HomeMy WebLinkAbout1982-06-08 ResolutionRESOLUTION NO. 82-1 P.1
WHEREAS, Lorada Cilek, during her lifetime in Iowa City, served as an
example to all in her compassion and generosity for her fellow human
beings, and
WHEREAS, these qualities were evident in her service with community
organizations and especially in programs which supported the poor,
elderly and disadvantaged youth, and
WHEREAS, she gave years of personal service to Johnson County
government through her work as a member of the Board of Supervisors,
and
WHEREAS, we are saddened by her death and wish to pay tribute to her
officially as the City Council and also individually as persons whose
lives she touched,
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of
Iowa City, Iowa, that this Resolution of Tribute be adopted, and
FURTHER, all citizens are urged to reflect upon the countless ways in
which Lorada Cilek's unselfish efforts and personal commitment
toward a better life for all will be enjoyed and appreciated by the
people of our community for many years to come.
It was moved by Balmer and seconded by
Dickson the Resolution be adopted, and upon roll call
there were:
AYES:
NAYS: ABSENT:
x
Balmer
x
_
Dickson
x
Erdahl
x
Lynch
x
McDonald
x
Neuhauser
x
Perret
Passed and approved this 8th day
o�f� June 1982.
12
(�� MAYOR
ATTEST:,
CITY CLERK
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I1ICROFiLME1 BY
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RESOLUTION NO. 82-124
RESOLUTION TO ISSUE CIGARETTE PERMITS
WHEREAS, the following firms and persons have made appli-
cation and paid the mulct tax required by law for the sale of
cigarettes and cigarette papers; therefore,
BE IT RESOLVED BY THE CITY COUNCIL OF IOWA CITY, IOWA, that
the applications be granted and the City Clerk be and he/she
is hereby directed to issue a permit to the following named
persons and firms to sell cigarette papers and cigarettes:
See attached list.
It was moved by Perret and seconded by Dickson
that the Resolution as read be adopted, and upon rol call there
were:
AYES: NAYS: ABSENT:
Balmer x
Lynch x
Erdahl x
•Neuhauser x
Perret x
Dickson x
McDonald x
Passed and approved this 8th day of June ,
19 82 .
Attest: Zy
City Clerk
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Mayor
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CIGARETTE PERMIT— % July 1, 1982 to June 30, 198?" `,
83-1 The Airliner, 22 South Clinton St.
83-2 Colonial Bowling Lanes, 2253 Highway 218 South
83-3 Hy -Vee Food Store #1, 501 Hollywood Blvd.
83-4 Hy -Vee Food Store 02, 310 N. 1st Avenue
83-5 Hy -Vee Food Store #3, 1201 N. Dodge St.
83-6 Hy -Vee Drugtown #1, 521 Hollywood Blvd.
83-7 Hy -Vee Drugtown #2, 1221 N. Dodge St.
83-8 Pester Marketing Company #58, 606 S. Riverside Drive
83-9 Pester Marketing Company #59, 302 S. Dubuque St. a
83-10 Eagle Discount Supermarket #157, 600 N. Dodge St. +
83-11 Eagle Discount Supermarket #220, 1101 S. Riverside Drive 1
83-12 Needs, 18 S. Clinton
83-13 Iowa City Sav-Mor #104, 1104 S. Gilbert St.
83-14 Sheller Globe Corp., Highway 6 East
83-15 Walt's, 928 Maiden Lane
83-16 Peoples Drug, 2425 Muscatine Ave.
83-17 Peoples Drug, 121 E. Washington St. I
83-18 Quiktrip #503, 123 W. Benton i
83-19 Quiktrip #509, 225 S. Gilbert
83-20 Quiktrip #539, 301 Market
83-21 Quiktrip #548, 955 Mormon Trek
83-22 Quiktrip #552, 25 West Burlington
83-23 Applegate's Landing, 1411 S. Gilbert St.
83-24 American Legion, 3016 American Legion Rd.
83-25 Amelia Earhart, 223 E. Washington
83-26 The Fieldhouse, 111 E. College
83-27 Godfather's Pizza, 531 Hwy. 1 W.
83-28 Hollywood's, 1134 S. Gilbert St. -
83-29 Highlander Inn, Hwy. 1 & I-80
83-30 Highland Ave. DX, 1310 S. Gilbert St.
83-31 Howard Johnson's, Hwy 1 & I-80
83-32 Hilltop Tavern, 1100 N. Dodge 1
83-33 Hungry Hobo, 517 S. Riverside Drive
83-34 Studio 114, 114 Wright St.
83-35 Mayflower Apartments, 1110 N. Dubuque
83-36 On Iowa Restaurant, 630 Iowa Ave.
83-37 Mill Restaurant, 120 E. Burlington
83-38 Plamor Lanes, 1555 1st Ave.
83-39 Mumm's Saloon & Eatery, 21 W. Benton
83-40 Second Ave. Restaurant, 1010 2nd Ave.
83-41 Silver Saddle, 1200 Gilbert Crt.
83-42 Smith & Company, 1210 Highland Crt.
83-43 Taco Grande, 331 E. Market
83-44 Towncrest Inn, 1011 B Arthur
83-45 First Ave. Skelly, 2303 Muscatine Ave.
83-46 Time Out Restaurant, 1220 Hwy. 6 W.
83-47 "Inner Circle", 325 E. Market
83-48 Vanessa's, 118 E. College
83-49 Woodfield's, 223 E. Washington
83-50 Dave's Foxhead Tavern, 402 E. Market St.
83-51 Gabe's, 330 E Washington
83-52 Leo's Standard, 130 N. Dubuque
83-53 Sheriff's Office, 400 South Clinton (Iowa Commission For The Blind)
83-54 Snack Shop, 400 South Clinton ( Iowa Commission For The Blind)
83-59 Little Red Barn #422, 513 South Riverside Drive
83-56 Sinclair Marketing, Inc., 731 South Riverside Drive
83-57 The Annex, 819 1st. Ave. 11/02-1
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RESOLUPION NO. 82-125
RESOLUTION ACCEPTING PAVING IMPROVEMENTS
WHEFM, the Engineering Department has certified that the following
impraverents have been completed in accordance with plans and specifications
of the City of Iowa City,
Paving for Pepperwood Addition, Part III, in Iowa City, Iowa, as
constructed by Metro Pavers, Inc., of Iowa City, Iowa.
AND WHEIEA.S, Maintenance Honda for the improvements are on
file in the City Clerk's Office,
NX THEREFORE BE IT RESOLVED by the City Council of Iowa City, Iowa,
that said improvements be accepted by the City of Iowa City.
It was moved by pafret and seby Dickson
that the Resolution as read »e accepted, cendei and upon roll call there were:
Passed and approved this 8th day of June , 19 82 .
SIA
Mayor
! ATTEST: �.., L�1 RntefvrrJ $ Approved
City Clerk B 'he Legal D2partrnenf
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CEDAR RAPIDS • DES MOINES
AYES: NAYS: ABSENT:
Balmer
x
Dickson
x
Erdahl
x
Lynch
x
McDonald
x
Neuhauser
x
Perret
x
Passed and approved this 8th day of June , 19 82 .
SIA
Mayor
! ATTEST: �.., L�1 RntefvrrJ $ Approved
City Clerk B 'he Legal D2partrnenf
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CEDAR RAPIDS • DES MOINES
CITY OF IOWA
CIVIC CEN E
f R 410 E. WASHINGTON ST. IOWA C(TY f0WA 52240
ENGINEER'S REPORT
June 1, 1982
CITY
(319) 356-500C)
Honorable Mayor and City Council
Iowa City
Iowa
Dear Honorable Mayor and Councilpersons:
I hereby certify that the construction of the improvements listed
below have been completed in substantial accordance with the plans
and specifications of the Engineering Division of the City of Iowa
City. The required maintenance bond is on file in the City Clerk's
office.
Paving for Pepperwood Addition, Part III, as constructed
by Metro Pavers, Inc., of Iowa City, Iowa.
I hereby recommend that the above mentioned improvements be accepted
by t e City of Iowa City.
spe tfull s itt d,
Frank K. Farmer
City Engineer
FKF/DSG/jp
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RESOLUTION NO. 82-126
RESOLUTION A0=IW PAVING IMPROVEMENTS
WHEFFM, the Engineering Department has certified that the following
iWrovements have been ompleted in accordance with plans and specifications
of the City of Iowa City,
Paving for Regency Gardens, Parts I, II, III, and IV, in Iowa
City, Iowa, as constructed by Metro Pavers, Inc. of Iowa City,
Iowa.
AND WHEREAS, Maintenance Bonds for said improvements are on
file in the City Clerk's Office,
NOW MMMUM BE IT RESOLVED by the City Council of Iowa City, Iowa,
that said irnproverents be accepted by the City of Iowa City.
It was moved by Perret and seconded by Dickson
that the Resolution as read be acre; , and upon roll call there were:
Balmer
Dickson
Erdahl
McDonald
Neuhauser
Perret
AYES:
x
x
x
x
x
x
passed arca approved this 8th day of
/J� Mayor
ATTEST: ��',-c-
City Clerk
NAYS:
June
141CROFILMED BY
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P.eeelved $ Approved
By The Legal Department
__ALI] B
119
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CITY
CIVIC CENTER
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OF
410 E. WASHINGTON ST
IOWA CITY
IOWA CITY, IOWA 52240 (319) 356-503D
ENGINEER'S REPORT
June 1, 1982
Honorable Mayor and City Council
Iowa City
Iowa
Dear Honorable Mayor and Councilpersons:
I hereby certify that the construction of the improvements listed
below have been completed in substantial accordance with the plans
and specifications of the Engineering Division of the City of Iowa
City. The required maintenance bond is on file in the City Clerk's
office.
Paving for Regency Gardens, Parts I, II, III, and IV,
as constructed by Metro Pavers, Inc., of Iowa City,
Iowa.
I hereby recommend that the above mentioned improvements be accepted
by the City of Iowa City.
R pe tfull uCJS d,
Frank K. Farmer
City Engineer
FKF/DSG/jp
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RESOLUTION NO. 82-127
RESOLUTION ENGAGING AUDITOR FOR YEAR ENDING JUNE 30, 1982.
BE IT RESOLVED by the City Council of Iowa City, Iowa, that the firm of
McGladrey, Hendrickson and Company, Certified Public Accountants, be
engaged to conduct the audit for the City of Iowa City for the year ending
June 30, 1982.
BE IT FURTHER RESOLVED that the City Clerk be appointed to notify the
State Auditor.
It was moved by Perret and seconded by
were: Dickson the Resolution be adopted, and upon roll call there
AYES: NAYS: ABSENT:
x
Balmer
x
Dickson
x
Erdahl
x
Lynch
x
McDonald
x
Neuhauser
x
Perret
Passed and approved this 8th day of June , 1982.
VVL�U.1.1 t 111��e1�1�
MAYOR
ATTEST: �&
CITY CLERK
Received & Approved
By The Legal Department
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RESOLUTION NO. 82_128
RESOLUTION APPROVING THE PRELIMINARY PLAT AND PRELIMINARY
PLANNED AREA DEVELOPMENT, LARGE SCALE RESIDENTIAL DEVELOPMENT
PLAN OF WALDEN WOOD, IOWA CITY, JOHNSON COUNTY, IOWA.
WHEREAS, the owner, Southgate Development has filed with the City Clerk of
Iowa City, Iowa, an application for approval of the preliminary plat and
preliminary Planned Area Development (PAD), Large Scale Residential
Development (LSRD) plan of Walden Wood pertaining to the real estate
described as follows:
A tract of land in the Northwest quarter of the Southwest
quarter of Section 17, Township 79 North, Range 6 West, of the
5th Principal Meridian.
Commencing at the Northeast corner of the Northwest quarter of
the Southwest quarter of Section 17, Township 79 North, Range 6
West, of the 5th Principal Meridian; thence S 00119'11" W,
232.00 feet along the East line of said Northwest quarter of the
Southwest quarter to the point of beginning; thence S 00019'11"
W, 1093.00 feet, said point being 1.25 feet west of the center
line of Mormon Trek Boulevard; thence N 89°39'49" W, 655.16
feet; thence N 03047'44" W, 621.42 feet- thence N 89049111" E,
42.96 feet; thence 209.04 feet Northeasterly on a 154.05 foot
radius curve concave Northwesterly to a point which lies N
50056141" E, 193.37 feet of the last described point; thence N
12004111" E, 286.94 feet; thence 211.92 feet Northeasterly on a
129.17 foot radius curve concave southeasterly to a point which
lies N 59004111" E, 188.94 feet of the last described point;
thence S 73055149" E, 71.63 feet; thence 69.96 feet easterly on
a 254.49 foot radius curve concave northerly to a point which
lies S 81°48119" E, 69.74 feet of the last described point;
thence S 89°40149" E, 149.34 feet to the point of beginning.
Said parcel contains 15.06 acres more or less; and
WHEREAS, the Department of Planning and Program Development and the Public
Works Department have examined the proposed preliminary plat and
preliminary PAD, LSRD plan and have recommended approval of same; and
WHEREAS, the preliminary plat and preliminary PAD, LSRD plan have been
examined by the Planning and Zoning Commission and after due deliberation
said Commission has recommended that it be accepted and approved; and
WHEREAS, the preliminary plat and preliminary PAD, LSRD plan are found to
conform with all of the requirements of the City ordinances of the City of
Iowa City, Iowa.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF IOWA
CITY, IOWA:
1. That the preliminary plat and preliminary PAD, LSRD plan are hereby
approved.
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Resolution NLi82-128
Page 2
2. That the City Clerk of the City of Iowa City, Iowa, is hereby
authorized and directed to certify a copy of this resolution to the
office of the County Recorder of Johnson County, Iowa, after passage
and approval as authorized by law.
It was moved by Balmer and seconded by McDonald the
Resolution be adopted, and upon roll call there were:
AYES: NAYS: ABSENT:
x Balmer
x Dickson
_x Erdahl
x Lynch
_x McDonald
x Neuhauser
x Perret
Passed and approved this 8th day of June 1982.
MAYOR
ATTEST:
CITY CLERK
iteeeived & ApprpVed
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STAFF REPORT
To: Planning & Zoning Commission Prepared by: Bruce A. Knight
Item: S-8209. Walden Wood. Date: April 15, 1982
GENERAL INFORMATION
Applicant: Southgate Development Company
Requested action:
Purpose:
Location:
Size:
Existing land use and zoning:
Surrounding land use and zoning:
Comprehensive Plan:
Applicable regulations:
45 -day limitation period:
60 -day limitation period:
SPECIAL INFORMATION
Public utilities:
Public services:
1902 Broadway
Iowa City, Iowa 52240
Approval of an amended prelim-
inary PAD/LSRD plan and plat.
To develop 67 condominium
residential dwelling units on
two lots.
Northwest quadrant of the
intersection of Mormon Trek
Boulevard and Rohret Road.
15.06 acres.
Undeveloped and RIB.
North - Undeveloped and R3.
East - Single family and R1B and
undeveloped and RI.A.
South - Undeveloped and R1A.
West - Undeveloped and R1A.
8-10 dwelling units per acre.
Provisions of the Subdivision,
Planned Area Development, Large
Scale Residential Development,
and Stormwater Management
Ordinances.
5/2/82
5/17/82
Adequate water and sewer service
are available.
Police and fire protection are
available.
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Transportation: Vehicular access is proposed
from Rohret Road via Walden Court
and Mormon Trek Boulevard via
Walden Road.
Physical characteristics: The topography is gently to
strongly sloping (2%-14%).
ANALYSIS
The applicant is proposing a two lot subdivision and Planned Area
Development (PAD), Large Scale Residential Development (LSRD) consisting
of 67 condominum residential dwelling units. These units range in size
from two to five bedrooms. The overall net density is approximately 7,378
square feet per unit (which is greater than the minimum of 6,000 square
feet required in an RIB zone). A preliminary plat for this addition was
previously approved by the Planning & Zoning Commission in April, 1979.
Because the Code states that approval of a preliminary plat is effective
for a period of 18 months, after which time all previous actions of the
Council are null and void, the applicant is required to resubmit the plat
for review.
Two public streets are being proposed to service this development. Walden
Road will be located along the north boundary of the plan and is designed
'i to provide access off of Mormon Trek Boulevard to Lot 2 and to any
additional development to the west. The second proposed public street is
Walden Court, which is a two loop cul-de-sac designed to provide access
from Rohret Road to the units on Lot 1. The street's configuration
consists of a drive, which has a pavement width of 28 feet, and a Y
' intersection splitting into two cul-de-sacs. In order to improve traffic
circulation and make the street safer, staff recommends that the Y
intersection be converted into a T intersection. Further, because Walden
Court is in reality, two streets, both should be named. The applicant has
also requested that the sidewalk requirements be waived for Walden Court.
Staff finds no compelling reason to waive sidewalks for this street, and
feels that a hazardous situation would be created for pedestrian traffic
if sidewalks were not installed.,
Another problem with Walden Court as designed is that it does not comply
with the Code of Ordinances regarding driveway width restrictions.
According to Chapter 31, Streets, Sidewalks, Public Places, "where more
than one driveway approach on a street front serves a single parcel of
land, there shall be at least 20 feet of space between the driveways."
Because Lot 1 is one parcel, the applicant would be required to maintain
at least 20 feet between the drives intersecting with Walden Court. Given
the present design, such separation is impossible. There are two
alternative solutions to this problem. First, the Code provides the
authority for the Board of Adjustment to modify these requirements.
Second, Walden Court could remain a private drive.
The remainder of the streets in the proposed development will be private.
These are located entirely on Lot 2 of the addition. Both the Engineering
Division and the Fire Chief have expressed concern over the dead -ending of
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the private "courts." They were, however, approved previously after a
fire lane was added at the end of Thoreau Court (the longest of the
private courts). The Fire Chief has requested that the applicant consider
installing fire lanes at the ends of the other private courts, or install
a cul-de-sac. The applicant has indicated that in their opinion, the
hammerhead turnarounds which they are proposing are adequate and
therefore request that the Commission accept them as designed.
In regards to the private courts, the applicant is also requesting that
the typical private drive section be approved with no sidewalk and either
six inches of Portland Cement concrete orfive
e installation of concrete.
Staff would recommend that the City require
ome type
of pedestrian circulation system and either six inches of Portland Cement
concrete or ei ht inches of asphaltic concrete. In regards to the
pedestrian circulation system, staff recommends that this include a
sidewalk on at least one side of Maine Woods Lane and walkways tying
Walden Court to the system of walkways on Lot 2.
The applicant is requesting approval of a fire lane constructed of five
inches of asphaltic concrete. Staff does not feel that this would hold up
to use by fire trucks, and recommends that six inches of Portland Cement
concrete or eight inches asphaltic concrete be required.
A 30 foot rear yard is required in an RIB zone, whereas the applicant is
proposing 20 foot rear yards for the units off of Walden Court. As part of
the PAD plan approval, rear yard requirements would have to be waived for
the units on Lot 1. It should be noted that if Walden Court were private,
the rear property line for Lot 1 would be that line furthest west from
Mormon Trek Boulevard. In this case, only one rear yard requirement would
have has no
to be
thevdevelopmentlas a wholefprovides adequate s to the open reduced
open space
STAFF RECOMMENDATION
The staff recommends that the preliminary plat, PADASRD plan of Walden
Wood be denied. Upon resolution of the above concerns, staff would
recommend approval.
DEFICIENCIES AND DISCREPANCIES
1. A note should be included on the plan indicating that the final plan
shall comply with the tree ordinance.
d, and
2 theewestsside lofeMormon rTreklBoulevard. northong the d
This should be showe of Rohret n on the
plat.
3. The typical cross section of the Walden Court cul-de-sac should
include sidewalk.
4. "Amended PAD Plan" should be added to the title block.
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5. An easement should be shown on the plat for the fire lane. 1
ATTACHMENTS
1. Location map. j
_ y ,
ACCOMPANIMENTS
1. Preliminary PAD/LSRD plan and plat - illustrative plan.
i
2. Preliminary PAD/LSRD plan and plat - layout. !
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3. Preliminary PAD/LSRD plan and plat - utilities and grading.
g
4. Preliminary duplex and townhou ou
Approved b
i App y Donald S mei r, Dire or
Department f Planning
and Progra evelopment
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RESOLUTION NO. 82-129
RESOLUTION APPROVING THE PRELIMINARY PLAT AND PRELIMINARY
PLANNED AREA DEVELOPMENT, LARGE SCALE RESIDENTIAL DEVELOPMENT
i
PLAN OF TY'N CAE, PART 3, IOWA CITY, JOHNSON COUNTY, IOWA.
WHEREAS, the owner, Ty'n Cae, Inc., has filed with the City Clerk of Iowa
City, Iowa, an application for approval of the preliminary plat and
I Planned Area Development (PAD), Large Scale Residential Development
i (LSRD) plan of Ty'n Cae, Part 3, pertaining to the real estate described
as follows:
Commencing at the Northwest corner of the Northeast quarter of
the Northwest quarter (NE4, NW',) of Section 20, Township 79
North, Range 6 West, of the 5th Principal Meridian; thence N
00°14110" E, 143.98 feet to the Southwesterly corner of Ty'n Cae
Subdivision, Part 2, as recorded in plat book 17 at page 24 of
the Johnson County, Iowa Recorder's Office; thence S 88058'49"
E, 45.4 feet along the South line of said subdivision to a point
on the Easterly right-of-way line of the relocation of Mormon
Trek Boulevard and the point of beginning; thence continuing S
88058149" E, 1,283.33 feet along the South line of said
subdivision; thence S 00°23'23" W, 136.10 feet to the Northeast
corner of the Northwest quarter (NW;) of said Section 20• thence
S 0103'09" W, 1,321.77 feet; along the East line of said
Northwest quarter; thence N 89°12119" W, 405.25 feet along the
South line of the Northeast quarter of the Northwest quarter
(NE;, NW;) of said Section 20 to a point on the easterly right-
of-way line of the relocation of Mormon Trek Boulevard; thence
Northwesterly along said of right-of-way line the following
courses: N 32002'4911W, 132.0 feet; thence N 42002'49" W, 403.8
feet; thence N 23°13'49" W, 309.4 feet; thence N 3802649" W,
387.4 feet; thence N 20006149" W, 340.7 feet; thence N 11°37'49"
W, 158.9 feet to the point of beginning.
i
Said tract of land containing 30.63 acres more or less and subject to
easements and restrictions of record; and
WHEREAS, the Department of Planning and Program Development and the Public
Works Department have examined the proposed preliminary plat and
preliminary PAD, LSRD plan and have recommended approval of same; and
WHEREAS, the preliminary plat and preliminary PAD, LSRD plan has been
examined by the Planning and Zoning Commission and after due deliberation
the Commission has recommended that it be accepted and approved; and
WHEREAS, the preliminary plat and preliminary PAD, LSRD plan conform with
all of the requirements of the City ordinances of the City of Iowa City,
Iowa.
