AGENDA MEMORANDUM

Meeting Date: December 8, 2008

From: Fred Morrison, City Attorney

Subject: Resolution authorizing LRMC Bonds

Staff Recommendation:

Staff recommends approval of a resolution authorizing the issuance by LRMC of refunding bonds.

Analysis:

The City has long served as the conduit issuer of limited obligation revenue bonds providing tax-exempt financing for Leesburg Regional Medical Center, Inc. ("LRMC") and affiliated companies. In 2006 The Villages Tri-County Medical Center, Inc. ("TVRH") joined the obligated group with LRMC and LRMC Home Health Services, Inc. ("HHS"). With the agreement of the Sumter County Industrial Development Authority, the City issued its Hospital Revenue Bonds (The Villages Regional Hospital Project), Series 2006 (the "2006 Bonds") and loaned the proceeds to the obligated group to provide financing for the expansion of The Villages Regional Hospital. The 2006 Bonds were initially issued as weekly floating rate bonds with credit enhancement provided by a municipal bond insurance policy issued by Radian Asset Assurance, Inc. and liquidity support provided by Scotia Bank. Radian's credit rating has been down graded. Earlier this year, to mitigate the impact of the Radian credit rating down grade, a Scotia Bank letter of credit providing both credit and liquidity support was substituted for the initial Scotia Bank liquidity facility. The Scotia Bank letter of credit expires in January of 2009, necessitating a refunding of the 2006 Bonds.

LRMC, HHS and TVRH, as the members of the obligated group, have requested the City to serve as a conduit issuer to issue its Hospital Revenue Refunding Bonds (The Villages Regional Hospital Project), Series 2008B and Series 2008C in an aggregate principal amount not to exceed $75,000,000 to finance the refunding of the 2006 Bonds. The 2008B Bonds will initially be issued as weekly floating rate bonds with credit and liquidity support provided by a Scotia Bank letter of credit. It was originally intended that the 2008C Bonds would also be issued as weekly floating rate bonds with liquidity and credit support provided by a Regions Bank letter of credit. Current market conditions, however, are not favorable to such a structure with a Regions Bank letter of credit. Accordingly, the 2008C Bonds will initially be sold in a private placement arranged by RBC Capital Corporation to Regions Bank and bear interest at a LIBOR based floating rate. Once the financial markets stabilize, it is expected that the 2008C Bonds will be remarketed as weekly floating rate bonds supported by a Regions Bank letter of credit. The 2008B Bonds and the 2008C Bonds will not be a general debt, liability of obligation of the City, but will be payable solely from the repayment of the loan of the proceeds to the obligated group and the additional credit enhancement provided by the obligated group.

The resolution presented for consideration authorizes the issuance of the 2008B Bonds and the 2008C Bonds in an aggregate principal amount not to exceed $75,000,000, authorizes the sale of the 2008B Bonds on a negotiated basis to RBC Capital Markets and the sale of the 2008C Bonds to Regions Bank in a negotiated private placement arranged by RBC Capital Corporation. The resolution also approves and authorizes various documents with respect to the issuance of the 2008B Bonds and 2008C Bonds, including an Eleventh Supplemental Trust Indenture with The Bank of New York Mellon Trust Company, N.A., an Eleventh Supplemental Financing Agreement with LRMC, HHS and TVRH, a First Supplement to Interlocal Agreement with the Sumter County Industrial Development Authority, an Escrow Deposit Agreement with the Trustee, as escrow agent, a Tax Regulatory Agreement, a Bond Purchase Contract with RBC Capital Markets and the obligated group relating to the 2008B Bonds, a Placement Agreement with RBC Capital Corporation and the obligated group relating to the 2008C Bonds and an Official Statement to be used in the marketing of the 2008B Bonds.

Options:

1. Approve the resolution as presented, or

2. Such other action as the City Commission deems appropriate.

Fiscal Impact:

There will be no fiscal impact to the City. The bonds will be paid solely from the pledged revenues which will consist of proceeds paid by LRMC. The costs of issuance will also be paid by LRMC.

Submission Date and Time: 12/4/2008 4:20 PM____

Department: ______________________

Prepared by: ______________________

Attachments: Yes____ No ______

Advertised: ____Not Required ______

Dates: __________________________

Attorney Review : Yes___ No ____

_________________________________

Revised 6/10/04

Reviewed by: Dept. Head ________

Finance Dept. __________________

Deputy C.M. ___________________

Submitted by:

City Manager ___________________

Account No. _________________

Project No. ___________________

WF No. ______________________

Budget ______________________

Available _____________________

RESOLUTION NO. ________

A RESOLUTION OF THE CITY OF LEESBURG, FLORIDA, AUTHORIZING THE ISSUANCE OF NOT TO EXCEED $75,000,000 AGGREGATE PRINCIPAL AMOUNT OF CITY OF LEESBURG, FLORIDA, HOSPITAL REVENUE REFUNDING BONDS (THE VILLAGES REGIONAL HOSPITAL PROJECT), SERIES 2008B AND SERIES 2008C FOR THE PURPOSE OF FINANCING THE CURRENT REFUNDING OF THE OUTSTANDING CITY OF LEESBURG, FLORIDA HOSPITAL REVENUE BONDS (THE VILLAGES REGIONAL HOSPITAL PROJECT) SERIES 2006; PROVIDING THAT SUCH BONDS SHALL NOT CONSTITUTE A GENERAL OBLIGATION OF THE CITY OF LEESBURG OR THE STATE OF FLORIDA OR ANY POLITICAL SUBDIVISION THEREOF BUT SHALL BE PAYABLE SOLELY FROM REVENUES HEREIN PROVIDED; AUTHORIZING AND APPROVING THE EXECUTION AND DELIVERY OF A FIRST SUPPLEMENT TO INTERLOCAL AGREEMENT BETWEEN THE CITY AND THE SUMTER COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY AND JOINED IN BY LEESBURG REGIONAL MEDICAL CENTER, INC., LRMC HOME HEALTH SERVICES, INC. AND THE VILLAGES TRI-COUNTY MEDICAL CENTER, INC.; AUTHORIZING AND APPROVING AN ELEVENTH SUPPLEMENTAL FINANCING AGREEMENT BETWEEN THE CITY AND LEESBURG REGIONAL MEDICAL CENTER, INC., LRMC HOME HEALTH SERVICES, INC. AND THE VILLAGES TRI-COUNTY MEDICAL CENTER, INC., AND AN ELEVENTH SUPPLEMENTAL INDENTURE OF TRUST BETWEEN THE CITY AND THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., AS SUCCESSOR TRUSTEE; AUTHORIZING THE MAYOR OR MAYOR PRO TEM TO AWARD THE SALE OF SAID 2008B BONDS TO RBC CAPITAL MARKETS CORPORATION ON A NEGOTIATED BASIS AND SAID 2008C BONDS IN A NEGOTIATED PRIVATE PLACEMENT TO REGIONS BANK BY RBC CAPITAL MARKETS CORPORATION, AS PLACEMENT AGENT, AND APPROVING THE CONDITIONS OF SUCH SALES; APPROVING THE FORM AND AUTHORIZING THE EXECUTION AND DELIVERY OF A CONTRACT OF PURCHASE WITH RESPECT TO THE 2008B BONDS AND A PLACEMENT AGREEMENT WITH RESPECT TO THE 2008C BONDS; APPROVING THE FORM OF AND AUTHORIZING THE EXECUTION AND DELIVERY OF AN OFFICIAL STATEMENT WITH RESPECT TO THE 2008B BONDS; APPROVING THE FORM AND AUTHORIZING THE EXECUTION AND DELIVERY OF A TAX REGULATORY AGREEMENT AMONG THE CITY, LEESBURG REGIONAL MEDICAL CENTER, INC., LRMC HOME HEALTH SERVICES, INC. AND THE VILLAGES TRI-COUNTY MEDICAL CENTER, INC., AND THE TRUSTEE; APPROVING THE FORM AND AUTHORIZING THE EXECUTION AND DELIVERY OF AN ESCROW DEPOSIT AGREEMENT AMONG THE CITY, LEESBURG REGIONAL MEDICAL CENTER, INC., LRMC HOME HEALTH SERVICES, INC. AND THE VILLAGES TRI-COUNTY MEDICAL CENTER, INC., AND THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.; PROVIDING CERTAIN FINDINGS WITH RESPECT TO THE FOREGOING; PROVIDING AN EFFECTIVE DATE FOR THIS RESOLUTION; AND PROVIDING CERTAIN OTHER DETAILS WITH RESPECT THERETO.

BE IT RESOLVED by the City Commission of the City of Leesburg, Florida, that:

AUTHORITY.

This Resolution is adopted pursuant to the Constitution of the State of Florida, Chapter 166, Florida Statutes, Part II of Chapter 159, Florida Statutes, and other applicable provisions of law (collectively, the "Act").

DEFINITIONS.

All terms used herein in capitalized form, unless otherwise defined herein, shall have the same meaning as ascribed to them in the Indenture of Trust (the "Original Indenture"), dated as of June 1, 1988, between the City of Leesburg, Florida (the "Issuer"), and The Bank of New York Mellon Trust Company, N.A., formerly, The Bank of New York Trust Company, N.A., as successor to Barnett Bank of Tampa, successor by merger to First Florida Bank, N.A., as trustee (the "Trustee"), as supplemented and amended by the First Supplemental Indenture of Trust (the "First Supplemental Indenture") dated as of November 1, 1991, between the Issuer and the Trustee, the Second Supplemental Indenture of Trust (the "Second Supplemental Indenture") dated as of May 1, 1993 between the Issuer and the Trustee, the Third Supplemental Indenture of Trust (the "Third Supplemental Indenture") dated as of October 1, 1993 between the Issuer and the Trustee, the Fourth Supplemental Indenture of Trust (the "Fourth Supplemental Indenture") dated as of March 15, 1996 between the Issuer and the Trustee, the Fifth Supplemental Indenture of Trust (the "Fifth Supplemental Indenture") dated as of January 1, 2001 between the Issuer and the Trustee, the Sixth Supplemental Indenture of Trust (the "Sixth Supplemental Indenture") dated as of August 1, 2002 between the Issuer and the Trustee, the Seventh Supplemental Indenture of Trust (the "Seventh Supplemental Indenture") dated as of June 1, 2003 between the Issuer and the Trustee, the Eighth Supplemental Indenture of Trust dated as of June 1, 2006, as supplemented and amended by the First Supplement to Eighth Supplemental Indenture dated as of January 1, 2008 (the "Eighth Supplemental Indenture") between the Issuer and the Trustee, the Ninth Supplemental Indenture of Trust (the "Ninth Supplemental Indenture") dated as of March 1, 2006, between the Issuer and the Trustee, the Tenth Supplemental Indenture of Trust (the "Tenth Supplemental Indenture") dated as of August 1, 2008, between the Issuer and the Trustee, and as to be further supplemented and amended by the Eleventh Supplemental Indenture of Trust (the "Eleventh Supplemental Indenture") between the Issuer and the Trustee, a proposed form of which is attached hereto as Exhibit "A," or in the Financing Agreement (the "Original Agreement"), dated as of June 1, 1988, among the Issuer, Leesburg Regional Medical Center, Inc. ("LRMC"), and LRMC North, Inc. (which was subsequently merged into LRMC), as supplemented and amended by the First Assumption Agreement and Supplemental Financing Agreement (the "First Supplemental Agreement") between LRMC and LRMC Home Health Services, Inc. ("HHS"), dated as of April 24, 1991, the Second Supplemental Financing Agreement (the "Second Supplemental Agreement") dated as of November 1, 1991 between the Issuer and LRMC and HHS, the Third Supplemental Financing Agreement (the "Third Supplemental Agreement") dated as of May 1, 1993 between the Issuer and LRMC and HHS, the Fourth Supplemental Financing Agreement (the "Fourth Supplemental Agreement") dated as of October 1, 1993 between the Issuer and LRMC and HHS, the Fifth Supplemental Financing Agreement (the "Fifth Supplemental Agreement") dated as of March 15, 1996 between the Issuer and LRMC and HHS, the Sixth Supplemental Financing Agreement (the "Sixth Supplemental Agreement") dated as of January 1, 2001 between the Issuer and LRMC and HHS, the Seventh Supplemental Financing Agreement (the "Seventh Supplemental Agreement") dated as of August 1, 2002 between the Issuer and LRMC and HHS, the Eighth Supplemental Financing Agreement (the "Eighth Supplemental Agreement") dated as of June 1, 2003 between the Issuer and LRMC and HHS, the Ninth Supplemental Financing Agreement (the "Ninth Supplemental Agreement") dated as of January 1, 2006 among the Issuer and LRMC, HHS and The Villages Tri-County Medical Center, Inc. ("TVRH"), the Amendment to the Financing Agreement and the Sixth Supplemental Financing Agreement (the "Amendment to the Financing Agreement and Sixth Supplemental Agreement") dated as of March 1, 2006 among the Issuer, LRMC, HHS and TVRH, the Tenth Supplemental Financing Agreement (the "Tenth Supplemental Agreement") dated as of August 1, 2008 among the Issuer, LRMC, HHS and TVRH, and as to be further supplemented and amended by the Eleventh Supplemental Financing Agreement (the "Eleventh Supplemental Agreement") among the Issuer, LRMC, HHS, and TVRH, a proposed form of which is attached hereto as Exhibit "B." The Original Indenture as supplemented and amended by the First Supplemental Indenture, the Second Supplemental Indenture, the Third Supplemental Indenture, the Fourth Supplemental Indenture, the Fifth Supplemental Indenture, the Sixth Supplemental Indenture, the Seventh Supplemental Indenture, the Eighth Supplemental Indenture, the Ninth Supplemental Indenture, the Tenth Supplemental Indenture and the Eleventh Supplemental Indenture is referred to herein as the "Indenture." The Original Agreement as supplemented and amended by the First Supplemental Agreement, the Second Supplemental Agreement, the Third Supplemental Agreement, the Fourth Supplemental Agreement, the Fifth Supplemental Agreement, the Sixth Supplemental Agreement, the Seventh Supplemental Agreement, the Eighth Supplemental Agreement, the Ninth Supplemental Agreement, the Amendment to the Financing Agreement and Sixth Supplemental Agreement, the Tenth Supplemental Agreement and the Eleventh Supplemental Agreement referred to herein as the "Agreement."

