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2003-25435 Reso RESOLUTION NO. 2003-25435 RESOLUTION 0 F THE MAYOR A NO CITY COMMISSION 0 F THE CITY 0 F MIAMI BEACH, FLORIDA, APPROVING THE ISSUANCE AND SALE OF NOT TO EXCEED $115,000,000 PRINCIPAL AMOUNT OF CITY OF MIAMI BEACH HEALTH FACILITIES AUTHORITY HOSPITAL REVENUE REFUNDING BONDS, SERIES 2004 (MOUNT SINAI MEDICAL CENTER OF FLORIDA), BY THE CITY OF MIAMI BEACH HEALTH FACILITIES AUTHORITY, INCLUDING THE APPROVAL REQUIRED BY SECTION 147(f) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, SUCH APPROVALS TO BECOME EFFECTIVE WHEN NOTICE IS FILED BY SUNTRUST BANK, AS TRUSTEE, ON OR PRIOR TO DECEMBER 31, 2003, WITH THE NATIONALLY RECOGNIZED MUNICIPAL SECURITIES INFORMATION REPOSITORIES TO THE EFFECT THAT THE EVENTS OF DEFAULT DESCRIBED IN THAT CERTAIN NOTICE OF EVENTS OF DEFAULT DATED NOVEMBER 18, 2003 FROM THE TRUSTEE HAVE BEEN WAIVED OR RESOLVED; PROVIDING THAT SAID BONDS SHALL NOT CONSTITUTE A DEBT, LIABILITY OR OBLIGATION OF THE CITY OR THE STATE OF FLORIDA OR ANY POLITICAL SUBDIVISION THEREOF BUT SHALL BE PAYABLE SOLELY FROM THE REVENUES PROVIDED THEREFOR; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the City of Miami Beach Health Facilities Authority (the "Authority") was created by Ordinance No. 90-2701 adopted on July 25, 1990 (the "Ordinance") by the Mayor and City Commission of the City of Miami Beach, Florida (collectively, the "Commission") pursuant to the Health Facilities Authorities Law, Chapter 154, Part III, Florida Statutes, as amended (the "Act"); and WHEREAS, the Ordinance was amended by Ordinance No. 91-2738 adopted on April 10, 1991 by the Commission, Ordinance No. 92-2776 adopted on March 4, 1992 by the Commission and Ordinance No. 97-3086 adopted on July 2, 1997 by the Commission and taking effect on January 1, 1998; and WHEREAS, on December 3, 2003, as required by Section 147(f) of the Internal Revenue Code of 1986, as amended (the "Code"), the Authority held a public hearing, for which there was reasonable public notice published on November 16, 2003 in The Miami Herald (a copy of which notice is attached hereto as Exhibit I and made a part Miami/\3280.2 hereof), for the purpose of giving all interested persons an opportunity to express their views in connection with the Authority's proposed issuance of its not to exceed $115,000,000 principal amount of City of Miami Beach Health Facilities Authority Hospital Revenue Refunding Bonds, Series 2004 (Mount Sinai Medical Center of Florida) (the "Bonds"); and WHEREAS, on December 3, 2003, the Authority adopted a resolution, a copy of which is attached hereto as Exhibit II and made a part hereof (the "Bond Resolution"), authorizing, under the provisions of the Act and the Florida Industrial Development Financing Act, Chapter 159, Part II, Florida Statutes, as amended, the issuance of the Bonds, the proceeds of which will be loaned to Mount Sinai Medical Center of Florida, Inc., a not-for-profit corporation organized under the laws of the State of Florida (the "Medical Center"), and used, together with a ny other available moneys, if any, to (a) refund and defease all of the currently outstanding City of Miami Beach Health Facilities Authority Hospital Revenue Bonds, Series 2001 B (Mount Sinai Medical Center of Florida Project), and City of Miami Beach Health Facilities Authority Hospital Revenue Bonds, Taxable Series 2001 C (Mount Sinai Medical Center of Florida Project) (collectively, the "Prior Bonds"), previously issued for the benefit of the Medical Center, (b) fund a deposit to a debt service reserve and (c) pay expenses in connection with the issuance of the Bonds and the refunding and defeasance of the Prior Bonds; and WHEREAS, the Ordinance, as amended, requires the approval by the Commission of sales of bond issues of the Authority and Section 147(f) of the Code requires the approval by the Commission of the issuance of the Bonds; and Miami/13280.2 2 WHEREAS, the Commission desires to approve the Bond Resolution and the issuance and sale of the Bonds pursuant thereto. NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA: Section 1. The Bond Resolution adopted by the Authority on December 3, 2003 and the issuance and sale of the Bonds pursuant thereto are hereby in all respects approved, including approval of the issuance of the Bonds in a principal amount not to exceed $115,000,000 in accordance with Section 147(f) of the Code, such approvals to become effective when notice is filed by SunTrust Bank, as trustee ( the "Trustee"), on or prior to December 31, 2003, with the Nationally Recognized Municipal Securities Information Repositories to the effect that the Events of Default described in that certain Notice of Events of Default dated November 18, 2003 from the Trustee have been waived or resolved. Section 2. The Bonds and interest thereon shall not be deemed to constitute a debt, liability or obligation of the City of Miami Beach, Florida or of the State of Florida or of any political subdivision thereof, but shall be payable solely from the revenues referred to in the Bond Resolution, and neither the faith and credit nor any taxing power of the City of Miami Beach, Florida or of the State of Florida or of any political subdivision thereof is pledged to the payment of the principal of, redemption premium, if any, or interest on the Bonds. Miami/\3280.2 3 Section 3. This resolution shall take effect immediately upon its adoption. ADOPTED this 10th day of December ,2003 (SEAL) Attest: _~Jr r{LL~ City Clerk ~ APPROVED AS TO FORM & LANGUAGE & FOR EXECUTION 12..