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1998 HFA 01-98-01RESOLUTION NO, HFA 1 -98 -1 A RESOLUTION OF THE CITY OF SOUTH MIAMI HEALTH FACILITIES AUTHORITY (THE "AUTHORITY "), (i) AUTHORIZING THE ISSUANCE AND SALE BY THE AUTHORITY OF ITS CITY OF SOUTH MIAMI HEALTH FACILITIES AUTHORITY HOSPITAL REVENUE BONDS, SERIES 1998 (BAPTIST HEALTH SYSTEMS OBLIGATED GROUP) (THE 'BONDS ") IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $144,000,000 TO PROVIDE FUNDS TO (1) PAY OR REIMBURSE BAPTIST HEALTH SYSTEMS OF SOUTH FLORIDA, INC. (THE "PARENT "), BAPTIST HOSPITAL OF MIAMI, INC. ('BAPTIST HOSPITAL "), SOUTH MIAMI HOSPITAL, INC. ( "SOUTH MIAMI "), HOMESTEAD HOSPITAL, INC. ( "HOMESTEAD ") AND KEYS HOSPITAL FOUNDATION, INC., DOING BUSINESS AS MARINERS HOSPITAL ( "MARINERS" AND, TOGETHER WITH THE PARENT, BAPTIST HOSPITAL, SOUTH MIAMI AND HOMESTEAD, THE 'BORROWERS "), EACH A FLORIDA NOT FOR PROFIT, NONSTOCK MEMBERSHIP CORPORATION, FOR THE PAYMENT OF, OR TO REFINANCE CERTAIN PRIOR DEBT THE PROCEEDS OF WHICH WERE USED TO PAY, COSTS OF ACQUIRING, CONSTRUCTING, RENOVATING, REHABILITATING AND EQUIPPING CERTAIN HEALTHCARE FACILITIES, (2) FUND A DEBT SERVICE RESERVE FUND FOR THE BENEFIT OF THE BONDS IF SUCH FUND IS DEEMED NECESSARY OR DESIRABLE BY THE PARENT AND THE AUTHORITY, AND (3) PAY CERTAIN COSTS INCURRED IN CONNECTION WITH THE ISSUANCE OF THE BONDS; (ii) AUTHORIZING THE EXECUTION AND DELIVERY OF A BOND PURCHASE AGREEMENT FOR THE SALE OF THE BONDS; (iii) AUTHORIZING THE EXECUTION AND DELIVERY OF A BOND TRUST INDENTURE SECURING THE BONDS; (iv) AUTHORIZING THE EXECUTION AND DELIVERY OF A LOAN AGREEMENT PROVIDING FOR THE LOAN OF THE PROCEEDS OF THE BONDS TO THE PARENT; (v) APPROVING THE FIFTH SUPPLEMENTAL MASTER TRUST INDENTURE OF THE BORROWERS; (vi) AUTHORIZING THE EXECUTION AND DELIVERY OF A TAX EXEMPTION AGREEMENT AND CERTIFICATE WITH RESPECT TO THE BONDS; (vii) AUTHORIZING THE DISTRIBUTION OF A PRELIMINARY OFFICIAL STATEMENT AND THE Page I of 13 EXECUTION AND DELIVERY OF AN OFFICIAL STATEMENT IN CONNECTION WITH THE ISSUANCE OF THE BONDS; (viii) APPROVING CREDIT SUPPORT FOR THE BONDS; (ix) AUTHORIZING THE EXECUTION AND DELIVERY OF TWO INTERLOCAL AGREEMENTS; (x) PROVIDING THAT THE BONDS SHALL NOT CONSTITUTE A DEBT, LIABILITY OR OBLIGATION OF THE CITY OF SOUTH MIAMI, FLORIDA OR OF THE STATE OF FLORIDA OR OF ANY POLITICAL SUBDIVISION OR AGENCY THEREOF, BUT SHALL BE PAYABLE SOLELY FROM THE REVENUES PROVIDED THEREFOR, AND THAT NEITHER THE FAITH AND CREDIT NOR ANY TAXING POWER OF THE CITY OF SOUTH MIAMI, FLORIDA OR OF THE STATE OF FLORIDA OR OF ANY POLITICAL SUBDIVISION OR AGENCY THEREOF IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON THE BONDS; (xi) PROVIDING FOR OTHER RELATED MATTERS; (xii) AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the City of South Miami Health Facilities Authority (the "Authority ") was created pursuant to the Health Facilities Authorities Law, Part III of Chapter 154 of the Florida Statutes, as amended (the "Act "), upon a determination of a need for the Authority by the South Miami City Commission under Section 54.207(1) of the Act; and WHEREAS, pursuant to City of South Miami Ordinance No. 11 -95 -1584 (the "Ordinance "), Chapter 154, Part III and Chapter 159, Part II, Florida Statutes, the Authority is vested with the power to authorize the issuance and sale of bonds, and to take such other actions identified in the title of this resolution, for the purpose of assisting health facilities in the acquisition, construction, financing and refinancing of projects; and, WHEREAS, the Authority is authorized to issue revenue bonds and loan the proceeds thereof to a "health facility," as defined in the Ordinance, for the purposes of financing the "cost" of a "project," as such terms are defined in the Ordinance, and refunding outstanding obligations issued by or on behalf of a health facility to provide funds for the cost of a project; and WHEREAS, Baptist Health Systems of South Florida, Inc. (the "Parent "), Baptist Hospital of Miami, Inc. ('Baptist Hospital "), South Miami Hospital, Inc. ( "South Miami "), Page 2 of 13 Homestead Hospital, Inc. ( "Homestead ") and Keys Hospital Foundation, Inc., doing business as Mariners Hospital ( "Mariners" and, together with the Parent, Baptist Hospital, South Miami and Homestead, the 'Borrowers "), each a Florida not for profit, nonstock membership corporation, have requesting the Authority to assist the Borrowers in obtaining funds to be used to (i) pay or reimburse the Borrowers for the payment of, or to refinance certain prior indebtedness the proceeds of which were used to pay costs of acquiring, constructing, renovating, rehabilitating and equipping certain healthcare facilities (the "Project'), (ii) fund a debt service reserve fund for the benefit of the Bonds if such fund is deemed necessary or desirable by the Parent and the Authority and (iii) pay certain costs incurred in connection with the issuance of the Bonds; and WHEREAS, in order to obtain funds for such purposes, the Authority desires to authorize the issuance and sale of not to exceed $144,000,000 in aggregate principal amount, excluding any original issue discount, of its City of South Miami Health Facilities Authority Hospital Revenue Bonds, Series 1998 (Baptist Health Systems Obligated Group) (the 'Bonds ") and the loan of the proceeds from the sale of the Bonds to the Borrowers, all under and pursuant to the Bond Trust Indenture and the Loan Agreement hereinafter referred to; and WHEREAS, other than the portion of the Project to be used by South Miami, the Project is or will be located outside of the boundaries of the City of South Miami, Florida; and WHEREAS, the Authority is a "public agency" as defined in Section 163.01, Florida Statutes, as amended, which is titled the "Florida Interlocal Cooperation Act of 1969" (the "Interlocal Act") and as such "public agency" is authorized to enter into interlocal agreements pursuant to the Interlocal Act, for the joint exercise of powers which it shares in common with other public agencies and which such public agencies might exercise separately; and WHEREAS, in order to accomplish economies of scale and other cost savings, and to reduce the costs of providing health care services in the areas served by the Borrowers, the Authority desires to assist the Borrowers by issuing the Bonds; and WHEREAS, the Authority has been requested to enter into interlocal agreements with Miami -Dade County, Florida and Monroe County, Florida, each a "public agency" under the Page 3 of 13 Interlocal Act, to provide for the issuance by the Authority of its Bonds for the benefit of the Borrowers (other than South Miami); and WHEREAS, the Authority further desires to authorize the sale of the Bonds by a negotiated sale to an underwriting syndicate or selling group led by Merrill Lynch & Co (collectively, the "Underwriters "), since the Parent has requested such sale to the Underwriters and since it appears to the Authority, for the reasons hereinafter set forth, that a negotiated sale of the Bonds rather than a public sale by competitive bid is in the best interests of the Authority and the Borrowers; and WHEREAS, authorizing the issuance and sale of the Bonds, as provided for in this resolution, furthers the purpose of the Ordinance. NOW, THEREFORE, Be It Resolved by the City of South Miami Health Facilities Authority as follows: Section 1. Findings. The Authority hereby finds and determines that: a. The Borrowers are each a "health facility" within the meaning of Section 2(0 of the Ordinance. b. Pursuant to Section 4 of the Ordinance, the Authority is authorized and empowered to enter into the Loan Agreement hereinafter referred to. C. Pursuant to Section 218.385 of the Florida Statutes, as amended, the sale of the Bonds to the Underwriters on the basis of a negotiated sale rather than a public sale by competitive bid is in the best interests of the Authority and the Borrowers; and the Authority hereby further finds and determines that the following reasons necessitate such sale of the Bonds to the Underwriters through a negotiated sale: i. Bonds issued by public bodies for the benefit of not - for - profit hospital corporations ( "Hospital Bonds ") generally involve specialized situations and transactions which