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GILMORE & BELL A PROFESSIONAL CORPORATION ATTORNEYS AT LAW 2405 gRAND BOULEVARD, SUITE 1100 KANSAS CITY, MISSOURI  64108-2521

sT. LOUIS, MISSOURI WICHITA, KANSAS LINCOLN, NEBRASKA

January 19, 2006

Mayor and City Commission

City of Lawrence, Kansas

Lawrence, Kansas

                                    Re:  Housing Development Revenue Bonds (Section 8 Assisted--HUD-FHA                                                    Insured Mortgage Loan), Series May 1, 1979

            In 1979, the City of Lawrence, Kansas, issued the above-referenced bonds in connection with the residential development known as Vermont Towers (the "Project") which is located at 1101 Vermont Street in Lawrence, Kansas.  The Project is owned by Vermont Towers, Ltd., a Kansas limited partnership (the "Company"). The Bonds are secured by mortgage insurance provided by the U.S. Department of Housing and Urban Development ("HUD").

            The Company wishes to sell the Project to Lawrence Senior Residences, L.P., a Kansas limited partnership (the "Purchaser").  As a part of the sale, the Company will assign its interests to the Purchaser and the Purchaser will assume the obligations of the Company with respect to the bonds and under the transaction documents (the "Transaction Documents") related to the bonds. 

            Pursuant to the Transaction Documents, the sale of the Project requires the approval of HUD, the fiscal agent for the bonds and the City.  The City has been requested to give its approval to the sale, subject to receipt of approval from HUD and the fiscal agent.

            The Purchaser has indicated its desire to redeem and pay the bonds prior to maturity and has requested that the City assist in that process.

            The resolution for consideration by the City Commission authorizes the execution of documents that include the City's approval of the assignment by the Company and the termination of certain Transaction Documents upon payment in full of the bonds.. 

            We recommend that the City Commission adopt the resolution as presented.

                                                            Very truly yours,

                                                            Clark R. Irey II              

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