I
NOW, THEREFORE BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF IOWA
CITY, IOWA:
937
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Resolution Nd" 82-129
Page 2
1. That the preliminary plat and preliminary PAD, LSRD plan are hereby
approved.
2. That the City Clerk of the City of Iowa City, Iowa, is hereby
authorized and directed to certify a copy of this resolution to the
office of the County Recorder of Johnson County, Iowa, after passage
and approval as authorized by law.
It was moved by Balmer and seconded by Lynch the
Resolution be adopted, and upon roll call there were:
AYES: NAYS: ABSENT:
x
X
x
x
x
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xz
Passed and approved this
ATTEST:
CITY CLERK
8th day of
Balmer
Dickson
Erdahl
Lynch
McDonald
Neuhauser
Perret
June 1982,.
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STAFF REPORT
To: Planning & Zoning Commission Prepared by: Bruce A. Knight
Item: S-8211. Ty'n Cae Subdivision, Date: May 20, 1982
Part III
GENERAL INFORMATION
Applicant:
Requested action:
Purpose:
Location:
Size:
Comprehensive plan:
Existing land use and zoning:
Surrounding land use and zoning:
Applicable regulations:
45 -day limitation period:
Ty'n Cae Inc.
1201 South Gilbert
Iowa City, Iowa 52240
Preliminary subdivision plat and
LSRD/PAD plan approval.
To develop 188 dwelling units (104
zero -lot line attached and detached
single family dwelling units and 84
units in multifamily buildings).
South of the existing Ty'n Cae
developments Part I and II, east of the
proposed alignment of Mormon Trek
Boulevard relocated and north and west
of the Iowa City corporate limits.
30.63 acres
2-8 dwelling units per acre
Undeveloped and RIB
North - single-family residential and
R1B
East - undeveloped and County R1A, CH
South - single-family residential and
County RS
West - undeveloped and County RIA
Provisions of the Subdivision Code and
the LSRD, PAD, and the Stormwater
Management Ordinances.
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SPECIAL INFORMATION
Public utilities:
Public services:
Transportation:
Physical characteristics:
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Sewer and water service are available.
Sanitation service is also available
for the single-family units. The
multi -family units will be serviced by
a private hauler.
Police and fire protection are
available.
Vehicular access is proposed via Mormon
Trek Boulevard.
The topography is moderate to steeply
sloping.
Ty'n Cae, Part III consists of 104 lots for zero -lot line (ZLL) single-family
dwelling units and two multi -family lots which contain a total of 84 dwelling
units in seven 12-plexes. The two housing types are integrated on a 30.63 acre
tract. In reviewing this proposal, consideration should be given to the impact
of opposing parking and 12-plex condominium dwelling units from single-family
ZLL dwelling units. In the case of Lot 53, which is located in the southeast
corner of the tract, the natural topography and existing vegetation should
effectively serve as a buffer between the condominiums and the ZLL lots.
However, on Lot 54, 16 ZLL units directly front 48 condominium units and their
parking area. In order to minimize the visual impact created by this
arrangement, staff recommends that the parking lot be located behind the multi-
family units. Further, a minimum setback equal to the height of the building
combined with landscaping should be required along Gryn Road. A final judgment
on the proposed siting will have to be made based on the review of building
elevations, which have not yet been submitted.
The proposed zoning ordinance contains four requirements pertaining to ZLL
dwellings. Staff recommends that the Commission attach these requirements to
the ZLL units planned for this PAD:
"(1) The lot adjacent. to the zero side yard must be under the same owner-
ship at the time of initial construction or a temporary ten foot
construction easement shall be obtained to allow access to construct
the dwelling on the lot line.
"(2) The setback on the adjacent lot must be either zero feet or a minimum
of ten feet.
"(3) The wall on the zero side yard must be of maintenance -free construc-
tion and no portion shall project over any property line. Windows in
the walls shall be prohibited.
"(4) Legal provisions shall be made for permanent access for the
maintenance of the exterior portion of the proposed building wall
located upon the lot line and unattached to another dwelling. A
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permanent ten foot maintenance easement to provide such access shall
be secured prior to issuance of a building permit."
A design issue which the use of ZLL dwelling units creates concerns the visual
image of the units from the street. Because of the minimal width of lots, garage
doors or carports become more dominant, often occupying half or more of the
building width and creating a monotonous streetscene. With good design, these
problems can be mitigated. Facade treatments are one solution. However, site
planning solutions would provide more complete assurances that too many garage
doors are not visible from one location. The applicant should submit with the
legal papers for the final plan a set of design specifications which allow the
greatest flexibility for the siting of dwellings so that good design is assured.
The design specifications would be submitted in lieu of elevations and building
Flocations for each lot.
It should be noted that the "Streets, Sidewalks, Public Places" section of the
Code of Ordinances does not permit a curb opening of greater than 42 feet for the
P purpose of constructing a driveway. Further driveways may not be closer than
three feet to a property line, except when common driveway agreements are
- provided. Detail for these items is not required until the final plan and could
be included in the design specifications.
Another issue regards the proposed traffic circulation pattern. The Code of
Ordinances states that a crosswalk may be required in a block length of greater
than 800 feet. Therefore, staff would recommend that a walkway be required
running between Gryn Road and Willow Creek Drive. One possible location would
` be along the north property line of Lots 14 and 15 as shown.
Also of concern in regard to circulation is the applicant's proposal (as shown
on the location map) to eventually connect the proposed Willow Creek Drive with
an existing portion of that street which intersects with Highway 1. Staff is
- strongly opposed to this connection because it will make this road a major
i collector street. This function was intended to be served by Aber Avenue, which
Is located just to the north. Also, extension of this road would tend to
integrate what the Comprehensive Plan shows as a "land consumptive" commercial
area to the east with this residential area. The staff recommends that the
street named Willow Creek Drive be continuous with Plaen View Drive and that
street access not be provided to the east. If, however, at some future date,
residential development occurs in the area abutting this development to the
east, it may be desirable to show a proposed future access to the abutting
property. Regardless, a 20 foot pedestrian access to the east should be
provided which could also be used for access to maintain a storm water detention
basin.
A stormwater management basin currently exists along the north boundary of the
subdivision and is adequate to service this development. However, because
approximately half of the development drains to the south, a second basin will
be required. The applicant has proposed that this be located in the county, and
used to service both the Ty'n Cae subdivision and any development which occurs
to the east. Engineering has no objections to this proposal as long as property
owners in both areas join in the agreement and the basin is designed to serve
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both developments. As an alternative, the applicant may wish to reserve an area
for a basin within the City limits. This area could be abandoned upon
construction of a basin designed to serve both developments.
The stormwater management basin located in the northeast corner of the tract has
been included in the rear yards of lots 9-13 in order to make given property
owners responsible for its maintenance. However, because of the configuration
of the lots, the result is five lots ranging in depth from approximately 300 to
400 feet with a width as narrow as 10 feet at the rear property line. Staff
contends that maintenance of a strip of land for this distance is unrealistic.
A more workable layout of lot lines may be to widen out the width of narrower
lots at the rear property line to give them a more usable area. Wider lots could
then be reduced in length. An even better alternative, one which should be
seriously considered, is the placement of the area within the limits of the
detention basin on a separate tract to be maintained by a homeowners'
association of the abutting lots.
The applicants are proposing to locate four lots between Gryn Road and the
right-of-way line for relocated Mormon Trek Boulevard. These lots range in
depth from 148 feet to 168 feet. The subdivision regulations require the width
of a block to be no less than 220 feet. The purpose of this requirement is to
ensure adequate room for further subdivision of double frontage lots. In
addition, the subdivision regulations state that "lots with double frontage on
front and rear shall be avoided, except in specific locations where good
platting indicates their use." Because of the topography in this area, and the
layout of the lots, staff has no objections to the platting of double frontage
lots in this instance, It is therefore recommended that the Commission waive
the required 220 feet, and permit the use of double frontage lots.
STAFF RECOMMENDATIONS
The staff recommends that the preliminary plat and LSRD, PAD plan of Ty'n Cae
Subdivision, Part III, be deferred. Upon resolution of the concerns discussed
above, and the deficiencies and discrepancies listed below, staff would
recommend approval.
DEFICIENCIES AND DISCREPANCIES
1. A twelve inch waterline should be shown along the proposed relocation of
Mormon Trek Boulevard in order to provide water to the property owners to
the south (the subdivider will pay for a 6" equivalent).
2. A sanitary sewer line should be extended to the south property line.
3. The size and location of existing utilities in Ty'n Cae Parts I and II
should be shown on the plat.
4. One congressional corner on the plat is mislabeled, and another one is not
labeled at all; these should be corrected.
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5. The drainage easement located in the southeast cornerof
the development
should be maintained at a constant 40 foot easement,
an taperi
down to a 20 foot easement.
ts should be labeled as such, with the width
6. All utility and sewer easemen
marked on the plat.
located on the interior of a lot should be a
7. Sewer and utility easements
minimum of 15 feet.
8. The radius and street width of Dynevor Circle should be shown.
9. All lots should be numbered consecutively, rather than using the present
numbering system, i.e., lot 1 A and B, etc.
10. A cross-section of the parking areas should be provided on the plat.
11. The PAD requirements require sketches which indicate the general design of
building types and overall character of the development.
12. The LSRD requirements require the height of proposed structures to be
shown.
ended to the west end of the west building on
13. The water main should be ext
Lot 53.
14. There appears to be a discrepancy in the square footage figures in the
"Development Character" information on the plat; this should be corrected.
15. Gryn "Road" should be changed to Gryn "Drive."
16. Willow Creek Drive should be renamed Plaen View Drive.
ATTACHMENTS
1. Location map.
ACCOMPANIMENTS
1. Preliminary plat and LSRD, PAD plan of TyACaebdivisi n,P t III.Approved by:iser, Dtrec& Pro ram
f Planning 9
Development
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RESOLUTION NO. 82-130
RESOLUTION APPROVING THE FINAL PLAT OF RESUBDIVISION OF A PORTION OF BLOCK 11,
EAST IOWA CITY, AN ADDITION TO THE CITY OF IOWA CITY, IOWA.
WHEREAS, THE OWNERS, Howard P. Amish and Anna L. Amish, have filed with
the City of Iowa City a plat of the real estate located in Iowa City, Iowa,
more particularly described on Exhibit "A" which is attached hereto and by this
reference made a part hereof.
WHEREAS, said property is owned by the above named owners who have
executed the dedication expressing that such resubdivision is with their
free consent.
WHEREAS, said plat is found to conform with Chapter 409 of the 1981
Code of Iowa and all .other statutory requirements.
WHEREAS, said plat was examined by the planning and zoning commission
which recommended that said plat be approved.
NOW, THEREFORE, BE IT RESOLVED, by the City Council of Iowa City, Iowa,
that:
1. Said plat pertaining to real estate described on the Exhibit "A"
attached hereto be and the same is hereby approved.
2. That at such time as the certificates . required pursuant to the
provisions of Chapter 409 of the Code of Iowa have been executed and presented
to the Clerk, the Mayor and the Clerk are hereby directed to certify a copy
of this Resolution and of the final plat of said subdivision to the Office
of the County Recorder of Johnson County, Iowa.
It was moved by McDonald and seconded by Balmer that
the Resolution be adopted as read, and upon roll call there were:
AYES: NAYS ABSTAINING OR ABSENT
X Balmer
X_ Dickson
Y,_ Erdahl
Ahsiained Lunch
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X McDonald
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X Perret
X Neuhauser
Passed and approved this 8th day of June 1982.
Mayor
i ATTEST:
City Clerk
! Reeelved A Approved
Ry The Legal Department
F"E
MAY 71952 D
ABBIE STOLFUS
CITY CLERK
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EXHIBIT "A"
Legal description pertaining to Resubdivision of a Portion of Block 11,
East Iowa City, an Addition to the City of Iowa, Iowa.
Beginning at the Northeast Corner of Lot 1, Block 11 of East Iowa
City as recorded in Plat Book 1, Page 92, Johnson County Recorder's
Office; Thence S 00° 00' 00" W, 249.65 feet along the West Right -of -Way
of Second Avenue; Thence N 61° 49' 00" W, 274.56 feet along the North-
easterly Right -of -Way of the C.R.I. 6 P. Railroad; Thence N 00° 00' 00"
E, 119.98 feet to a point which is West 7.00 feet of the Northeast Corner
of Lot 4 as recorded in said Book 1, Page 92, Johnson County Recorder's
Office; Thence N 90° 00' 00" E, 242.00 feet along the South Right -of -Way
of "J" street to the Point -of -Beginning.
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To: Planning & Zoning Commission
Item: S-8213. Resubdivision of
Block 11
GENERAL INFORMATION
Applicant:
Requested action:
Purpose:
Location:
Size:
Existing land use and zoning:
Surrounding land use and zoning:
Applicable regulations:
45 -day limitation period:
60 -day limitation period:
SPECIAL INFORMATION
Public utilities:
Public services:
STAFF REPORT
Prepared by: Bruce Knight
Date: May 20, 1982
Howard Amish
1317 Second Avenue
Iowa City, Iowa 52240
Preliminary and final plat
approval of the resubdivision
of a portion of Block 11,
east Iowa City
To bring the subdivision into
compliance with Chapter 409 of
the State Code
South of J Street, west of
Second Avenue, and north of
the Chicago, Rock Island and
Pacific Railroad
1.03 acres
Duplex or undeveloped and R3
North - duplex and R2
East - single-family residential
and RIB
South and West - across the rail-
road tracks industrial and M1
Provisions of the Subdivision
Ordinance
6/20/82
7/5/82
Sanitary sewer and water services
are available. Sanitation
service is also available.
Police and fire protection are
available.
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Transportation:
Physical characteristics:
ANALYSIS
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Vehicular access would be
provided from Second Avenue or
J Street.
The topography is relatively
flat.
The applicant has submitted a preliminary and final plat of the resubdivision of
a portion of Block 11, east Iowa City in order to bring it into compliance with
the requirements of Chapter 409 of the State Code. The area was originally
divided into four lots as part of the platting of East Iowa City. This was done
prior to the existence of Chapter 409 of the State Code, and was "grandfathered"
in. Over the years, the applicant has proceeded to build three duplexes on the
original Lot 1, retaining ownership of all three. Recently, the applicant
decided to sell the duplexes. However, because they had never been subdivided
under Chapter 409 of the State Code, a title objection was raised and the City
was contacted. After a period of correspondence, the applicant agreed to submit
a plat to resubdivide the area. The plat complies with the final platting
provisions of the subdivision regulations, and staff recommends that part of the
preliminary platting requirements be waived.
STAFF RECOMMENDATION
Staff recommends that the preliminary platting requirements be waived and that
preliminary and final plat of the resubdivision of a portion of Block 11, east
Iowa City, be approved.
DEFICIENCIES AND DISCREPANCIES
None.
ATTACHMENTS
1. Location map.
1. Preliminary and final plat, resubdivision of a portion of Block 11, east
Iowa City.
2. Auxilliary plat information.
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Approved by:
Donald Schm iser, Director
Department of Planning & Program Development
93 S
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RESOLUTION NO. 82-131
RESOLUTION APPROVING PRELIMINARY AND FINAL LARGE SCALE NON-
RESIDENTIAL DEVELOPMENT FOR MERCY HOSPITAL PROJECT '82.
WHEREAS, the owner, Mercy Hospital, has filed with the City Clerk of Iowa
City, Iowa, an application for approval for a large scale non-residential
development for the following described premises located in Iowa City,
Johnson County, Iowa, to -wit:
Lots 1, 2, 3, 4, 5, 6, 7, and 8 in Block 38, the alley in Block 38,
Original Town of Iowa City, Johnson County, Iowa; that portion of Van
Buren Street lying south of the south right-of-way line of
Bloomington Street, and lying north of the north right-of-way line of
Market Street between Blocks 38 and 47, Original Town of Iowa City,
Johnson County, Iowa; Lots 1 and 2, the east one-half of Lot 3, Lots
7 and 8, the following described portion of Lot 4: Commencing at the
southwest corner of Lot 4, thence east 70 feet, thence north 40 feet,
thence west 70 feet, thence south 40 feet at the place of beginning;
and the east 100 feet of the alley, all in Block 47, Original Town of
Iowa City, Johnson County, Iowa.
WHEREAS, said property is owned by the above-named party; and,
WHEREAS, the Department of Planning and Program Development and the Public
Works Department have examined the proposed large scale non-residential
development and have approved the same; and,
WHEREAS, the said large scale non-residential development is found to
conform with requirements of the City ordinances of the City of Iowa City,
Iowa.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF IOWA
CITY, IOWA:
1. That the said plan is hereby approved as a large scale non-.
residential development.
2. That the said large scale non-residential development shall conform
with all the requirements of the City of Iowa City, Iowa, pertaining
to large scale non-residential developments.
3. That the City Clerk of the City of Iowa City, Iowa, is hereby
authorized and directed to certify a copy of this resolution to the
Office of the County Recorder of Johnson County, Iowa, after final
passage and approval as authorized by law.
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Resolution No. .%2-131
Page 2
It was moved by Balmer and seconded by McDonald the
Resolution be adopted, and upon roll call there were:
AYES: NAYS: ABSENT:
x Balmer
z Dickson
z Erdahl
x Lynch
x McDonald
x Neuhauser
z Perret a
Passed and approved this 8th day of June 1982.
MAYOR
ATTEST: �aL
CITY CLERK
Received & Approved
By The Legal D-partmenf
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Resolution No. .%2-131
Page 2
It was moved by Balmer and seconded by McDonald the
Resolution be adopted, and upon roll call there were:
AYES: NAYS: ABSENT:
x Balmer
z Dickson
z Erdahl
x Lynch
x McDonald
x Neuhauser
z Perret a
Passed and approved this 8th day of June 1982.
MAYOR
ATTEST: �aL
CITY CLERK
Received & Approved
By The Legal D-partmenf
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STAFF REPORT
To: Planning and Zoning Commission Prepared by: Karin Franklin ,
r Item: 5-8212. Project '82, Mercy
Hospital Preliminary and Final
LSNRD Date: May 20, 1982
E '
GENERAL INFORMATION
Applicant: Mercy Hospital
500 Market Street
Iowa City, Iowa 52240
Requested action: Approval of a preliminary and
final large scale non-residential
development plan.
Purpose: To expand the existing hospital to i
include a new emergency facility Y
and surgery area.
Location: In the block defined by Market,
Johnson, Bloomington, and Gilbert
Streets.
Size: 4.7 acres
Existing land use and zoning: Hospital; R3
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Surrounding land use and zoning: North - Office, residential; R3
East Residential, parking; R3
South School, residential,
commercial; R3
West - Residential, Commercial;
R3 i
Comprehensive plan: Public/semi-public facility
Applicable regulations: Provisions of the Large Scale Non- Illi
Residential Development, Tree, j
and Stormwater Management Ij
Ordinances.
45 -day limitation period: 6/16/82
SPECIAL INFORMATION i
Public utilities: Adequate water and sewer service
are available.
Public service: Police and fire protection are
available.
+
Transportation: Vehicular access is provided by
existing urban transportation F
sytem.
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Physical Characteristics: Urban topography.
ANALYSIS
Mercy Hospital proposes two areas of expansion of their current facility at 500
Market Street - a surgery expansion to the east behind the current parking on
Johnson Street and an expansion of their emergency facilities on the northwest
corner of the hospital along Bloomington Street. Both the emergency and surgery
expansions extend current areas of each service. A heli -stop is proposed for
the roof of the emergency expansion, however, the structure will not be altered
in terms of height or bulk in order to accommodate the heli -stop. Approval of
the LSNRD by Planning and Zoning is not necessarily an endorsement of the heli -
stop, since a heli -stop is not a use by right in this zone and may require a
variance from the Board of Adjustment or a permit from the City Council.
Modifications in the amount of parking west and east of the existing building
are also proposed. These modifications will provide more spaces and are
intended to enhance the traffic flow in the emergency area, and near the main
entrance and admissions. Additional parking is also intended in a proposed
parking facility on a lot across Johnson Street; this facility is not included
in this LSNRD since it is on a separate tract of land.
Since the hospital was built prior to August 7, 1962, it is exempt from any
height, yard, and off-street parking requirements according to Section
8.10.19.II of the Zoning Ordinance. In addition, the Engineering staff has
determined that with the expansion there will be no change in the drainage and
run-off characteristics on the site, and therefore application of the Stormwater
Management Ordinance is not required. The plan, as submitted, is in substantial
compliance with the requirements of the Large Scale Non-residential Development
and Tree Ordinances.
The staff recommends approval of the LSNRD plan for the expansion of Mercy
Hospital upon resolution of the listed deficiencies.
1. Openings for driveways should be no more than 42 feet at the curb lines and
24 feet at the back of the walk.
2. Removal of the existing emergency driveway should be shown.
ATTACHMENTS
1. Location map.
1. LSNRD Plan.
Approved by: VS�0�
D nald Sc meiser, Director
Department of Planning &
Program Development
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RESOLUTION NO. 82-132
RESOLUTION APPROVING THE PRELIMINARY AND FINAL
LARGE SCALE RESIDENTIAL DEVELOPMENT PLAN OF
LOT 6, ASPEN LAKE SUBDIVISION, IOWA CITY, JOHNSON COUNTY, IOWA
7
WHEREAS, the owner, Mad Creek Development Corporation, has filed with the City
Clerk of Iowa City, Iowa, an application for approval of the preliminary and
final Large Scale Residential Development (LSRD) plan of Lot 6, Aspen Lake
Subdivision, pertaining to the real estate described as follows:
All of Lot 6, Aspen Lake Subdivision, Iowa City, Iowa, as shown on the
recorded plat thereof, Johnson County Recorder's office; and
WHEREAS, the Department of Planning and Program Development and the Public Works
Department have examined the proposed preliminary and final LSRD and have
recommended approval of same; and
WHEREAS, the preliminary and final LSRD has been examined by the Planning and
Zoning Commission and after due deliberation said Commission has recommended
that it be accepted and approved; and
WHEREAS, the preliminary and final LSRD is found to conform with all the
requirements of the City Ordinances of the City of Iowa City, Iowa.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF IOWA CITY,
IOWA:
1. That the preliminary and final LSRD plan is hereby approved.
2. That the City Clerk of the City of Iowa City, Iowa, is hereby authorized
and directed to certify a copy of this resolution to the Office of the
County Recorder of Johnson County, Iowa, after passage and approval as
authorized by law.