need detailed analysis, structuring and explanation throughout the course of the issue by sophisticated financial advisors, underwriters, investment bankers and similar parties, such as the Underwriters, experienced in Page 4 of 13 the structuring of issues of Hospital Bonds (hereinafter referred to collectively as "Health -care Underwriters" and individually as a "Health -care Underwriter "), much of which would not generally be available on a timely basis from the ultimate underwriter of Hospital Bonds issued pursuant to a public competitive sale. ii. Hospital Bond issues generally involve a rather detailed and often complicated explanation to potential investors of the structure of the issue, the nature of the underlying hospital corporation and the impact upon each of the foregoing of federal and state health care regulations, including Medicare and Medicaid practices and procedures, and the assistance of a Health -care Underwriter in preparing necessary offering memoranda, official statements and related information is desirable from the standpoint of the hospital corporation involved in the issue and from the standpoint of the public body issuing the Hospital Bonds in insuring full and accurate disclosure of all relevant information. iii. For the foregoing and related reasons, most of the Hospital Bonds heretofore issued throughout the United States have involved participation throughout the structuring and offering process of Health -care Underwriters who have purchased or arranged for the purchase of the Hospital Bonds through a negotiated sale rather than through a public sale by competitive bid; accordingly, the market may well be more receptive to an issue of Hospital Bonds sold on a negotiated basis than to one sold by competitive public sale. iv. Consequently, the presence of the Underwriters throughout the structuring of the Bond issue is desirable in attempting to obtain the most attractive financing for the Authority and the Borrowers. Section 2. Authorization of Bonds. The Authority shall finance the Project, certain related expenses, including fiscal, legal and other incidental costs and charges, bond insurance premium and other fees and expenses associated with credit support and the funding of a debt service reserve fund, if deemed necessary, and in order to accomplish the same, there is hereby authorized the issuance of not to exceed $144,000,000 in aggregate principal amount of the City of South Miami Health Facilities Authority Hospital Revenue Bonds, Series 1998 (Baptist Health Systems Obligated Group) of the Authority. The principal of the Bonds and the premium, if any, and interest thereon shall not be deemed to constitute a debt, liability or obligation of the City of South Miami, Florida or of the State of Florida or of any political subdivision or agency thereof, but shall be payable solely from the revenues Page 5 of 13 provided therefor, and neither the faith and credit nor any taxing power of the City of South Miami, Florida or of the State of Florida or of any political subdivision thereof is pledged to the payment of the principal of, premium, if any, or interest on the Bonds. The Bonds shall: (1) be issued in an aggregate principal amount, excluding any original issue discount, not exceeding $144,000,000; (2) be issued in fully registered form in such denominations as provided in the Bond Trust Indenture hereinafter referred to; (3) bear interest at stated rates not exceeding 5.25 %; (4) mature no later than 35 years from the date of issuance; and (5) be dated as provided in the Bond Trust Indenture. The exact principal amount of the Bonds, the interest rates thereon and the final maturity dates thereof shall be fixed, within the foregoing limits, and the optional and mandatory redemption provisions thereof shall be fixed as provided in the Bond Trust Indenture hereinafter referred to and as approved by the Chairperson or Vice Chairperson of the Authority executing the same, with such execution to constitute conclusive evidence of such officer's approval and the Authority's approval of the final terms of the Bonds. The Bonds shall be executed on behalf