<strong>Cleveland</strong> <strong>Clinic</strong>’s main campus that are either undeveloped or have structures on them that the <strong>Cleveland</strong> <strong>Clinic</strong>expects to raze or that otherwise meet the Master Trust Indenture requirements for exclusion. In addition, the<strong>Cleveland</strong> <strong>Clinic</strong> may, in the future, designate other properties as Excluded Properties, whether those properties arecurrently owned or are acquired in the future. In order to do so without the consent of any of the holders of MasterNotes, the property to be added to the list must meet certain requirements regarding either its value or itssignificance to the operational activities of the <strong>Obligated</strong> <strong>Group</strong>. See “APPENDIX C – SUMMARY OF BASICDOCUMENTS – THE MASTER TRUST INDENTURE – Excluded Property.”B. OHIO REGIONAL HOSPITALSHospital FacilitiesThe <strong>Cleveland</strong> <strong>Clinic</strong> controls indirectly nine freestanding hospital facilities in northeast Ohio: Children’sHospital, Euclid, Fairview, Hillcrest, Huron, Lakewood, Lutheran, Marymount and South Pointe Hospitals.Lakewood Hospital is leased and operated by Lakewood, which is not a member of the <strong>Obligated</strong> <strong>Group</strong>; Children’sHospital is operated by the <strong>Cleveland</strong> <strong>Clinic</strong>, but is not a member of the <strong>Obligated</strong> <strong>Group</strong>; the other seven hospitalfacilities are owned and operated by members of the <strong>Obligated</strong> <strong>Group</strong>. Each hospital in the <strong>Obligated</strong> <strong>Group</strong>provides short-term acute care.Euclid Hospital. Euclid Hospital is located in Euclid, Ohio, and has 231 available beds, including a 48-bed rehabilitation facility, a 40-bed skilled nursing facility and a 13-bed psychiatric unit. Its campus also includesan approximately 25,000 square foot medical office building.Fairview Hospital. Fairview Hospital is located on the west side of <strong>Cleveland</strong> and has 410 available beds,including a Level III perinatal unit and a Level II trauma center. Its campus also includes an approximately 53,000square foot medical office building and attached parking garage.Hillcrest Hospital. Hillcrest Hospital is located in Mayfield Heights, Ohio, and has 377 available beds; an88,000 square foot medical office building is attached to the hospital facility; and two additional medical officebuildings, together aggregating approximately 119,000 square feet, are located near the hospital facility.Huron Hospital. Huron Hospital is located in East <strong>Cleveland</strong>, Ohio, and has 198 available beds, includinga 30-bed psychiatric unit, a 10-bed alcohol rehabilitation unit and a Level II trauma center. Its campus also includesan approximately 5,300 square foot medical office building.Lutheran Hospital. Lutheran Hospital is located on the near-west side of <strong>Cleveland</strong>, and has 191available beds, including a 10-bed Extended Rehabilitation Center offering skilled nursing care and a transitionalprogram for patients requiring services at levels below those provided in an acute care hospital, but at levelsgenerally not available in a nursing home or a private residence. Its campus also includes an approximately 38,000square foot medical office building.Marymount Hospital. Marymount Hospital is located on a 26-acre campus in Garfield Heights, Ohio, andhas 286 available beds. The campus includes an approximately 77,000 square foot medical office building and anindependent and assisted living <strong>com</strong>munity for senior citizens. Marymount operates its hospital facilities inaccordance with the Ethical and Religious Directives for Catholic <strong>Health</strong> Care Services.South Pointe Hospital. South Pointe Hospital is located in Warrensville Heights, Ohio, and has 259available beds, including a 29-bed skilled nursing facility and a 38-bed psychiatric unit. Two medical officebuildings owned by CCHS-East Region, together aggregating approximately 37,000 square feet, are also located onits campus. South Pointe Hospital operates two urgent care centers in Twinsburg, Ohio, and an emergencydepartment and ambulatory services site in Sagamore Hills, Ohio.A-16
GovernanceThe <strong>Cleveland</strong> <strong>Clinic</strong> is the sole member of CCHS-East Region (which owns and operates Euclid, Hillcrest,Huron and South Pointe Hospitals) and CCHS-Western Region (which is the parent of Fairview and Lutheran), andis the sole regular member of Marymount, and has substantial control of the facilities, finances and operations ofthose entities through certain reserve powers, direct representation on each entity’s Board of Trustees and othergovernance controls. Each of CCHS-East Region, CCHS-Western Region, Fairview, Lutheran and Marymount isan Ohio nonprofit corporation and a Tax-Exempt Organization. CCHS-Western Region is not a member of the<strong>Obligated</strong> <strong>Group</strong>; each of the others is a member of the <strong>Obligated</strong> <strong>Group</strong>.C. FLORIDA<strong>Cleveland</strong> <strong>Clinic</strong> <strong>Health</strong> <strong>System</strong> operations in southeast Florida consist of clinical and hospital servicesprovided, and medical education and research conducted, at the Weston <strong>Clinic</strong> and the Weston Hospital located inWeston, Broward County, Florida. The Weston <strong>Clinic</strong> is owned and operated by Florida <strong>Clinic</strong>, which is a memberof the <strong>Obligated</strong> <strong>Group</strong>. The Weston Hospital is owned and operated by CCF Florida Hospital Corporation, whosesole member is the <strong>Cleveland</strong> <strong>Clinic</strong>, but which is not a member of the <strong>Obligated</strong> <strong>Group</strong>.Florida <strong>Clinic</strong>Florida <strong>Clinic</strong> is a Florida nonprofit corporation and Tax-Exempt Organization. The <strong>Cleveland</strong> <strong>Clinic</strong> isFlorida <strong>Clinic</strong>’s sole member. Florida <strong>Clinic</strong>’s Articles of Incorporation provide certain reserve powers to the<strong>Cleveland</strong> <strong>Clinic</strong> as its sole member, including approval of changes to the Articles of Incorporation and Bylaws.The Board of Trustees of Florida <strong>Clinic</strong> is currently <strong>com</strong>prised of six trustees, all of whom (including <strong>Cleveland</strong><strong>Clinic</strong>’s Chief Executive Officer and Chief of Staff) are also members of the Executive Committee of <strong>Cleveland</strong><strong>Clinic</strong>’s Board of Trustees. The Board of Trustees is empowered with all of the powers and duties necessary orappropriate for the administration of the affairs of Florida <strong>Clinic</strong> and may do all acts as are not by law or by theArticles of Incorporation or the Bylaws directed to be exercised by the members. Certain corporate officers