Cleveland Clinic Health System Obligated Group - FMSbonds.com

Additional LiensThe Sixtieth Master Note and the Variable Rate Note are not secured by a pledge, grant or mortgage of, ora security interest in, any of the Property of any Obligated Issuer, other than a security interest in the Gross Receiptsof each Obligated Issuer. The Obligated Group will covenant in the Master Trust Indenture that the ObligatedIssuers will not create, assume or suffer to exist any mortgage, lien, charge, encumbrance, pledge or security interestof any kind on their Property, except Permitted Encumbrances. In addition to certain specific PermittedEncumbrances, the Master Trust Indenture will permit the Obligated Issuers to create any mortgage, lien, charge,encumbrance, pledge or security interest on its Property as long as, at the time of creation of any such mortgage,lien, charge, encumbrance, pledge or security interest, the aggregate Book Value of Property which is subject tosuch mortgage, lien, charge, encumbrance, pledge or security interest of any kind (a) (1) does not exceed 25% of theBook Value of all Property of the Combined Group, or (2) does not exceed 15% of the Fair Market Value of allProperty of the Combined Group; or (b) does not exceed 15% of the Gross Revenues of the Combined Group for themost recent Fiscal Year for which audited financial statements of the Combined Group are available. In thealternative, any mortgage, lien, charge, encumbrance, pledge or security interest may be incurred if the MasterTrustee shall have received a report or opinion of an Independent Consultant to the effect that the Debt ServiceCoverage of the Combined Group for the most recent Fiscal Year for which audited financial statements of theCombined Group are available, excluding in the computation of Net Income Available for Debt Service any incomefrom Property on which a mortgage, lien, charge, encumbrance, pledge or other security interest has been imposedpursuant to this authority, is greater than 1.25. The foregoing provisions of the Master Trust Indenture summarizedunder this paragraph notwithstanding, no lien on Gross Receipts shall be permitted except for those permitted byparagraph (w) of the definition of “Permitted Encumbrances” in the Master Trust Indenture as summarized inAPPENDIX C hereto under the caption “SUMMARY OF BASIC DOCUMENTS — Definition of Certain Terms.”See the information in “APPENDIX C — SUMMARY OF BASIC DOCUMENTS — The Master TrustIndenture — Negative Lien Covenant.”Additional BondsThe Series 2008A Bonds will be secured by the Bond Indenture on a parity with the Variable Rate Bondsand any Additional Bonds issued thereunder. At the time the Series 2008A Bonds are issued, they will be the onlyoutstanding Bonds under the Bond Indenture.Pursuant to the Bond Indenture, the Commission may issue Additional Bonds from time to time undercertain terms and conditions. If issued, such Additional Bonds will be on a parity as to the assignment to the BondTrustee of Hospital Receipts with the Series 2008A Bonds and the Variable Rate Bonds and any further AdditionalBonds issued and at that time or thereafter Outstanding. Additional Bonds may, however, be secured by property,instruments or documents other than those securing the Series 2008A Bonds, any outstanding bonds or any furtherAdditional Bonds issued and outstanding at the time of issuance of such Additional Bonds.Other Outstanding Master Notes; Other IndebtednessThe Obligated Issuers have certain previously issued Master Notes to secure the County Bonds. See“Master Trust Indenture” above. As of the date of issuance of the Series 2008A Bonds and the Variable RateBonds, $758,980,000 in aggregate principal amount of Master Notes will be outstanding which secure bonds issuedunder the County Indenture.The Obligated Issuers also have certain outstanding indebtedness and obligations not secured by MasterNotes. As of December 31, 2007, the outstanding principal balance of such indebtedness and obligations wasapproximately $64.2 million. See Note 9 to the financial statements included in Appendix B.18