32-89 Hospital Improvement Revenue Bonds $36 mil

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Counsel, in the aggregate materially impair the property affected thereby for the purpose for which it is or will be held by the Issuer. "Projected Annual Requirements" means the aggregate amount required to be paid (other than from proceeds of Hospital Debt or from funds that are irrevocably deposited and committed solely to such pay- ments, including funds constituting Capitalized Interest or held in connection with an advance or cross-over refunding) for the payment of principal (including any mandatory sinking fund requirements) of, premium, if any, and interest on Hospital Debt (including Bond Service Charges), including the amount to be required to be paid on additional Hospital Debt proposed to be issued, in any applicable complete Fiscal Year following the completion of the construction, acquisition, or improvement to be financed from the proceeds of such additional Hospital Debt proposed to be issued. "Projected Earnings Test" means, with respect to the Operator, that (i) one-half of the aggregate Projected Net Annual Income for the two complete Fiscal Years of the Operator following the completion of the construction, acquisition, or improvement to be financed from the proceeds of the additional Hospital Debt proposed to be issued is at least 120 percent of the maximum Projected Annual Requirements in any subsequent Fiscal Year; and (ii) the Projected Net Annual Income for each of the ~wo complete Fiscal Years following the completion of the cons%ruction, acquisition or improvement to be financed from the proceeds of the additional Hospital Debt proposed to be issued is at least 100 percent of the maximum Projected Annual Requirements in any subsequent Fiscal Year; provided, however, that if a Hospital Consultant certifies (and in so certifying, states that, in the opinion of the Hospital Consultant, such assumptions are reasonable) that the Operator cannot satisfy the 120 percent Test set forth in (i) above because of any governmental or third-party reimbursement agency regulations here- after adopted or promulgated, then the 120 percent Test set forth in (i) above shall not apply, but the 100 percent Test set forth in (ii) above shall continue to apply. "Projected Net Annual Income" means, with respect to the Issuer, the difference resulting by (1) aggregating the projected total annual Hospital Receipts, as determined by the Auditor in accordance with generally accepted accounting principles consistently applied, plus the Net Proceeds from use and occupancy insurance (but excluding any profit on the sale or other disposition, not in the ordinary course of business, of investments or fixed or capital assets, and also excluding proceeds from life insurance policies, any grant, gifts, bequests, contributions and other donations, and proceeds of any borrowing), during any applicable complete Fiscal Year following the completion of the construction, acquisition, or improvement to be financed from the proceeds of the additional Hospital Debt proposed to be incurred or assumed, and (2) subtracting from such amount the projected aggregate current operating expenses of the Issuer for the Hospital Facilities, as determined by Auditor in accordance with generally accepted accounting principles consistently applied, during such Fiscal Year excluding from any such current operating expenses: (a) any allowance for depreciation -10-