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AN ORDINANCE AUTHORIZING THE EXECUTION AND DELIVERY BY THE CITY OF GAHANNA, OHIO OF A MODIFICATION AGREEMENT, WHICH AMENDS AND SUPPLEMENTS THE TRUST INDENTURE AND LEASE AGREEMENT, SECURING THE OUTSTANDING $4,360,000 ADJUSTABLE RATE HEALTH CARE FACILITIES REVENUE BONDS, SERIES 1995 (GAHANNA CARE CENTER, INC. PROJECT) OF THE CITY, AND OF A SUBORDINATION AGREEMENT RELATED THERETO, AND TO DECLARE AN EMERGENCY.
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WHEREAS, the City of Gahanna, Ohio (the "Issuer") is a municipal corporation and political subdivision organized and existing under the laws of the State of Ohio and by virtue of the laws of said State, including Chapter 140 of the Ohio Revised Code (the "Act"), an ordinance adopted on April 18, 1995 by the City Council of the Issuer (the "Council"), and a certificate of award dated April 26, 1995, has issued its $4,360,000 Adjustable Rate Health Care Facilities Revenue Bonds, Series 1995 (Gahanna Care Center, Inc. Project) dated April 26, 1995, (the "Bonds"), of which $3,395,000 in principal amount will remain outstanding on October 1, 2001; and
WHEREAS, the proceeds of the Bonds were used to pay costs of acquiring, constructing, improving and equipping "hospital facilities" as defined in the Act, consisting of a 100-bed nursing home (the "Project"); which Project was leased to Traditions at Stygler Road, formerly known as Gahanna Care Center, Inc. (the "Borrower"), pursuant to the Lease Agreement dated as of April 1, 1995 (the "Lease"), between the Issuer and the Borrower; and
WHEREAS, the Bonds are secured by a Trust Indenture dated as of April 1, 1995 (the "Indenture"), between the City and Chase Manhattan Trust Company, National Association (successor to Mellon Bank, F.S.B., successor to KeyBank National Association, formerly known as Society National Bank), as trustee (the "Trustee");
WHEREAS, KeyBank National Association ("KeyBank"), successor to Society National Bank, is currently the registered owner of all outstanding Bonds; and
WHEREAS, the Borrower now proposes to enter into a Bond Purchase Agreement, dated as of October 1, 2001 (the "Purchase Agreement"), with The Huntington National Bank (the "Bank"), pursuant to which the Bank will agree to purchase all outstanding Bonds from KeyBank and to convert the interest rate on the Bonds to a new variable interest rate mode, based primarily upon the LIBOR index, pursuant to the terms of a proposed Modification Agreement, dated as of October 1, 2001 (the "Modification Agreement"), among the Issuer, the Trustee, the Borrower, National Church Residences (the "Corporation") and the Bank; and
WHEREAS, the Corporation, as the sole member of the Borrower, now proposes to enter into a Guaranty Agreement (the "Guaranty") dated as of October 1, 2001, between the Corporation and the Bank, pursuant to which the Corporation will unconditionally guarantee to the Bank, among other things, the payment of all principal of, and interest and any premium on, the Bonds, when due; and
WHEREAS, the Council has determined that it is necessary to enter into (i) the Modification Agreement in order to amend and supplement the Indenture and the Lease, and thereby amending the terms of the Bonds to provide for such new variable interest rate mode; and (ii) the Subordination Agreement, dated as of October 1, 2001 (the "Subordination Agreement"), among the Borrower, the Issuer, the Trustee and the Bank, in order to subordinate the Base Lease and the Lease to the Open-End Mortgage, Assignment of Rents, and Security Agreement, dated as of October 1, 2001 (the "Mortgage"), between the Borrower and the Bank; all pursuant to Section 7.07 of the Indenture; and
WHEREAS, that this ordinance must be immediately effective so that the Borrower realize debt service savings as soon as possible, and thereby benefit the people of the Issuer by enhancing the availability of the services provided by the Borrower at the "hospital facilities" constituting the Project as soon as possible all for the preservation of the public peace, health safety and welfare;
NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF GAHANNA, STATE OF OHIO:
Section 1 Modification of the Terms of the Bonds.
(a) Interest Rate. Upon the later to occur of October 1, 2001 or the date that the Bank purchases 100% of all outstanding Bonds, the interest rate mode on the Bonds will automatically convert to a new variable interest rate mode, based primarily upon the LIBOR index, pursuant to the terms of the Modification Agreement.
(b) Form of Bonds. The Trustee is hereby authorized to cause to be printed replacement bonds, containing such modifications to the Bond form attached to the Indenture as are necessary or appropriate to reflect the modifications to the Bond terms made by the Modification Agreement, and to cause such replacement bonds to be issued to the Bank in substitution for the existing Bonds.
Section 2. Modification Agreement and Subordination Agreement. The Mayor and the Director of Finance and any other appropriate officer of the Issuer, alone or in conjunction with any of the foregoing, are hereby authorized and directed to execute and deliver, in the name and on behalf of the Issuer, the Modification Agreement, attached hereto as EXHIBIT A, and Subordination Agreement, attached hereto as EXHIBIT B, in substantially the forms submitted to this Council, which instruments are hereby approved, with such changes therein not inconsistent with this Ordinance and not substantially adverse to the Issuer as may be permitted by the Act and approved by the officers executing the same on behalf of the Issuer. The approval of such changes by said officers, and that such changes are not substantially adverse to the Issuer, shall be conclusively evidenced by the execution of such instruments.
Section 3. Other Documents. The Mayor, the Director of Finance, and the Clerk of Council, and any other appropriate officer of the Issuer, alone or in conjunction with any of the foregoing, are hereby further authorized and directed to execute such certifications, financing statements, assignments and instruments as are in the opinion of bond counsel to the Issuer necessary to perfect the pledges set forth in the Indenture and to consummate the transactions provided for in the Modification Agreement. The Clerk or other appropriate officer of the Issuer, shall furnish to the Bank a true transcript of proceedings, certified by said Clerk or officer, of all proceedings had with reference to the modifications to the terms of the Bonds made by the Modification Agreement, along with such information from the records as is necessary to determine the regularity and validity of such modifications.
Section 4. Compliance with Open Meeting Requirements. It is hereby found and determined that all formal actions of this Council concerning and relating to the enactment of this ordinance were taken in an open meeting of this Council, and that all deliberations of this Council and of any of its committees that resulted in such formal action, were in meetings open to the public, in compliance with all legal requirements, including Section 121.22, Revised Code.
Section 5. Effective Date; Emergency Clause. That, for the reasons set forth in the preamble hereinabove, this ordinance is declared emergency legislation and shall be in full force and effect after passage by this Council and on date of signature approval by the Mayor.