of the Authority by the manual or facsimile signature of its Chairperson or Vice Chairperson and shall have impressed or printed by facsimile thereon the corporate seal of the Authority attested with the manual or facsimile signature of a Member of the Authority designated for such purpose as provided in Section 4 hereof. In other respects the Bonds shall be in the forms, shall bear interest, shall be executed and authenticated, shall be subject to replacement and shall be delivered as provided in the Bond Trust Indenture hereinafter referred to and set out as Exhibit A attached hereto. Page 6 of 13 Section 3. Authorization of Sale: Authorization of Execution and Delivery of Bond Purchase Agreement. The Authority does hereby authorize the sale of the Bonds to the Underwriters; provided, however, that the Bonds shall be sold with terms within the limits set forth in Section 2 hereof and that the total compensation paid to the Underwriters, including any underwriting discount, shall not exceed an amount equal to 0.75% of the aggregate principal amount of the Bonds. The Authority does hereby authorize and approve the execution and delivery on behalf of the Authority by its Chairperson or Vice Chairperson of the Bond Purchase Agreement to be dated the date of the sale of Bonds (the "Bond Purchase Agreement ") among the Authority, the Parent and Merrill Lynch & Co., acting on behalf of itself and the other Underwriters to be named therein. The Bond Purchase Agreement shall be in substantially the form thereof attached hereto and marked "Exhibit B" and hereby approved, with such changes therein as shall be approved by the Chairperson or Vice Chairperson executing the same, with such execution to constitute conclusive evidence of such officer's approval and the Authority's approval of any changes therein from the form of Bond Purchase Agreement attached hereto. The award of the sale of the Bonds to the Underwriters is expressly conditioned upon the receipt by the Authority of a disclosure statement of the Underwriters prepared in accordance with Section 218.385 of the Florida Statutes, as amended, which receipt shall be evidenced by the Authority's execution and delivery of the Bond Purchase Agreement. The Bond Purchase Agreement shall also contain a "Truth -in- Bonding Statement" in conformance with the requirements of Section 218.385 of the Florida Statutes, as amended. Section 4. Designation of Attesting Member. Leon Valentine or, in the case of such Member's absence or inability to act, Barbara Acker or Elizabeth Hutson Claviio, all Members of the Authority (the "Designated Members "), are hereby designated and authorized on behalf of the Authority Page 7 of 13 to attest to the seal of the Authority and to the signature of the Chairperson or Vice Chairperson of the Authority as they appear on the Bonds, the Bond Trust Indenture, the Loan Agreement and the Interlocal Agreements, each as hereinafter referred to, and any other documents which may be necessary or helpful in connection with the issuance and delivery of the Bonds and in connection with the application of the proceeds thereof. Section 5. Authorization of Execution and Delivery of Bond Trust Indenture. The Authority does hereby authorize and approve the execution by the Chairperson or Vice Chairperson and any of the Designate Members of the Authority and the delivery of a Bond Trust Indenture (the "Bond Trust Indenture ") between the Authority and First Union National Bank, as bond trustee (the "Bond Trustee "), providing for the issuance thereunder of the Bonds and setting forth the terms and provisions applicable to the Bonds, including a description of the underlying security for the Bonds and expressing the contract between the Authority and the holders thereof. The Bond Trust Indenture shall be in substantially the form thereof attached hereto and marked "Exhibit A" and hereby approved, with such changes therein as shall be approved by the Chairperson or Vice Chairperson executing the same, with such execution to constitute conclusive evidence of such officer's approval and the Authority's approval of any changes therein from the