Ordinance

(Published in The Lawrence Journal-World on March __, 2011)

ORDINANCE NO. 8612

AN ORDINANCE AUTHORIZING THE ISSUANCE OF NOT TO EXCEED $10,500,000 OF HOSPITAL REVENUE BONDS, SERIES 2011 (THE LAWRENCE MEMORIAL HOSPITAL), TO PROVIDE FUNDS TO FINANCE AN ADDITIONAL PROJECT FOR THE LAWRENCE MEMORIAL HOSPITAL AND TO PAY THE COST OF ISSUING THE BONDS; AUTHORIZING AND APPROVING CERTAIN DOCUMENTS AND ACTIONS IN CONNECTION WITH THE ISSUANCE OF THE BONDS; AND REPEALING ORDINANCE NO. 8600.

WHEREAS, the City of Lawrence, Kansas (the “City”) is authorized pursuant to K.S.A. 12‑1740 to 12‑1749d, inclusive, as amended (the “Act”), to issue revenue bonds for the purpose of providing funds to pay the costs of purchasing, acquiring, constructing, reconstructing, improving, equipping, furnishing, repairing, enlarging or remodeling facilities for hospital purposes, and to lease any such project to any person, firm or corporation pursuant to the Act; and

WHEREAS, at the request of the Board of Trustees of The Lawrence Memorial Hospital (the “Institution”), the City has issued its Hospital Revenue Bonds, Series 2003 (The Lawrence Memorial Hospital), in the original principal amount of $17,450,000 (the “Series 2003 Bonds”) and its Hospital Revenue Bonds, Series 2006 (The Lawrence Memorial Hospital), in the original principal amount of $51,845,000 (the “Series 2006 Bonds,” and together with the Series 2003 Bonds, the “Bonds”); and

WHEREAS, the Bonds were issued pursuant to an Indenture of Trust dated as of June 1, 1994 (the “Original 1994 Indenture”), as supplemented by the Third Supplemental Indenture dated as of October 1, 2003 (the “Third Supplemental Indenture,”), the Fourth Supplemental Indenture dated as of November 1, 2003 (the “Fourth Supplemental Indenture”) and the Fifth Supplemental Indenture dated as of August 1, 2006 (the “Fifth Supplemental Indenture,” and together with the Original 1994 Indenture, the Third Supplemental Indenture and the Fourth Supplemental Indenture, the “1994 Indenture”);

WHEREAS, the Hospital’s facilities (the “Facility”) were originally leased to the Institution pursuant to a Supplemental Lease Agreement dated as of June 1, 1994 (the “Original 1994 Lease”), as supplemented by the Fourth Supplemental Lease Agreement dated as of October 1, 2003 (the “2003 Supplement”) and the Fifth Supplemental Lease Agreement dated as of August 1, 2006 (the “2006 Supplement,” and together with the Original 1994 Lease and the 2003 Supplement, the “1994 Lease”), pursuant to which the Institution agreed to make rental payments in an amount sufficient to pay the principal of and premium, if any, and interest on the Bonds and any additional bonds issued from time to time under the 1994 Indenture and to make certain other payments provided for therein; and

WHEREAS, pursuant to Section 209 of the 1994 Indenture and Article XI of the 1994 Lease, the City and the Institution desire that the City issue its Hospital Revenue Bonds, Series 2011 (The Lawrence Memorial Hospital), in the aggregate principal amount of not to exceed $10,500,000 (the “Series 2011 Bonds”), for the purposes of (i) financing or reimbursing the Institution for the costs of various improvements to the Facility (the “Series 2011 Project”) and (ii) paying certain costs of issuance of the Series 2011 Bonds; and

WHEREAS, to secure the payment of the Series 2011 Bonds, the City and the Trustee desire to enter into the Sixth Supplemental Indenture as a supplement to the 1994 Indenture (the “Sixth Supplemental Indenture”), and the City and the Institution desire to enter into the Sixth Supplemental Lease Agreement as a supplement to the 1994 Lease (the “Sixth Supplemental Lease”); and

WHEREAS, the City finds and determines that it is necessary and desirable in connection with the issuance of the Series 2011 Bonds that the City execute and deliver certain additional documents and that the City take certain other actions as herein provided;

NOW, THEREFORE, BE IT ORDAINED BY THE GOVERNING BODY OF THE CITY OF LAWRENCE, KANSAS AS FOLLOWS:

Section 1. Findings and Determinations. The City hereby makes the following findings and determinations with respect to the Series 2011 Bonds to be issued by the City, based upon representations made to the City by the Institution:

(a) The Institution has properly requested the City’s assistance in financing the costs of the Series 2011 Project;

(b) The issuance of the Series 2011 Bonds for the purpose of providing funds to finance the costs of the Series 2011 Project is in furtherance of the public purposes set forth in the Act; and

Section 2. Authorization of the Series 2011 Bonds. In order to obtain funds to be used for the purposes set forth in the Recitals, the City is hereby authorized to issue the Series 2011 Bonds in an aggregate principal amount of not to exceed $10,500,000, which shall be issued under and secured by and shall have the terms and provisions set forth in the 1994 Indenture, as supplemented by the Sixth Supplemental Indenture herein authorized. The Series 2011 Bonds shall bear interest at an average interest rate of not to exceed 6.25% per annum, and shall mature in principal installments with a final maturity not later than the year 2036, and shall have such redemption provisions, including premiums, and other terms as provided in the Sixth Supplemental Indenture. The final terms of the Series 2011 Bonds shall be specified in the Purchase Contract (hereinafter defined) upon the execution thereof, and the signatures of the officers of the City executing such Purchase Contract shall constitute conclusive evidence of the City’s approval thereof.