It was moved by Balmer and seconded by Perret
the Resolution be adopted, and upon roll call there were:
AYES: NAYS: ABSENT:
x
Balmer
x
Dickson
z
Erdahl
x
Lynch
x
McDonald
z
Neuhauser
x
Perret
Passed and approved this 8th day of June , 1982.
MAYOR
ATTEST: ed & APP10,114
CITY CLERK R°C°� arlmen►
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3. That the City Clerk is hereby authorized and directed to publish notice for
the receipt of bide for the construction of the above-named project in a newspaper
published at least once weekly and having a general circulation in the city not less 11
than four (4) nor more than twenty (20) days before the date established for the receipt R
of bids.
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4. That bids for the construction of the above-named project are to be received
by the City of Iowa City, Iowa, at the Office of the City Clerk, at the Civic Center,
until 10:00 a.m. on the 29th day of June , 1982. Thereafter,
the bids will be opened by the City Engineer of his designee and
thereupon referred to the Council of the City of Iowa City, Iowa, for action upon said a
t
bids at its next meeting to be held at the Council Chambers, Civic Center, Iowa City,
Iowa, at 7:30 p.m. on the 6th day of July 1982 j
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RESOLUTION NO. 82-133
RESOLUTION APPROVING PLANS, SPECIFICATIONS, FORM OF CONTRACT, AND
ESTIMATE OF COST FOR THE CONSTRUCTION OF THE LIBRARY PLAZA
BRICK INSTALLATION PROJECT
ESTABLISHING AMOUNT OF BID SECURITY TO ACCOMPANY EACH BID, DIRECT-
ING CITY CLERK TO PUBLISH NOTICE TO BIDDERS, AND FIXING TIME AND
PLACE FOR RECEIPT OF BIDS.
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WHEREAS, notice of public hearing on the plans, specifications, form of contract,
and estimate of cost for the construction of the above-named project was published as
required by law, and the hearing thereon held.
NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF IOWA CITY, IOWA:
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1. That the plans, specifications, form of contract, and estimate of cost for
the construction of the above-named project are hereby approved.
1:
2. That the amount of bid security to accompany each bid for the construction of
the above-named project shall be in the amount of 5% of bid _ payable to
Treasurer, City of Iowa City, Iowa.
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3. That the City Clerk is hereby authorized and directed to publish notice for
the receipt of bide for the construction of the above-named project in a newspaper
published at least once weekly and having a general circulation in the city not less 11
than four (4) nor more than twenty (20) days before the date established for the receipt R
of bids.
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4. That bids for the construction of the above-named project are to be received
by the City of Iowa City, Iowa, at the Office of the City Clerk, at the Civic Center,
until 10:00 a.m. on the 29th day of June , 1982. Thereafter,
the bids will be opened by the City Engineer of his designee and
thereupon referred to the Council of the City of Iowa City, Iowa, for action upon said a
t
bids at its next meeting to be held at the Council Chambers, Civic Center, Iowa City,
Iowa, at 7:30 p.m. on the 6th day of July 1982 j
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RESOLUTION NO. 82-134
RESOLUTION AUTHORIZING THE FILING OF AN APPLICATION WITH THE DEPARTMENT OF
TRANSPORTATION, UNITED STATES OF AMERICA, FOR A GRANT UNDER THE URBAN MASS
TRANSPORTATION ACT OF 1964, AS AMENDED.
WHEREAS, the Secretary of Transportation is authorized to make grants for
mass transportation projects;
i.
E' WHEREAS, the contract for financial assistance will impose certain
obligations upon the applicant, including the provision by it of the local
E share of project costs;
WHEREAS, it is required by the U.S. Department of Transportation in accord
with the provisions of Title VI of the Civil Rights Act of 1964, that in
connection with the filing of an application for assistance under the
4 Urban Mass Transportation Act of 1964, as amended, the applicant give an
assurance that it will comply with Title VI of the Civil Rights Act of
1964 and the U.S. Department of Transportation requirements thereunder;
and
WHEREAS, it is the goal of the Applicant that minority business enterprise
be utilized to the fullest extent possible in connection with this
project, and that definitive procedures shall be established and
j administered to ensure that minority business shall have the maximum
feasible opportunity to compete for contracts when procuring construction
contracts, supplies, equipment contracts, or consultant and other
services.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY OF IOWA CITY:
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I. That the City Manager is authorized to execute and file an
application and a grant contract on behalf of the City of Iowa City
with the U.S. Department of Transportation, to aid in financing Phase
II architectural and engineering services, construction,
furnishings, and special equipment for a new transit facility to
replace the City's existing facility.
2. That the City Manager is authorized to execute and file with such
application an assurance or any other document required by the U.S.
Department of Transportation effectuating the purposes of Title VI
of the Civil Rights Act of 1964.
3. That the City Manager is authorized to furnish such additional
information as the U.S. Department of Transportation may require in
connection with the application for the project and subsequent grant
I contract.
4. That the City Manager is authorized to set forth and execute affirma-
tive minority business policies in connection with the project's
procurement needs.
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It was moved by Perret and seconded by
Lynch the Resolution be adopted, and upon roll call there
were:
AYES: NAYS: ABSENT:
x Balmer
7— Dickson
Erdahl
Lynch
McDonald
Neuhauser
Perret
Passed and approved this 8th day of June 1982.
MAYOR
ATTEST:
CITY CLERIC
MIN
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141CROPILMED BY
-'JORMMICR+LAB'-
CEDAR RAPIDS DES MOINES
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RESOLUTION NO. 82-135
RESOLUTION AWARDING CONTRACT AND AUTHORIZING MAYOR TO SIGN AND
CITY CLERK TO ATTEST CONTRACT FOR THE CONSTRUCTION OF THE
C.B.D.ALLEY PAVING - PHASE III BLOCKS 65 AND 81 O.T.
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WHEREAS, James T. Fox Contracting Corporation of Marion, Iowa,
has submitted the best bid of 56.155.00 for the construction of the
above-named project.
NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF IOWA CITY,
IOWA:
1. That the contract for the construction of the above-named project is
hereby awarded to James T. Fox Contractinq Corporation
subject to the condition that awar ee secure adequate performance bond and
insurance certificates.
2. That the Mayor is hereby authorized to sign and the City Clerk to
attest the contract for the construction of the above-named project, subject
to the condition that awardee secure adequate performance bond and insurance
certificates.
It was moved by Balmer and seconded by Perret that
the resolution as read be adopted, an upon roll call there were:
AYES: NAYS: ABSENT:
x Balmer
x Dickson
x Erdahl
x Lynch
x McDonald
x Neuhauser
x Perret
Passed and approved this 8th day of June 1982 .
C. qbAAfL&4ALA
MAYOR
ATTEST:
CITY CLERK
�terelvnd & Appmvcd
OR Me Lapal Daparinmit
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RESOLUTION NO. 82-136
RESOLUTION AUTHORIZING AMENDMENT OF THE 1982
METRO ENTITLEMENT COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM
AND BUDGET
WHEREAS, the City of Iowa City, Iowa, is the recipient of Community
Development Block Grant (CDBG) funds granted by the U.S. Department
of Housing and Urban Development under Title I of the Housing and
Community Development Act of 1974, as amended (Public Law 93-383);
and
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WHEREAS, as a result of changes in the estimated cost for certain
projects and the need to allocate additional funds to complete the
4 Ralston Creek North Branch Detention Basin, it is necessary to amend
the 1982 Metro Entitlement Program and Budget.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF IOWA CITY,
IOWA:
That the City Manager is hereby authorized and directed to amend
the 1982 Metro Entitlement CDBG budget in accordance with the
schedule attached hereto as Exhibit A.
It was moved by Balmer and seconded by
McDonald the Resolution be adopted, and upon roll call
there were:
AYES: NAYS: ABSENT:
x Balmer
x Dickson
x Erdahl
x Lynch
x McDonald
j x Neuhauser
x Perret
Passed and approved this 8th day of
June 1982.
_ MAYOR
ATTEST: 4
CITY CLERK
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EXHIBIT A
COMMUNITY DEVELOPMENT BLOCK GRANT BUDGET
1982 METRO ENTITLEMENT PROGRAM
Project or
Budget Approved by
Activity
HUD 3/82
Amended Budget
1.
Lower Ralston Creek
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Improvements
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$ 78,300
2.
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EXHIBIT A
COMMUNITY DEVELOPMENT BLOCK GRANT BUDGET
1982 METRO ENTITLEMENT PROGRAM
FIrIACRIF'LME' BY
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Project or
Budget Approved by
Activity
HUD 3/82
Amended Budget
1.
Lower Ralston Creek
y -
Improvements
$303,100
$ 78,300
2.
Housing Rehabilitation
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& Weatherization
$129,000
$136,990
3.
Housing Code Enforcement
$ 12,000
$ 12,000
4.
Public Housing Site
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Acquisition and Development
$ 75,000
$ 75,000
5.
Community Development
Planning
$ 26,924
$ 16,955
6.
Economic Development
Planning
$ 5,080
$ 5,000
7.
General Program Admini-
stration
$106,493
$ 88,145
8.
Contingency
$ 13,403
$ -0-
9.
Ralston Creek North
Branch Improvements
$ -0-
$252,000
10.
Congregate Housing
$ -0-
$ 4,000
11.
Spouse Abuse Shelter
$ -0-
$ 2 610
TOTAL
$671,000
671,000
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RESOLUTION NO. 82-137
RESOLUTION AUTHORIZING THE CITY OF IOWA CITY, IOWA, TO
IMPLEMENT AN ASSISTED HOUSING REHABILITATION LOAN SUBSIDY
PROGRAM.
WHEREAS, the City of Iowa City is empowered pursuant to Chapter 403, Code
of Iowa (1981), to formulate a program for utilizing appropriate private
and public resources to eliminate slums and prevent the development or
spread of urban blight and to encourage urban rehabilitation, and
WHEREAS, the City Council, acting as the Iowa City Housing Authority, has
applied for and received approval for 30 units of Section 8 Moderate
Rehabilitation housing units, and
WHEREAS, the City Council has budgeted Community Development Block Grant
funds to assist in programs of public and low income housing, and
WHEREAS, part of said program involves public assistance in the form of
loans or grants as a method of financing HUD required rehabilitation, and
WHEREAS, the said program requires an operational manual known as the
Assisted Housing Rehabilitation Loan Subsidy Program, and
WHEREAS, a copy of the operational manual for said program for the City of
Iowa City is attached and by reference is made part of this resolution.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF IOWA
CITY, IOWA, that the City Council has approved the above program, opera-
tional manual, and methods of financing and authorizes its implementation
as outlined in the Assisted Housing Rehabilitation Loan Subsidy Program.
It was moved by Erdahl and seconded by Perret the
Resolution be adopted, and upon roll call there were:
AYES: NAYS: ABSENT:
x Balmer
A Dickson
x Erdahl
x Lynch
x McDonald
x Neuhauser
x Perret
Passed and approved this 8th day of June 1982.
' MAYOR
ATTEST:
ITY CLERK Recelvod & Approved
i By The Legal Department
MICROFILMED BY
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",City of Iowa Cites
MEMORANDUM
Date: June 1, 1982
To: City Manager and City Council
-� From: Michael Kucharzak� .
Re: Assisted Housing Rehabilitation Loan Subsidy Program
Enclosed is your copy of the subsidy program designed to assist rental property
owners with financing the required repairs necessary to participate in the
federally assisted Section 8 Moderate Rehabilitation program.
fUnlike our existing rehabilitation program which offers financial grants to
i property owners in the form of Forgivable Loans, or direct loans at 6% interest;
the proposed Assisted Housing Rehabilitation Loan Subsidy program would assist
r owners of rental housin by providing a grant utilizing Community Development
Grant dollars to reduce the amount of money that the owner would have to borrow
to repair the dwelling. This mix of City/Federal dollars with privately
borrowed money has the effect of leveraging the public money at an anticipated
ratio of nearly 2.5 to 1.
Since the maximum rent that can be charged to eligible participating tenants is
established by HUD for Iowa City, and since only structures that require repair
to meet HUD Minimum Housing Standards are eligible for Section 8 Moderate Rehab
Rental Agreements, it is imperative that the cost of operating the structure,
especially the principal and interest payments on improvement loans, be kept at
levels that when matched with established rents, result in an acceptable
j cost/expenditure ratio. Of course, participating owners are expected to show a
I reasonable profit on their rental investment or the Section 8 Moderate
Rehabilitation Program is doomed to failure. Itis hoped that the loan subsidy
program will provide the needed incentive to encourage rental property owners to
participate, and by so doing, assure the capturing of the 30 units of Mod Rehab
Section 8 allocated to the Iowa City Housing Authority.
The Iowa City Housing Commission, the Citizens Committee on Community Needs and
the staff recommend approval of the financing plan to help assure a successful
participation of the private sector in the Section 8 rental subsidy program.
When you finish reviewing the Operational Manual, you may wish to return your
copy of the loan program to Lorraine Saeger for further distribution to
interested rental property owners. If you choose to retain your copy for future
reference, please feel free to do so.
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ASSISTED HOUSING REHABILITATION
LOAN SUBSIDY PROGRAM
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TABLE OF CONTENTS
Chapter
1.
General
Chapter
2.
Project Financing and Eligible Project Costs
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Chapter
3.
Eligibility Requirements
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Chapter
4.
Cost Includable in Subsidized Loans
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Chapter
5.
Limitations on Amount of the Loan`Subsidy
FI
Chapter
6.
Processing & Submissions for a Loan Subsidy
Chapter
7.
Loan Settlement
Chapter
8.
Loan Closeout
_
Chapter
9.
Terms & Conditions Under Which Assisted Housing Rehabilitation
Loan Subsidies are Made
Chapter
10.
Funding of Individual Loan Subsidies & Management of
Accounts
Chapter
11.
Determining Work to be Done with a Subsidized Rehabilitation
—
Loan
Chapter
12.
Contracting for Repair Work
Chapter
13.
Inspection of Repair Work
Chapter
14.
Truth in Lending Requirements for Subsidized Rehabilitation
Loans
Chapter
15.
Grievance,Procedure
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Principal Reduction Payments apply the "lever" of CDBG funds to reduce the funds
borrowed from a private sector lender. This payment serves to drop the
effective interest rate paid by the applicant on the total cost of
rehabilitation. The amount of the public payment is determined by the below —
market interest rate established by the City.
The Principal Reduction Payment is calculated by computing the monthly cost of
an individual loan at a bpkow-market interest rate and then determining the
principal that this monthly payment can support at available lender rates. The
difference between this principal amount and the actual cost of the repair work
is called the Principal Reduction Payment. It is made directly to a property
rehabilitation escrow account after satisfactory completion of rehabilitation.
The following example illustrates this computation. The City wishes to provide
financing at 10 percent interest for a 15 year term. The property owner
desiring to participate in the Moderate Rehabilitation Section 8 program
requires a $10,000 construction loan and negotiates loan terms with a private
lender at market rates. The first step is to compute the monthly cost for the
below-market loan (10%) which is $107.46. At the 21 percent market rates, a
$107.46 monthly payment supports a $5,870 principal loan. The difference
between this principal amount and the 5101000 cost of the rehabilitation work is
$4,130, which becomes the Principal Reduction Payment. The leveraging ratio in
this example is $10,000 to $4,130, or nearly 2.5 to 1.
Principal Reduction Payments are approved only when a property owner also takes
out private financing to cover the cost of work not to be covered by public
funds. The City helps the property owner qualify for private financing by
reducing the cost of the loan. The relative proportion of private and public
funds varies depending on the actual rate received by the financial institution
on its loan.
This technique appeals to lenders who are interested in supporting local
rehabilitation efforts but hesitant to assume supplemental administrative costs
and responsibilities. Financial institutions use their own loan and mortgage
credit reviews to process applications, and have generally been sympathetic on
marginal cases. The fact that lenders are asked to fund less than total
rehabilitation costs contributes to their cooperative attitude; loan officers
regard the public payments as attractive additional equity in the structure.
For the City, the simplicity and economy of the Principal Reduction Payments
system is its most attractive feature. The technique is simple because once the
public payment is made the City need not have further financial involvement in
the loan. Furthermore, since the public subsidy computations are based on the
present value of funds, the costs to the government are one-half of what they
would be if paid throughout the life of the loan.
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CHAPTER 1. GENERAL
1. LEGAL AUTHORITYAssisted Housing Rehabilitation Loan subsidies are
authoriz ed by City Council utilizing Title I assistance under the Housing
and Community Development Act of 1974, as amended.
2. DEFINITIONS. Following are definitions of various terms as used with
respect to rehabilitation activities.
a. Owner. Means one or more natural persons who hold legal title to a
property to be rehabilitated.
b. Owner -Occupied Rental Property. A property occupied by the owner
that it is used entirely for residential purposes and that contains
rental dwelling units.
C. Renair�Cost. The total cost of repairs or improvements incurred by
the owner that are includable in a rehabilitation contract, whether or
not financed in part with funds from other sources.
d.Rehabilitation Officer. 'An employee of the .City's: Department of
administering'thesspeciti4 aspects of then ehabil�it tion programth ts of
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CHAPTER 1. GENERAL
1. LEGAL AUTHORITYAssisted Housing Rehabilitation Loan subsidies are
authoriz ed by City Council utilizing Title I assistance under the Housing
and Community Development Act of 1974, as amended.
2. DEFINITIONS. Following are definitions of various terms as used with
respect to rehabilitation activities.
a. Owner. Means one or more natural persons who hold legal title to a
property to be rehabilitated.
b. Owner -Occupied Rental Property. A property occupied by the owner
that it is used entirely for residential purposes and that contains
rental dwelling units.
C. Renair�Cost. The total cost of repairs or improvements incurred by
the owner that are includable in a rehabilitation contract, whether or
not financed in part with funds from other sources.
d.Rehabilitation Officer. 'An employee of the .City's: Department of
administering'thesspeciti4 aspects of then ehabil�it tion programth ts of
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CHAPTER 2. PROJECT FINANCING AND ELIGIBLE PROJECT COSTS
1. GENERAL. This chapter covers City Council provisions required for the
making of Assisted Housing Rehabilitation Loan subsidies, sources of funds
to be used for making loan subsidies, program reimbursement for advanced
fees, and the costs in connection with rehabilitation loan subsidies that
are eligible projects costs.
2. PROJECT FINANCING. Assisted Housing Rehabilitation Loan subsidies may be
made only if there exists a City Council resolution approving the
rehabilitation loan subsidy program and a sufficient appropriation of
funds to finance said loan subsidies.
a. Inclusion of Loan Subsidies in Pro'ect Bud ets. The amounts for
Assisted Housing Rehabi station Loan subsidies shall be included in
the Community Development Block Grant budget as approved by the City
Council.
b. Source of Funds for Assisted Housin Rehabilitation Loan Subsidies.
Funds to cover an approved oan subsidy sha be provided by the ity
from project funds in accordance with the procedures established
herein.
3. ELIGIBLE PROJECT COSTS. The costs described below, related to the
processing of rehabilitation cases are eligible project costs. Provision
shall be made for these eligible project costs in the budget which is
appropriate for the program involved.
a. City Overhead and T1ird-Party Contracts. The following costs
incurred in t� processing and administering of Assisted Housing
Rehabilitation Loan subsidies are eligible project costs, to the same
extent as costs incurred for other eligible project activities.
(1) City cost for staff salaries, wages, and general overhead.
(2) Costs incurred under contracts or agreement with organizations,
firms, and -individuals for technical and professional services.
Contracts and agreements for the provision of technical or
professional service must meet the City requirements for the
third -party contracts as to form and methods of solicitation and
execution, and shall be concurred in by the City Attorney's
office and the City Manager.
b. Other Costs Related to Loans. With the exception of those costs set
forthin paragraph 3.a. above there are no other costs related to the
processing of a Assisted Housing Rehabilitation Loan subsidy
v application that may be included in charges arising from the
processing of a loan application that may be eligible project costs.
C. Advancing funds for Includable Costs. As necessary, the City shall
advance project funds to pay for processing fees, credit reports and
charges for title reports and recordation fees.
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CHAPTER 3. ELIGIBILITY REQUIREMENTS
1.
GENERAL. This chapter sets forth eligibility requirements as to the
._
Property, and the applicant for an Assisted Housing Rehabilitation Loan
subsidy. A loan may be made only with respect to a property located within
the City of Iowa City. The property must need rehabilitation to meet the
Minimum Housing Quality Standards as required in the Moderate
—
Rehabilitation Section 8 program. A structure may not participate more
than once in the Loan subsidy program.
2.
REQUIREMENTS APPLICABLE TO EVERY LOAN SUBSIDY. In order to be eligible
for an Assisted Housing Rehabilitation Loan subsidy, the applicant must be
-•
capable of obtaining a rehabilitation .loan from a private lending
institution. An Assisted Housing loan subsidy cannot be approved if the
applicant cannot obtain the remainder of construction monies in the form of
I J
a rehabilitation loan from a private lending institution. In addition,
depending upon the type of applicant and property involved, the
—
requirements as described,below also apply.
3.
REQUIREMENTS APPLICABLE TO LOAN SUBSIDY FOR RESIDENTIAL PROPERTY. An
applicant for an Assisted Housing Rehabilitation n Loan subsidy on
—
residential property must be the owner of the property.
4.