form of Bond Trust Indenture attached hereto. Section 6. Authorization of Execution and Delivery of Loan Agreement. The Authority does hereby authorize and approve the execution by the Chairperson or Vice Chairperson and any of the Designated Members of the Authority and the delivery of a Loan Agreement (the "Loan Agreement ") between the Authority and the Borrowers, providing for the loan of the proceeds of the Bonds to the Borrowers. The Loan Agreement shall be in substantially the form thereof attached hereto and marked "Exhibit C" and hereby approved, with such changes therein as shall be approved by the Chairperson or Vice Chairperson executing the same, with such execution to Page 8 of 13 constitute conclusive evidence of such officer's approval and the Authority's approval of any changes therein from the form of Loan Agreement attached hereto. Section 7. Approval of Fifth Supplemental Master Trust Indenture and the Series 1998 Obligation. The loan of Bond proceeds to the Borrowers will be secured by the Direct Note Obligation, Series 1998 (the "Series 1998 Obligation ") of the Parent payable to the Bond Trustee in a principal amount equal to the aggregate principal amount of Bonds, which Series 1998 Obligation will be issued under the Fifth Supplemental Master Trust Indenture (the "Fifth Supplemental Master Indenture ") among the Borrowers, South Miami Health Systems, Inc. ( "SMHS ") and First Union National Bank as master trustee (the "Master Trustee "), which supplements and amends the Master Trust Indenture dated as of March 1, 1993, as previously supplemented and amended, among the Borrowers, SMHS and the Master Trustee: The Authority hereby approves the execution by the Borrowers, SMHS and the Master Trustee of the Fifth Supplemental Master Indenture (including the form of the Series 1998 Obligation as set forth therein), which shall be in substantially the forms thereof attached hereto and marked "Exhibit D" and hereby approved, with such changes therein as shall approved by the Chairperson or Vice Chairperson executing the Loan Agreement, with such execution of the Loan Agreement to constitute conclusive evidence of such officer's approval and the Authority's approval of any changes therein from the form of Fifth Supplemental Master Indenture attached hereto. Section 8. Authorization of Execution and Delivery of Interlocal Agreements. The Authority does hereby authorize and approve the execution by the Chairperson or Vice Chairperson of the Authority and the delivery of an Interlocal Agreement between the Authority and Monroe County, Florida (the "Monroe Interlocal Agreement ") and an Interlocal Agreement between the Authority and Miami -Dade County, Florida (the "Dade Interlocal Agreement" and together with the Monroe Page 9 of 13 Interlocal Agreement, the "Interlocal Agreements "). The Interlocal Agreements shall be in substantially the forms thereof attached hereto and marked "Exhibit E" and "Exhibit F", respectively, and hereby approved, with such changes therein as shall be approved by the Chairperson or Vice Chairperson executing the same, with such execution to constitute conclusive evidence of such officer's approval and the Authority's approval of any changes therein from the forms of Interlocal Agreements attached hereto. Section 9. Authorization of Execution and Delivery of Tax Exemption Agreement. The Authority does hereby authorize and approve the execution by the Chairperson or Vice Chairperson of the Authority and the delivery of a Tax Exemption Agreement and Certificate to be dated the date of the issuance and delivery of the Bonds (the "Tax Exemption Agreement ") among the Authority, the Bond Trustee and the Borrowers establishing a Rebate Fund thereunder in order to provide for certain payments to the United States as required by applicable Treasury Regulations. The Tax Exemption Agreement shall be in such form as is approved by the Chairperson or Vice Chairperson executing the same, with such execution to constitute conclusive evidence of such officer's approval and the Authority's approval of the form of Tax Exemption Agreement. Section 10. Authorization