-'0.. r:!J Date Miamil13280.2 4 ~ht .tami Htfal~ etht Heralb BHDWAHD m:mImII PUBLJ:SHED DAJ:LY MIAMI, FLORIDA STATE OF FLORIDA COUNTY OF DADE Before the undersigned authority personally appeared: Sonia Correa who on oath says that she is an Account Executive of The Miami Herald, a daily newspaper published at Miami in Dade County, Florida; that the advertisements for City of Miami Beach appeared in said newspaper in the issues of: Beach Neighbors, November 1611>, 2003, Pg. 34MB Affidavit further says that the said Miami Herald is a newspaper published at Miami, in the said Dade County, Florida and that the said newspaper has heretofore been continuously published in said Dade County, Florida, each day and has been entered as second class mail matter at the post office in Miami, in said Dade County, Florida, for a period of one year next preceding the first publication of the attached copy of advertisement. a.7~ Sworn to and subscribed before me This 2nd day of December, 2003 Carolyn Mason MY COMMISSION # 00148187 EXPIRES JONDEDSeptember 6. 2006 . THl!U Tl!OV FAIN INSURANCE INe. :~w.her"ld.co": I THE HERALD I SUNDAY.NOVEMBER 16. 2003 I ~ 1- : PUBLIC HEARt~' . - . cg NOTICE OF PUBUC HEARING REGARDING THE . PROPOSED ISSUANCE BY THE CITY OF MIAMI BE:ACH HEALTH FACILmES AUTHORITY OF UP TO $115,000,000 HOSPITAl. REVENUE REFUNDING BONOS ' (MOUHTSINAI MEDICAL CENTER OF FLORIDA) Noliee Is Iler8by giYen that . public haarlng will be held by the City rI MiImI Beach HeaIlh Facilities AiJIhorlly (the .AuthOriIY") on December 3, 2003. comillnl"ll. 4:00 p.rn'I_~,ShOr1lY tI18reafter, In tile CIty ManQ(s Large Conference Room. CIly llII, City 01 Moarroi 1le8Cl1, AOOda, 1700 ConYenlloo Center Drive, 4th Aoor, MIIinIII8Ich ] Florida 33139, leI the purpose 01 plllYid' a reasonable opporlP\1lY Illr iiiiiBiiiiI. pelllOns In elllll'ess 1I1eir views, both d In writillQ (whICh musf be received by tf1a Au1Ilortly before the =: 8PlJllIllrialely ma1<8d envtlOpe)j.~~ pn>~ iSsuance!lYthlI 01 of Miami Be8chHoaltl1 FaclMlles....u", HosJIIlaI R8V8RUS Rilfundlng Borids ( n Sinai Medical Center of AoOdal, In .. aggregate prIR:ipal amou'll ii<lt lllexceed $115,000,000 (the 'BondS"). The proceedS of the IlDl1ds wiil be loaned III Mount SIn8I MedIcII CenIIr " ~~~'J:a=~Q.~~~~~~=:1 -.y, to: (i)refund aI or a rtion oIthelhen oiJtsl8ndlng.S25.090.000 orIl1in11pr1nctD11 amount CIl: of Miami HaaIlh Facllllles AulhOrIly HoIp/lllI RevInJe BiIndI. SIriII 2001 B Mount Sinai of Flor1da ProIeCll. and S70,~llOO 0dgInaI amount CIl'i of BelICh Health Faclllie$ AuthOrity ~bl IIIrinut Taxable Serfes 2001 (Mount Sinal Mellcal Center of fIOrlda ProiI!:II (co! . the 'Prior Bonds'~ flQ Iu1d cap;!aIze(I interesllor the lIaIIds. Oil) f1ilda debt . r8Sllrvelllr the Bonds lI1d (Iv! pay C8I1ain expenras in cormactIoiI WIth the issuance c1t1la Bonds and the rafoodlng oIlhe Prior Bonds. . TIle PrIor Bonds wera issued III rarnn:e carlaln he8IIh care fIciIiIiM, ~ =\tlll~=. ~:rJes..=m:lhe -==,=:-.:f ~-:re: Medical Cenlllr'S facilities lOcated at 4300 AIloo Road, Miami Beach, F1oi1da. 4701 Meridian AwIllRl lIanll BeacII. FlorIda, 400 ArlIU GodIr8v Road. M.."j BeII:h. AlIldI, 1680 Moridian AWnua. Miami Beach. FIo~da. and 25(J 63/llSlreel. MiamI ae.:I1. Aorllla. Tho Banda and 1110 In\IraSl theraon shall not COIIIlI\ID 1 dIIIl, IIIbIMy lII: obltaalion oIb CIlY of MIamIIloadI. AorIcIa. or 01.. Sta\lt 01 florida or 01 lIlY JlIIIIII:!II suIIiIiYlsiln thllraOl, but eball be payIbIe solelY from lI1e __ and un iilirmInlI payable under 1100II agroernanllll be ontsrail irm by and be\WOan the AufIaIllJ II1lI the M.ecIcal Cerrtlr. P\nlIIIl to SeclIon 286.0105, FIlL Sl8l. the AuIhorlIv haraby .......... PItIc that r a peraon lIociIles III appHlll1y decltlon mall8 by llie MthIltIlY with nepI!CI tD an~ mallar conoiIlIrad at III mellln!l or Ita haarlng. sUCh PII1lIIl mUll "In IbIII vetllatim raconl of \I1e prtlCIIadlnga Ii made, which IllCOIIl ~ the ~ IIlII evidence upon which Iha aJll!l<ll is to .. baSeCl. l1is notlCI doeInot cor.utuIot c:aiWII by tha AuIl1clrilY lor lI1e IntrOOuclion or admiSsion of o\I1erwtse IMdmlalll8 or Irnl80IIIl ovIdence, nor doeI n authoriza chal8!l\I8S or appeals not olh8rwiae a1kMad by 1IIw. In acconllr1C8 wllh lI1e Amefk:anS with D Act d 1990, ~ Il88tlInII spectal 8CClImmodaUon to participate I11lh1s or to r8QU8Sll~ on access lor persons wIIh lIiSilbilitilS. or to raqiJest Ilcatlon In aocassible larm8t, or to raQll8&l sigllanguage InIerprellll1l. sI1iluld allllacltha CIty of MIaml !l88Ch caY Clerk's otnce at (305) 673]411, no later than leur claYS prior to \he 1XJlC88dirllI. r hearinQ impaired, cooIacl the CItY C18I1<'s office via the Florida Relay Sai'<Ica numIJeI1, (800) %5_8771 (IT/) or (800) 95S_BnO (VOICE). ,/ Tills notice Is published pllrsuant to the requirements of SecIion 147(fJ d lII8 Inlemal Revenuo Code of 1986, as amended.....__ November Ie. 2003 'I1f~ ~~~U:::Jlnum ..., t; '.:l"'" . ....__ _.._.._ ...__. ..._____._ .' ".0 __ .'_ . EXHIBIT II BOND RESOLUTION Miamil13280.2 Miami/13256.2 RESOLUTION A RESOLUTION (i) authorizing the issuance of City of Miami Beach Health Facilities Authority Hospital Revenue Refunding Bonds, Series 2004 (Mount Sinai Medical Center of Florida) (the "Bonds") of the City of Miami Beach Health Facilities Authority (the "Authority") in an aggregate principal amount not to exceed $115,000,000, for the purpose of providing funds to be used, together with other available moneys, if any, to: (a) refund and defease all of the currently outstanding City of Miami Beach Health Facilities Authority Hospital Revenue Bonds, Series 20018 (Mount Sinai Medical Center of Florida Project), and City of Miami Beach Health Facilities Authority Hospital Revenue Bonds, Taxable Series 200lC (Mount Sinai Medical Center of Florida Project) (collectively, the "Prior Bonds"), previously issued for the benefit of Mount Sinai Medical Center of Florida, Inc., (b) fund a deposit to a debt service reserve and (c) pay expenses in connection with the issuance of the Bonds and the refunding and defeasance of the Prior Bonds, to be issued under the provisions of a Trust Indenture and a Loan Agreement, and to be further secured by an Amended and Restated Master Trust Indenture, a Supplemental Master Trust Indenture for Obligation No.8, an Obligation No.8, a Fee and Leasehold Mortgage, Assignment and Security Agreement and an Amended and Restated Guaranty and Security Agreement; (ii) providing that the Bonds shall not constitute a debt, liability or obligation of the City of Miami Beach, Florida or of the