of the<strong>Cleveland</strong> <strong>Clinic</strong> are also corporate officers of Florida <strong>Clinic</strong>.Weston <strong>Clinic</strong>. Weston <strong>Clinic</strong> is a 190,000 square foot outpatient facility and educational building openedin July 2001, located on a 42-acre campus that includes the Weston Hospital, a medical office building, researchfacilities, a medical library and facilities for graduate medical education. This facility was built to replace theFlorida <strong>Clinic</strong>’s original operations in Fort Lauderdale. The Weston <strong>Clinic</strong> has approximately 150 physicians onstaff covering 45 different specialties and subspecialties.D. MARKET DYNAMICSNortheast OhioCompetition. In addition to the <strong>Cleveland</strong> <strong>Clinic</strong> <strong>Health</strong> <strong>System</strong>, there are numerous other healthcareproviders in northeast Ohio, including University Hospitals, Summa <strong>Health</strong> <strong>System</strong>, Metro<strong>Health</strong> Medical Center,Akron General <strong>Health</strong> <strong>System</strong>, UHHS/CSAHS, Inc.-Cuyahoga, Lake Hospital <strong>System</strong>, Community <strong>Health</strong> Partnersand other <strong>com</strong>munity and regional hospitals. The largest of these other northeast Ohio healthcare providers isUniversity Hospitals. According to its website, University Hospitals is a broad-based healthcare system servingpatients throughout northeastern Ohio. Its primary hospital facility is the 801-bed University Hospitals CaseMedical Center, which includes Rainbow Babies and Children’s Hospital, Ireland Cancer Center and MacDonaldWomen’s Hospital and is the primary affiliate and teaching hospital of the CWRU School of Medicine. UniversityHospitals has announced plans for the expansion of its main campus on the east side of <strong>Cleveland</strong> that will include a200-bed cancer hospital, an expanded emergency department and a new neonatal intensive care unit. It has alsoannounced plans to construct a state-of-the-art Suburban Center for <strong>Health</strong> in the eastern suburbs of <strong>Cleveland</strong> thatwill include a 200 bed hospital, ambulatory surgery center, and physician offices.A-17
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NEW ISSUEBOOK ENTRY ONLYSee “RATI
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TABLE OF CONTENTSINTRODUCTORY STATE
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OFFERING CIRCULARRelating to$452,34
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Security and Sources of Payment for
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Upon issuance of the Series 2008A B
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(ii) acquisition of magnetic resona
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$147,200,000 Term Bonds Due January
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that the redemption is conditional
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Use of Certain Terms in Other Secti
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County BondsThe Cleveland Clinic an
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The Cleveland Clinic regularly revi
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ESTIMATED SOURCES AND USES OF FUNDS
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DEBT SERVICE COVERAGEThe following
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MedicareGeneralApproximately 29% of
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there is no assurance that the Obli
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Medicare Conditions of Participatio
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fiscal year’s budget that are in
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Federal Regulatory and Contractual
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Other Financial Information
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• Ernst & Young LLPSuite 1300925
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Liabilities and net assetsCurrent l
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Liabilities and net assetsCurrent l
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Cleveland Clinic Health SystemConso
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Cleveland Clinic Health SystemConso
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Cleveland Clinic Health SystemNotes
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APPENDIX CSUMMARY OF BASIC DOCUMENT
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APPENDIX CSUMMARY OF BASIC DOCUMENT
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“Bond Indenture” means the Bond
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period of three months from the com
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PROPERTY”, and all improvements,
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direct, express or charitable trust
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Rate Hedge” for purposes of this
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Debt according to a fixed schedule
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“Officer’s Certificate” means
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provided, however, that Series 2008
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(t) liens on money or obligations d
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Project Administrator. In the event
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“Stated Maturity” means, when u
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(b) the Cleveland Clinic, or if the
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(d) the Master Trustee receives an
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(g) the loan of cash or other non-O
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under this caption shall be deemed
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Supplemental Indenture to which suc
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emedy thereunder, unless the Noteho
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purchase or other acquisition or re
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limitation, (A) the Special Funds a
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(b) Default in the payment of the p
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Fund Requirements, in the order of
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(g) to evidence the appointment of
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THE LEASEThe Lease contains various
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(a) Failure by the Cleveland Clinic
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APPENDIX DPROPOSED FORM OF OPINION
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PROPOSED TEXT OF LEGAL OPINION OFSQ
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October __, 2008Page 32008A Bonds c