Section 3. Limited Obligations. The Series 2011 Bonds shall be limited obligations of the City payable solely from the sources and in the manner as provided in the 1994 Indenture (as supplemented by the Sixth Supplemental Indenture, the “Bond Indenture”), and shall be secured by the pledge of the Facility and the revenues therefrom and by a transfer, pledge and assignment of and a grant of a security interest in the Trust Estate (as defined in the Bond Indenture) to the Bond Trustee in favor of the holders of the Series 2003 Bonds, the Series 2006 Bonds and the Series 2011 Bonds, all as provided in the Bond Indenture. The Series 2011 Bonds and interest thereon shall not be deemed to constitute a debt or liability of the City, the State of Kansas (the “State”) or of any political subdivision thereof within the meaning of any State constitutional provision or statutory limitation and shall not constitute a pledge of the full faith and credit of the City, the State or of any political subdivision thereof, but shall be payable solely from the funds provided for in the Bond Indenture and the 1994 Lease (as supplemented by the Sixth Supplemental Lease, the “Lease”). The issuance of the Series 2011 Bonds shall not, directly, indirectly or contingently, obligate the City, the State or any political subdivision thereof to levy any form of taxation therefor or to make any appropriation for their payment. No breach by the City of any such pledge, mortgage, obligation or agreement may impose any liability, pecuniary or otherwise, upon the City or any charge upon its general credit or against its taxing power.

Section 4. Authorization and Approval of Documents. The following documents are hereby approved in substantially the forms presented to and reviewed by the City at this meeting (copies of which documents shall be filed in the records of the City), and the City is hereby authorized to execute and deliver each of such documents (the “City Documents”) with such changes therein as shall be approved by the officials of the City executing such documents, such officials’ signatures thereon being conclusive evidence of their approval and the City’s approval thereof:

(a) Sixth Supplemental Indenture providing for the issuance thereunder of the Series 2011 Bonds and setting forth certain terms and provisions applicable to the Series 2011 Bonds;

(b) Sixth Supplemental Lease pursuant to which the City will make the proceeds of the Series 2011 Bonds available to the Institution; and

(c) Tax Compliance Agreement pursuant to which the City, the Institution and the Trustee make certain covenants relating to the federal tax status of the Bonds; and

(d) Purchase Contract (the “Purchase Contract”) among the City, the Institution and Piper Jaffray & Co., the underwriter of the Series 2011 Bonds (the “Underwriter”), pursuant to which the City agrees to sell the Series 2011 Bonds to the Underwriter upon the terms and conditions as set forth in the Purchase Contract.

Section 5. Preliminary Private Placement Memorandum; Preliminary Private Placement Memorandum Deemed Final. The draft Preliminary Private Placement Memorandum submitted to the City, and the final Private Placement Memorandum, in substantially the form of the Preliminary Private Placement Memorandum with such changes and additions thereto as are necessary to conform to the transaction are hereby approved for use in connection with the Series 2011 Bonds. The City has not participated in the preparation of the Preliminary Private Placement Memorandum or the final Private Placement Memorandum and has not verified the accuracy of the information therein, other than information respecting the City. Accordingly, such approvals do not constitute approval by the City of such information or a representation by the City as to the completeness or accuracy of the information contained therein. For the purpose of enabling the Underwriter to comply with the requirements of Rule 15c2‑12(b)(1) of the Securities and Exchange Commission, to the extent applicable or required by the Rule, the City hereby deems the information regarding the City contained in the Preliminary Private Placement Memorandum to be “final” as of its date, except for the omission of such information as is permitted by Rule 15c2‑12(b)(1), and the appropriate officers of the City are hereby authorized, if requested, to provide the Underwriter a letter or certification to such effect and to take such other actions or execute such other documents as such officers in their reasonable judgment deem necessary to enable the Underwriter to comply with the requirements of such Rule. The Underwriter may elect to forego the use of the Preliminary Private Placement Memorandum.

Section 6. Execution of Series 2011 Bonds and City Documents. The Mayor of the City is hereby authorized and directed to execute the Series 2011 Bonds by manual or facsimile signature and to deliver the Series 2011 Bonds to the Trustee for authentication for and on behalf of and as the act and deed of the City in the manner provided in the Bond Indenture. The Mayor of the City is hereby authorized and directed to execute and deliver the City Documents for and on behalf of and as the act and deed of the City. The City Clerk of the City is hereby authorized and directed to attest, by manual or facsimile signature, to the Series 2011 Bonds, the City Documents and such other documents, certificates and instruments as may be necessary or desirable to carry out and comply with the intent of this Ordinance, and to affix or imprint the municipal seal of the City on the Series 2011 Bonds.

Section 7. Further Authority. The City shall, and the officials, agents and employees of the City are hereby authorized and directed to, take such further action, and execute such other documents, certificates and instruments, including, without limitation, arbitrage certificate, notices, closing certificates and tax forms, as may be necessary or desirable to carry out and comply with the intent of this Ordinance, and to carry out, comply with and perform the duties of the City with respect to the Series 2011 Bonds and the City Documents.

Section 8. Repeal of Ordinance No. 8600. In order to consider authorization of the issuance of the Series 2011 Bonds and as a condition to such issuance, Ordinance No. 8600, adopted on December 7, 2010, that authorized the issuance of up to $13,500,000 in Industrial Revenue Bonds for Lawrence Memorial Hospital in connection with the Series 2011 Project and authorized the execution of certain documents related thereto, is hereby repealed.

Section 9. Effective Date. This Ordinance shall take effect and be in full force immediately after its adoption by the Governing Body of the City and publication in the official newspaper of the City.

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