State of Florida or of any political subdivision thereof but shall be payable solely from the sources provided therefor under the Trust Indenture; (iii) delegating to the Chairman, or in his absence, the Vice-Chairman, the fixing of the terms of the Bonds and other details within the parameters set forth herein; (iv) authorizing the execution and delivery by the Authority of the Trust Indenture and the Loan Agreement; (v) approving the forms of Supplemental Master Trust Indenture for Obligation No.8, Obligation No.8, and Amended and Restated Guaranty and Security Agreement; (vi) authorizing the execution and delivery by the Authority of Escrow Deposit Agreements, the redemption of the Prior Bonds and the purchase of Escrow Securities; (vii) authorizing the sale of the Bonds through a negotiated private placement and waiving certain provisions of the Authority's Administrative Procedures; (viii) authorizing the execution and delivery by the Authority of a Bond Placement Agreement and Subscription Agreements; (ix) appointing a Bond Trustee and Bond Registrar under the Trust Indenture; (x) approving the use of a Preliminary Private Placement Memorandum and a Private Placement Memorandum; (xi) authorizing the execution and delivery of additional documents required; (xii) recommending approval of the Bonds by the Mayor and City Commission of the City of Miami Beach, Florida; and (xiii) providing for other related matters. WHEREAS, the City of Miami Beach Health Facilities Authority (the "Authority") has been created pursuant to the Health Facilities Authorities Law, being Chapter 74-323, Laws of Florida, and Part III of Chapter 154 of the Florida Statutes, as amended (the "Health Act"), and has been determined to be needed by the Mayor and City Commission (collectively, the "Commission") of the City of Miami Beach, Florida (the "City") under Section 4 of the Health Act; and WHEREAS, the Authority is also a "local agency" as defined in Section 3 of the Florida Industrial Development Financing Act, being Chapter 69-104, Laws of Florida, and Part II of Chapter 159 of the Florida Statutes, as amended (the "Industrial Act" and, together with the Health Act, the "Act"); and WHEREAS, the Authority is authorized pursuant to the Act to issue its refunding bonds and to loan the proceeds thereofto "health facilities" (as defined in the Health Act) located in the City to refund revenue bonds issued by the Authority for the benefit of health facilities; and WHEREAS, Mount Sinai Medical Center of Florida, Inc., a Florida not-for-profit corporation (the "Medical Center") is requesting the Authority to assist the Medical Center in providing funds to be used, together with other available moneys, if any, to (i) refund and defease all of the currently outstanding City of Miami Beach Health Facilities Authority Hospital Revenue Bonds, Series 200m (Mount Sinai Medical Center of Florida Project) (the "Series 200lB Bonds"), and City of Miami Beach Health Facilities Authority Hospital Revenue Bonds, Taxable Series 200lC (Mount Sinai Medical Center of Florida Project) (the "Series 200lC Bonds" and, together with the Series 2001B Bonds, the "Prior Bonds"), previously issued for the Miamil13256.2 2 benefit of the Medical Center, (ii) fund a deposit to a debt service reserve and (iii) pay expenses in connection with the issuance of the Bonds (hereinafter defined) and the refunding and defeasance of the Prior Bonds, through the issuance by the Authority of not to exceed $115,000,000 principal amount of City of Miami Beach Health Facilities Authority Hospital Revenue Refunding Bonds, Series 2004 (Mount Sinai Medical Center of Florida) (the "Bonds"); and WHEREAS, the Bonds will be issued under the provisions of a Trust Indenture (the "Trust Indenture") to be entered into between the Authority and SunTrust Bank, a Georgia banking corporation, as trustee (the "Bond Trustee"), and the proceeds thereof will be loaned to the Medical Center and their repayment secured by a Loan Agreement (the "Loan Agreement") to be entered into between the Authority and the Medical Center; and WHEREAS, the Medical Center has previously entered into an Amended and Restated Master Trust Indenture (the "Master Indenture") with SunTrust Bank, Central Florida, National Association, now SunTrust Bank, a Georgia banking corporation, successor by merger, as master trustee (the "Master Trustee"), under which the Medical Center and certain other affiliated entities which may be included therein in the future are jointly and severally liable for the payment of obligations outstanding thereunder; and WHEREAS, in connection with the issuance of the Bonds by the Authority and the loan of the proceeds thereof to the Medical Center, the Medical Center will enter into a Supplemental Master Trust Indenture for Obligation No.8 ("Supplemental Indenture No.9") with the Master Trustee, supplementing the Master Indenture, pursuant to which Obligation No. 8 ("Obligation No.8") will be issued securing the obligation of the Medical Center to make payments under the Loan Agreement in respect of the Bonds; and Miami/13256.2 3 WHEREAS, Mount Sinai Medical Center Foundation, Inc., a Florida not-for-profit corporation (the "Foundation"), will guarantee to the Bond Trustee the payment of the principal of, redemption premium, if any, and interest on the Bonds, all as more specifically set forth in an Amended and Restated Guaranty and Security Agreement (the "Restated Guaranty Agreement") to be entered into between the Foundation and the Bond Trustee; and WHEREAS, as security for Obligation No.8 and any other obligations outstanding under the Master Indenture from time to time, but subject to release in accordance with its terms, the Medical Center has previously delivered to the Master Trustee, a Fee and Leasehold Mortgage, Assignment and Security Agreement, which will be modified in connection with the issuance of Obligation No.8; and WHEREAS, on this date, the Authority held a public hearing in accordance with Section 147(f) of the Internal Revenue Code of 1986, as