Cleveland Clinic Health System Obligated Group - FMSbonds.com
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Cleveland Clinic Health System Obligated Group - FMSbonds.com

Cleveland Clinic Health System Obligated Group - FMSbonds.com Cleveland Clinic Health System Obligated Group - FMSbonds.com

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09.07.2015 Views

encumbrances, pledges, or other security interests pursuant to this clause (g), (A)(1) does not exceed 25%of the Book Value of all Property of the Combined Group or (2) does not exceed 15% of the Fair MarketValue of all Property of the Combined Group; or (B) does not exceed 15% of the Gross Revenues of theCombined Group for the most recent Fiscal Year for which audited financial statements of the CombinedGroup are available or (II) the Master Trustee shall have received a report or opinion of an IndependentConsultant to the effect that the Debt Service Coverage of the Combined Group for the most recent FiscalYear for which audited financial statements of the Combined Group are available, excluding in thecomputation of Net Income for Debt Service any income from Property on which a mortgage, lien, charge,encumbrance, pledge or other security interest has been imposed pursuant to the provisions of the MasterIndenture summarized in this subsection (g), is greater than 1.25; provided, however, that the provisions ofthe Master Indenture summarized in this subsection (g) shall not permit any mortgage, lien, charge,encumbrance, pledge or other security interest in the Gross Receipts of an Obligated Issuer with respect toa sale, purported sale, or other transfer of or involving accounts receivable if it would not be permittedunder paragraph (w) of the definition of Permitted Encumbrances.TRANSFERS OF PROPERTYEach Obligated Issuer agrees (i) not to sell, lease, convey, transfer or otherwise dispose of (collectively,“dispose”) any portion of its Property to Persons outside the Combined Group and (ii) to cause each Affiliate andGroup Affiliate which it controls not to dispose of any Property of a Group Affiliate, unless:(a)the disposition is in the ordinary course of its business; or(b) the sum of (i) the Book Value of any Real Property or tangible personal property to bedisposed of, and (ii) any cash and investments (valued at Fair Market Value) being disposed of withoutconsideration (other than any such cash and investments which were donor restricted so as not to qualify asNet Income Available for Debt Service), and (iii) the aggregate Book Value of all other Real Property andtangible personal property disposed of by the Combined Group pursuant to the Master Indenture during thethen current Fiscal Year, and (iv) the aggregate of all cash and investments (valued at Fair Market Value asof the time of disposition) so disposed of during the current Fiscal Year without consideration (other thanany such cash and investment which were donor restricted so as not to qualify as Net Income Available forDebt Service), does not exceed 15% of the Book Value of all the Property of the Combined Group or doesnot exceed 15% of the Fair Market Value of all Property of the Combined Group; or(c) the Master Trustee shall have received an Officer’s Certificate from the Obligated GroupRepresentative to the effect that (i) the Debt Service Coverage Ratio of the Combined Group obtainedusing Net Income Available for Debt Service for the most recent Fiscal Year for which audited financialstatements of the Combined Group are available and assuming that all of the Property proposed to bedisposed of had been disposed of at the beginning of that Fiscal Year is not less than 1.50; or (ii) theforecasted Debt Service Coverage Ratio of the Combined Group, obtained for the Fiscal Year nextfollowing the proposed disposition of Property calculated by assuming no additional Indebtedness is to beissued or incurred, is not less than the forecasted Debt Service Coverage Ratio obtained for that Fiscal Yearbut calculated as if none of such Property had been disposed of; or(d) the Master Trustee receives an opinion from the Obligated Group Representative that theProperty being disposed of is an Operating Asset and is obsolete, worn out, unprofitable or undesirable; or(e) the proceeds from the disposition of Property, or the Property acquired in exchange, havea Fair Market Value that is not less than that of the Property being disposed of; or(f) the Property being disposed of is cash or another non-Operating Asset and is disposed ofon terms no less favorable than would be obtained in an arm’s-length transaction; orC-28

(g) the loan of cash or other non-Operating Asset being made is secured by an obligation ofthe borrower and such obligation matures within a reasonable time, bears interest at a reasonable interestrate and is reasonably expected to be repaid.PERMITTED INDEBTEDNESSEach Obligated Issuer covenants that, so long as any Master Note is Outstanding, it will not, and will notpermit any Group Affiliate which it controls to, incur Indebtedness in addition to the Indebtedness evidenced byMaster Notes which are outstanding as of the date of execution of the Master Indenture except:(a) any Indebtedness as to which the Obligated Issuer or Group Affiliate shall certify in anOfficer’s Certificate delivered to the Master Trustee delivered at the time such Indebtedness is incurred,that for the most recent Fiscal Year for which audited financial statements of the Combined Group areavailable, the Debt Service Coverage Ratio of the Combined Group was not less than 1.25 assuming thatthe Indebtedness then proposed to be incurred was outstanding during such Fiscal Year and excluding anydebt service on Outstanding Indebtedness which is to be refunded with proceeds of the Indebtednessproposed to be incurred;(b) Indebtedness of any member of the Combined Group for an amount owing to any othermember of the Combined Group;(c) Indebtedness consisting of an obligation to reimburse payments made under a letter ofcredit, surety bond, policy of insurance, bond purchase agreement or similar credit or liquidity supportobtained to secure the payment or purchase of other Indebtedness incurred pursuant to the provisions of theMaster Indenture summarized under this caption, to pay interest thereon until paid and to pay fees,indemnification, expenses, including without limitation, expenses of enforcement, and penalties, inconnection therewith;(d)Non-Recourse Indebtedness;(e) Liabilities for contributions to self-insurance or shared or pooled-risk insurance programsrequired or permitted to be maintained under the Master Indenture;(f) Indebtedness consisting of accounts payable incurred in the ordinary course of businessor other Indebtedness not incurred or assumed primarily to assure the repayment of money borrowed orcredit extended which Indebtedness is incurred in the ordinary course of business; and(g)Subordinated Indebtedness.Indebtedness shall generally be deemed to be “incurred” by an Obligated Issuer or Group Affiliatewhenever that Obligated Issuer or Group Affiliate shall create, assume, guarantee, or otherwise become liable inrespect thereof, including without limitation, as the result of merger or consolidation; provided, however, that noadditional Indebtedness shall be deemed to be incurred if such Obligated Issuer is drawing additional funds availableunder a line of credit or drawdown loan so long as the provisions of the Master Indenture summarized under thiscaption have been met assuming the maximum principal amount available under such Indebtedness was incurred onthe date such Obligated Issuer or Group Affiliate demonstrates satisfaction of the requirements summarized underthis caption.FILING OF FINANCIAL STATEMENTS AND CERTIFICATE OF NO DEFAULTAs soon as practicable, but in no event later than six months after the end of each Fiscal Year, theObligated Group Representative is required to file, or cause to be filed, with the Master Trustee and with eachRating Agency (i) a combined revenue and expense statement of the Combined Group and of the Obligated Groupprepared in each case on a consolidated and consolidating basis along with combining entries eliminating materialinter-company balances and transactions, (ii) a combining balance sheet of the Combined Group and of theC-29