R• EQUIREMENTS.2F THE MODERATE REHABILITATION SECTION 8 PROGRAM. Before an
Assisted ousing kES71 stat on loan, subsidy can. a approved, the {
applicant and the
—
property to undergo the rehabilitation shall be approved
by the Department of Housing and Urban Development and have entered into an i
agreement for Housing Assistance payments (HAP). I
5.
DAMS -BACON RE UIREMENTS. In the event a contract for rehabilitation -
contains m ne 9 or more units the provisions of Davis -Bacon wage laws {
prevailing at the time will be applicable.
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CHAPTER 4. COSTS INCLUDABLE IN SUBSIDIZED LOANS
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1. GENERAL. An Assisted Housing Rehabilitation Loan subsidy maybe made only
with respect to a property which needs to be brought up to HUD Housing
Quality Standards (HQS), and, after rehabilitation, the property must, at a —
minimum, conform to the HQS. Within the limitations on amount of loan
subsidy as set forth in Chapter 5, a subsidized loan may also include
amounts for purposes other than meeting the HQS, as set forth in this
section.
a. Conversions. In general, conversion of a property so as to change a
either its use or the number of units may be provided for in a .�
subsidized loan only if conversion is necessary to meet HQS or to
eliminate a nonconforming use. However, a subsidized loan may provide
for conversion if there is an insufficient market for the property in
.,
. its present form, and conversion will make rehabilitation and
maintenance economically feasible. However, conversion costs not �I
required by the HQS or Zoning Ordinance shall be regulated according
to the formula set forth below under General Improvements (If).
b. Energy Conservation Measures. A subsidized loan may provide for
specific energy conservation measures such as storm windows, caulking
and weather stripping and attic and wall insulation. �1
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C. BuildinPermits and Related Fees. A subsidized loan may provide
funds to cover the cost of bui ding permits and related fees that are w�
required to carry out the proposed rehabilitation work. However,
since the construction contract documents will require the contractor
to pay for them, this cost ordinarilywould be included in the I
contract amount. c�
d. Architectural Services. In some unusual cases, an applicant may
employ a private architect to prepare plans' and drawings for the e.I
rehabilitation of his property. In these cases, and with prior ei
approval from the City, the subsidized loan may include an amount to
cover the cost of the architectural services for the foregoing
rehabilitation work to be financed by the subsidized loan.
I r
e. Certain Related Costs. A subsidized Loan may include funds to cover
certain costs and charges related to processing the loan application
and to obtaining security for the subsidized loan. I
(1) Type of Related Costs. A subsidized loan may provide the cost
of the following:
(a) Appraisal fee.
(b) Title reports.
(c) Fees for recordation and filing. I
(d) Abstracting. el
(e) Termite inspection.
(f) Lead based paint analysis.
(g) Bank servicing charge.
(h) Hazard insurance.
(i) Architectural fees.
(j) Current accruals for: taxes, insurance, and special
assessments. .a
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(k) Credit reports.
(1) Debtor's life insurance.
(2) Advance of Funds. As necessary, the City may advance funds to
pay fo— r appraisal fee, title reports, termite inspection, lead
based paint analysis and credit reports prior to formal
commitment on the rehabilitation loan application. If the loan
is approved, the City shall be reimbursed from the proceeds of
the loan at the time of loan settlement. If the loan is not
approved, and the application withdrawn, the City advances shall
be regarded as eligible project costs.
f. General Inorovements. A subsidized loan which includes funds to
cover cost of meeting the requirements of HQS may include, in
addition, funds for general improvements the owner may wish to perform
and can.financially afford to do. The maximum dollar amount available
for general improvements shall be limited to 60% of the cost of
correcting to HQS, and incipient work.
2. WORK WRITE -USP. The Rehabilitation Officer shall prepare a work write-up in
_ accordance with this manual, to document the rehabilitation work to be I
financed with the subsidized loan. I
3. ASSURANCE THAT REPAIRS WILL BE COMPLETED. In some instances the repair
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ost may exceed the maximum amount o the subsidized loan permitted. In
such cases, the subsidy will not be made unless the applicant can provide
whatever additional amount is 'needed to assure completion of the work so
that the property will meet at least the HQS. If the subsidized loan will
not be sufficient to pay for the repair cost to meet at least the HQS, the j
staff shall not approve the subsidy unless the applicant can furnish
supplementary funds sufficient to complete the work.
_ 4. LOAN CANCELLATION. Should a HAP Agreement be cancelled after
rehabilitation work has begun due to some unforeseen occurrence, the City j
reserves the right to withdraw their subsidy.
_ If the homeowner changes his/her mind and decides not to do energy
conservation measures or general repairs, the total loan and computed
subsidy will be reduced to the actual amount of money used rather than the
full amount.
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5. SUPPLEMENTAL FUNDS. When the applicant is furnishing supplementary funds
from other sources other than the subsidized loan, evidence that actual
funds are available shall consist of verification and documentation by the
staff that the applicant can deposit the required amount in a
rehabilitation escrow account.
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CHAPTER S. LIMITATIONS ON THE AMOUNT — THE LOAN SUBSIDY
1. GENERAL. This section sets forth the eligibility requirements fo
apP1 ants of the Assisted Housing Rehabilitation Loan subsidy program
hereinafter referred to as a Loan.
2. MAXIMUM LOAN. The maximum loan subsidy shall be the lowest amoun
determined using the following criteria:
a. $10,000 per dwelling unit.
b. An amount which when added to a 15 year loan obtained by the owner
from a private lending institution results in a principal value that,
at 10% annual interest, would generate a monthly principal anc
interest payment equal to the actual and verified principal ano
interest payment of the private loan in question.
3. TERMS AND CONDITIONS
a.. Terms and Conditions.
(1) The Maximum term of the subsidized.loan shall be 15 years, and it
shall bear an effective interest rate of ten
annum.. percent (10%) per
(2) The subsidized loanmay be.retired,,in a period of less than 15
years without penalties imposed by the City. _
(3) , The City loan subsidy contributions shall be held in escrow until
such time,as the,City and HUD have approved of the rehabilitation
and have executed a HAP Agreement.
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CHAPTER 6. PROCESSING AND SUBMISSIONS FOR A LOAN SUBSIDY
M.
1. REHABILITATION LOAN ON RESIDENTIAL PROPERTY. The material under this
heading is in connection with an Assisted Housing Rehabilitation Loan
subsidy that in -conjunction with funds to be provided by a private loan
obtained by the applicant, is sufficient to accomplish the required
rehabilitation.
a. Outline of Rehabilitation Staff Functions. Listed below are the
functions to be performed by the staff for an Assisted Housing
i Rehabilitation Loan subsidy. Regardless of the sources of funds to
- rehabilitate a property, the staff shall assist the property owner by
performing functions (1) through (7) listed below:
(1) Interview and advise the property owner on the general
rehabilitation objectives for the Section 8 Moderate
Rehabilitation program and the purposes and meaning of the HQS.
(2) Advise the property owner on the availability and benefits of a
j rehabilitation loan subsidy, and on other Federal and private
programs and resources for financing rehabilitation.
i (3) Inspect the property.
(4) Prepare a work write-up and cost estimate of the rehabilitation 1
work..
- (5) Conduct a financial interview to determine eligibility of the
applicant for a loan subsidy.
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(6) Determine that items in the work write-up conform to purposes for
which a subsidized rehabilitation loan may be used.
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(7) Advise applicant concerning the conditions under which a loan E
- subsidy is made.
(8) Final consultation with applicant on preliminary work write-up
j and cost estimate to reach agreement on work to be done within
HUD Section 8 Moderate Rehabilitation Guidelines.
(9) Prepare contract specifications.
(10) Assist the property owner in obtaining construction bids, assist
applicant in selection of acceptable contractors.
(11) Take "before" pictures.
(12) Assign loan number and set up separate file for each case.
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(13) Deliver case to Director for submission to Housing Commission
for conditional commitment. Include the following papers and/or
forms:
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(a) Two (2) copies of accepted bid.
(b) "Before" pictures.
(c) Copy of staff list of HQS deficiencies, energy conservation
measures and general improvement ideas and cost estimate.
(14) Complete loan subsidy application.
(15) Determine that through the subsidized loan the property will
conform to Housing Quality Standards. If additional financing
is required, assist applicant in obtaining the needed funds.
(16) Deliver to Director for submission to the Housing Commission for
firm commitment (loan subsidy approval). Include the following
as applicable:
(a) Completed loan subsidy application.
(b) Letter of commitment from a private lending institution to
make the rehabilitation loan.to be subsidized.
(c) Executed agreement for HAP.
(d) City Attorney's opinions.
(17) When the firm commitment has been received by the Rehabilitation
Officer, advise applicant and lending institution and set date
for the settlement of the loan to be subsidized.
(18) Prepare "Check Request", and hold in safe until date certain.
(19) On date certain, meet at designated loan closing location and
assist in getting all necessary papers signed.
(a) Have recipient sign:
1. All copies of construction contract.
2. Proceed order.
3. Receipt of check.
(20) Assure compliance with Equal Employment Opportunity requirements
and Davis -Bacon as required. This is a continuing
responsibility until the work is completed.
(21) Inspect the rehabilitation work and assisted owner in making
progress payments, if stipulated in construction contract.
(22) Make final inspection of completed rehabilitation work.
(23) Issue "Certificate of Final Inspection".
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(24) Take "after" pictures.
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(25) Assist owner in obtaining from the contractor the guarantee of
" work, manufacturers' and suppliers' warranties, and release of
liens from the general contractor, subcontractors and suppliers
" prior to final payment for rehabilitation work.
(26) Assist the owner in making final payment to contractor for
completed rehabilitation work.
1} b. Disapproval of Loan Subsidy Application. Disapproval by the Housing
Commission for any loan subsidy application constitutes a formal turn
down and the Rehabilitation Officer shall advise the applicant
accordingly and properly document the file. In the case of special or
extenuating circumstances, the Rehabilitation Officer may ask the
Housing Commission to re-examine an application along with the
!� documentation necessary to support the request for reconsideration.
c.Applicant Cancels Loan Subsid ication. In the event the
j applicant chooses to cance t e paAppin subsidy application prior to Date
1 Certain, the Rehabilitation Officer shall prepare Cancellation of
Loan Subsidy form and obtain the applicant(s) signature(s). If the
applicant(s) refuses to sign,; the Rehabilitation Officer shall
document this refusal by so indicating on the CDR -7630C by a statement
- signed by the Rehabilitation Officer.
•3. DOCUMENTATION FOR LOAN ON RESIDENTIAL PROPERTY. This material sets forth
required documentation in conjunction with an application recommended for
approval by the Rehabilitation Officer. The farms and other documentation
to be included with the application by the, Rehabilitation Officer to the
Housing Commission are listed in paragraph 1. Instructions concerning some
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of the documents listed are as follows:
a. Application Form.
b. Letter of Loan Commitment from Lending Institution.
C. Terms and Conditions Form signed by applicant to verify receipt of
same.
d. Ownership Data. The Rehabilitation Officer shall make a preliminary
informal determination of ownership. The citation from the land
records or other official records used in the verification shall be
retained in the file.
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CHAPTER 7. LOAN SETTLEMENT _
1. GENERAL. This chapter sets forth the staff responsibilities with respect
To an Assisted Housing Rehabilitation Loan subsidy for: (a) preparing for _
loan settlement; (b) completing loan settlement; and carrying out post
settlement activities.
2. PREPARING FOR LOAN SETTLEMENT. The following actions shall be taken in _
preparation for loan settlement:
a. Establish a date certain for loan settlement that allows a minimum of
15 days for processing.
b. Request a check in the amount of the Assisted Housing Rehabilitation
Loan subsidy to be dated the date certain.
C. After the loan subsidy check is requested, the Rehabilitation Officer
shall promptly take the following actions: w j
(1) Prepare a proceed order to be signed by the borrower at !,
settlement. For a secured loan on an owner occupied rental
property, the executed proceed order shall be retained by the
Rehabilitation Officer for five working days from the date of
signing in order to give the borrower time to exercise his rights
of rescission under the Truth in Lending Act.
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(2) Make arrangements for loan settlement with the private lender on It t
the date certain.
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3. DELAY IN LOAN SETTLEMENT. Loan settlement shall be effected on the 1
established settlement date, provided that the loan subsidy check has been rl
received from the Finance Department. If for any reason loan settlement
cannot be accomplished on the established date, it shall be accomplished as FI
soon thereafter as possible. Such later settlement shall, with the written
consent of the borrower, be effected as of the originally established
settlement date. In the absence of that written consent, the loan subsidy
check must be returned to the Finance Department. The Rehabilitation r
Officer shall then set a new settlement date and shall prepare and submit
to the Finance Department a new check request with the new date certain
specified thereon, unless requested to do otherwise by the Director of
Finance.
4. COMPLETING LOAN SETTLEMENT. The Rehabilitation Officer shall proceed with
loan settlement on the date certain as follows:
a. Review the approved loan subsidy application form with the borrower.
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b. Secure the borrower's signature in block M of each of the three copies ri
of the loan subsidy application form and witness the signature. 1
C. If necessary, review with the borrower the copy of the terms and r:I
conditions form which was previously given to him before he signed the
loan subsidy application form.
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d. Secure the borrower's endorsement on the loan subsidy check.
} e. If applicable, obtain check from borrower for supplemental monies in
excess of the Assisted Housing Rehabilitation Loan subsidy or the
Private Loan that it subsidizes. The check shall be given to the
lending institution providing the subsidized loan for inclusion in
�! the escrow account.
1. Obtain borrower's signature on proceed order.
2. If the borrower is an owner occupant of a rental property, hold
until it is evident that the borrower does not intend to cancel
the loan in accordance with the Truth in Lending Act.
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CHAPTER 8. LOAN CLOSEOUT
1. GENERAL. This chapter sets forth the staff responsibilities for loan
c o� seout and transmittal of related documents for an Assisted Housing
Rehabilitation loan.
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2. DISPOSITION OF FUNDS STATEMENT. After all funds have been disbursed from
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the rehabs tatJon escrow account and the account has been closed, the
Rehabilitation Officer shall obtain a copy of the Disposition of Funds
statement from the escrow agent for inclusion in the property file.]
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3. CLOSEOUT DOCUMENTS. After final payment for all rehabilitation costs and
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after closing the borrower's account, the Rehabilitation Officer shall
transmit the documents prescribed below to the borrower and the Finance
Department, in accordance with the following:
a. For retention in the property file.
(1) Disposition of funds statement (copy).
(2) Copy of Contractor's final invoice.
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(3) Certificate of Completion (CDR -7645).
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CHAPTER 9. TERMS AND CONDITIONS UNDER WHICH
ASSIS ED HOUSING R kABILITATION LOAN SUBSIDIES ARE MADE
I. GENERAL. This chapter sets forth City requirements with respect to terms
and conditions to which an applicant must agree in order to obtain an
Assisted Housing Rehabilitation Loan -subsidy.
2. LOAN CONDITIONS. The specific terms and conditions with respect to
rehabilitation loan subsidies to a residential property are incorporated
in Form CDR -7631.
i
a. Cancellation Provision. Under paragraph 3 of Form CDR -7631,
concerning the City's right to cancel a loan subsidy if within 60 days
from the notes execution the rehabilitation work has not commenced,
the City may extend the 60 -day period by not more than 30 days, due to
unforseen and extenuating circumstances.
_ b. Additional Extension. The Rehabilitation Officer shall not grant any
urther extensions of time without prior written concurrence by the
Director, Department of Housing and Inspection Services. If the loan
subsidy is to be canceled because of failure to begin anticipated
rehabilitation work within the allowed.
Rehabilitation Officer shall initiate cancellation. of time, the
-• ation.
3. AMOUNT OF LOAN SUBSIDY. The amount of subsidy is calculated by computing
the monthly cost V an individual 15 year loan at a 10% annual interest and
then determining the principal that this monthly payment can support at
locally available present lender rates for 15 year construction loans. The
difference between this principal amount and the actual cost of the repair
work is call the loan subsidy. It is made directly to a property !
rehabilitation escrow account and cannot be released until satisfactory
completion of rehabilitation has been documented and approved by the City
and HUD.
4. TERM OF LOAN. The maximum term for a subsidized loan shall be 15 years.
The -ac—tu-a-C7an from a private lending institution may be for less than 15
years, but all calculations shall be based on current, 15 year market rate
- loans.
5. POINTS OF AGREEMENT. The applicant shall agree, as required by the related
documents, to abide by the following terms and conditions.
a.Civil Rights. Comply with all Federal and City requirements with
respect to Title VI of the Civil Rights Act of 1964, to not
discriminate upon the basis of race, color, creed, religion, national
origin, age, sex, marital status, disability and sexual orientation.
b. Use of Proceeds. Use the loan subsidy proceeds only to supplement
pr vat�e financing such that the total monies, both City and private
shall go to pay for costs of services and materials necessary to carry
out the rehabilitation work for which the loan subsidy will be
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C. Com letion of Work. Assure that the rehabilitation work shall be
carried out prompt y and efficiently through written contract.
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d. Ineligible Contractors. Not award any contract for rehabilitation
work to be paid for in whole or in part with the proceeds of the loan
to any contractor, who, at the time, is ineligible under the provision
of any applicable regulation issued by the Secretary of Labor to
receive an award of such contract.
e. Inspection. Permit inspection by the City or its designee of the
property, the rehabilitation work, and all contracts, materials,
equipment, payrolls, and conditions of employment pertaining to the
work.
f. Records. Keep such records as may be required by the City with
respect to the rehabilitation work.
g. Interest of Certain Officials. Not permit any member of or Delegate
to the Congress of the United States, and no Resident Commissioners,
to share in any -proceeds of the subsidized loan, or to any benefit to
arise -from the same.
h: Bonus Commission or Fee. Not pay any bonus, commission, or fee for
the purpose o obtaining the City's approval of the loan subsidy
application, or any other approval or concurrence required by the City
or its designee to complete the rehabilitation work, financed in whole
or in part with the subsidized rehabilitation loan.
i. Interest of the Cit . Allow no member of the governing body.of the
Yty w o exercises any functions or responsibilities in connection
with the administration of the Section 8 Moderate Rehabilitation
program, and no other officer or employee of the City who exercises
such functions or responsibilities to have any direct interest in the
proceeds of the subsidized loan, or in any contract entered into by
the applicant for the performance of work .financed, in whole or in
part, with the proceeds of the subsidized loan.
j. Preservationof the Securit . Maintain the property at the
requirements o the evel.and permit the City or its designee to
inspect the property during the term of the HAP contract.
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CHAPTER 10. FUNDING OF INDIVIDUAL LOAN SUBSIDIES
AND MANAGEMENT OF ACCOUNTS
~ 1. GENERAL.. This chapter sets forth policies for funding the individual loan
subsidies and also the policies for City management of loan subsidy funds.
2. FUNDING REPAIR LOANS. When an application for financial assistance has
been processed and approved, the staff shall enter the total amount of
assistance in the program account ledger as encumbered monies. The staff
must be certain that adequate funds are budgeted and uncommitted before
processing applications for subsidized loans. Program budgets will be
established annually by the City Council according to local, state and
— federal funding availability.
3. FUNDING REPAIR PROJECTS SUPPLEMENTED BY PRIVATE FUNDS. When supplemental
funds are utilized to complete a project, these funds are collected when
— the application for a loan subsidy is approved and deposited into the
project escrow account awaiting disbursement. An entry of fund receipt
shall be made in the account ledger by the escrow agent. The escrow agent
— is responsible for depositing the check and reporting the transaction in
the case file.
4. MANAGEMENT OF THE REPAIR LOAN AND SUPPLEMENTAL FUNDS ACCOUNT. All
Assisted Housing Rehabilitation Loan subsidy funds, shall be deposited by
the private lender assigned as escrow agent in A non-interest earning j
escrow account.
a. Se orate Case Numbers for Each Pro ram Participant. The
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ehabi station Officer shal assign case numbers to each program
applicant. The accounting computer printout will log all credits and
debits according to assigned case numbers.
b. Disbursements of Repair Funds. Disbursements from repair escrow
funds shall be made only with concurrence of the Director of Housing
and Inspection Services. The Rehabilitation Officer shall maintain a
duplicate file of all invoices and receipts. The escrow agent shall
prepare a check, as directed, payable to the applicant/borrower and
the payee for the following purposes, as may be appropriate:
(1) Reimburse the City for advanced loan expenses.
(2) Payment for rehabilitation work.
(3) Payment for taxes and insurance.
C. Transmittal of Checks. The Escrow Agent shall secure the borrower's
endorsement on checks payable to the borrower and the payee. The
Rehabilitation Officer, or the Escrow Agent, shall transmit the
endorsed check to the payee. Checks which include any amounts
previously withheld from construction progress payments shall be
accompanied by an explanation of the computation.
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CHAPTER 11. DETERMINING WORK TO BE DONE
WITH A SUBSIDIZED REHABILITATION LOAN
I. GENERAL. This section sets forth the responsibilities of the
Rehabilitation Officer for determining the repair work necessary to bring a
property into conformance with the requirements of the Moderate
Rehabilitation Section 8 program and for providing assistance in the repair
of the property. In carrying out these responsibilities, the
Rehabilitation Officer shall:
2.
3.
a. Inspect the property.
b. Make a preliminary work write-up and cost estimate of the work to be
done.
C. Consult with and advise the owner on the work to be done, and the
availability of a subsidized rehabilitation loan.
d.• Prepare a final work write-up and cost estimate as the basis for a
subsidized loan and for contracting for the repair work.
WORK WRITE-UP AND COST ESTIMATE. A work write-up and cost estimate is a
statement prepared by the Rehabilitation Officer -based on the property
inspection report that itemizes all the repair work to be done on the
property, and includes an estimate of the cost of each item. The cost
estimate shall be reasonable and shall reflect actual costs prevailing in
the, locality for comparable work.
SPECIFICATIONS IN CONSTRUCTION CONTRACT DOCUMENTS. Each specification in
a construction contract document shat be written so that it provides a
clear understanding of the nature and scope of the work to be done, and a
basis for carefully determined bids and proposals from contractors. Each
specification shall show the nature and location of the work and the
quantity and type of materials required. The specifications shall refer to
manufacturers' brand names or to association standards to identify the
quality of materials and equipment required, and may make provisions for
acceptable substitutes. If the work write-up is sufficiently
comprehensive, it may itself be used for the specifications, without any
cost estimate figures or distinctions as to work required or not required.