FINDINGS.

The Issuer, acting through its City Commission, has found and determined and does hereby declare that:

The Issuer has previously issued its $9,530,000 City of Leesburg, Florida, Refunding and Capital Improvement Hospital Revenue Bonds (Leesburg Regional Medical Center Project), Series 1988A (the "1988A Bonds") and its $30,465,000 City of Leesburg, Florida, Refunding and Capital Improvement Hospital Revenue Bonds (Leesburg Regional Medical Center Project), Series 1988B (the "1988B Bonds," and together with the 1998A Bonds collectively referred to herein as the "1988 Bonds") pursuant to the Original Indenture and the Original Agreement for the purpose of making a loan to LRMC and LRMC North, Inc. to finance the cost of the acquisition, construction and installation of certain improvements to the hospital facility known as Leesburg Regional Medical Center (the "1988 Project") and refunding certain outstanding indebtedness.

LRMC North, Inc. was subsequently merged into LRMC. Pursuant to the First Supplemental Agreement, HHS was added to the Restricted Group and became an obligor under the Agreement.

The Original Indenture permits the issuance from time to time of Additional Bonds of the Issuer secured equally and ratably with the 1988 Bonds outstanding under the Original Indenture on the terms and conditions set forth therein.

The Issuer has previously issued its $20,760,000 City of Leesburg, Florida, Capital Improvement Hospital Revenue Bonds (Leesburg Regional Medical Center Project), Series 1991A (the "1991A Bonds") pursuant to the Original Indenture, as supplemented and amended by the First Supplemental Indenture, and the Original Agreement, as supplemented and amended by the First Supplemental Agreement and the Second Supplemental Agreement, to finance certain renovations and improvements to the hospital facilities known as Leesburg Regional Medical Center (the "LRMC Hospital Facilities"), and to purchase certain equipment therefor, as more particularly described in the Second Supplemental Agreement (the "1991A Project").

The Issuer has also previously issued its $29,020,000 City of Leesburg, Florida, Hospital Revenue Refunding Bonds (Leesburg Regional Medical Center Project), Series 1993A (the "1993A Bonds") pursuant to the Original Indenture, as supplemented and amended by the First Supplemental Indenture and the Second Supplemental Indenture, and the Original Agreement, as supplemented and amended by the First Supplemental Agreement, the Second Supplemental Agreement and the Third Supplemental Agreement, to finance the refunding of the 1988B Bonds maturing on July 1, 2018 and its $22,730,000 City of Leesburg, Florida Hospital Revenue Refunding Bonds (Leesburg Regional Medical Center Project), Series 1993B (the "1993B Bonds") pursuant to the Original Indenture as so supplemented and amended and as further supplemented and amended by the Third Supplemental Indenture and the Original Agreement, as so supplemented and amended and as further supplemented and amended by the Fourth Supplemental Agreement, to finance the refunding of the 1991A Bonds maturing July 1, 2011 and July 1, 2021.

