperity of the Issuer the state of Kansas that the Issuer issue its Assisted Living Residence Revenue Bonds (Sterling oup, L.L.C.) Series A and Series B, 1993, in the aggregate principal amount not to exceed S1,500,000 e "Series A and Series B, 1993 Bonds"), for the purpose of paying the costs of acquiring, constructing, talling and equipping an independent and assisted living center (the "Project"), as more fully described the Indenture and in the Lease hereinafter authorized and which Project shall be leased by the Issuer Sterling Group, L.L.C., a Kansas limited liability company (the "Tenant"); and K.hl C . P—t,nq — Salina, Kansas WHEREAS, the Issuer further finds and determines that it is necessary and desirable in inection with the issuance of the Series A and Series B, 1993 Bonds to execute and deliver a Trust lenture dated as of December 1, 1993, (the "Indenture"), with Union National Bank of Wichita, .chita, Kansas (the "Trustee"), for the purpose of issuing and securing the Series A and Series B, 1993 nds as provided therein and to enter into a Lease dated as of December 1, 1993 (the "Lease"), with : Tenant pursuant to which the Issuer shall cause the Project to be acquired, constructed, installed, lipped and leased to the Tenant in consideration of payments of Basic Rent, Additional Rent and other trges provided for therein, and to enter into a Land Use Restriction Agreement dated as of December 1993 (the "Land Use Restriction Agreement") by and among the Tenant, the Issuer and the Trustee the purpose of establishing certain restrictions requiring the Project to be occupied by persons of low moderate income in order to permit the Series A and Series B, 1993 Bonds to comply with certain visions of the Internal Revenue Code of 1986, as amended; NOW, THEREFORE, BE IT ORDAINED BY THE GOVERNING BODY OF THE CITY OF k, KANSAS, AS FOLLOWS: Section 1. Definition of Terms. All terms and phrases not otherwise defined herein shall have respective meanings set forth in the Indenture and the Lease herein authorized. Section 2. Authority to Cause the Project to be Purchased and Constructed. The Issuer is hereby :horized to cause the Project to be acquired, constructed, installed and equipped all in the manner and more particularly described in the Indenture and the Lease hereinafter authorized. Section 3. Authorization of and Security for the Series A and Series B. 1993 Bonds. There is hereby authorized and directed to be issued pursuant to the Act a series of revenue bonds to be designated A sisted Living Residence Revenue Bonds (Sterling Group, L.L.C.) Series A and Series B, 1993, dated D cember 1, 1993 in an aggregate principal amount not to exceed $1,500,000 (the "Series A and Series B 1993 Bonds") for the purpose of providing funds to pay the cost of acquiring, constructing, installing arid equipping the Project. The Series A and Series B, 1993 Bonds shall be in such principal amount, shill be dated and bear interest, shall mature and be payable at such times, shall be in such forms, shall be subject to redemption and payment prior to the maturity thereof, and shall be issued in the manner pi scribed and subject to the provisions, covenants and agreements set forth in the Indenture. The Series A and Series B, 1993 Bonds shall be limited obligations of the Issuer payable solely and only from the net earnings derived by the Issuer from the Project, including but not limited to the rents, revenues and receipts under the Lease (including, in certain circumstances, Bond proceeds and income from the to porary investment thereof and proceeds from insurance and condemnation awards and the Guaranty), ar i shall be secured by a pledge and assignment of the Trust Estate to the Trustee in favor of the Owners of the Bonds, as provided in the Indenture. The Bonds and the interest thereon shall not be a debt or ge leral obligation of the Issuer or the State of Kansas, shall not be payable in any manner by taxation, a do not constitute an indebtedness of the Issuer within the meaning of any constitutional or statutory d t limitation or restriction. Section 4. Authorization of Indenture and Land Use Restriction Agreement. The Issuer is hereby horized to enter into a Trust Indenture dated as of December 1, 1993, by and between the Issuer and Trustee (a copy of which has been submitted to and will be kept on file with the Issuer), under which Issuer shall pledge and assign to the Trustee, for the benefit of the owners of the Bonds, the Trust ate created thereby, all upon the terms and conditions set forth in said Indenture. The Issuer is hereby :her authorized to enter into the Land Use Restriction Agreement dated as of December 1, 1993 by . among the Tenant, the Issuer and the Trustee (a copy of which has been submitted to and will be kept file with the Issuer). ON K,h,-Cos Printing — Salina, Kansas Section 5. Lease of the Project. The Issuer shall cause the Project to be acquired, constructed, imstalled and equipped and the Project to be leased to the Tenant pursuant to and in accordance with the provisions of the Lease dated as of December 1, 1993, by and between the Issuer and the Tenant (a copy of which has been submitted to and will be kept on file with the Issuer). Section 