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a. Contractor Selection. The owner shall be asked for the name of a
contractor he/she would like to bid on the repair of his/her property.
If the owner does not know of a contractor, the staff shall provide
the property owner with two contractor names from the list of
contractors maintained at the Department of Housing and Inspection
Services. In the event a contract contains nine (9) or more units the
provisions of Davis -Bacon wage laws will be applicable.'
b. Invitation to Bid. Once the contractor has been selected according
to paragraph 4a. above, the owner shall contact the selected
contractor and invite him/her to bid the proposed repair. The
Rehabilitation Officer shall meet the contractor at the subject
property at an appointed time to assist in the inspection of the
property and to facilitate obtaining a bid.
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CHAPTER 12. CONTRACTING FOR REPAIR WORK
1. INTRODUCTION. This chapter sets forth requirements and procedures with
respect to construction contracts for repair financed through an Assisted
.,
Housing Rehabilitation Loan subsidy. Repair work shall be undertaken only
through a written contract between the contractor and the recipient of the
subsidized loan. Whenever possible the owner shall be encouraged to obtain
their own bids and enter into the repair contract with little or no City
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involvement. The Rehabilitation Officer shall assist each applicant as
needed, in arranging for and obtaining an acceptable construction
contract.
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a. Form of Contract. The construction contract shall consist of a
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single document form provided by the City and signed by the contractor
and accepted by the owner, only following approval of the subsidized
loan. It shall contain a bid and proposal by the contractor.
b. Procurement of Bids. An acceptable contractor's bid and proposal
must be obtained before the Director approves the application form for
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the loan subsidy.
2. GENERAL CONDITIONS. The Rehabilitation Officer shall prepare "general
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conditions for use in all construction contracts for the repair of the
property.
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3. SPECIFICATIONS AND DRAWINGS. Specifications, based on the work write-up
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and illustrative sketches, if any, covering the specific repair work for
each property on which a subsidized loan will be made shall be prepared by
the Rehabilitation Officer or contractor. Drawings shall be prepared only
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when essential to show the scope of the work involved so that a fair bid for
the work can be obtained, and to avoid misunderstandings with the bidder.
The specifications and drawings shall' be based on the work write-up
resulting from an inspection of the property and interviews, as indicated,
with the applicant. The specifications shall clearly establish the nature
of the work to be done and the material and equipment to be installed. Each
page of the specifications and drawings shall be numbered and shall contain
identification that includes the name, address of owner, and the date of
the specification.
4. INVITATION TO CONTRACTORS FOR BID AND PROPOSAL.
a. Contractor Selection. The owner shall be asked for the name of a
contractor he/she would like to bid on the repair of his/her property.
If the owner does not know of a contractor, the staff shall provide
the property owner with two contractor names from the list of
contractors maintained at the Department of Housing and Inspection
Services. In the event a contract contains nine (9) or more units the
provisions of Davis -Bacon wage laws will be applicable.'
b. Invitation to Bid. Once the contractor has been selected according
to paragraph 4a. above, the owner shall contact the selected
contractor and invite him/her to bid the proposed repair. The
Rehabilitation Officer shall meet the contractor at the subject
property at an appointed time to assist in the inspection of the
property and to facilitate obtaining a bid.
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C. Bid Review. Upon receipt of the bid proposal from the bidding
contractor, the homeowner shall review the bid for completeness and
accuracy making special note to assure that the specifications have
been adhered to.
d. Acceptable Bid. An acceptable bid is one that upon review under 4c.
above, is not in excess of 10% of the Rehabilitation Officer's
estimate. Where two or more bids have been obtained, the lowest
acceptable bid shall be recommended to the owner for approval. Tn the
event no acceptable bids are received, the homeowner shall reject all
bids and the owner shall select another contractor and repeat the
bidding process.
e. Maintenance of the Contractors' List.
(1) The Rehabilitation Officer shall be responsiblg for maintaining
a list of all contractors including minority and female
contractors who have expressed an interest in bidding on repair
construction and who can provide the following as contained on
Form CDR -7946:
(a) Adequate active liability insurance
(b) The name of his/her company bank.
(c) The names of his/her usual subcontractors.
(d) The names of his/her principal suppliers.
(e) The names and addresses of at least two (2) residential
repair or construction jobs.
(f) Iowa City contractor's license as applicable.
(2) The Contractor List shall be maintained within the Department of
Housing and Inspection Services office, open to public review.
The Contractor. List shall be grouped according to the category of
specialization the contractor requests to be listed (e.g.,
general contractors, electrical, plumbing/heating, masonry, dry
wall, etc.).
AWARD OF CONSTRUCTION CONTRACT. The contract shall be awarded by having
the applicant for the subsidized loan properly execute the contract with
the assistance of the Rehabilitation Officer.
a. Issuance of Proceed Offer. At the time the award is made, the
Rehabi itation cer s all remind the applicant and the successful
contractor that the undertaking of the work covered by the contract is
subject to issuance by the owner of a proceed order, within the number
of days stated in the general conditions of the contract from the date
of the award. Upon award of the contract, the homeowner shall notify
unsuccessful bidders that they have not been awarded the contract.
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b. Award within 30 days of Cutoff Date. In order for the bid and
proposal to be binding, the award shall be made within a period of 30
w days from the cutoff date established by the homeowner for the receipt
of the bid and proposal, unless a later date is agreed upon in
writing.
C. Contract Award. The award of a construction contract shall be
accompli-`
shed
Gy the owner executing the original and two copies of the
contract documents. The homeowner shall distribute the executed
1y contract documents as follows:
(1) Executed original retained by homeower.
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(2) Executed copy to contractor.
(3) Executed copy to the City of Iowa city in care of the
Rehabilitation Officer.
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7. LABOR PERFORMED BY OWNER IN REPAIRING PROPERTY.
a. Type of Work and Skill of Owner. A property owner may complete some
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or all of the tasks required to repair his/her property, if he/she has
involved. Self-help
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the degree of skill required to perform the work
is usually appropriate for the accomplishment of tasks of an unskilled
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nature such as general clean-up, demolition of small buildings on a
debris, and for work
—
property, removal, cartage, and disposal of the
use of costly materials and equipment. Work of
that involves minimal
nature, and work involving the extensive installation of
1
a skilled
costly materials and equipment, are appropriate if the Rehabilitation
Officer is assured the property owner has the ability and experience
he/she
—.
required to do the work properly without supervision, or that
do the with technical advice and
J
has sufficient skill to work properly
i
guidance from the Rehabilitation Officer.
b. Provision for Self-Ne1 in Loan. Whenever self-help is necessary,
Rehabilitation Officer considers that
_
Indicated, or desired, and the
with or without its technical assistance and guidance a property owner
will be able to perform the work 16 a reasonablyacceptable and
expeditious manner, he/she may process an application for a loan
the amount of the subsidized
J
subsidy on that basis. In such a case,
loan would provide funds to pay for the materials and equipment to be
installed by self-help, as well as any additional funds needed, to pay
not
for other work to be performed by a contractor. The loan shall
include funds to pay the owner or members of his/her family for their
good
labor. Further, the Rehabilitation Officer must exercise
judgement and prudence as to avoid a situation in which an owner could
in financial difficulty through improper
place himself or herself
installation,, or even destruction of the materials and
use,
equipment purchased with loan subsidy funds. For this reason, the
understand that the proceeds of a su
owner should subsidized loan to pay
in will
the supplier for materials and equipment involved a self-help
loan by the staff, only after they have
be disbursed from the account
been properly installed.
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CHAPTER 13. INSPECTION OF REPAIR WORK _
1. GENERAL. This chapter sets forth the requirements for the inspection of
repair work financed in whole or in part with a subsidized rehabilitation
loan.
2. RESPONSIBILITY FOR MAKING INSPECTIONS. The Rehabilitaton Officer shall
make inspections of construction work in cases involving a subsidized loan.
To accomplish this, the Rehabilitation Officer shall make:
(1) Compliance inspection, as necessary, to assure that the construction
work is being completed in accordance with the construction contract.
(2) A final inspection to determine that the construction work has been
completed in accordance with construction contract. The Building _
Inspector and any specialists from the Building Inspection Division,
as may be required, shall accompany the Rehabilitation Officer on the -
final inspection and shall provide the Rehabilitation Officer with a
written report of their findings.
3. INSPECTIONS FOR PAYMENT. Inspection of construction work shall be made in
accordance with the following: .0
a. Ins ep ctions. Upon completion of the repair work and receipt of the ..+
contractor s invoice containing his certification of satisfactory
completion of the work in accordance with the contract and his Ka t
warranty, the Rehabilitation Officer shall arrange for inspection of
r>i
the completed work. j
b. Making Payments. When the inspection determines that the work is `j i
satisfactorily completed in accordance with the contract, the owner el
shall be advised to obtain from the contractor a release of liens, and
a copy of each warranty due the owner for the work. After receipt of a • cI
release of liens, including releases from all subcontractors and
suppliers and a copy of each warranty, the owner shall make payment. r.I
.4. CERTIFICATION OF FINAL INSPECTION. After the Rehabilitation Officer
!j
determines that the rehabs station work has been satisfactorily completed
�{
and the final inspection report obtained, the staff shall prepare a Form
CDR -7945 (original and one copy).
Distribution. Form CDR -7945 shall be distributed as follows:
(1) Signed original to the property owner.
a�
e
(2) Signed copy retained in the property file.
C. Coordination with Contractor. When some of the repair work is to be
performed through self-help, and the remainder is to be completed by
r
the contractor, the Rehabilitation Officer shall help assure that the
work is accomplished by each of them so as not to interfere with or
I
jeopardize the other's work. In cases where a separation in the
ti
timing of the work is not feasible, the Rehabilitation Officer should
urge the owner and the contractor to make their own arrangements on
the timing, so that each may do his/her work without causing any
interference in the work to be done by the other. In all instances,
r
the owner will be better protected if work to be performed through
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self-help is completed before the contractor starts his/her work.
Such completion will help avoid claims by the contractor for extras or
damages he/she may claim are caused by the self-help efforts, and will
assure that when all work is finished, the property will comply with
the Department of Housing and Urban Development and City of Iowa City
program requirements.
9. OTHER PROVISIONS
a. The Contractor Shall: Indemnify and hold harmless the owner, the
owners employees, and the City of Iowa City, and its officials,
employees, and agents from any and all liability, loss, cost, damage,
and expense (including reasonable attorney's fees and court costs)
resulting from, arising out of, or incurred by reason of any claims,
actions, or suits based upon or alleging bodily injury, including
death, or property damage rising out of or resulting from the
contractor's operations under this contract, whether such operations
be by himself/herself or by any subcontractor or by anyone directly or
indirectly employed by either of them. The contractor shall obtain
insurance for this purpose, which shall insure the interests of the
owner and the City as the same shall appear, and shall file with the
owner and the.City certificates of such insurance.
b. Correction of Fault Work after Final Payment: The approval of the
eq� or ayment by t e e a i station UTficer and the making of
the payment .by.the owner to the contractor shall not relieve the
contractor of responsibility for faulty materials or workmanship.
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6• ONE-YEAR GUARANTEE ON WORK BY CONTRACTOR. All work
contractor Is covered b
always aware that, y a one-year guarantee but Performed by the
contractor to for a period of one Property owners are , they mnot B�
y require the
performed under this contract. For thj!Aeir reason and
the RehabilitationtOfficer
shall inform the owner of the guarantee requirements upon completion of the
contract.
If the owner has a complaint about the work
the contractor must be given written performed under the contract,
reasonable notice of �l
defect promptness- Should the contractor fail to answer orCompcorrectwthe
(s) within a reasonable time, the rehabilitation staff, 1
request, shall assist owner in the follOwln
g manner: at owner f.l
(1) Staff members of the Department of Housin +
shall investigate g and Inspection Services
the complaint.
(2) If the staff finds the complaint to be invalid, owner shall be so c�
notified. s
(3) If the staff finds the complaint to be valid, the owner shall direct F�
the contractor to take necessarya�
reasonable length of time, which shall be specified.
a
(4) If the contractor complies, the staff shall reinspect the work and R '
it is satisfactory, the owner will be expected to
statement withdrawing the complaint. If
sign a written
!'1 1
(6) If the contractor fails to respond to the request within the specified 1
length of time, the staff, upon owner request, shall •_ i
for owner's signature, notifying the contractor prepare a letter
unless the Complaint is abated b
will be filed with the Cit a second time that
y a specified time, a formal complaint
Licensing Board for appropriate Attorney or the a
ppropriate action. appropriate Iowa City ,, 1
(6) If the contractor fails to 1
within the time specified: respond to the I
request for correction
I (a) The owner shall take an l�
corrected, includingbut necessary action to have the defects
costs of correcting ork orot limited to paying the reasonable
be defective, materials determined by the owner to '
il!
(b) The contractor may be prohibited b
other repair work under an Y loan or r the City from contracting any
the City. grant program administered by n,
6. REHABILITATION OFFICER -
OWNER - CONTRACTOR RELATIONS I '
Rehabilitation off- cer's�� '
Res onsibilit and Authorit : �"
The Rehabilitation Officer shall observe the work on behalf of the City,
and will provide �I I
interpretation of the loan arequirements ssistance ris affecteding ction insofar as
proper
The Rehabilitation Officer and owner shall decide
all questions which may arise as to the quality necessaryany and
q Y and acceptability of
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materials furnished, work performed, interpretation of Plans and
Specifications and all questions as to the acceptable fulfillment of the
Contract on the part of the Contractor.
The Rehabilitation Officer will not be on the construction site at all
times and as such cannot be responsible for the acts or omissions of the
contractor or his employees. For the same reason, acceptance by the owner
or the City of the contractor's work performed, does not release the
contractor from the responsibility to provide quality performance on all
contract specifications.
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CHAPTER 14. TRUTH IN LENDING RE UIREMENTS
R SUBSIDIZED REH BILI ATION LOANS
1• PURPOSE. This chapter describes the Truth in Lending Act and its
procedural and disclosure requirements which must be followed in the
settlement of a subsidized rehabilitation loan.
2. BACKGROUND. „
a• The Act. The Truth in Lending Act is Title I of the Consumer Credit
w a
Protection Act (Public Law 90-321; title 15, U.S. Code 1601 et. se
enacted by Congress on May 29, 1968. The act requires that borrowers
in consumer credit transactions" be vested with certain rightsandprotections in connection with the transaction and receive specified
written informatidn from their lenders. The disclosures must be made I }
before credit is extended and before the borrowers become obligated in W
connection with the transaction; i.e., before execution of a note or
mortgage. Among the required disclosures are:
(1) The amount of credit a borrower will have for his actual use (the
AMOUNT FINANCED); and el
R')
(2) The FINANCE CHARGE (consisting primarily of interest but also k� 1
other�ees and charges) expressed both as a dollar amount and as
an ANNUAL PERCENTAGE RATE. r
� s
b• Three -da Rescission Provision. In addition, the act enables a 1
borrower, within 3 days fo owing the subsidized loan transaction to e
rescind the transaction, if the subsidized loan is secured by a lien i
on the borrower's residence.
3• TRUTH IN LENDING DISCLOSURE STATEMENT: USE IN REHABILITATION F
L S L ttl �
a• A 1* b* . A completed Disclosure Statement shall be given to all CJ 1
orrowers of subsidized rehabilitation loans.
b• Time of Furnishing Disclosure Statement to Borrower. The Disclosure
he time
nt shall be given the orrowers at loan settlement but prior to
the time he/she executes the mortgage obligating repayment of the
jj loan.
C. R1ceipted COD't of Disclosure Statement Retained b
p!
xenaoiiitation Officer.
nt
beFfirequested touseigntandedatesani identically completed the eDisclosure
Statement in the presence of an employee or other author
representative of the City who shall also sign as wiized
tness. The signed
and witnessed copy of the Disclosure Statement shall be retained by
the City in the loan subsidy application file.
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4. BORROWER'S RIGHT OF RESCISSION: SECURED LOANS. Under the law, certain
-- borrowers have the right, within a 3 -day period, to rescind the entire
subsidized loan transaction. The right of rescission applies to subsidized
rehabilitation loans, secured by mortgage or deed of trust, on residential
property owned and occupied by a borrower who is a natural person.
5. NOTICE OF OPPORTUNITY TO RESCIND TRANSACTION. Borrowers entitled, by the
preceding paragraph 5, to rescind A the loan transaction shall receive a
properly completed Notice of Opportunity to Rescind Transaction.
a. Furnishing Notice to Borrower at Loan Settlement. The lending
agency shall give the borrowers two copies of the notice at loan
settlement, and prior to his execution of mortgage and note. The
notice's nature and purpose shall be explained. An additional third
copy of the notice shall be signed by the borrowers so as to evidence
his receipt of two copies of the notice. The receipted copy shall be
retained by the City in its loan application file.
b. Three -Da Rescission Period. To compute the running of the 3 -day
— rescission period or entry on the notice, treat the date of loan
settlement on which the borrowers receives the notice as Day Zero and
the next business day thereafter as Day, 1, etc. Three business days
— must elapse following loan settlement date to complete the rescission
period. A business day is any calendar day except Sunday and the
— following ,holidays on the dates established by Federal law: New
Year's Day, Washington's Birthday, Memorial Day, Independence Day,
Labor Day, Columbus Day, Veterans Day, Thanksgiving, and Christmas.
6. ACCOMPLISHMENT OF RESCISSION. It is expected in most cases that the
borrowers rescission wi a accomplished by his mailing or delivery of
the notice, bearing his signature and date under the cancellation recital.
However, rescission may be accomplished by any written communication
signed by the borrowers or a telegram sent by the borrower. Oral
communications cannot accomplish rescission, but they should be followed
up by the Rehabilitation Officer to obtain written rescission:
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CHAPTER 15. GRIEVANCE PROCEDURE j
w
1. REVIEW COMMITTEE
ci
a. Purpose. A Review Committee is hereby established to review the 1
complaint of any person aggrieved by the—Department of Housing &
Inspection Services handling of the application for and processing of
assistance under rehabilitation programs funded by Community a
Development Block Grant funding. Procedures as set out hereinafter
are hereby established for the submission to and disposition of
grievances by Committee. The Committee shall function in an advisory
role and it shall make recommendations to the City Manager. The City
Manager shall receive and review the recommendation of said Committee
and respond within ten days of receipt.
IL1b. Desi nation of Committee. The Housing Commission shall act as the
Review Comm ttee. he Chairperson of the Housing Commission shall
preside at all meetings conducted by the Housing Commission while 69
convened as the Review Committee. In the absence of the Chairperson, B�
the Vice Chairperson shall preside. The meetings shall,be conducted
in a timely, orderly, fair and dignified manner. All persons
appearing before the Committee shall have an opportunity to be heard. E
A quorum of the Housing Commission must be present in order for the 1I
Housing Commission to be convened as the Review Committee.
c. Power and Duties. The Committee shall have the following powers and e-
dut ees:
To review complaints of any persons aggrieved by determinations of the R1
Department of Housing & Inspection Services concerning:
• t
-The sufficiency of his application for assistance; RI `
-The eligibility of his application for assistance under the project; c
-The amount of the loan subsidy allocated or received by said person; ;I
m
-The quality and appropriateness of the work designated to be done;
-The adequacy of the information and assistance concerning the b
project which is furnished by the Department of Housing & Inspection
Services.
d. Standards. In exercising its powers and duties, the Committee shall C
Fe guided by the following standards:
1. Persons eligible for loan subsidies under provisions specified
in rehabilitation programs operated by the Department of Housing
& Inspection Services and funded by Community Development Block
Grant funding shall have full right to a subsidized loan
sufficient to accomplish the purposes intended by the applicable ¢
program within the limitations specified therein.
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2. Eligible persons should be provided adequate assistance in
determination of improvements that are needed and eligible and
technical assistance related to cost estimates, contract
negotiation and payment of contractors for work completed.
3. Service should be provided by the Department of Housing and
- Inspection Services in such a way to assure that the
administration of the program will not result in different or
_ separate treatment on account of race, color, religion, national
origin, sex, or source of income.
4. Eligible persons should be provided full information and
advisory services relating to the programs and the way in which
they may benefit from them.
5. Assistance to eligible persons should be provided as promptly as
possible within the priority guidelines established by the
_ programs and the time limitations of the staff assigned to the
program.
e. Staff. • The Recording Secretary of the Housing Commission shall
provide secretarial services for the Housing Commission while
_ constituted as the Review Committee and shall assist in the
preparation of the agenda items for meetings.
2. PROCEDURE
a. Filin . The Committee's jurisdiction may be invoked by or on behalf
�y aggrieved person by filing a grievance with the Review
Committee. A grievance must be filed at the Office of the City Clerk
for the City of Iowa City. Grievances shall be filed in a timely
manner and must be received tie Z"7ty or owa-Eit��thin r year
of f nr payment p4 the C� of oan sum bsidy funds in connection th
rehabilitation work. The cammum cation of the action shall be in
wr tte� n form and should contain a short, concise statement of the
grievance and explanation of action desired. The aggrieved person may
seek the assistance of the staff of the Department of Housing &
Inspection Services in filing of an action. No filing or processing
_ fees shall be required of any aggrieved person involving the
Committee's jurisdiction.
b. Notice. The Committee shall fix a reasonable time for hearing actions
and the Department of Housing & Inspection Services shall give notice
in writing of the time and place of the meeting to the aggrieved
person. In no event shall the hearing be held more than 30 calendar
days following receipt of the grievance at the Office of the City
Clerk. Recording Secretary of the Housing Commission shall be
responsible for coordinating and scheduling the hearing with the
Chairperson of the Housing Commission. At the hearing, the aggrieved
may appear in person, by agent or by attorney. If a grievance is
resolved prior to the date of the hearing, the aggrieved party shall
request in writing that the grievance be withdrawn. The Committee
shall forward its recommendation in writing to the City Manager within
ten (10) calendar days following the Grievance Hearing.
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RESOLUTION NO. 82-13z
RESOLUTION ESTABLISHING FEES FOR CITY PLAZA USE PERMITS.