The Issuer has also previously issued its $12,515,000 City of Leesburg, Florida Hospital Revenue Refunding Bonds (Leesburg Regional Medical Center Project), Series 1996A (the "1996A Bonds") pursuant to the Original Indenture, as supplemented and amended by the First Supplemental Indenture, the Second Supplemental Indenture, the Third Supplemental Indenture and the Fourth Supplemental Indenture and the Original Agreement, as supplemented and amended by the First Supplemental Agreement, the Second Supplemental Agreement, the Third Supplemental Agreement, the Fourth Supplemental Agreement and the Fifth Supplemental Agreement for the purpose of refunding the outstanding 1988A Bonds maturing on or after July 1, 1997 and the outstanding 1988B Bonds maturing on July 1, 2008.

The Issuer has also previously issued its $27,150,000 City of Leesburg, Florida Auction Rate Hospital Revenue Bonds (Leesburg Regional Medical Center Project), Series 2001 (the "2001 Bonds") pursuant to the Original Indenture, as supplemented and amended by the First Supplemental Indenture, the Second Supplemental Indenture, the Third Supplemental Indenture, the Fourth Supplemental Indenture and the Fifth Supplemental Indenture and the Original Agreement, as supplemented and amended by the First Supplemental Agreement, the Second Supplemental Agreement, the Third Supplemental Agreement, the Fourth Supplemental Agreement, the Fifth Supplemental Agreement and the Sixth Supplemental Agreement to finance the acquisition, construction and equipping of certain improvements to and renovation of the LRMC Hospital Facilities, as more particularly described in the Sixth Supplemental Agreement (the "2001 Project").

The Issuer has also previously issued its $33,060,000 City of Leesburg, Florida Hospital Revenue Bonds (Leesburg Regional Medical Center Project), Series 2002 (the "2002 Bonds") pursuant to the Original Indenture, as supplemented and amended by the First Supplemental Indenture, the Second Supplemental Indenture, the Third Supplemental Indenture, the Fourth Supplemental Indenture, the Fifth Supplemental Indenture and the Sixth Supplemental Indenture and the Original Agreement, as supplemented and amended by the First Supplemental Agreement, the Second Supplemental Agreement, the Third Supplemental Agreement, the Fourth Supplemental Agreement, the Fifth Supplemental Agreement, the Sixth Supplemental Agreement and the Seventh Supplemental Agreement to finance the acquisition, construction and equipping of certain improvements to and renovations of the LRMC Hospital Facilities, as more particularly described in the Seventh Supplemental Agreement (the "2002 Project").

The Issuer also previously issued its $43,415,000 City of Leesburg, Florida Hospital Revenue Refunding Bonds (Leesburg Regional Medical Center Project), Series 2003 (the "2003 Bonds") pursuant to the Original Indenture, as supplemented and amended by the First Supplemental Indenture, the Second Supplemental Indenture, the Third Supplemental Indenture, the Fourth Supplemental Indenture, the Fifth Supplemental Indenture, the Sixth Supplemental Indenture and the Seventh Supplemental Indenture and the Original Agreement, as supplemented and amended by the First Supplemental Agreement, the Second Supplemental Agreement, the Third Supplemental Agreement, the Fourth Supplemental Agreement, the Fifth Supplemental Agreement, the Sixth Supplemental Agreement, the Seventh Supplemental Agreement and the Eighth Supplemental Agreement for the purpose of currently refunding the 1993A Bonds and the 1993B Bonds maturing on or after July 1, 2004.

The Issuer has also previously issued its $75,000,000 City of Leesburg, Florida Hospital Revenue Bonds (The Villages Regional Hospital Project), Series 2006 (the "2006 Bonds") pursuant to the Original Indenture, as supplemented and amended by the First Supplemental Indenture, the Second Indenture, the Third Supplemental Indenture, the Fourth Supplemental Indenture, the Fifth Supplemental Indenture, the Sixth Supplemental Indenture, the Seventh Supplemental Indenture, and the Eighth Supplemental Indenture and the Original Agreement as supplemented and amended by the First Supplemental Agreement, the Second Supplemental Agreement, the Third Supplemental Agreement, the Fourth Supplemental Agreement, the Fifth Supplemental Agreement, the Sixth Supplemental Agreement, the Seventh Supplemental Agreement, the Eighth Supplemental Agreement, the Ninth Supplemental Agreement and the Amendment to the Financing Agreement and the Sixth Supplemental Agreement to finance (i) the current refunding of the Sumter County Industrial Development Authority Adjustable Rate Demand Revenue Bonds, Series 2001 (The Villages Tri-County Medical Center, Inc. Project) and (ii) the acquisition, construction and equipping of improvements and expansion to The Villages Regional Hospital (the "2006 Project").

Pursuant to the Ninth Supplemental Agreement, TVRH was added as a Member of the Restricted Group and became an obligor under the Financing Agreement. The Original Indenture was further supplemented and amended by the Ninth Supplemental Indenture, which deleted provisions requiring deposits to a Depreciation Reserve Fund.

The Issuer has also previously issued its $22,655,000 City of Leesburg, Florida Hospital Revenue Refunding Bonds (Leesburg Regional Medical Center Project), Series 2008A (the "2008A Bonds") pursuant to the Original Indenture, as supplemented by the First Supplemental Indenture, the Second Supplemental Indenture, the Third Supplemental Indenture, the Fourth Supplemental Indenture, the Fifth Supplemental Indenture, the Sixth Supplemental Indenture, the Seventh Supplemental Indenture, the Eighth Supplemental Indenture, the Ninth Supplemental Indenture and the Tenth Supplemental Indenture, and the Original Agreement as supplemented and amended by the First Supplemental Agreement, the Second Supplemental Agreement, the Third Supplemental Agreement, the Fourth Supplemental Agreement, the Fifth Supplemental Agreement, the Sixth Supplemental Agreement, the Seventh Supplemental Agreement, the Eighth Supplemental Agreement, the Ninth Supplemental Agreement, the Amendment to the Financing Agreement and the Sixth Supplemental Agreement and the Tenth Supplemental Agreement to finance the current refunding of the 2001 Bonds.

