Cleveland Clinic Health System Obligated Group - FMSbonds.com

Frederick R. Nance, Regional Managing Partner of Squire, Sanders & Dempsey L.L.P., is a member of theBoard of Trustees of the Cleveland Clinic. Stephen Brogan, Esq., Managing Partner of Jones Day, is a member ofthe Board of Trustees of the Cleveland Clinic. Patrick F. McCartan, Esq., a senior partner with Jones Day, is anEmeritus Trustee of the Cleveland Clinic and is a member of the Board of Trustees’ Executive Committee. MichaelHorvitz, of counsel with Jones Day, is also a member of the Board of Trustees of the Cleveland Clinic.RATINGSMoody’s and Standard & Poor’s have assigned their municipal bond ratings of “Aa2” and “AA-”,respectively, to the Series 2008A Bonds. Such ratings reflect only the views of such organizations, and anexplanation of the significance of such ratings may be obtained only from the rating agencies furnishing the same.There is no assurance that such ratings will remain in effect for any given period of time or that such ratings will notbe revised downward or upward or withdrawn entirely by any of such rating agencies if, in the judgment of suchrating agency, circumstances so warrant. Any such downward revision or withdrawal of such rating may have anadverse effect on the market price or marketability of the Series 2008A Bonds.UNDERWRITINGAll of the Series 2008A Bonds will be purchased by the Underwriter under a Contract of Purchase betweenJ.P. Morgan Securities, Inc. and the Commission at a purchase price of $449,469,919, reflecting an underwriter’sdiscount of $2,216,466, plus original issue premium of $3,812,918, less original issue discount of $4,466,532. TheContract of Purchase provides that the Underwriter will purchase all of the Series 2008A Bonds if any arepurchased. Pursuant to Letter of Representations and Indemnification delivered concurrently with the issuance ofthe Series 2008A Bonds, the Cleveland Clinic will indemnify the Underwriter and the Commission against losses,claims and liabilities arising out of materially incorrect or incomplete statements of information contained in thisOffering Circular pertaining to the Cleveland Clinic, the Cleveland Clinic Health System, or the Obligated Group.The Underwriter may offer and sell the Series 2008A Bonds to certain dealers (including depositing theSeries 2008A Bonds into investment trusts) and to others at a price lower than that offered to the public.INDEPENDENT AUDITORSThe consolidated financial statements of the Cleveland Clinic and controlled affiliates as of December 31,2007 and 2006 and for the years then ended appearing in APPENDIX B to this Offering Circular have been auditedby Ernst & Young LLP, independent auditors, as stated in their report thereon also appearing in APPENDIX B.INTERIM FINANCIAL INFORMATIONThe unaudited consolidated financial statements of the Cleveland Clinic and controlled affiliates as of June30, 2008 and for the three and six months ended June 30, 2008 are available from Digital Assurance CertificationLLC, a post-bond issuance, compliance, and monitoring system for municipal bond issuers (“DAC”) (website:www.dacbond.com). The unaudited consolidated financial statements were prepared by management of the HealthSystem in accordance with GAAP. Operating results for the three and six months ended June 30, 2008 are notnecessarily indicative of the results to be expected for the year ending December 31, 2008. The financialinformation that is available from DAC is incorporated herein by reference and should be read in conjunction withthe consolidated financial statements, related notes, and other financial information included in this OfferingCircular, including the Appendices.ELIGIBILITY UNDER STATE LAW FOR INVESTMENT ANDAS SECURITY FOR THE DEPOSIT OF PUBLIC MONEYSUnder the Act, and to the extent investments of the following are subject to the laws of the State of Ohio,the Series 2008A Bonds will be lawful investments for banks, societies for savings, building and loan associations,savings and loan associations, deposit guarantee associations, trust companies, trustees, fiduciaries, insurancecompanies, including domestic for life and domestic not for life, trustees or other officers having charge of sinking59