WHEREAS, the City Council of Iowa City, Iowa, did on April 27, 1982, adopt
Ordinance No. 82-3058 which governs the use of City Plaza; and
WHEREAS, Section 12 of said ordinance provides for the permit fees for the use
of the City Plaza to be established by Resolution; and
WHEREAS, this Resolution will supercede Resolution 79-387 (which established
fees for City Plaza permits) due to changes in Ordinance No. 82-3058.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Iowa City,
Iowa, that the following fee schedule is established for permits issued for the
use of City Plaza:
I. Motor Vehicle Permit
a. Continuing No charge'
b. Temporary No charge
2. Mobile Vending Cart $250 annually
3. Ambulatory Vending $100 per year
4. Sales for vending - temporary or occasional $10 per day
5. Cultural or Entertainment exhibits or
events where no sales occur No charge
These fees may be prorated for the 1982 vending season. In all subsequent years
the effective date of the permit shall be March 15.
It was moved by Balmer and seconded by Perret
the -Resolution be adopted, and upon roll call there were:
AYES: NAYS: ABSENT:
x Balmer
x Dickson
x Erdahl
x Lynch
x McDonald
x Neuhauser
Perret
Passed and approved this 8th day of June 1982.
MAYOR
ATTEST:ce!
CITY CLERK
Received & Approved
By The legal Department
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City of Iowa Ci j
MEMOR ANDV M
Date: June 3, 1982
To: City Council
From:idrea Hauer
Re: City Plaza Fees
On April 27, 1982, the Council approved a revised City resolution.laza The
Fees for permits to use the City Plaza are set by applicable section
previous resolution now needs to be revised be
the
number in the ordinance has changed,
This resolution would also permit the City Manager to pro -rate the user
fees for the remainder of this year. This would allow the City to begin
most of the rpermitovide sforrauselectionXof vendorshand�vendorplaza on a m
fose for areas ina more
basis and p
systematic manner.
There is no change in fees from the previous year.
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RESOLUTION NO. 82-139
RESOLUTION AUTHORIZING THE MAYOR TO SIGN AND THE CITY
CLERK TO ATTEST A 28E AGREEMENT BETWEEN THE CITY OF IOWA
CITY AND THE IOWA GERONTOLOGY PROJECT ADULT DAY PROGRAM
FOR THE LEASE OF SPACE AT THE IOWA CITY SENIOR CENTER.
WHEREAS, the City of Iowa City is operating a Senior Center for the
benefit of elderly residents of Johnson County; and
WHEREAS, the Iowa Gerontology Project Adult Day Program of Johnson
County, Iowa, is a University sponsored community service whose
goals include: the maintenance and development of its clients'
independence, and the reduction of its clients' inactivity; and
WHEREAS, it is in the mutual interest of the City of Iowa City and
the Iowa Gerontology Project Adult Day Program to meet such goals at
the Senior Center; and
WHEREAS, the City of Iowa City and the Iowa Gerontology Project Adult
Day Program have negotiated a 28E agreement for the lease of space at
the Iowa City Senior Center.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF IOWA CITY,
THAT:
1. The Mayor is hereby authorized to sign and the City Clerk to
attest the attached 28E agreement between the City of Iowa City
and Iowa Gerontology Project Adult Day Program for the lease of
space at the Iowa City Senior Center.
2. Upon execution, the City Clerk is directed to file the agreement
with the Iowa Secretary of State and the Johnson County
Recorder's Office.
It was moved by Erdahl and seconded by
Dickson the Resolution be adopted, and upon roll call
there were:
AYES: NAYS: ABSENT:
x Balmer s
x Dickson
x — — Erdahl j
x — Lynch
x McDonald E
x Neuhauser
x Perret
Passed and approved this 8th day of June , 1982.
MAYOR
ATTEST:
CITY CLERK Rseelved Z Approved
By The Legal ^parlmont
6.17,197-
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IOWA GERONTOLOGY PROJECT
ADULT DAY PROGRAM AGREEMENT
This Agreement, made and entered into this 8th day of
June , 1982, by and between the City of Iowa City, Iowa, a
municipal corporation, hereinafter referred to as the City, and the
Iowa Gerontology Project Adult Day Program of Johnson County, Iowa,
hereinafter referred to as ADP, whereas, ADP is a University
sponsored community service whose goals are: to maintain and develop
the clients' independence; to improve the clients mental and
physical functioning; to reduce the clients' inactivity; and to
reduce the clients' isolation; and whereas, it is in the mutual
interest of the City and ADP to attempt to meet such goals at the
Senior Center; and whereas, Chapter 28E of the Code of Iowa, 1979,
provides that any power exercisable by a public agency of the State
may be exercised jointly with any other public agency of this State
having such power;
Now, therefore, be it agreed by and between the City and ADP as
follows:
I. Scope of Services
A. The City agrees to provide space, furnishings, janitorial
services, utilities, and use of specific equipment and
services as set forth below.
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II. General Terms
A. The City agrees to provide suitable classroom space on the
ground floor and on the second floor of the senior center
to ADP for the provision of a day program for the elderly.
The kitchen/classroom would be available on Wednesday and
Friday from 8:45 AM to 10:00 AM. The clean craft room
would be available from 10:00 AM to 11:00 AM on the same
day. The second floor exercise room would be available
from 11:00 AM to 12:00 noon on the same day. The spaces
would become available for use by the program on
March 1 1982, and continue until
June 30 1982, at which time the Senior Center
Commission would reevaluate the success of the program
using these spaces.
B. The City agrees to provide heating and cooling for these
spaces at a level deemed appropriate for older persons.
C. The City agrees to provide regular janitorial service on a
schedule deemed appropriate by the Senior Center staff.
D. The City agrees to make available the services of. the
Senior Center secretary or the phone answering device to
accept calls to the program on a limited basis.
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E. The City agrees to treat in a confidential manner all
participant information that is jointly gathered.
F. ADP agrees to provide services and activities which are
consistent with the purpose and goals of the Senior
Center, such services to include, but not be limited to,
health education, group counseling, social group
activities, exercise and movement therapy.
G. ADP agrees to submit a yearly self-evaluation of services
and activities.
H. ADP agrees to cooperate in data collection. A monthly
report will be filed with the Senior Center staff to
include:
1. Monthly total of service units/activities provided.
2. Monthly total of elderly receiving service or
participation in scheduled activities (duplicated and
unduplicated count).
3. Identification of request for services or activities
not currently provided.
I. ADP agrees to submit a 30 day written notice when program
changes are planned.
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E. The City agrees to treat in a confidential manner all
participant information that is jointly gathered.
F. ADP agrees to provide services and activities which are
consistent with the purpose and goals of the Senior
Center, such services to include, but not be limited to,
health education, group counseling, social group
activities, exercise and movement therapy.
G. ADP agrees to submit a yearly self-evaluation of services
and activities.
H. ADP agrees to cooperate in data collection. A monthly
report will be filed with the Senior Center staff to
include:
1. Monthly total of service units/activities provided.
2. Monthly total of elderly receiving service or
participation in scheduled activities (duplicated and
unduplicated count).
3. Identification of request for services or activities
not currently provided.
I. ADP agrees to submit a 30 day written notice when program
changes are planned.
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J. ADP agrees that it shall be responsible for the
supervision of ADP clients while they are participants in
the Adult Day Program at the Senior Center.
III. Responsibility
ADP assumes responsibility and agrees to pay for any and all
claims for personal injury or property damage incurred by
reason of the negligence of ADP, The University, or its
employees arising from the activities conducted under this
agreement to the full extent permitted by Chapter 25A, Code of
Iowa, 1981, which is the exclusive remedy for the processing of
tort claims against the State of Iowa.
IV.. Discrimination
ADP agrees not to deny to any person its services on the basis
of race, creed, color, sex, national origin, religion, marital
status, sexual orientation or disability.
V. Assignment
A. This agreement may not be assigned without written consent
of the parties.
B. No space may be reassigned to any other agency or
organization.
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VI. Termination f
1
This agreement shall become effective March 1, 1982
and shall terminate June 30, 1.983 However, this
i
agreement may otherwise be terminated upon 30 days written
notice by either party.
VII. This agreement shall be filed with the City Clerk of Iowa City,
Iowa.
VIII. The undersigned do hereby state that this agreement is
executed in triplicate as though each were an original,
that there are no oral agreements that have not been,
reduced in writing in the instrument, and that this
agreement constitutes the entire contract.
FOR CITY OF IOWA CITY, IOWA:
i
Reootvod & Approved
By Tha Legal De artment
7a z
FOR ADP OF JOHNSON COUNTY, IOWA
THE UNIVERSITY OF IOWA
Business Manaaer & Treasurer
TITLE
1
ATTEST:
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CITY
CMC CENTER
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410 E. WASHINGTON ST
June 10, 1982
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OWA
IOWA CITY, IOWA 52240
CITY
(319) 356-5000
Mary Jane Odell
Secretary of State
Iowa State Capitol Building
Des Moines, Iowa 50319
Dear Ms Odell:
The City of Iowa City and the Iowa Gerontology Project Adult Day
Program of Johnson County, which is University sponsored, have
entered into an agreement conforming to Chapter 28E of the Code of
Iowa, Joint Exercising of Governmental Powers, regarding the lease
of space at the Iowa City Senior Center. -
Attached is an originally executed Resolution authorizing the agree-
ment with the originally executed agreement for the City and for ADP
of Johnson County, The University of Iowa. These documents have
been recorded with the Johnson County Recorder.
Yours very truly,
Abbie Stolfus, CMC
City Clerk
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CITY
CMC CENTER
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410 E. WASHINGTON ST
June 10, 1982
i 1
OWA
IOWA CITY, IOWA 52240
CITY
(319) 356-5000
Mary Jane Odell
Secretary of State
Iowa State Capitol Building
Des Moines, Iowa 50319
Dear Ms Odell:
The City of Iowa City and the Iowa Gerontology Project Adult Day
Program of Johnson County, which is University sponsored, have
entered into an agreement conforming to Chapter 28E of the Code of
Iowa, Joint Exercising of Governmental Powers, regarding the lease
of space at the Iowa City Senior Center. -
Attached is an originally executed Resolution authorizing the agree-
ment with the originally executed agreement for the City and for ADP
of Johnson County, The University of Iowa. These documents have
been recorded with the Johnson County Recorder.
Yours very truly,
Abbie Stolfus, CMC
City Clerk
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RESOLUTION NO.
RESOLUTION AUTHORIZING THE MAYOR TO SIGN AND THE CITY CLERK TO
ATTEST AN AGREEMENT BETWEEN THE CITY OF IOWA CITY AND THE IOWA
GERONTOLOGY PROJECT ADULT DAY PROGRAM FOR THE LEASE OF SPACE AT
THE IOWA CITY SENIOR CENTER.
WHEREAS;.. the City of Iowa City is operating a Senior Center for the
benefit of.elderly residents of Johnson County; and
WHEREAS, the'Iowa Gerontology Project Adult Day Program of Johnson County,
Iowa, is a University sponsored community service whose goals include:
the maintenance and development of/its clients' independence, and the
reduction of its clients' inactivity; and
WHEREAS, it is in the mutual interest of the City of Iowa City and the Iowa
Gerontology Project Adul�a�Program to meet such goals at the Senior
Center; and
WHEREAS, the City of Iowa City and the Iowa Gerontology Project Adult Day
Program have negotiated �an. agi��ement for the lease of space at the Iowa
City Senior Center.
NOW, THEREFORE, BE IT RESOLVED BY THE\CITY COUNCIL OF IOWA CITY, THAT:
The Mayor is hereby authorized to si\and the City Clerk to attest the
attached agreement between the City of \Iowa City and Iowa Gerontology
Project Adult Day Program for the lease of�space at the Iowa City Senior
Center. �' \.
It was moved/ by and seconded by the
Resolution bi adopted, and upon roll call there were:.
AYES: NAYS: ABSENT:
/ Balmer
_ Dickson
Erdahl.
Lynch
_ McDonald
_ Neuhauser
Perret
Passed and approved this day of 1982.
MAYOR
ATTEST:
NITY—CLERK
{teceived B Approved
By The Legal Dapartment
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/ Proceedings to Proceed
With Issuance of Bonds
Iowa City, Iowa
June 8 1982
The City Council of Iowa City, Iowa, met in _regular session
on the �— day of June
M., at the 1982' at 7:30 o'clock
Civic Center , in the City pursuant
to -,-raw and -to the rules olid Council. The meeting was called to
order and there were present 1=4 C. Neuhauser
and the following named Council Members: Mayor, in the Chair,
Balmer, Dickson, Erdahl, Lynch, McDonald, Perret
Absent: 'None
The Council took up and considered matters relating to the
issuance of Hospital Facility Revenue 3onds, Series 1982 (Mercy I
Project) and after consideration thereof, Council Member
Balmer introduced a Resolution entitled:
i
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RESOLUTION AUTHORIZING AND PROVIDING FOR: THE ISSUANCE OF NOT TO
EXCEED 0;000,000 AGGREGATE PRINCIPAL AMOUNT OF HOSPITAL
REVENUESPTAFACILITY I
E CITY
OFOWA CITY, IOWA EFOR9THE(PURPOSMERCYE OFILENDINGJTHE PROCEEDS THEREOF
TO MERCY HOSPITAL, IOWA CITY, IOWA, FOR THE PURPOSE OF DEFRAYING S
THE COST OF ACQUISITION OF LAND, THE CONSTRUCTION AND EQUIPPING OF
PARKING -FACILITIES, THE CONSTRUCTING AND -EQUIPPING OF A NEW 9
HOSPITAL WING AND THE RENOVATION AND EQUIPPING OF THE EXISTING
HOSPITAL FACILITIES OF SAID HOSPITAL AND DEFRAYING THE COST OF i
RETIRING CERTAIN INDEBTEDNESS OF SAID HOSPITAL; THE EXECUTION AND
DELIVERY OF A TRUST INDENTURE TO SECURE SAID BONDS; THE EXECUTION
AND DELIVERY OF A LOAN AGREEMENT AND SECURITY AGREEMENT BETWEEN
SAID CITY AND SAID HOSPITAL PROVIDING FOR THE REPAYMENT OF THE
LOAN OF THE PROCEEDS OF SAID BONDS AND THE SECURING OF SAID
REPAYMENT OBLIGATION; THE SALE OF SAID BONDS; AND RELATED MATTERS.
and moved its adoption, seconded by Council Member McDonald
After due consideration of said Resolution by the CUuncl the mayor
Put the question on the motion and upon the roll being called, the
following named Council Members voted:
Ayes: _Balmer..Lvnch, McDonald Neuhauser
Nays: _Di kcon Erdahl. Perret
Whereupon, the Mayor declared said Resolution duly adopted and
approval was signed thereto.
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RESOLUTION 82-140
RESOLUTION AUTHORIZING AND PROVIDING FOR: THE ISSUANCE OF NOT TO
EXCEED 0,000,000 AGGREGATE PRINCIPAL AMOUNT OF HOSPITAL FACILITY ='
REVENUE BONDS, SERIES 1982 (MERCY HOSPITAL PROJECT), OF THE CITY
OF IOWA CITY, IOWA, FOR THE PURPOSE OF LENDING THE PROCEEDS THEREOF
TO MERCY HOSPITAL, IOWA CITY, IOWA, FOR THE -PURPOSE OF DEFRAYING
THE COST OF ACQUISITION OF LAND, THE CONSTRUCTION AND EQUIPPING OF
PARKING FACILITIES, THE CONSTRUCTING AND EQUIPPING OF A NEW
HOSPITAL WING AND THE RENOVATION AND EQUIPPING OF THE EXISTING
HOSPITAL FACILITIES OF SAID HOSPITAL AND DEFRAYING THE COST OF
RETIRING CERTAIN INDEBTEDNESS OF SAID HOSPITAL; THE EXECUTION AND
DELIVERY OF A TRUST INDENTURE TO SECURE SAID BONDS; THE EXECUTION
AND DELIVERY OF A LOAN AGREEMENT AND SECURITY AGREEMENT BETWEEN
SAID CITY AND SAID HOSPITAL PROVIDING FOR THE REPAYMENT�OF THE
LOAN OF THE PROCEEDS OF SAID BONDS AND THE SECURING OF SAID
REPAYMENT OBLIGATION; THE SALE OF SAID BONDS; AND RELATED MATTERS.
WHEREAS, the City of Iowa City, Iowa (the "Issuer") is authorized
by Chapter 419 of the Code of Iowa (the "Act"), to issue revenue bonds
and loan the proceeds to one or more contracting parties to be used (0
to pay the cost of acquiring, constructing, improving and equipping
land, buildings and improvements suitable for use by any voluntary
nonprofit hospital or (ii) to retire any existing indebtedness of a
voluntary nonprofit hospital; and
WHEREAS, Mercy Hospital, Iowa City, Iowa, an Iowa not-for-profit
corporation (the "Hospital"), presently owns and operates.a voluntary
nonprofit hospital located within the corporate boundaries of the
Issuer; and
WHEREAS, the Issuer proposes to issue its Hospital Facility
'Revenue Bonds, Series 1982 (Mercy Hospital Project), in.the aggregate
principal amount of not to exceed $20,000,000 (the "Series 1982 Bonds")
to obtain funds to lend to the Hospital pursuant to a loan agreement
between the Issuer and the Hospital for the purpose of defraying the
cost of acquisition of land, the construction and equipping of parking
facilities, the construction and equipping of a new hospital wing and
the renovation and equipping of the existing hospital facilities of the
Hospital (the "Poject") and defraying the cost of certain indebtedness
of the Hospital (which consists of notes payable to Penn Mutual Life
Insurance Company given to evidence indebtedness incurred for
constructing a previous addition and improvements to the Hospital's
facilities) (the "Existing Debt"); and
WHEREAS, the Hospital is the contracting party to said loan
agreement within the meaning of the Act, and said loan agreement will
provide for the repayment by the Hospital of the loan of the proceeds
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of the Series 1982 Bonds in an amount sufficient to pay principal of,
premium, if any, and interest on the Series 1982 Bonds and will further
provide for the Hospital's repayment obligation to be evidenced by the
secured debt obligation of the Hospital; and
WHEREAS, the Project will'improve the general health and welfare
of the inhabitants of the Issuer; and
WHEREAS, pursuant to published notice'of intention this City
Council has conducted public hearings, as required by Section 419.9 of
the Act, and this City Council deems it necessary and advisable to
proceed with the issuance of the Series 1982 Bonds, and the loan of the
proceeds of the Series'1982 Bonds to the Hospital to allow the Hospital
to proceed with the Project and to retire the Existing Debt; and
WHEREAS, the Issuer proposes to sell the Series 1982 Bonds to John
Nuveen s Co. Incorporated (the "Underwriter"), as representatives for
themselves and other purchasers;
NOW, THEREFORE, Be It Resolved by the City Council of the City of
Iowa City, Iowa, as follows:
Section 1. That, in order to finance part of the cost of the i
Project end to retire the Existing Debt, the Series 1982 Bonds be and
the same are hereby authorized and ordered to be issued pursuant to the
Indenture of Trust to be dated as of June 1, 1982 (the "Indenture") by
and between the Issuer and a trustee for the holders of the Series 1982
Bonds to be determined (the "Trustee"), in substantially the form
attached hereto as Exhibit A and containing substantially the terms and
provisions set forth therein, and the forms, terms and provisions of
the Series 1982 Bonds and the Indenture are hereby approved, and the
Mayor and the City Clerk are hereby authorized and directed to execute,
attest, seal and deliver the Indenture, and the Mayor and the City
Clerk are further authorized and directed to execute, attest, seal and
deliver the Series 1982 Bonds (including coupons) as provided in the
Indenture, including the use of facsimile signatures as therein
provided; it is the intent hereof that the Series 1982 Bonds shall bear ?
interest at rates which result in a net interest cost of not to exceed
148 per annum in the aggregate and shall mature on the dates and in the
amounts set forth in Schedule A-1 hereto and that the'Series 1982 Bonds
maturing June 1, 2012 shall be subject to mandatory sinking fund
redemption on the dates and in the amounts set forth in Schedule A-2.
Section 2. That the final maturity dates and amounts, the total
principa amount and the interest rate or rates per annum of the Series
1982 Bonds as are finally determined shall be set by the Issuer by
appropriate amendment to this resolution.
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Section 3. That the Issuer loan the proceeds of the Series 1982
Bondstom Hospital to defray part of the cost of the Project and to
retire the Existing Debt pursuant to the Loan Agreement and Security
Agreement to be dated as of June 1, 1982 (the "Agreement"), by and
between the Issuer and the Hospital, in substantially the form attached
hereto as Exhibit B and containing substantially the terms and
Provisions set forth therein, and the form, terms and provisions of the
Agreement are hereby approved, and the Mayor and the City Clerk are
hereby authorized and directed to execute, attest, seal and deliver the
Agreement.
Section 4. That the sale of the Series 1982 Bonds at a price of
�_% o par, plus accrued interest to the date of delivery of the
Series 1982 Bonds, to the Underwriter pursuant to a Bond Purchase
Agreement (the "Bond Purchase Agreement"), by and among the •Issuer, the
Hospital and the Underwriter, in substantially the form attached hereto
as Exhibit C and containing substantially the terms and provisions set
forth
therein, s
terhereby
msand yprovis•ionsdofrthe fBond Purchase Agreementarehereby approved, and the execution and delivery of the Bond Purchase
Agreement by the Mayor are hereby authorized, ratified, approved and -
confirmed.
Section S. That the use by the Underwriter of the Preliminary
Officio tMie ent dated 1982 is herebya
Underwriter is hereby authorize' to approved, and the
Statement substantially in the form of esaid•Preliminaryuse a iOfficialnal cial
Statement but with such changes therein as are required to conform the
same to the terms of the Series 1982 Bonds, the Indenture, the
Agreement and the Bond Purchase Agreement, all in connection with the
resellin
hereby authorizedsandedirectedotosexecute to the saib'dlfinalulc, andOfficiathe lor is
Statement; provided that this authorization shall not be deemed to
include authorization and approval of information contained in the
Preliminary Official Statement and the final Official Statement except
for information and statements set forth under the captions "The
Issuer" and "Absence of Material Litigation -- The Issuer" therein, but
nothing herein shall be construed as prohibitingthe Underwriter from
including such information therein pursuant to authorization from the
Hospital.