LRMC, HHS and TVRH (referred to herein collectively as the "Borrower") have requested the Issuer to issue its City of Leesburg, Florida Hospital Revenue Refunding Bonds (The Villages Regional Hospital Project"), Series 2008B (the "2008B Bonds") and its City of Leesburg, Florida Hospital Revenue Refunding Bonds (The Villages Regional Hospital Project), Series 2008C (the "2008C Bonds" and, together with the 2008B Bonds, the "2008 Refunding Bonds") in an aggregate principal amount of not to exceed $75,000,000, all as Additional Bonds under the Indenture for the purpose of making a loan to the Borrower to finance the current refunding of the outstanding 2006 Bonds (the "Refunded Bonds"). The LRMC Hospital Facilities and TVRH Hospital Facilities are collectively referred to herein as the "Hospital Facilities."

To authorize the Issuer to serve as the issuer of the 2008 Refunding Bonds as an accommodation to the Borrower, the Borrower has requested that the Issuer and the Sumter County Industrial Development Authority (the "Sumter County IDA") enter into a First Supplement to Interlocal Agreement (the "First Supplement"), a proposed form of which is attached hereto as Exhibit "G," supplementing the Interlocal Agreement dated as of January 1, 2006 between the Issuer and the Sumter County IDA to authorizing the Issuer to operate in the jurisdiction of the Sumter County IDA to issue the 2008 Refunding Bonds to finance the refunding of the Refunded Bonds.

It is in the best interest of the inhabitants of the Issuer to issue the 2008 Refunding Bonds as Additional Bonds under the Indenture for the purpose of financing the current refunding of the Refunded Bonds.

The Issuer is authorized under the Act and the First Supplement to issue the 2008 Refunding Bonds to finance the current refunding of the Refunded Bonds and to issue revenue bonds payable from the sale, operation or leasing of the Hospital Facilities.

The Sumter County IDA, by resolution adopted on December 8, 2006 previously found, determined and declared that (i) the 2006 Project is appropriate to the needs and circumstances of and shall make a significant contribution to the economic growth of Sumter County, shall provide or preserve gainful employment, and shall serve a public purpose of advancing the public heath and general welfare of the State of Florida and its people; and (ii) Sumter County will be able to cope satisfactorily with the impact of the 2006 Project and will be able to provide or cause to be provided, when needed, the public facilities, including utilities and public services, that will be necessary for the construction, operation, repair and maintenance of the 2006 Project and on account of any increases in population or other circumstances resulting therefrom. By resolution adopted on November 6, 2008, the Sumter County IDA found, determined and declared that the refunding of the Refunded Bonds is in the best interests of Sumter County and its inhabitants, and is appropriate to the needs and circumstances of and shall serve a public purpose of Sumter County.

Adequate provision has been made in the Agreement and the Indenture for the refunding and redemption of the Refunded Bonds, and for the operation, repair and maintenance of the Hospital Facilities at the expense of the Borrower, and for the payment by the Borrower of amounts sufficient to pay the principal of and interest and, if any, premium on the 2008 Refunding Bonds and all costs and expenses relating thereto in the amounts and at the times required.

The 2008B Bonds will initially be additionally secured by a direct pay letter of credit (the "2008B Credit Facility") issued by Scotia Bank. The 2008C Bonds will initially be privately placed with Regions Bank. It is anticipated that upon stabilization of the credit markets, the 2008C Bonds will be converted to a Weekly Interest Rate Period and following such conversion the 2008C Bonds will be additionally secured by a direct pay letter of credit issued by Regions Bank.

The Borrower is financially responsible based on the criteria established by the Act, and is fully capable and willing to fulfill its obligations under the Agreement, including the obligation to make payments in installments, in the amounts and at the times required, sufficient to timely discharge the debt service on the 2008 Refunding Bonds, the obligation to operate, repair and maintain the Hospital Facilities at the Borrower's own expense and such other obligations and responsibilities as are imposed under the Agreement. The payments to be made by the Borrower to the Issuer and the other security provided by the Agreement, and by the Indenture and the 2008B Credit Facility are adequate within the meaning of the Act for the security of the 2008 Refunding Bonds.

The Issuer is not obligated to pay the 2008 Refunding Bonds except from the proceeds derived from the installment payments made by the Borrower pursuant to the Agreement and payments received on Obligations issued by the Obligated Group under the Master Trust Indenture to be entered into in connection with the issuance of the 2008 Refunding Bonds, as supplemented and amended by the First Supplemental Indenture for Obligation Nos. 1-9 each by and among LRMC, HHS, TVRH, and The Bank of New York Mellon Trust Company, N.A., as Master Trustee (collectively, the "Master Trust Indenture"), proceeds of draws under the 2008B Credit Facility and any Credit Facility provided with respect to the 2008C Bonds upon conversion of the Interest Rate Period applicable thereto, or from other amounts or collateral pledged therefor and neither the faith and credit nor the taxing power of the Issuer or of the State of Florida or any political subdivision thereof is pledged to the payment of the principal of, the premium, if any, or the interest on the 2008 Refunding Bonds.

The Borrower will not discriminate among its patients due to race, religion or national origin.

RBC Capital Markets Corporation, (the "2008B Original Purchaser") has indicated an intent to offer to purchase the 2008B Bonds pursuant to a contract of purchase, in substantially the form attached hereto as Exhibit "C-1" (the "2008B Purchase Contract"). RBC Capital Markets Corporation, as Placement Agent (in such capacity, the "Placement Agent"), has arranged for the purchase of the 2008C Bonds by Regions Bank (the "2008C Original Purchaser") in a negotiated private placement pursuant to a Placement Agreement, in substantially the form attached hereto as Exhibit "C-2" (the "2008C Placement Agreement").