of Preliminary Official Statement and Official Statement. The Authority hereby authorizes the use and distribution by the Underwriters of a Preliminary Official Statement of the Authority and the Borrowers (the "Preliminary Official Statement "), in substantially the form thereof attached hereto and marked "Exhibit G," in connection with the offering of the Bonds. The Chairperson or Vice Chairperson of the Authority is hereby authorized and empowered, for and on behalf of the Authority, to execute and deliver a final Official Statement of the Authority and the Borrowers relating to the Bonds in substantially the form of the Preliminary Official Statement, but with such changes therein as may be necessary to reflect the sale of the Bonds on the terms hereby authorized and with such further changes therein as the Page 10 of 13 Chairperson or Vice Chairperson shall deem necessary or desirable as conclusively evidenced by such officer's execution thereof. Section 11. Approval of Credit Sup oo . In order to provide credit support for the Bonds, MBIA Insurance Corporation (the "Bond Insurer ") will issue a financial guaranty insurance policy insuring the payment of the principal of and interest on the Bonds. The Authority hereby approves the Bond Insurer as the provider of such credit support. Section 12. Authentication and Delivery of Bonds. Upon the execution of the Bonds in accordance with the provisions of the Bond Indenture, the Chairperson or Vice Chairperson of the Authority shall deposit the same with the Bond Trustee for authentication and delivery to or upon the instructions of the Underwriters. The Bond Trustee is hereby requested to authenticate and deliver the Bonds in accordance with the Bond Indenture. The Chairperson or Vice Chairperson shall receive and receipt for the proceeds of the sale of the Bonds an behalf of the Authority and shall deposit said proceeds with the Bond Trustee to be applied in the manner set forth in the Bond Indenture. Section13. Securities Laws. The Authority does hereby authorize its Members, officials and officers to take or cause to be taken all action deemed necessary or advisable in order to comply with the requirements of the securities or "Blue Sky" laws of any jurisdiction in connection with the offering and sale of the Bonds. Section 14. Bond Validation. Pursuant to Section 75.05(3), Chapter 75, Florida Statutes, as amended, the Authority hereby elects not to validate the issuance of the Bonds. Section 15. Further Acts. The Chairperson or Vice Chairperson and any of the Designated Members shall sign all necessary documents on behalf of the Authority to comply with the requirements Page 11 of 13 of the Bond Indenture and the Bond Purchase Agreement and shall furnish the Borrowers and the Underwriters with such further assurances as they may reasonably require of the Authority in connection with the issuance and sale of the Bonds. Section 16. Ratification of Acts. All of the things and doings of the Members, officials, officers, agents and employees of the Authority which are in conformity with the intent and purposes of this Resolution, whether heretofore or hereafter taken or done, shall be and are hereby ratified, confirmed and approved. Section 17. Severabilitv. If any section, paragraph, clause or provision of this Resolution shall be held to be invalid or ineffective for any reason, the reminder of this Resolution shall continue in full force and effect, it being expressly hereby found and declared that the remainder of this Resolution would have been adopted despite the invalidity or ineffectiveness of such section, paragraph, clause or provision. Section 18. Effective Date. This Resolution shall take effect immediately upon its adoption, and any provisions of any previous resolutions in conflict with the provisions herein are hereby superseded. Page 12 of 13 ADOPTED this 7th day of October, 1998. Z T *A CITY CLERK READ AND APPROVED AS TO FORM: CITY ATTORNEY CITY OF SOUTH MIAMI HEALTH FACILITIES AUTHORITY ,774 CHAIRPERSON Page 13 of 13 AUTHORITY VOTE: 4 -0 Chair Valentine: Yea Vice Chair Acker: Yea Member Young: Yea Member Hutson Clavijo: Yea