Section 6. That it is hereby found, determined and declared that
the Series 1982 Bonds and interest and premium, if any, thereon shall
never constitute the debt or indebtedness of the Issuer within the
meaning of any constitutional or statutory provision or limitation and
shall not constitute nor give rise to a pecuniary liability of the
Issuer or.a charge against its general credit or taxing powers, but the
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Series 1982 Bonds and interest and premium, if any, thereon shall be
payable solely and only from the revenues derived from the Agreement
and the secured debt obligations of the Hospital delivered pursuant
thereto; and no part of the cost of the Project or of retiring the
Existing Debt will be payable out of the general funds or other
contributions of the Issuer (except the proceeds of the Series 1982
Bonds and any subsequent issues of bonds permitted under the Agreement
and the Indenture).
Section 7. That the Issuer hereby finds, determines and declares
that i t e amount necessary in each year to pay the principal of,
premium, if any, and interest on the Series 1982 Bonds proposed to be
issued is set forth in the Agreement and the secured debt obligations
of the Hospital delivered pursuant thereto as a formula which will
insure that the Hospital is obligated to pay amounts sufficient to pay
the principal of, premium, if any, and interest on the Series 1982
Bonds and the payment of such amounts by the Hospital to the Trustee
pursuant to the Agreement is hereby authorized, approved and confirmed;
and (ii) no land acquired by the Issuer by the exercise of condemnation
through eminent domain will be used to effectuate the purposes of the
Act in connection with the Project.
Section 8. That the•Mayor and the City Clerk are hereby
author z—%3 a—n directed to execute, attest, seal and deliver any and
all documents and do any and all things deemed necessary to effect the
issuance and sale of the Series.1982 Bonds and the execution and
delivery of the Agreement, the Indenture, the Official Statement and
the Bond Purchase. Agreement, and to carry out the intent and purposes .
of .this Resolution, including the preamble hereto; the execution by the
Mayor and, if required, the City Clerk of the Series 1982 Bonds, the
indenture, the Agreement, the Bond Purchase Agreement and the Official
Statement (to the extent authorized in Section 5 hereof) shall
constitute conclusive evidence of their approval and this City
Council's approval thereof and of any and all changes, modifications,
additions or deletions therein from the respective forms thereof now
before this meeting.
Section 9. That the provisions of this Resolution are hereby
declared to be separable and if any action, phrase or provision shall
for any reason be declared to be invalid, such declaration shall not
affect the validity of the remainder of the sections, phrases and
provisions.
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section 10. That this Resolution shall become effective
immediately upon its passage and approval.
Passed and approved June 8, , 1982.
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Following the completion of other business before the Council, the
meeting duly adjourned.
Mayor
ity cleyk
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section 10. That this Resolution shall become effective
immediately upon its passage and approval.
Passed and approved June 8, , 1982.
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Following the completion of other business before the Council, the
meeting duly adjourned.
Mayor
ity cleyk
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State of Iowa
County of Johnson SS:
City of Iowa City
I, the undersigned, do hereby certify that I am the duly
appointed, qualified and acting City Clerk of the City of Iowa City, in
the County of Johnson, State of Iowa; that as such I have in my
possession, or have access to, the complete corporate records of said
City and of its Council and officers; that I have carefully compared
the transcript hereto attached with the aforesaid corporate records;
and that said transcript hereto attached is a true, correct and
complete copy of all of the corporate records showing the action taken
by the City Council of said City at a meeting open to the public on
June 8 , 1982, authorizing the issuance of not to exceed $2.000,000
aggregate principal amount of Hospital Facility Revenue Bonds, Series
1982 '(Mercy Hospital Project) of the City.of Iowa City, Iowa and
related matters.
WITNESS my hand and the Corporate Seal of said City hereto affixed
at Iowa City, Iowa, this 8th day of June , 1982.
tyCer
(Seal)
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SCHEDULE A-1
Terms of Series 1982 Bonds
Serial Series 1982 Bonds
` I Maturing June 1
Principal Amount
S Term Series 1982 Bonds due June 1, 2012 '
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SCHEDULE A-2
Series 1982 Bonds maturing June 1, 2012 subject to mandatory
sinking fund redemption on June 1 of the years -and in the principal t
amounts set forth below:
� 1
Year Principal Amount
1994 8 I
1995 i
1996 1
1997
1998 .
1999 X
2000
2001
2002 }
2003 S
2004 _
2005
2006
2007
2008
2009
2010
2011
2012*
* Final Maturity I
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City of Iowa City
MEMORANDUM
DATE: June 4, 1982
TO: City Council
FROM: Ci N Nnager
J
RE: Mercy Hospital Industrial Revenue Bonds
I waited until 2:00 P.P1. on Friday before dictating this memorandum.
The intention was to provide the City Council with a staff review of
the 1,1ercy Hospital bond proposal. The City had been assured that all
information would be received in a timely manner. However, as of this
time, we still have not received any written communication from Mercy
Hospital concerning the use of the proceeds and particularly the $3 million
in question. If the information is received before the packet is sent to
you, it will be included in the packet and I will review their submission
over the weekend.
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City of Iowa City
MEMORANDUM
DATE: June 4, 1982
TO: City Council
FROM: Ci N Nnager
J
RE: Mercy Hospital Industrial Revenue Bonds
I waited until 2:00 P.P1. on Friday before dictating this memorandum.
The intention was to provide the City Council with a staff review of
the 1,1ercy Hospital bond proposal. The City had been assured that all
information would be received in a timely manner. However, as of this
time, we still have not received any written communication from Mercy
Hospital concerning the use of the proceeds and particularly the $3 million
in question. If the information is received before the packet is sent to
you, it will be included in the packet and I will review their submission
over the weekend.
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IF,
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TRUST INDENTURE
Dated as of June 1, 1982
BETWEEN
THE CITY OF IOWA CITY, IOWA
AND
As Trustee
�1
Hospital Facility Revenue Bonds, Series 1982
(Mercy Hospital Project)
This instrument prepared by:
BELIN, HARRIS, HELMICK & HEARTNEY
2000 Financial Center
Des Moines, Iowa.50309
Telephone: (515) 243-7100
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TRUST INDENTURE
TABLE OF CONTENTS
Parties ....................................................
Recitals ...................................................
Granting Clauses ...........................................
ARTICLE I
Definitions and Exhibits
101. Terms Defined ....................................
102. Rules of Interpretation ..........................
ARTICLE II
The Bonds
201. Authorized Amount of Series 1982 Bonds ...........
202. Issuance of Bonds ................................
203. Execution; Limited obligation ....................
204. Authentication ...................................
205. Form of Bonds ....................................
206. Delivery of Series 1982 Bonds ....................
207. Issuance of Additional Bonds and Parity Obligations
208. Mutilated, Lost, Stolen or Destroyed Bonds or
Coupons ••
209. Registration of Bonds; Persons Treated as Owners .
ARTICLE III
Application of Series 1982 Bond Proceeds;
Construction Fund
301. Deposit of Funds ................................
d302. Construction Fun ................................
ARTICLE IV
Revenues and Funds
401. Source of Payment of Bonds .......................
402. Creation of Funds ................................
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403.
404.
405.
501.
502.
503.
504.
505.
506.
507.
601.
602.
603.
604.
605.
606.
607.
608.
609.
701.
702.
703.
704.
705.
706.
707.
708.
709.
710.
711.
1
Application of Monies; Deposit of Assigned
Revenues
Investment of Funds
Trust Funds ......................................
ARTICLE V
Redemption of Bonds Before Maturity
Extraordinary Redemption of Bonds ................
Notice of Redemption
Cancellation... ....
Partial Redemption of Fully Registered Bonds ..
Purchase of Bonds ...........
Unpaid Coupons ... .... `
Non -presentment of Bonds or Coupons ..............
ARTICLE VI
General Covenants
Payment of Principal and Interest ................
Performance of Covenants .......
Ownership; Instruments of Further. Assurance ..••..
Recordation of Security Instruments
Inspection of Books
List of Bondholders ....
Rights Under the Agreement ......................
Designation of Additional Paying Agents
Bonds to Remain Tax Exempt .......................
ARTICLE VII
Remedies
Events of Default ..............
Acceleration
Remedies; Rights of Holders of Bonds and Parity
Obligations ....................................
Right of Holders of the Bonds and Parity
Obligations to Direct Proceedings ..............
Application of Monies .......
Remedies Vested in Trustee.......................
...................
Rights and Remedies of Holders of Bonds and
Parity Obligations .........
Termination of Proceedings
Waivers of Events of Default ..
Cooperation of Issuer .. ...................
Notice of Defaults; Opportunity of Issuer and
Hospital to Cure Defaults ......................
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ARTICLE VIII
The Trustee
801. Acceptance of the Trusts .........................
802. Fees, Charges and Expenses of Trustee and
Paying Agent ...................................
803. Notice to Bondholders if Default Occurs ..........
804. Intervention by Trustee ..........................
805. Successor Trustee .........................
806. Resignation by the Trustee .......................
807. Removal of the Trustee ...........................
808. Appointment of Successor Trustee by the
Holders of Bonds and Parity Obligations;
Temporary Trustee
809. Concerning any Successor Trustees
810. Trustee Protected in Relying Upon. Resolution. Etc,
811. Successor Trustee as Trustee of Funds and
Bond Registrar ...
812. Trust Estate may be Vested in Separate or i
Co -Trustee
..
813. Adoption of Certain Provisionsof the Trust
Indenture Act of 1939 ..........................
814. Trustee and Issuer Required to Accept Directions
" and Action of Hospital ......................... y
ARTICLE IX
Supplemental Indentures
901. Supplemental Indentures Not Requiring Consent
of Holders of Bonds and Parity obligations .....
902. Supplemental Indentures Requiring Consent of
Holders of Bonds and Parity Obligations ........
ARTICLE X
Amendments to the Agreement
i
1001. Amendments, etc., to Agreement Not Requiring
Consent of Holders of Bonds and Parity
Obligations • ...... '
1002. Amendments, etc., to Agreement Requiring Consent
of Holders of Bonds and Parity Obligations .....
1003. No 'Amendment May Alter Notes
1004. Release of Land and Equipment ....................
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ARTICLE XI
Discharge of Lien
ARTICLE XII
Miscellaneous
1201. Consents of Holders of Bonds and Parity
Obligations ..............................
1202. Limitation of Rights .............................
1203. Severability......................
1204. Addresses for Notice and Demands .................
1205. Trustee as Registrar and Paying Agent; Appointment
of Co -Paying Agent .............................
1206. Counterparts .....................................
1207. Applicable Law .................................
1208. immunity of Officers and Members .................
1209. Holidays ...................................
Signatures....... . .......................
Exhibit A - LegalDescription ofRealEstate ..............
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TRUST INDENTURE
THIS TRUST INDENTURE (the "indenture") dated as of June 1, 1982,
by and between THE CITY OF IOWA CITY, IOWA, a municipality duly created
and existing under the laws of the State of Iowa (the "Issuer"), party
of the first part, and—Eh—•'a
banking duly organized and existing under e laws of the
, and its successors and assigns, with its
principal office in , as Trustee (the
"Trustee"), party of the second part:
W I T N E S S E T H:
WHEREAS, the Issuer is authorized and empowered by the provisions
of Chapter 419 of the Code of Iowa, 1981, as amended (the "Act"), to
issue revenue bonds and to loan the.proceeds of such revenue bonds
pursuant to a loan agreement to one or more contracting parties, as
defined in the Act, to be used (i) to pay the cost of acquiring, by
construction or purchase, land, buildings, improvements and equipment,
or any interest therein, suitable for use of any voluntary nonprofit
hospital and (ii) to retire any existing indebtedness of a voluntary
nonprofit hospital; and
�• WHEREAS, Mercy Hospital, Iowa City, Iowa (the "Hospital") is a
voluntary not-for-profit hospital within the meaning of the Act, which
presently owns and operates a hospital facility (the "Existing
Facility") located within the corporate boundaries of the Issuer which
is in need of additions and improvements and in order to improve the
hospital and health care services for the inhabitants of the Issuer and
to lower the expense.thereof, the Hospital proposes to acquire certain
land and to construct certain additions and improvements to and parking
facilities for the Existing Facility (the "Project") and to refund
certain existing indebtedness (the "Existing Debt") of the Hospital, as
more fully described herein; and
WHEREAS, the Issuer intends to issue its Hospital Facility Revenue
Bonds, Series 1982 (Mercy Hospital Project) in the aggregate principal
amount of $ (the "Series 1982 Bonds") pursuant.to this
Indenture in order to obtain funds to loan to the Hospital pursuant to
the Loan Agreement and Security Agreement dated as of June 1, 1982
(the "Agreement") between the Issuer and the Hospital for the purpose
of defraying the cost of the Project and to refund the Existing Debt in
order to promote the general health and welfare of the residents of the
Issuer; and
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WHEREAS, the Hospital is the contracting party to the Agreement
within the meaning of the Act, and the Agreement provides for the
repayment by the Hospital of the loan of the proceeds of the Series
1982 Bonds and further provides (i) for the Hospital's repayment
obligations to be evidenced by the Hospital's Promissory Note, Series
1982 (the "Series 1982 Note") in substantially the form attached to the
Agreement as Exhibit B and (ii) for such loan and the Series 1982 Note
to be secured by the security interest provided for in the Agreement;
and
WHEREAS, pursuant to this Indenture, the Issuer will pledge and
assign the Series 1982 Note and assign certain of its rights under the
Agreement as security for the Series 1982 Bonds and any Additional
Bonds issued hereunder which are payable solely and only out Zf the
payments to be made on the Series 1982 Note and any other Notes issued
under the Agreement; and
WHEREAS, the execution and delivery of this Indenture and the
issuance of Series 1982 Bonds hereunder have been in all respects duly
and validly authorized by a resolution duly passed and approved by the
governing body of the Issuer; and
NOW, THEREFORE, THIS INDENTURE WITNESSETH: That in order to
secure the payment of the principal of and interest and premium, if
any, on the Bonds to be issued under this Indenture -according to their
tenor, purport and effect, and in order to secure the performance and
observance of all the covenants and conditions contained herein and in
the Bonds, and in order to declare the terms and conditions upon which
the Bonds and the coupons for interest appertaining thereto are issued,
authenticated, delivered, secured and accepted by all persons who shall
from time to time be or become holders thereof, and for and in
consideration of the mutual covenants hereby contained, of the
acceptance by the Trustee of the trust hereby created, and of the
purchase and acceptance of the Bonds by the holders or obligees
thereof, the Issuer has executed and delivered this Indenture, and by
these presents does hereby convey, grant, assign, pledge and grant a
security interest in and unto the Trustee, its successor or successors
and its or their assigns forever, all and singular, the property, real
and personal, hereinafter described:
GRANTING CLAUSES
DIVISION I
The Series 1982 Note, which has been endorsed by the Issuer to the
order of the Trustee, and any Additional Notes, and all sums payable in
respect of the indebtedness evidenced thereby;
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DIVISION II
The Agreement (except Unassigned Rights) and the Pledged Property
referred to therein;
DIVISION III
Any and all other property of every kind and nature from time to
time hereafter; by delivery or by writing of any kind, pledged,
assigned or transferred as and for additional security hereunder by the
Issuer or by anyone in its behalf to the Trustee, which is hereby
authorized to receive the same at any time as additional security
hereunder;
SUBJECT, HOWEVER, to Permitted Encumbrances;
TO HAVE AND TO HOLD the same unto the Trustee, and its successor
or successors and its or their assigns, forever;
IN TRUST, NEVERTHELESS, upon the terms and trusts herein set
forth, to secure the payment of the Bonds to be issued hereunder and
any Parity Obligations, and premium, if any, payable upon redemption or
prepayment thereof,, and the interest payable thereon, and to secure
also the observance and performance of all the terms, provisions,
covenants and conditions of this Indenture, and for the equal and
ratable benefit and security of all and singular the holders of all
Bonds and coupons issued hereunder and any Parity Obligations, without
preference, priority or distinction as to lien or otherwise, except as
otherwise hereinafter provided, of any one Bond, Parity Obligation, or
coupon over any other Bond, Parity Obligation, or coupon or as between
principal and interest.
It is hereby mutually covenanted and agreed that the terms and
conditions upon which the Bonds, Parity Obligations, and coupons are to
be issued, authenticated, delivered, secured and accepted by all
persons who shall from time to time be or become the holders thereof,
and the trusts and conditions upon which the Pledged Property and any
monies and revenues and other collateral received by the Trustee
hereunder are to be held and disbursed, are as follows:
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ARTICLE I
Definitions and Exhibits
Section 101. Terms Defined. In addition to the words and terms
elsew ere de ined in this Indenture or in the Agreement, the following
words and terms as used in this Indenture shall have the following
meanings unless the context or use indicates another or different
meaning or intent:
"Agreement" means the Loan Agreement and Security Agreement dated
as of June 1, 1982 between the Hospital and the Issuer and all
amendments and supplements thereto.
"Construction Period" shall mean the period of time from the date
of issuance of the Series 1982 Bonds to the date of receipt by the
Trustee of the completion certificate of the Independent Architect
referred to in Section 302(b) hereof.
"Coupon" means any of the coupons issued hereunder evidencing the
semiannual installments of interest on the applicable Bond or Bonds.
The term "event of default" means those events of default
specified in and defined by Section 701 hereof.
"Person" means natural persons, firms, associations, corporations
and public bodies.
"Trustee" means , the
party of the second part ere to, an any successor trustee or
co -trustee.
Section 102. Rules of Interpretation.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(a) "This Indenture" means this instrument as originally
executed and as it may from time to time be supplemented or amended
pursuant to the applicable provisions hereof.
(b) All references in this instrument to designated
"Articles", "Sections" and other subdivisions are to the designated
Articles, Sections and other subdivisions of this instrument as
originally executed. The words "herein", "hereof" and "hereunder" and
other words of similar import refer to this Indenture as a whole and
not to any particular Article, Section or other subdivision.
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(c) The terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the
singular.
(d) All accounting terms not otherwise defined herein have
the meanings assigned to them in accordance with generally accepted
accounting principles.
(e) Any terms not defined herein but defined in the
Agreement shall have the same meaning herein.
(f) The terms defined elsewhere in this Indenture shall have
the meanings therein prescribed for them.
(g) This Indenture shall be interpreted and construed in
accordance with the laws of the State of Iowa.
ARTICLE II
The Bonds
Section 201. Authorized Amount of Series 1982 Bonds. No Bonds
may be issue under the provisions of this In enture except in
accordance with this Article. The total principal amount of Series
1982 Bonds that may be issued is hereby expressly limited to $
(other than Bonds issued pursuant to Section 208 hereof). Additional
Bonds may be issued as provided in Section 207 hereof.
Section 202. Issuance of Bonds. The Series 1982 Bonds shall be
designated "Hospital Facility Revenue Bonds, Series 1982 (Mercy
Hospital Project)". They shall bear interest from their respective
dates and shall be issuable as coupon Bonds in the denomination of
$5,000 and as fully registered Bonds without coupons in the
denomination of $5,000 or any multiple thereof. The Series 1982 Bonds
shall be lettered and numbered as follows: The coupon Series 1982
Bonds shall be numbered from 1 upward and'the fully registered Series
1982 Bonds shall be lettered and numbered R-1 and upward.
The coupon Series. 1982 Bonds shall be dated June 1, 1982. Each
fully registered Series 1982 Bond shall be dated as of the interest
payment date to which interest has been paid as of the date on which it
is authenticated or if it is authenticated prior to the first date on
which interest is to be paid, it shall be dated June 1, 1982. Interest
on the Series 1982 Bonds shall be payable on June 1 and December 1 of
each year commencing December 1, 1982.
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The Series 1982 Bonds shall bear interest at the respective rates
set forth in and shall mature on June 1 of each of the years set forth
in and in the principal amount set opposite each year in the following
schedule:
Maturity Date Principal Amount Interest Rate
The principal of, premium, if any, and interest on the -Bonds shall
be payable in any coin or currency of the United States of America
which, at the respective dates of payment thereof, is legal tender for
the payment of public and private debts. Such principal, premium, if
any, and interest on Bonds of all series shall be payable at the
principal office of the Trustee, or of any alternate paying agent named
in any such Bonds or subsequently appointed. Payment of the interest
on the coupon Bonds of any such series shall be made only upon
presentation and surrender of the coupons representing such interest as
the same respectively falls due. Payment of the interest on any fully
registered Bond of any such series on any interest payment date shall
be made to the person appearing on the Bond registration books of the
Issuer as the registered owner thereof and shall be paid by check or
draft mailed to the registered owner at his address as it appears on
such registration books or at such other address as is furnished the
Trustee in writing by such holder.
Section 203. Execution; Limited Dbli tion. The Bonds shall be
execute on a alf o t e Issuer wit t e o ictal manual or facsimile
signature of its Mayor and attested with the official manual or
facsimile signature of its City Clerk and shall have impressed or
Printed thereon the corporate seal of the Issuer. The coupons attached
to the Bonds, if any, shall be executed by the facsimile signature of
the City Clerk of the Issuer and such facsimile signature shall have
the same force and effect as if such officer had manually signed each
of said coupons. In case any officer whose signature or the facsimile
of whose signature shall appear on the Bonds or coupons shall cease to
be such officer before the delivery of such Bonds, such signature or
such facsimile signature shall nevertheless be valid and sufficient for
all purposes, the same as if he had remained in office until delivery.
The Bonds, together with interest thereon, shall be limited obligations
of the Issuer payable solely from the payments to be made on the Notes
or otherwise pursuant to the Agreement (except to the extent paid out
of monies attributable to the Bond proceeds or the income from the
temporary investment thereof and under certain circumstances, proceeds
from insurance and condemnation awards) and shall be a valid claim of
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Trustee pand lthe hpayments htoebe made onathe tNotes themandyunder dthe the
Agreement which are hereby pledged and assigned for the equal and
ratable payment of the Bonds and shall be used for no other purpose
than to pay the principal of, premium, if any, and interest on the
Bonds, except as may be otherwise expressly authorized in this
Indenture. The Bonds and any interest coupons donow and shall
never constitute a charge against the general crednot
it or taxing powers
of the Issuer.