The negotiated sale of the 2008 Refunding Bonds is necessary and is in the best interest of the Issuer for the following reasons: the 2008 Refunding Bonds will be special and limited obligations of the Issuer, the debt service of which and other costs and expenses related to the 2008 Refunding Bonds shall be payable out of moneys derived by the Issuer from payments to be received under the Agreement and payments received on Obligations issued by the Obligated Group under the Master Trust Indenture; the Borrower will be required to pay all costs of the Issuer in connection with the refunding of the Refunded Bonds which are not paid out of the proceeds of the 2008 Refunding Bonds or otherwise and to operate and maintain the Hospital Facilities at its own expense; the cost of issuance of the 2008 Refunding Bonds, which must be borne directly or indirectly by the Borrower, is likely to be greater and the time until issuance longer if the 2008 Refunding Bonds are sold at public sale by competitive bids than if the 2008 Refunding Bonds are sold at negotiated sale, and there is no basis, considering prevailing market conditions, for any expectation that the terms and conditions of a sale of the 2008 Refunding Bonds at public sale by competitive bids would be more favorable than at negotiated sale; hospital revenue bonds having the characteristics of the 2008 Refunding Bonds are typically sold at negotiated sale under prevailing market conditions; and the Borrower has undertaken substantial negotiations with the 2008B Original Purchaser, the Placement Agent and the 2008C Original Purchaser regarding the 2008 Refunding Bonds.

It is in the best interest of the Issuer to authorize the acceptance of the expected offers of the 2008B Original Purchaser and the 2008C Original Purchaser to purchase the 2008 Refunding Bonds at negotiated sales. Prior to the sale of the 2008 Refunding Bonds, the 2008B Original Purchaser and the Placement Agent or the 2008C Original Purchaser will provide the Issuer with disclosure statements containing the information required by Section 218.385(6), Florida Statutes and the truth-in-bonding statement required pursuant to Section 218.385, Florida Statutes.

To facilitate the current refunding of the Refunded Bonds, it is in the best interest of the Issuer to enter into the Escrow Deposit Agreement among the Issuer, the Borrower, and The Bank of New York Mellon Trust Company, N.A. (the "Escrow Deposit Agreement"), a proposed form of which is attached hereto as Exhibit "F."

Neither the Trustee nor the 2008 Refunding Bondholders shall have the right directly or indirectly to require the Issuer to levy ad valorem taxes to pay the 2008 Refunding Bonds or to fund the operations of the Hospital Facilities.

The Borrower has represented to the Issuer that no certificates of need from the Agency for Health Care Administration of the State of Florida are required in accordance with Sections 408.031‑.045, Florida Statutes, and Chapter 59C‑1 of the Florida Administrative Code in connection with the issuance of the 2008 Refunding Bonds or the refunding of the Refunded Bonds.

approval and authorization of first supplement.

To permit the Issuer to operate within Sumter County to issue the 2008 Refunding Bonds to finance refunding of the Refunded Bonds, at the request and as an accommodation to the Borrower, the execution and delivery of the First Supplement between the Issuer and the Sumter County IDA and joined in by LRMC, HHS and TVRH, are hereby authorized. The form of the First Supplement attached hereto as Exhibit "G" is hereby approved, subject to such changes, insertions and omissions and such filling of blanks therein as may be approved by either of the officers of the Issuer executing the same, execution and delivery to be conclusive evidence of such approval. The Mayor or Mayor Pro Tem of the Issuer and the City Clerk or Assistant City Clerk of the Issuer, or their duly authorized alternate officers, are hereby authorized and empowered to execute and deliver the First Supplement in substantially the form attached hereto, subject to such changes, insertions and omissions and filling of blanks therein authorized hereby.

AUTHORIZATION AND APPROVAL OF 2008 refunding BondS.

Subject and pursuant to the provisions hereof and of the Indenture and the Agreement, for the purpose of financing the current refunding of the Refunded Bonds, the issuance of the 2008B Bonds and the 2008C Bonds of the Issuer under the authority of the Act and the First Supplement as Additional Bonds under the Indenture in an aggregate principal amount not to exceed $75,000,000 is hereby authorized.

The Mayor or Mayor Pro Tem is hereby authorized to award the sale of the 2008 Refunding Bonds, as requested by the Borrower, provided that the aggregate principal amount of the 2008B Bonds, together with the aggregate principal amount of the 2008C Bonds, shall not exceed $75,000,000, the 2008B Bonds shall mature not later than July 1, 2036, the 2008B Bonds shall initially bear interest at a Weekly Interest Rate determined in accordance with the Eleventh Supplemental Indenture, and the purchase price shall not be less than 98% of the principal amount of the 2008B Bonds, all as approved by the Borrower and set forth in the 2008B Purchase Contract.

The Mayor or Mayor Pro Tem is hereby authorized to award the sale of the 2008C Bonds, as requested by the Borrower, provided that the aggregate principal amount of the 2008C Bonds, together with the aggregate principal amount of the 2008B Bonds, shall not exceed $75,000,000, the 2008C Bonds shall mature not later than July 1, 2036, the 2008C Bonds shall initially bear interest at the Bank Loan Interest Rate determined in accordance with the Eleventh Supplemental Indenture, and the purchase price shall not be less than 98% of the principal amount of the 2008C Bonds, all as approved by the Borrower and set forth in the 2008C Placement Agreement.

The 2008B Bonds shall be designated "City of Leesburg, Florida Hospital Revenue Refunding Bonds (The Villages Regional Hospital Project), Series 2008B." The 2008C Bonds shall be designated "City of Leesburg, Florida Hospital Revenue Refunding Bonds (The Villages Regional Hospital Project), Series 2008C." The Mayor or Mayor Pro Tem is hereby authorized to change such designations as necessary in the event the 2008 Refunding Bonds are not initially issued in calendar year 2008. The 2008 Refunding Bonds shall be subject to payment as provided in the Indenture. Notwithstanding anything contained herein to the contrary, the 2008 Refunding Bonds shall not be issued until the conditions precedent to the issuance thereof as Additional Bonds under Article IV of the Original Indenture have been complied with and upon issuance, the 2008 Refunding Bonds shall constitute Additional Bonds under the Indenture entitled to the security and benefits thereof.