amended, for which there was reasonable public notice published on November 16, 2003 in The Miami Herald, for the purpose of giving all interested persons an opportunity to express their views on the proposed issuance of the Bonds; and WHEREAS, the Authority desires to authorize the issuance of the Bonds for the above described purposes and to recommend for approval to the Commission the issuance of the Bonds; and WHEREAS, the Authority further desires to authorize the sale of the Bonds through a negotiated private placement by Merrill Lynch, Pierce, Fenner & Smith Incorporated, as placement agent (the "Placement Agent"), for the reasons hereinafter set forth. NOW THEREFORE, Be It Resolved by the City of Miami Beach Health Facilities Authority as follows: Miarnil13256.2 4 Section 1. Findings. The Authority hereby finds and determines that: (1) The Medical Center is a "health facility" within the meaning of Section 154.205(8) of the Health Act and a "health care facility" within the meaning of section 159.27(16) of the Industrial Act. (2) Pursuant to Sections 154.209(10) and 154.235 of the Health Act and Sections 159.28(7) and 159.41 of the Industrial Act, the Authority is authorized and empowered to issue the Bonds for the purposes described herein. (3) The issuance of the Bonds by the Authority for the purposes described herein will serve a valid public purpose by advancing the commerce, welfare and prosperity of the City and its people. (4) The Authority and the City are each a "local agency" as defined in Section 159.27(4) of the Industrial Act. (5) Review and comment from the Health Council of South Florida, Inc. (the "Health Council") as to the issuance of the Bonds was requested and the Health Council has advised that it has no material concerns. (6) Pursuant to Section 218.385 of the Florida Statutes, as amended, the sale of the Bonds through a negotiated private placement by the Placement Agent rather than a public sale by competitive bid is necessary and in the best interest of the Authority and the Medical Center, and the Authority hereby further finds and determines that the following reasons necessitate the private placement of the Bonds by the Placement Agent: (a) The Bonds will not be rated in one of the four (4) highest rating categories by a nationally recognized rating service and in accordance with Section 189.4085 of the Florida Statutes, as amended, and the Authority's Administrative Procedures (the Miarni/13256.2 5 "Administrative Procedures") must be privately placed with and sold to "accredited investors" (as defined in Rule 501(a) of the Securities Act of 1933, as amended, and the Rules of the Florida Department of Financial Services). (b) Bonds issued by public bodies for the benefit of not-for-profit hospitals such as the Medical Center ("health care bonds") generally involve specialized situations and transactions which need detailed analysis, structuring and explanation throughout the course of the issue by sophisticated financial advisors, investment bankers and similar parties, such as the Placement Agent, experienced in the structuring of issues of health care bonds ("health care investment bankers"), much of which would not generally be available on a timely basis in the case of health care bonds issued pursuant to a public competitive sale. (c) Health care 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 obligor 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 investment banker in preparing necessary offering memoranda and related information is extremely desirable in ensuring full and accurate disclosure of all relevant information. (d) For the reasons described in (b) and (c) above and other related reasons, most of the health care bonds heretofore issued throughout the United States have involved participation throughout the structuring and offering process of health care investment bankers who have purchased or arranged for the purchase of the health care bonds through a negotiated sale or private placement rather than through a public sale by Miami/13256.2 6 competitive bid; accordingly, the market may well be more receptive to an issue of health care bonds placed and sold on a negotiated basis than to one sold by competitive public sale. (e) Finally, the market for health care bonds such as the Bonds is volatile, making the presence of the Placement Agent, who has participated and will participate in the structuring of the Bond issue, desirable in attempting to obtain the most attractive financing for the Authority and the Medical Center. Section 2. Authorization of the Bonds. There is hereby authorized the issuance, under and pursuant to the Trust Indenture, of the Bonds, to be designated as "City of Miami Beach Health Facilities Authority Hospital Revenue Refunding Bonds, Series 2004 (Mount Sinai Medical Center of Florida)", in an aggregate principal amount not exceeding $115,000,000, and the loan of the proceeds thereof to the Medical Center to (i) refund and defease the Prior Bonds, (ii) fund a deposit to a debt service reserve and (iii) pay expenses in connection with the issuance of the Bonds and the refunding and defeasance of the Prior Bonds. The principal of, premium, if any, and interest on the Bonds shall not be deemed to constitute a debt, liability or obligation of the City or of the State of Florida or of any political subdivision thereof, but shall be payable solely from the sources pledged therefor under the Trust Indenture and neither the faith and credit nor any taxing power of the City 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. Section 3. Terms of the Bonds. The Bonds shall be payable as to principal and interest in lawful money of the United States of America in accordance with the provisions of the Trust Indenture, and shall be issued only as fully registered bonds without coupons in denominations Miami/13256.2 7 of $100,000 and integral multiples of $5,000 in excess thereof. The Bonds shall be initially issued in book-entry-only form through The Depository Trust Company, New York, New York ("DTC") and shall be registered in the name of Cede & Co. The Chairman of the Authority or, in his absence, the Vice Chairman of the Authority is hereby authorized on behalf of the Authority to approve, subject to the limitations contained herein, the final terms of the Bonds, which approval will be evidenced by the execution of the Bond Placement Agreement (hereinafter defined) on behalf of the Authority as provided herein. The aggregate principal amount of the Bonds shall not exceed $115,000,000; the interest rate on the Bonds shall not exceed the maximum rate permitted by law; the term of the Bonds shall not exceed thirty-five (35) years; and the Bonds may be issued as serial and/or term bonds and may be subject to optional and mandatory redemptions as shall be provided in the Trust Indenture. The Bonds shall be initially dated such date as shall be approved by the Chairman, or in his absence, the Vice Chairman, and shall be executed on behalf of the Authority with the official manual or facsimile signature of its Chairman or, in his absence, its Vice Chairman and attested with the official manual or facsimile signature of a Designated Member (hereinafter defined). Section 4. Designation of Attesting Members. The members of the Authority, other than the Chairman or Vice Chairman to the extent the Chairman or Vice Chairman execute the documents described herein, (individually a "Designated Member"), are each hereby designated and authorized on behalf of the Authority to attest to the seal of the Authority and to the signature of the Chairman or Vice Chairman of the Authority as they appear on the Bonds, the Trust Indenture, the Loan Agreement, the Escrow Deposit Agreements (hereinafter defined) and any other documents which may be necessary or helpful in connection with the issuance and Miami/13256.2 8 delivery of the Bonds, the application of the proceeds thereof and the refunding and defeasance of the Prior Bonds. Section 5. Authorization of Execution and Delivery of Trust Indenture. The Authority does hereby authorize and approve the execution by the Chairman or Vice Chairman and a Designated Member of the Authority and the delivery of the Trust Indenture. The 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 Chairman or Vice Chairman 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 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 Chairman or Vice Chairman and a Designated Member of the Authority and the delivery of the Loan Agreement. The Loan 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 Chairman or Vice Chairman 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 Loan Agreement attached hereto. Section 7. Aooroval of Other Documents. The Authority does hereby approve the forms of Supplemental Indenture No.9, Obligation No.8 and Restated Guaranty Agreement. The Authority hereby consents to and approves the Guaranty Amendment (as defined in the Preliminary Private Placement Memorandum hereinafter described). Supplemental Indenture No.9, Obligation No.8 and the Restated Guaranty Agreement shall be in substantially the forms Miami/13256.2 9 attached hereto and marked Exhibits C, D and E, respectively, and hereby approved, with such changes therein as shall be approved by the Chairman or Vice Chairman, with the execution of the Trust Indenture by such officer to constitute conclusive evidence of such officer's approval and the Authority's approval of any changes therein. Section 8. Authorization of Execution and Deliverv of Escrow Deposit Agreements. The Authority does hereby authorize and approve the execution by the Chairman or Vice Chairman and a Designated Member of the Authority and the delivery of (i) an Escrow Deposit Agreement with respect to the Series 2001B Bonds (the "Series 2001B Escrow Deposit Agreement") to be entered into among the Authority, the Medical Center and the trustee for the Series 200lB Bonds and (ii) an Escrow Deposit Agreement with respect to the Series 2001C Bonds (together with the Series 2001B Escrow Deposit Agreement, the "Escrow Deposit Agreements") to be entered into among the Authority, the Medical Center and the trustee for the Series 2001 C Bonds. The Escrow Deposit Agreements provide for the defeasance and redemption of the Prior Bonds and shall be in substantially the forms attached hereto and marked Exhibit F and hereby approved, with such changes therein as shall be approved by the Chairman or Vice Chairman 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 the Escrow Deposit Agreements attached hereto. Section 9. Redemption of Prior Bonds: Purchase of Escrow Securities. The Prior Bonds shall be called for optional redemption prior to maturity as shall be provided in the Escrow Deposit Agreements. In order to provide for the defeasance and redemption of the Prior Bonds, there is hereby authorized the purchase of Escrow Securities (as defined in the Escrow Deposit Agreements) as shall be provided in the Escrow Deposit Agreements and the Chairman Miamil13256.2 10 or Vice Chairman is hereby authorized to execute any necessary subscription forms for the purchase of such Escrow Securities. Section 10. Application of Bond Proceeds. The proceeds of the Bonds shall be applied, together with certain other available moneys, if any, as provided in the Trust Indenture, the Loan Agreement and the Escrow Deposit Agreements. Section 11. Authorization of Negotiated Private Placement. Pursuant to the findings in Section 1 hereof, the Authority does hereby authorize and approve the sale of the Bonds to "accredited investors" through a negotiated private placement by the Placement Agent rather than a public sale by competitive bid. Section 12. Waiver of Administrative Procedures. Based on the provisions for the private placement and sale of the bonds contained in the Bond Placement Agreement, the Subscription Agreements (hereinafter defined), the Preliminary Private Placement Memorandum and this resolution, the Authority hereby waives compliance with the provisions of Chapter 2, Section 7 of the Administrative Procedures not