6. Approval of the Guaranty Agreement. The Guaranty Agreement, dated as of De -.ember 1, 1993, pursuant to which Sterling Group, L.L.C. and its manager, Sterling House Corporation, guarantees to the Trustee, for the benefit of the owners of the Series A and Series B, 1993 Bonds (a copy of which has been submitted to and will be kept on file with the Issuer), the full and pr rapt payment of the principal of, redemption premium, if any, and interest on the Series A and Series 13,11993 Bonds, is hereby approved. Section 7. Authorization of Bond Purchase Agreement. The Series A and Series B, 1993 Bonds 11 be sold and delivered to Chapman Securities, Inc., Wichita, Kansas (the "Original Purchaser") upon terms and subject to the provisions of the Bond Purchase Agreement herein authorized, such Bond chase Agreement to be dated the date of execution thereof, by and among the Issuer, the Tenant and Original Purchaser (a copy of which has been submitted to and will be kept on file with the Issuer). Section 8. Execution of Bonds and Agreements. The Mayor or Vice Mayor of the City Commission of the City of Salina, Kansas are hereby authorized and directed to execute the Series A and Se ies B, 1993 Bonds and deliver same to the Trustee for authentication for and on behalf of and as the acl and deed of the Issuer in the manner provided in the Indenture. The Mayor or Vice Mayor of the Ci Commission are hereby further authorized and directed to execute and deliver the Indenture, the L e, the Land Use Restriction Agreement and the Bond Purchase Agreement for and on behalf of and as he act and deed of the Issuer in substantially the form presented to the Issuer this date, with such co rection or amendments thereto as the Mayor or Vice Mayor of the City Commission shall approve, wl i'ch approval shall be evidenced by his or her execution thereof, and such other documents, certificates ant instruments as may be necessary or desirable to carry out and comply with the purposes and intent of his Ordinance. The City Clerk or the Deputy City Clerk of the City are hereby authorized and diiected to attest the execution of the Series A and Series B, 1993 Bonds, the Indenture, the Lease, the La id Use Restriction Agreement and the Bond Purchase Agreement and such other documents, ce ificates and instruments as may be necessary or desirable to carry out and comply with the intent of thi Ordinance. -- Section 9. Pledge of the Project. The Issuer hereby pledges the Project to the payment of the Set ies A and Series B, 1993 Bonds in accordance with K.S.A. 12-1744. The lien created by such pledge shill be discharged when all of the Series A and Series B, 1993 Bonds and any Additional Bonds issued under the terms of the Indenture shall be deemed to have been paid within the meaning of the Indenture. Section 10. Approval of Preliminary Official Statement and Official Statement. The Preliminary O tcial Statement, a copy of which has been submitted to the Issuer on the date hereof, and the Official Statement, in substantially. the form of the Preliminary Official Statement, and the public distribution of the same by the Original Purchaser is hereby approved. The Issuer has not participated in the preparation of he Preliminary Official Statement or the Official Statement and has not verified the accuracy of the information therein. Accordingly, such approvals do not constitute approval by the Issuer of such information or a representation by the Issuer as to the completeness or accuracy of the information contained therein. In order to enable the Original Purchaser to comply with the requirements of Ru 15c2 -12(b)(1) of the Securities and Exchange Commission, the Mayor or Vice Mayor has deemed th information regarding the Issuer contained in the Preliminary Official Statement to be "final" as of its ate, except for the omission of such information as is permitted by Rule 15c2 -12(b)(1), and the action 3 the Mayor or Vice Mayor in that regard is hereby ratified and approved and the Mayor or Vice Mayor hereby authorized, if requested, to take such other actions or execute such other documents as the ayor or Vice Mayor in his reasonable judgment deem necessary to enable the Original Purchaser to mply with the requirements of such Rule. Section 11. Further Authority. The Issuer shall, and the officers, agents and employees of the I suer are hereby authorized and directed to, take such action, expend such funds and execute such other cuments, certificates and instruments as may be necessary or desirable to carry out and comply with e provisions of this Ordinance and to carry out, comply with and perform the duties of the Issuer with r spect to the Series A and Series B, 1993 Bonds, the Indenture, the Lease, the Land Use Restriction greement and the Bond Purchase Agreement, all as necessary to carry out and give effect to the t ansaction contemplated hereby and thereby. Section 12. Effective Date. This Ordinance shall take effect and be in full force from and after adoption by the City Commission and publication once in the official newspaper of the Issuer. PASSED by the governing body of the City of Salina, Kansas this 20th day of December, 1993. B. Shiever, City Clerk ►i 0"t - ,I- //L Peter F. Brungardt,'Mayor