The 2008 Refunding Bonds shall be dated the date of original issuance thereof, shall bear interest from the dated date thereof at rates determined in the manner provided in and payable at the times and in the manner provided in the Eleventh Supplemental Indenture. The 2008 Refunding Bonds shall mature and be subject to optional and mandatory redemption and optional and mandatory tender for purchase, shall be issued in registered form without coupons, shall be in the denomination or denominations, shall be payable at the place or places and in the manner, shall be executed, authenticated and delivered, shall otherwise be in such form, and subject to such terms and conditions, all as provided in the Indenture.

The 2008 Refunding Bonds and the premium, if any, and interest thereon shall not be deemed to constitute a general debt, liability or obligation of the Issuer or a debt, liability or obligation of the State of Florida or any political subdivision thereof, or a pledge of the faith and credit or taxing power of the Issuer, the State of Florida or any political subdivision thereof, but shall be payable solely from the revenues and other collateral provided and pledged therefor in the manner and to the extent provided in the Indenture. The Issuer shall not be obligated to pay the 2008 Refunding Bonds or any premium or interest thereon except from the revenues, collateral and proceeds pledged therefor as provided in the Indenture. Neither the Issuer, nor the State of Florida, nor any political subdivision thereof shall be directly, indirectly or contingently obligated to levy or pledge any form of taxation whatsoever for the payment of the 2008 Refunding Bonds or to make any appropriation for the payment thereof.

AUTHORIZATION AND APPROVAL OF eleventh SUPPLEMENTAL AGREEMENT.

As authorized by and in conformity with the Act, the Original Indenture and the Original Agreement, to provide for additional Bond Payments by the Borrower sufficient to pay the principal of, premium, if any, and interest on the 2008 Refunding Bonds and certain other amounts provided therein, to provide certain additional covenants of the Borrower with respect to the 2008 Refunding Bonds, the execution and delivery of the Eleventh Supplemental Agreement between the Issuer and the Borrower is hereby authorized. The form of the Eleventh Supplemental Agreement attached hereto as Exhibit "B" is hereby approved, subject to such changes, insertions and omissions and such filling of blanks as may be made in such form of Eleventh Supplemental Agreement and approved by the Borrower and either of the officers of the Issuer executing the same, such execution and delivery to be conclusive evidence of such approval. The Mayor or Mayor Pro Tem of the Issuer and the City Clerk or Assistant City Clerk of the Issuer or their duly authorized alternate officers are hereby authorized and empowered to execute and deliver the Eleventh Supplemental Agreement in substantially the form attached hereto, subject to such changes, insertions and omissions and filling of blanks therein as authorized hereby.

APPROVAL AND AUTHORIZATION OF eleventh SUPPLEMENTAL INDENTURE.

In order to provide for the issuance of the 2008 Refunding Bonds and the terms thereof, and to supplement and amend the Original Indenture, the execution and delivery of the Eleventh Supplemental Indenture between the Issuer and the Trustee is hereby authorized. The form of the Eleventh Supplemental Indenture attached hereto as Exhibit "A" is hereby approved, subject to such changes, insertions and omissions and such filling of blanks therein as may be made in such form of Eleventh Supplemental Indenture and approved by the Trustee and either of the officers of the Issuer executing the same, such execution and delivery to be conclusive evidence of such approval. The Mayor or Mayor Pro Tem of the Issuer and the City Clerk or Assistant City Clerk of the Issuer or their duly authorized alternate officers are hereby authorized and empowered to execute and deliver the Eleventh Supplemental Indenture in substantially the form attached hereto, subject to such changes, insertions and omissions and filling of blanks therein as authorized hereby.

ASSIGNMENT OF eleventh SUPPLEMENTAL AGREEMENT.

The Issuer's interest in the Eleventh Supplemental Agreement, other than certain reserved rights, shall be assigned by the Issuer to the Trustee under the terms of the Indenture, the Agreement and the Master Trust Indenture.

APPROVAL OF 2008B PURCHASE CONTRACT AND 2008C PLACEMENT AGREEMENT.

The form of the 2008B Purchase Contract attached hereto as Exhibit "C-1" is hereby approved, subject to such changes, insertions and omissions and filling of blanks therein, not inconsistent with the terms hereof, as may be made in such form and approved by the officers of the Issuer executing the same, the Borrower and the 2008B Original Purchase, such execution to be conclusive evidence of such approval. Upon receipt from the 2008B Original Purchaser of a disclosure statement required pursuant to Section 218.385(6), Florida Statutes, the Mayor or Mayor Pro Tem of the Issuer is hereby authorized to accept the offer of the 2008B Original Purchaser to purchase the 2008B Bonds, subject to the conditions provided in Section 5 above, upon the terms and conditions set forth in the 2008B Purchase Contract. The form of the 2008C Placement Agreement attached hereto as Exhibit "C-2" is hereby approved, subject to such changes, insertions and omissions and filling of blanks therein, not inconsistent with the terms hereof, as may be made in such form and approved by the officers of the Issuer executing the same, the Borrower and the Placement Agent, such execution to be conclusive evidence of such approval. Upon receipt from the Placement Agent or 2008C Original Purchaser of a disclosure statement required pursuant to Section 218.385(6), Florida Statutes, the Mayor or Mayor Pro Tem of the Issuer is hereby authorized to accept and approve a private negotiated sale of the 2008C Bonds pursuant to the 2008C Placement Agreement on terms approved by the Borrower, subject to the conditions provided in Section 5 above. The Mayor or Mayor Pro Tem of the Issuer is hereby authorized to execute and deliver the 2008B Purchase Contract and the 2008C Placement Agreement in substantially the forms attached hereto as Exhibits "C-1" and "C-2," respectively, subject to such changes, insertions, omissions and filling of blanks therein, not inconsistent with the terms hereof, as may be approved by the Mayor or Mayor Pro Tem, such execution to be conclusive evidence of such approval, for and on behalf of the Issuer.