otherwise contained in said documents. Section 13. Authorization of Execution and Delivery of Bond Placement Agreement and Subscription Agreements. The sale of the Bonds in an aggregate principal amount not to exceed $115,000,000 through the negotiated private placement by the Placement Agent, in accordance with a Bond Placement Agreement (the "Bond Placement Agreement") to be entered into among the Authority, the Medical Center, the Foundation and the Placement Agent and Subscription Agreements (the "Subscription Agreements") to be entered into between each purchaser of the Bonds and the Authority, is hereby in all respects authorized and approved and there shall be executed on behalf of the Authority in furtherance thereof the Bond Placement Agreement and the Subscription Agreements. The Authority does hereby authorize and approve the execution Miami/13256.2 11 and delivery of the Bond Placement Agreement and the Subscription Agreements on behalf of the Authority by its Chairman or Vice Chairman and such Bond Placement Agreement and Subscription Agreements shall be in substantially the forms thereof attached hereto and marked Exhibits G and H, respectively, and hereby approved, with such changes as shall be necessary and appropriate to reflect the final terms of the sale of the Bonds by the Authority and such further changes therein as shall be approved by the Chairman or Vice Chairman executing the same, with such execution to constitute conclusive evidence of the award of the Bonds to the purchasers thereof and of such officer's approval and the Authority's approval of any changes therein from the forms of Bond Placement Agreement and Subscription Agreements attached hereto; provided that the Bond Placement Agreement and Subscription Agreements shall comply with the provisions of this resolution and that the final terms of the Bonds contained in the Bond Placement Agreement and Subscription Agreements shall be within the parameters established in this resolution. Prior to the execution of the Bond Placement Agreement by the Authority, the Authority must be presented with a disclosure statement prepared by the Placement Agent in compliance with Section 218.385, Florida Statutes, which disclosure statement shall be filed in the records of the Authority. Section 14. Appointment of Bond Trustee and Bond Registrar. SunTrust Bank, a Georgia banking corporation, is hereby appointed the Bond Trustee and bond registrar (the "Bond Registrar") under the Trust Indenture. Section 15. Approval of Preliminary Private Placement Memorandum. The Authority hereby approves the use and distribution of the Preliminary Private Placement Memorandum relating to the Bonds (the "Preliminary Private Placement Memorandum") by the Placement Agent in connection with the offer and sale of the Bonds, in substantially the form attached Miami/13256.2 12 hereto and marked Exhibit I, with such changes as shall be necessary and appropriate to reflect the expected terms of the Bonds and to ensure accurate disclosure of all relevant information; provided, however, that except as specifically set forth in the Preliminary Private Placement Memorandum, the Authority makes no representations with respect to the information contained in the Preliminary Private Placement Memorandum Section 16. Approval of Private Placement Memorandum. The Authority hereby approves the use and distribution of the Private Placement Memorandum relating to the Bonds (the "Private Placement Memorandum") by the Placement Agent in connection with the offer and sale of the Bonds in substantially the form of the Preliminary Private Placement Memorandum attached hereto and marked Exhibit I, with such changes as shall be necessary and appropriate to reflect the final terms of the Bonds and to ensure accurate disclosure of all relevant information; provided, however, that except as specifically set forth in the Private Placement Memorandum, the Authority makes no representations with respect to the information contained in the Private Placement Memorandum. Section 17. Delivery of the Bonds. Upon the execution of the Bonds in accordance with the provisions of the Trust Indenture, the Chairman or the Vice Chairman shall deposit the same with the Bond Registrar for authentication and delivery upon the order of the purchasers thereof. The Bond Registrar is hereby requested to authenticate and deliver the Bonds in accordance with the Trust Indenture. Section 18. Authorization of Execution and Delivery of Certain Additional Documents. The Authority does hereby authorize the subsequent execution and delivery of such additional documents as may be required in connection with the issuance and sale of the Bonds, the application of the proceeds thereof and the refunding and defeasance of the Prior Bonds, in such Miarnil13256.2 13 form or forms and with such party or parties as shall be approved by the Chairman or Vice Chairman, including, without limitation, a letter of representations from the Authority to DTC. Section 19. Authorization and Ratification of Acts. The members, officers, agents and employees of the Authority are hereby authorized and directed to do all such acts and things and to execute all such documents, including, without limitation, the execution and delivery of any closing documents, as may be necessary to carry out and comply with the provisions of this resolution, the documents attached hereto as Exhibits A through I, respectively, and any documents executed and delivered pursuant to Section 18 hereof, and all of the acts and doings of such members, 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 20. Recommendation to the City of Miami Beach. Florida. Having conducted a public hearing on this date pursuant to the provisions of Section 147(f) of the Internal Revenue Code of 1986, as amended, for the purpose of giving all interested persons an opportunity to express their views on the proposed issuance of the Bonds, for which hearing reasonable public notice was given, the Authority hereby recommends that the Commission approve the issuance of the Bonds. Section 21. Severability. If any section, paragraph, clause or provision of this resolution shall be held to be invalid or ineffective for any reason, the remainder 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. Miami/13256.2 14 Section 22. 