encumbrances, pledges, or other security interests pursuant to this clause (g), (A)(1) does not exceed 25%of the Book Value of all Property of the Combined <strong>Group</strong> or (2) does not exceed 15% of the Fair MarketValue of all Property of the Combined <strong>Group</strong>; or (B) does not exceed 15% of the Gross Revenues of theCombined <strong>Group</strong> for the most recent Fiscal Year for which audited financial statements of the Combined<strong>Group</strong> are available or (II) the Master Trustee shall have received a report or opinion of an IndependentConsultant to the effect that the Debt Service Coverage of the Combined <strong>Group</strong> for the most recent FiscalYear for which audited financial statements of the Combined <strong>Group</strong> are available, excluding in the<strong>com</strong>putation of Net In<strong>com</strong>e for Debt Service any in<strong>com</strong>e from Property on which a mortgage, lien, charge,encumbrance, pledge or other security interest has been imposed pursuant to the provisions of the MasterIndenture summarized in this subsection (g), is greater than 1.25; provided, however, that the provisions ofthe Master Indenture summarized in this subsection (g) shall not permit any mortgage, lien, charge,encumbrance, pledge or other security interest in the Gross Receipts of an <strong>Obligated</strong> Issuer with respect toa sale, purported sale, or other transfer of or involving accounts receivable if it would not be permittedunder paragraph (w) of the definition of Permitted Encumbrances.TRANSFERS OF PROPERTYEach <strong>Obligated</strong> Issuer agrees (i) not to sell, lease, convey, transfer or otherwise dispose of (collectively,“dispose”) any portion of its Property to Persons outside the Combined <strong>Group</strong> and (ii) to cause each Affiliate and<strong>Group</strong> Affiliate which it controls not to dispose of any Property of a <strong>Group</strong> Affiliate, unless:(a)the disposition is in the ordinary course of its business; or(b) the sum of (i) the Book Value of any Real Property or tangible personal property to bedisposed of, and (ii) any cash and investments (valued at Fair Market Value) being disposed of withoutconsideration (other than any such cash and investments which were donor restricted so as not to qualify asNet In<strong>com</strong>e Available for Debt Service), and (iii) the aggregate Book Value of all other Real Property andtangible personal property disposed of by the Combined <strong>Group</strong> pursuant to the Master Indenture during thethen current Fiscal Year, and (iv) the aggregate of all cash and investments (valued at Fair Market Value asof the time of disposition) so disposed of during the current Fiscal Year without consideration (other thanany such cash and investment which were donor restricted so as not to qualify as Net In<strong>com</strong>e Available forDebt Service), does not exceed 15% of the Book Value of all the Property of the Combined <strong>Group</strong> or doesnot exceed 15% of the Fair Market Value of all Property of the Combined <strong>Group</strong>; or(c) the Master Trustee shall have received an Officer’s Certificate from the <strong>Obligated</strong> <strong>Group</strong>Representative to the effect that (i) the Debt Service Coverage Ratio of the Combined <strong>Group</strong> obtainedusing Net In<strong>com</strong>e Available for Debt Service for the most recent Fiscal Year for which audited financialstatements of the Combined <strong>Group</strong> are available and assuming that all of the Property proposed to bedisposed of had been disposed of at the beginning of that Fiscal Year is not less than 1.50; or (ii) theforecasted Debt Service Coverage Ratio of the Combined <strong>Group</strong>, obtained for the Fiscal Year nextfollowing the proposed disposition of Property calculated by assuming no additional Indebtedness is to beissued or incurred, is not less than the forecasted Debt Service Coverage Ratio obtained for that Fiscal Yearbut calculated as if none of such Property had been disposed of; or(d) the Master Trustee receives an opinion from the <strong>Obligated</strong> <strong>Group</strong> Representative that theProperty being disposed of is an Operating Asset and is obsolete, worn out, unprofitable or undesirable; or(e) the proceeds from the disposition of Property, or the Property acquired in exchange, havea Fair Market Value that is not less than that of the Property being disposed of; or(f) the Property being disposed of is cash or another non-Operating Asset and is disposed ofon terms no less favorable than would be obtained in an arm’s-length transaction; orC-28

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