APPROVAL OF OFFICIAL STATEMENT; EXECUTION AND DELIVERY OF OFFICIAL STATEMENT.

The Issuer hereby approves the form and content of the Official Statement attached hereto as Exhibit "D." The Mayor or Mayor Pro Tem of the Issuer is hereby authorized to execute, on behalf of the Issuer, the final Official Statement, and in the Mayor's or Mayor Pro Term's sole discretion, may approve any changes, insertions, omissions and filling of blanks therein, such execution to be conclusive evidence of such approval, and such Official Statement is hereby authorized to be used and distributed in connection with the marketing and sale of the 2008B Bonds.

APPROVAL AND AUTHORIZATION OF TAX REGULATORY AGREEMENT.

To provide for and preserve the exclusion from gross income for federal income tax purposes of interest on the 2008 Refunding Bonds, the execution and delivery of a Tax Regulatory Agreement among the Issuer, the Borrower and the Trustee in substantially the form attached hereto as Exhibit "E" are hereby authorized and approved. The form of the Tax Regulatory attached hereto as Exhibit "E" is hereby approved, subject to such changes, insertions and omissions and such filling of blanks therein as may be approved by the officers of the Issuer executing the same, such execution to be conclusive evidence of such approval. The Mayor or Mayor Pro Term of the Issuer and the City Clerk or the Assistant City Clerk or their duly authorized alternate officers are hereby authorized and empowered to execute and deliver the Tax Regulatory Agreement in substantially the form attached hereto, subject to such changes, insertions and omissions and filling of blanks therein as either of such officers may approve, such execution and delivery to be conclusive evidence of such approval.

APPOINTMENT OF ESCROW AGENT AND APPROVAL OF ESCROW DEPOSIT AGREEMENT.

The Bank of New York Mellon Trust Company, N.A. is hereby designated as the Escrow Agent for the current refunding of the Refunded Bonds, the execution and delivery of the Escrow Deposit Agreement is hereby authorized. To provide for the refunding and redemption of the Refunded Bonds the form of the Escrow Deposit Agreement attached hereto as Exhibit "F" is hereby approved, subject to such changes, insertions and omissions and such filling of blanks therein as may be approved by either of the officers of the Issuer executing the same, the execution and delivery thereof to be conclusive evidence of such approval. The Mayor or Mayor Pro Tem of the Issuer and the City Clerk or Assistant City Clerk of the Issuer, or their duly authorized alternate officers are hereby authorized and empowered to execute and deliver the Escrow Deposit Agreement in substantially the form attached hereto, subject to such changes, insertions and omissions and filling of blanks therein authorized hereby.

APPLICATION OF PROCEEDS.

The proceeds from the sale of the 2008 Refunding Bonds shall be disposed of in the manner provided in Section 5.01 of the Eleventh Supplemental Indenture and as provided by a certificate of the Issuer delivered at or prior to the delivery of the 2008 Refunding Bonds.

AUTHORIZATIONS.

The Mayor or the Mayor Pro Tem and the City Clerk or any Assistant City Clerk of the Issuer are hereby authorized and directed to execute the 2008 Refunding Bonds as provided herein and in the Indenture, and the Mayor or the Mayor Pro Tem of the Issuer or the City Clerk or any Assistant City Clerk of the Issuer is hereby authorized and directed upon the execution of the 2008 Refunding Bonds to deliver such Bonds in the amounts authorized to be issued hereunder or such lesser amount as requested by the Borrower, to the Trustee for authentication and delivery to or upon the order of the applicable Original Purchaser, upon payment of the purchase price therefor and upon compliance by the 2008B Original Purchaser with the terms of the 2008B Purchase Contract and the Placement Agent and 2008C Original Purchaser with the terms of the 2008C Placement Agreement.

The Mayor or the Mayor Pro Tem and the City Clerk or any Assistant City Clerk of the Issuer and the Issuer's Attorney, and such other officers and employees of the Issuer as may be designated by the Mayor or the Mayor Pro Tem, are each designated as agents of the Issuer in connection with the issuance and delivery of the 2008 Refunding Bonds and the redemption of the Refunded Bonds, and are authorized and empowered, collectively or individually, to take all action and steps and to execute all instruments, documents and contracts whether or not expressly contemplated hereby, and to execute and do all acts and things required by the provisions of this Resolution and by the provisions of the 2008 Refunding Bonds, the Tax Regulatory Agreement, the Escrow Deposit Agreement, the 2008B Purchase Contract, the 2008C Placement Agreement, the Indenture and the Agreement, as may be necessary for the full, punctual and complete performance of all the terms, covenants, provisions and agreements herein and therein contained, or as otherwise may be necessary or desirable to effectuate the purpose and intent of this Resolution. The Mayor or Mayor Pro Tem and the City Clerk or any Assistant City Clerk of the Issuer are hereby designated as the primary officers of the Issuer charged with the responsibility of issuing the 2008 Refunding Bonds.

REPEAL OF INCONSISTENT PROVISIONS.

All resolutions or parts thereof in conflict herewith are to the extent of such conflict superseded and repealed.

INVALIDITY.

In case any one or more of the provisions of this Resolution, the Indenture, the Agreement, the 2008 Refunding Bonds, the Tax Regulatory Agreement, the Escrow Deposit Agreement, the 2008B Purchase Contract or the 2008C Placement Agreement shall for any reason be held to be illegal or invalid, such illegality or invalidity shall not affect any other provisions of this Resolution, the Indenture, the Agreement, 2008 Refunding Bonds, the Tax Regulatory Agreement, the Escrow Deposit Agreement, the 2008B Purchase Contract and the 2008C Placement Agreement and each such document shall be construed and enforced as if such illegal or invalid provision had not been contained herein or therein. The 2008 Refunding Bonds are issued and this Resolution is adopted and the Tax Regulatory Agreement, 2008B Purchase Contract, the 2008C Placement Agreement, Escrow Deposit Agreement, Indenture and Agreement shall be executed with the intent that the laws of the State of Florida shall govern their construction.