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. Adopted this 3rd day of December, 2003. (SEAL) Miarni/13256.2 15 STATE OF FLORIDA ) ) SS: COUNTY OF MIAMI-DADE) We, the undersigned, do hereby certify that we are duly qualified and acting Members of the City of Miami Beach Health Facilities Authority (the "Authority"). We further certify that we were present at the meeting of the Authority held on December 3, 2003 and according to the official records of the Authority in our possession the above and foregoing constitutes a true and correct copy of a resolution adopted at said meeting of the Authority. We further certify that at such meeting said resolution was introduced in written form by Arthur S. Unger, Chairman of the Authority, and pursuant to motion made by Laurence A. Herrup and seconded by Lawrence A. Fuller, adopted by the following vote: Aye: ArthurS. Unger Michael Baum Lawrence A. Fuller Laurence A. Herrup Nay: None We further certify that provision has been made for the preservation and indexing of said resolution, which is open for inspection by the public at all reasonable times at the office of the Chief Financial Officer of the City of Miami Beach, Florida, in the City of Miami Beach, Florida. Miami/13256.2 16 IN WITNESS WHEREOF, we have hereunto set our hands and affixed the official seal of the Authority this 3rd day of December, 2003. [SEAL] SUBSCRIBED AND SWORN to before me, a Notary Public in the State and County aforesaid, this 3rd day of December, 2003. Miamil13256.2 17 Miamil13256.2 EXHIBITS A THROUGH I ON FILE WITH THE AUTHORITY CITY OF MIAMI BEACH COMMISSION ITEM SUMMARY lD - Condensed Title: A Resolution approving the issuance and sale of not to exceed $115,000,000 principal amount of City of Miami Beach Health Facilities Authority Hospital Revenue Refunding Bonds, Series 2004 (Mount Sinai Medical Center of Florida), by the City of Miami Beach Health Facilities Authority, including the approval required by section 147 of the Internal Revenue Code of 1986, as amended; providing that said bonds shall not constitute a debt, liability or obligation of the City or the State of Florida or any political subdivision thereof but shall be a able solei from the revenues rovided therefore; and rovidin an effective date. Issue: Should the City Commission approve the issuance and sale of not to exceed $115,000,000 principal amount of City of Miami Beach Health Facilities Authority Hospital Revenue Refunding Bonds, Series 2004 (Mount Sinai Medical Center of Florida), by the City of Miami Beach Health Facilities Authority, including the a roval re uired b section 1470f the Internal Revenue Code of 1986, as amended: Item Summa IRecommendation: The proposed Revenue Refunding Bonds, Series 2004, will refinance the City of Miami Beach Health Facilities Authority (the "CMBHFA") Hospital Revenue Bonds, Series 2001 Band 2001 C, issued on behalf of Mount Sinai Medical Center of Florida (the "Medical Center"). The proposed refunding will achieve interest savings, as interest rates have significantly improved in the capital market since these bonds were originally issued. The refinancing will allow for the conversion of the 2001 C Bonds from taxable to tax- exempt debt. The refinancing will also address the potential liquidity issues created by the structure of the Series 2001 Band 2001 C Bonds, which offer bondholders a put provision. The Administration recommends that the Ci Commission ado t the Resolution. Adviso Board Recommendation: On December 3, 2003 the Health Facilities Authority voted unanimously in favor of approving the proposed bond issue and further recommended that the City Commission approve the issuance and sale of the not to exceed $115,000,000 principal amount of City of Miami Beach Health Facilities Authority Hospital Revenue Refundin Bonds, Series 2004. Source of Amount Account Approved Funds: 1 D 2 3 4 Finance Dept. Total Financial Information: Cit Clerk's Office Le islative Trackin Patricia D. Walker, Chief Financial Officer Si n-Offs: Department Director City Manager T:\AGENDA\2003 AGENDA ITEM DATE R1E- 12.-(0-03 CITY OF MIAMI BEACH 1700 CONVENTION CENTER DRIVE, MIAMI BEACH FL 33139-1824 htlp:\\ci .miami-beach .fl.us COMMISSION MEMORANDUM FROM: Mayor David Dermer Members of the City Commission Jorge M. Gonzalez \ .. / City Manager 0 ~ DATE: December 10, 2003 TO: SUBJECT: A RESOLUTION APPROVING THE ISSUANCE AND SALE OF NOT TO EXCEED $115,000,000 PRINCIPAL AMOUNT OF CITY OF MIAMI BEACH HEALTH FACILITIES AUTHORITY HOSPITAL REVENUE REFUNDING BONDS, SERIES 2004 (MOUNT SINAI MEDICAL CENTER OF FLORIDA), BY THE CITY OF MIAMI BEACH HEALTH FACILITIES AUTHORITY, INCLUDING THE APPROVAL REQUIRED BY SECTION 147 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED; PROVIDING THAT SAID BONDS SHALL NOT CONSTITUTE A DEBT, LIABILITY OR OBLIGATION OF THE CITY OR THE STATE OF FLORIDA OR ANY POLITICAL SUBDIVISION THEREOF BUT SHALL BE PAYABLE SOLELY FROM THE REVENUES PROVIDED THEREFORE; AND PROVIDING AN EFFECTIVE DATE. ADMINISTRATION RECOMMENDATION Adopt the Resolution. ANALYSIS By approving this Resolution, the City Commission is authorizing the following action: . issuance and sale of not to exceed $115,000,000 principal amount of City of Miami Beach Health Facilities Authority Hospital Revenue Refunding Bonds, Series 2004 (Mount Sinai Medical Center of Florida), by the City of Miami Beach Health Facilities Authority, including the approval required by section 1470f the Internal Revenue Code of 1986, as amended. These Bonds and the interest thereon, shall not be deemed to constitute a debt, liability or obligation of the City of Miami Beach or the State of Florida or any political subdivision thereof, but shall be payable solely from the revenues referred to in the Bond Resolution and neither the faith and credit nor any taxing power of the City of Miami Beach is pledged to the payment of principal, a redemption premium or interest on the Bonds. The proposed Revenue Refunding Bonds, Series 2004, will refinance the City of Miami Beach Health Facilities Authority (the "CMBHFA") Hospital Revenue Bonds, Series 2001 B and 2001 C, issued on behalf of Mount Sinai Medical Center of Florida (the "Medical Center"). The proposed refunding will achieve interest savings, as interest rates have significantly improved in the capital market since these bonds were originally issued. The refinancing will allow for the conversion of the 2001 C Bonds from taxable to tax-exempt debt. The refinancing will also address the potential liquidity issues created by the structure of the Series 2001 Band 2001 C Bonds, which offer bondholders a put provision. NOTICE OF EVENTS OF DEFAULT The CMBHFA, on November 18, 2003, heard a discussion regarding the proposed refunding and restructuring of the Medical Center's outstanding Series 2001 Band 2001 C Revenue Bonds. The CMBHFA, at this meeting, scheduled a December 3, 2003 public hearing to consider the Mt. Sinai bonds for approval. Subsequent to the November 18, 2003 meeting, the CMBHFA and City have been notified by the Medical Center that they are in receipt of a Notice of Events of Default from SunTrust Bank. SunTrust Bank is the registered trustee for the Medical Center's Series 1998 and Series 2001 Bonds. The Medical Center and their counsel have stated that it is their position that the technical defaults noted in the Notice of Events of Default do not and did not exist. The trustee claims that the following three defaults ofthe Master Trust Indenture (MTI) with the Medical Center Revenue Bonds have occurred: . Revenues were required by the MTI to be not less than the amount required in cash to pay the total operating expenses of the Medical Center and to pay the debt service on all indebtedness for the fiscal year (FY) ended December 31, 2002. According to the Medical Center's independent auditors, Deloitte & Touch, the revenues of the Medical Center did not meet this requirement. . The Medical Center has not delivered, as required by the MTI, a certificate from their consultant, Cap Gemini Ernst & Young, stating that the Medical Center has followed their consultant's recommendations. . The Medical Center has not delivered, as required by the MTI, a report of an independent certified public accountant (CPA) stating whether any member of the Medical Center is in default in the performance of any covenant contained in the MTI. The Medical Center has submitted a report from an independent CPA firm, but said report does not contain a definitive statement of compliance with the above requirement. The Medical Center has stated that the claimed defaults are based on technical defaults, all which arise as a consequence of the application of a test contained in the MTI. The Medical Center has also stated that the event that formed the basis of the claimed technical defaults did not exist, and their counsel and accountants are working together to resolve this matter. The Medical Center has further stated that the claimed defaults are not based on the Medical Center's current financial condition or because of any missed payments. Furthermore, the Medical Center auditors have agreed to restate the Medical Center's FY 2002 financial statements and have sent a draft copy to the trustee. The Medical Center has stated that they expect the trustee to withdraw the default notice as a result of the restatement of the coverage test by the auditors. BACKGROUND The City Commission of the City of Miami Beach adopted Ordinance No. 90-2701 on July 25, 1990, creating the CMBHFA to assist health facilities in the acquisition, construction, financing, and refinancing of health facility related projects in the City. The Ordinance, as amended, provides that the CMBHFA can issue bonds and notes for the purpose of providing funds to pay all or any part of the cost of any project or any other lawful purpose and to issue refunding bonds. Further, it provides that the City Commission must approve any bonds issued by the CMBHFA as the final step in the approval process. On December 3,2003, the CMBHFA adopted a Resolution authorizing the issuance of the CMBHFA Series 2004 Bonds, the proceeds of which will be used by the Medical Center to: (i) refund and defease the currently outstanding CMBHFA Hospital Revenue Bonds, Series 2001 Band 2001 C Bonds; (ii) fund certain debt service reserves for the Bonds; and (iji) pay certain expenses in connection with the issuance of the Bonds. At this December 3, 2003 meeting, the CMBHFA granted a waiver to the Medical Center regarding a requirement for a traveling Sophisticated Investor Letter, and certain other requirements under the Authority's Administrative Procedures. This waiver has been reviewed and approved by CMBHFA Counsel, Squire, Sanders, & Dempsey, and CMBHFA Financial Advisor, William R. Hough & Co as reasonable and necessary in order to make the bonds saleable. The Medical Center has also agreed to: increase the minimum denomination of any of the bonds from the required $50,000 to no less than $100,000; and have the bonds rated by the three major rating agencies. The waiver will improve the marketability of the Series 2004 Bonds while continuing to enforce the CMBHFA's objective of protecting unsophisticated Investors from investing in high-risk securities. The CMBHFA also held a public hearing on December 3, 2003, as required by Section 147(f) of the Internal Revenue Code of 1986, for the purpose of giving all interested persons an opportunity to express their views in connection with the CMBHFA's proposed issuance of the Series 2004 Bonds. CONCLUSION The Commission should adopt this Resolution to approve the issuance of the Bonds for the purpose detailed above, including the approval required under Section 147(f) of the Internal Revenue Code of 1986, as amended. JMG/PDW/mim~ F:IFINAI$CIPIMANUELIHFAIHFA Memo 2004 Bonds 12-10-2003 ~