Section 204. , Authentication. No Bond and no coupon appertaining
to any Bo— n— dl be valid or obligatory for any purpose or entitled to
any security or benefit under this Indenture unless and until a
certificate of authentication on such Bond substantially in the form
herein set forth shall have been duly executed by the Trustee, and such
executed certificate of the Trustee upon any such Bond shall be
conclusive evidence that such Bond has been authenticated and -delivered
under this Indenture. The Trustee's certificate of authentication on
any Bond shall be deemed to have been executed by it if signed by an
authorized officer of the Trustee, but it shall not be necessary that
the same Officer sign the certificate of authentication on all of the
Bonds issued hereunder. Before authenticating or delivering any coupon
Bonds, the Trustee shall detach and cancel all matured coupons, if any,
appertaining thereto, and such cancelled coupons shall be cremated or
otherwise destroyed by the Trustee. The Trustee shall provide the I
Issuer and the Hospital a certificate certifying such cremation or
other destruction.
Section 205. Form of Bonds. The Series 1982 Bonds, in coupon and
fully rey>stered form, thea interest coupons to be attached to the
coupon Series 2Bonds the
Trustee's
cate of
authentication ltobeendorsedthereonshall cbetinlsubstantially the
following respective forms, and any Additional Bonds, coupons and
Trustee's certificate of authentication are also to be in substantially 1
the following forms (except as to redemption, sinking fund and other
provisions peculiar to such Additional Bonds), with necessary and
appropriate variations, omissions and insertions as permitted or
required by this Indenture, to wit:
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(Form of Series 1982 Coupon Bond)
UNITED STATES OF AMERICA
STATE OF IOWA
COUNTY OF JOHNSON
CITY OF IOWA CITY
HOSPITAL FACILITY REVENUE BONDS, SERIES 1982
(MERCY HOSPITAL PROJECT)
No. $5,000
The City of Iowa City, Iowa (the "Issuer"), a municipal
corporation of the State of Iowa, for value received, hereby promises
to pay in lawful money of the United States of America to the bearer,
on June 1, , unless this Bond shall be redeemable and shall
have previo—been called for redemption and payment of the
redemption price made or provided for, but solely from the payments
hereinafter referred to pledged and assigned for the payment hereof
pursuant to the Indenture hereinafter defined and not otherwise, upon
surrender hereof, the principal sum of Five Thousand Dollars ($5,000),
and to pay interest on such principal amount in like money, but solely
from said payments, from the date hereof at the rate of
per cent (_%) per annum, payable initially on December 1, 1982, and
thereafter on each subsequent June 1 and December 1 until payment of
such principal amount, or provision therefor, shall have been made upon
redemption or at maturity, but with respect to interest accrued at or
prior to maturity, only upon presentation and surrender of the coupons
for interest hereunto appertaining as they severally mature. The
principal of and interest on this Bond and the premium, if any, payable
upon redemption, are payable at the office of the Trustee hereinafter
defined, or at the principal office of any successor or additional
paying agent appointed under the Indenture hereinafter defined.
This Bond is one of a series of bonds (the "Series 1982 Bonds")
being issued under the hereinafter defined Indenture. The Series 1982
Bonds are being issued in the aggregate principal amount of $
for the purpose of providing funds to finance a portion of thee co—
acquiring land, constructing and equipping parking facilities,
constructing and equipping a new hospital wing, and renovating and
equipping an existing hospital facility located within the Issuer (the
"Project") to be owned by Mercy Hospital, Iowa City, Iowa, an Iowa
not-for-profit corporation (the "Hospital") to refund certain existing
indebtedness of the Hospital and to pay the costs of issuance of the
Series 1982 Bonds, capitalized interest during the construction of the
Project and partially funding the Debt Service Reserve Fund created in
the Indenture: To accomplish such purposes, the Issuer made a loan of
the proceeds of the Series 1982 Bonds to the Hospital pursuant to a
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Loan Agreement and Security Agreement dated as of June 1, 1982 (the
"Agreement") between the Hospital and the Issuer, which creates a
security interest in the Pledged Property (as therein defined). The
Hospital's obligation to repay the loan of the proceeds of the Series
1982 Bonds is evidenced by its Promissory Note, Series 1982, in the
principal sum of $ (the "SeAes 1982 Note") issued by the
Hospital under the Agreement.
The Series 1982 Bonds are all issued under and are equally and
ratably secured and entitled to the security of a Trust Indenture dated
as of June 1, 1982 (the "Indenture") duly executed and delivered by the
Issuer to , as Trustee (the
term "Trustee" where used herein referring to said Trustee or its
successors), pursuant to which Indenture the rights of the Issuer under
the Series 1982 Note and the Agreement are pledged and assigned by the
Issuer to the Trustee as security for the Series 1982 Bonds. The
Indenture provides that the Issuer may hereafter issue Additional Bonds
(as defined in the indenture) and the Hospital may issue Parity
Obligations (as defined in the Indenture) from time to time under
certain terms and conditions contained therein, and if issued, such
Additional Bonds and Parity Obligations will rank on a parity with the
Series 1982 Bonds (the Series 1982 Bonds and such Additional Bonds
being hereinafter referred to as the "Bonds"). Reference is made to
the Indenture and to the Agreement for a description of the nature and
extent of the security, the rights, duties and obligations of the
Issuer, the Hospital and the Trustee, the rights of the holders of the
Bonds and Parity Obligations, the issuance of Additional Bonds and
Parity Obligations and' the terms on which the Additional Bonds and
Parity Obligations are or may be issued and secured, and to all the
provisions of which the holder hereof by the acceptance of this Bond
assents.
This Bond and appurtenant coupons shall pass by delivery and
interest accruing on this Bond will be paid only on presentation and
surrender of the attached interest coupons as they respectively become
due. The Issuer, the Trustee and any agent.of the Issuer may treat the
bearer of this Bond and the bearer of any coupon appertaining hereto as
the absolute owner hereof and thereof for the purpose of receiving
payment and for all other purposes, whether or not this. Bond or such
coupon be overdue, and neither the issuer, the Trustee nor any agent of
the Issuer shall be affected by any notice to the contrary.
The Bonds are issuable as coupon bonds in the denomination of
$5,000 and as registered Bonds without coupons in denominations of
$5,000 and any integral multiple thereof. Subject to the limitations
and upon payment of the charges provided in the Indenture, registered
Bonds without coupons may be exchanged for a like aggregate principal
amount of coupon Bonds of the same series and the same maturity,
bearing all unmatured coupons (and any matured coupons in default) or
for a like aggregate principal amount of registered Bonds without
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coupons of the same series and the same maturity of other authorized
denominations, and coupon Bonds bearing all unmatured coupons (and any
matured coupons in default) may be exchanged for a like aggregate
principal amount of registered Bonds without coupons of the same series
and the same maturity of authorized denominations.
The Bonds may be redeemed in the event of damage to or destruction
of the Hospital Facilities (as defined in the Agreement) or any part
thereof or condemnation of the Hospital Facilities or any part thereof
all to the extent provided in the Indenture. When called for
redemption as a result of any such event, the Bonds shall be subject to
redemption, in whole or in part at a redemption price of 1008 of the
principal amount of the Series 1982 Bonds being redeemed plus accrued
interest to the redemption date but without premium.
The Bonds may also be redeemed upon the happening of certain other
events with respect to legislative, judicial or administrative action
requiring the operation of the Hospital Facility in a manner contrary
to the principles and beliefs of the Roman Catholic Church including
Ethical and Religious Directives for Catholic Health Facilities or
similar guidelines promulgated by the National Council of Catholic
Bishops, Washington, D.C. or upon the happening of certain events with
respect to governmental, judicial or administrative action requiring
the disclosure of any records or other information which the Hospital
deems to be private, privileged or confidential. In the event that the
Hospital is ordered or, in the opinion of Independent Counsel (as
defined in the Agreement), is required, by such legislative, -judicial
or administrative action to so operate the Hospital Facility, such
Bonds shall be subject to redemption by the Issuer (at the direction of
the Hospital) on any date, in whole but not in part, at a redemption
price of 1008 of the principal amount thereof plus accrued interest to
the redemption date, without premium. In the event that the Hospital
determines in good faith that there exists a substantial possibility
that the Hospital will be required by such legislative, judicial'or
administrative action to so operate the Hospital Facility, the Bonds
shall be subject to redemption on any date, in whole but not in part,
at a redemption price equal to the lesser of 8 of the principal
amount thereof or the then applicable redemption price or prices for
the optional redemption of such Bonds, plus accrued interest to the
redemption date. In the event that the Hospital is required, as a
result of its being a party to the Agreement, to disclose to any court
or governmental unit or agency any records or other information which
the Hospital deems to be private, privileged or confidential, such
Bonds shall be subject to redemption by the Issuer (at the direction of
the Hospital) on any date, in whole but not in part, at a redemption
price of 1008 of the principal amount thereof plus accrued interest to
the redemption date, without premium.
The Series 1982 Bonds maturing on or after June 1, 1993 are also
subject to redemption prior to maturity at the option of the Issuer (at
the direction of the Hospital) out of amounts prepaid by the Hospital
on the Series 1982 Note and deposited in .the Bond Redemption Fund
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established under the Indenture, from time to time in whole, at any
time, or in part, on any interest payment date (and if in part, in the
inverse order of maturity, and within any maturity, by lot in such
manner as may be designated by the Trustee), at the redemption prices
(expressed as percentages of the principal amount of Bonds being
redeemed) set forth in the table below plus accrued interest to the
redemption date:
Redemption
Redemption Dates Price
on
or after
June
1,
1992
but
prior
to
June
1,
1993
1028
on
or after
June
1,
1993
but
prior
to
June
1,
1994
101.58
On
or after
June
1,
1994
but
prior
to
June
1,
1995
1018
On
or after
June
1,
1995
but
prior
to
June
1,
1996
100.58
On
June 1,
1996
and
thereafter
1008
In addition, all of the Series 1982 Bonds are subject to
redemption prior to maturity at the option of the Issuer (at the
direction of the Hospital) out of amounts prepaid by the Hospital from
nonborrowed funds on the Series 1982 Note and deposited in the Bond
Redemption Fund established under the Indenture, from time to time in
whole, at any time, or in part, on any interest payment date (and if in
part, in the inverse order of maturity, and within any maturity, by lot
in such manner as may be designated by the Trustee) at a redemption
price of 1008 of the principal amount redeemed plus accrued interest to
the redemption date.
In addition, the Series 1982 Bonds maturing on June 1, 2012, are
subject to mandatory redemption prior to maturity in part, by lot in
such manner as may be designated by the Trustee, at the principal
amount thereof plus acrued interest to the redemption date, without
premium, from monies required to be on deposit in the Principal Account
of the Bond Fund established under the Indenture, in the amounts and on
the dates as follows:
Mandatory Redemption Dates
Principal Amounts
In the event any of the Bonds are called for redemption as
aforesaid, notice thereof identifying the Bonds to be redeemed will be
given by publication at least twice in a newspaper or financial journal
of general circulation in the City of Des Moines, Iowa, or the City of
New York, New York, customarily published each business day, the first
of which shall be published not less than thirty (30) days nor more
than sixty (60) days prior to the redemption date, and in the case of
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the redemption of Bonds at the time registered, upon mailing a copy of
the redemption notice by registered or certified mail not less than
thirty (30) days nor more than sixty (60) days prior to the date fixed
for redemption to the registered owner of the Bond to be redeemed at
the address shown on the registration books; provided, however, that
failure to give such notice by mailing, or any defect therein, shall
not affect the validity of any proceeding for the redemption of Bonds.
If all of the Bonds to be redeemed are at that time registered, notice
by mailing given by registered or certified mail to the registered
owner or owners thereof, at their addresses shown on the registration
books, not less than thirty (30) days nor more than (60) days prior to
the date fixed for redemption shall be sufficient and published notice
of the call for redemption need not be given. All Bonds so called for
redemption will cease to bear interest on the specified redemption
date, provided funds for their redemption are on deposit at the place
of payment at that time, and shall no longer be protected by the
Indenture and shall not be deemed to be outstanding under the
provisions of the Indenture. If, because of the temporary or permanent
suspension of the publication or general circulation of any such
newspaper or financial journal, or for any other reason, it is
impossible or impractical to publish such notice of call for redemption
in the manner herein provided, then such publication in lieu thereof as
shall be made with the approval of the Trustee shall constitute a
sufficient publication of notice.
THE BONDS, AND THE INTEREST PAYABLE THEREON, DO NOT REPRESENT OR
CONSTITUTE AN INDEBTEDNESS OF THE ISSUER WITHIN THE MEANING OF THE
PROVISIONS OF THE CONSTITUTION OR STATUTES OF THE STATE OF IOWA OR A
PLEDGE OF THE FAITH AND CREDIT OF THE ISSUER. THE BONDS AND THE
INTEREST PAYABLE THEREON DO NOT GIVE RISE TO A PECUNIARY LIABILITY OF
THE ISSUER OR A CHARGE AGAINST ITS GENERAL CREDIT OR TAXING POWERS.
THIS BOND IS A SPECIAL AND LIMITED OBLIGATION OF THE ISSUER AND IS
PAYABLE SOLELY AND ONLY FROM THE PAYMENTS TO BE MADE ON THE SERIES 1982
NOTE AND OTHERWISE UNDER THE AGREEMENT WHICH SERIES 1982 NOTE AND
AGREEMENT ARE PLEDGED AND ASSIGNED FOR THE PAYMENT HEREOF IN ACCORDANCE
WITH THE INDENTURE.
Payments sufficient for the prompt payment when due of the
Principal of, premium, if any, and interest on the Series 1982 Bonds
are to be paid to the Trustee for the account of the Issuer and
deposited in special accounts created by the Indenture and duly pledged
and assigned for that purpose, and in addition the rights of the Issuer
under the Agreement and the Series 1982 Note have been assigned to the
Trustee under the Indenture to secure payment of such principal,
premium, if any, and interest.
The holder of this Bond shall have no right to enforce the
provisions of the Indenture or to institute action to enforce the
covenants therein, or to take any action with respect to any event of
default under the Indenture, or to institute, appear in or defend any
suit or other proceedings with respect thereto, except as provided in
the Indenture. In certain events, on the conditions, in the manner and
with the effect set forth in the Indenture, the principal of all the
Bonds issued under the Indenture and then outstanding may become or may
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be declared due and payable before the stated maturity thereof,
together with interest accrued thereon. Modifications or alterations
of the Indenture, or of any supplements thereto may be made only to the
extent and in the circumstances permitted by the Indenture.
It is hereby certified that all conditions, acts and things
required to exist, happen and be performed under the laws of the State
of Iowa, and under the Indenture precedent to and in the issuance of
this Bond, exist, have happened and have been performed, and that the
issuance, authentication and delivery of this Bond have been duly
authorized-by'a resolution of the Issuer duly adopted by its governing
body.
This Bond and the coupons appertaining hereto shall not be valid
or become obligatory for any purpose or be entitled to any security or
benefit under the Indenture until the certificate of authentication
hereon shall have been duly executed by the Trustee.
IN WITNESS WHEREOF, THE CITY OF IOWA CITY, IOWA, has caused this
Bond to be executed in its name and on its behalf by the facsimile
signature of its Mayor and its corporate seal to be affixed hereon and
attested to by the facsimile signature of its City Clerk, and coupons
for interest bearing the facsimile signature of its City Clerk to be
hereto attached, all as of the 1st day of dune, 1982.
Attest:
(facsimile signature)
L'i"ty CICT
(Seal)
THE CITY OF IOWA CITY, IOWA
By_ (facsimile signature)
Mayor
(Form of Trustee's Certificate of Authentication)
This Bond is one of the Bonds described in the within -mentioned
Indenture.
As Trustee
By
Au
orize Officer
i
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OFILMED BY
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(PROVISION FOR REGISTRATION)
This Bond may be registered as to principal alone on books of the
Issuer, kept by the Trustee under the within -mentioned Indenture, as
Bond Registrar, upon presentation hereof to the Bond Registrar, which
shall make notation of such registration in the registration blank
below, and this Bond may thereafter be transferred only upon an
assignment duly executed by the registered owner or his attorney or
legal representative in such form as shall be satisfactory to the Bond
Registrar, such transfer to be made on such books and endorsed hereon
by the Bond Registrar. The principal of this Bond, if registered and
unless registered to bearer, shall be payable only to or upon the order
of the registered owner or his legal representative. Such registration
of this Bond as to principal will not affect the transferability by
delivery only of the coupons hereto attached.
Date of Name of Signature of
Registration Registered Owner Bond Registrar
(Form of Interest Coupon)
No. $
On , , unless the Bond hereinafter mentioned
shall have been duly called dor previous redemption and payment of the
redemption price made or provided for, THE CITY OF IOWA CITY, IOWA,
will pay to the bearer, but only out of the payments referred to in the
Bond hereinafter mentioned upon surrender hereof at the office of
in , Iowa, or it successor or any
duly appointed additional paying agent, the amount shown herein,•in
lawful money of the United States of America, being interest then due
on its Hospital Facility Revenue Bond, Series 1982 (Mercy Hospital
Project), dated June 1, 1982, No.
THE CITY OF IOWA CITY, IOWA
By (facsimile signature)
.. City Clerk
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The form of the fully registered Series 1982 Bond shall be
identical with the form of coupon Series 1982 Bond except that the
form of interest coupons and Provision for Registration on the form of
coupon Series 1982 Bond should be omitted, the Form of Assignment
hereinafter set out should be added, and there should be substituted in
the form of the fully registered Series 1982 Bond in lieu of the
heading and corresponding paragraphs of the coupon Series 1982 Bond the
following heading and paragraphs:
[to be substituted for heading and first paragraph
of Coupon Series 1982 Bond form]
(Form of Fully Registered Series 1982 Bond)
UNITED STATES OF AMERICA
STATE OF IOWA
COUNTY OF JOHNSON
CITY OF IOWA CITY
HOSPITAL FACILITY REVENUE BOND, SERIES 1982
(MERCY HOSPITAL PROJECT)
No. R-
E
THE CITY OF IOWA CITY, IOWA, (the "Issuer"), a municipal
corporation of the State of Iowa, for value received, hereby promises
to pay in lawful money of the United States of America to
or registered assigns, on 1, , unless
this Bond shall be redeemable and shall have previously been called for
redemption and payment of the redemption price made or provided for,
but solely from the payments hereinafter referred to pledged and
assigned for the payment hereof pursuant to the Indenture hereinafter
defined and not otherwise, upon surrender hereof, the principal sum of
Dollars ($ ), and to pay interest on such principal
amount in like money, but solely from said payments, from the date
hereof at the rate of per cent ( 8) per annum, payable on
each 1 and 1 occurring after the date hereof,
until payment of such principal amount, or provision therefor, shall
have been made upon redemption or at maturity. The principal of and
interest on this Bond and the premium, if any, payable upon redemption,
are payable at the office of the Trustee hereinafter defined, or at the
principal office of any successor or additional paying agent appointed
under the Indenture hereinafter defined.
[to be substituted for fourth paragraph of Coupon
Series 1982 Bond Form]
This Bond is transferable by the registered holder hereof in
person or by his attorney duly authorized in writing at the principal
office of the Trustee in , but only in the manner, subject to
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No
the limitations and upon payment of the charges provided in the
Indenture and upon surrender and cancellation of this Bond. Upon such
transfer a new registered Bond or Bonds without coupons of the same
series and the same maturity, of an authorized denomination or
denominations, for the same aggregate principal amount will be issued
to the transferee in exchange therefor. The Issuer and the Trustee
may deem and treat the registered holder hereof as the absolute owner
hereof for the purpose of receiving payment of or on account of
principal hereof and premium, if any, hereon and interest due hereon
and for all other purposes and neither the issuer nor the Trustee nor
any paying agent shall be affected by any notice to the contrary.
(to be substitued for last two paragraphs of Coupon
Series 1982 Bond Form)
This Bond shall not be valid or become obligatory for any purpose
or be entitled to any security or benefit under the Indenture until the
certificate of authentication hereon shall have been duly executed by
the Trustee.
IN WITNESS WHEREOF, THE CITY OF IOWA CITY, IOWA, has caused this
Bond to be executed in its name and on its behalf by the facsimile
signature of its Mayor and its corporate seal to be affixed hereon and
attested by the facsimile signature of its City Clerk, all as of the
day of . 19_
Attest:
(facsimile signature)
City Clerk
(Seal)
THE CITY OF IOWA CITY, IOWA
By (facsimile signature)
Mayor
(Form of Trustee's Certificate of Authentication)
This Bond is one of the Bonds described in the within -mentioned
Indenture.
As Trustee
By
Authorized Officer
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(FORM OF &SGIG00EMT)
~
Assignment ,
FOR VALUE 8DCUJVOD the undersigned hereby sells, assigns and
transfers unto
`
(Please Print or Typewrite Name and Address of Transferee) the within
Bond and all rights thereunder, and hereby irrevocably constitutes and
appoints 'Attorney, to transfer the �
within Bond on the books kept for registration thereof, with full power i 1
of substitution in the premises. '
1
Dated; �
^
^.~--gn_^ '
Section Upon the
execution and delivery of ball execute and
deliver the Series 1982 Bonds to the Trustee, and the Trustee shall ,
authenticate such Series 1982 Bonds and deliver them to the original
Purchaser as hereinafter in this section 2¢6 provided.
Prior to the delivery by the Trustee of any of the Series 1982
Bonds there shall be filed with the Trustee:
- � (
(a) A copy, doll/ certified by 'the City Clerk of the Issuer,
of the resolution adopted and approved by the governing body of the
Issuer authorizing the execution and delivery of the Agreement and this �
Indenture and the issuance of the Series 1982 Bonds;
/
(b) An original executed counterpart of the Agreement;
`
(o) The Series 1982 Note, duly executed by the Hospital and �
endorsed by the Issuer to the order of the Trustee; '
(d) The written opinion of Counsel expressing the conclusion '
that the Hospital has good and marketable fee simple title to the real
estate described in Exhibit A to the Agreement, subject to Permitted
Encumbrances; and
(e) & Written Request of the Issuer to the Trustee
requesting the Trustee to authenticate and deliver the Series 1982
Bonds in the aggregate principal amount of to the
Original Purchaser.
The proceeds of the Series 1983 Bonds, including accrued interest
thereon to the date of delivery, shall he paid over to the Trustee and
deposited to the credit of various Funds and Accounts as hereinafter
provided under Section 301 hereof. .N
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Section 207. Issuance of Additional Bonds and Parity Obligations.
So long as no event of default has occurred and is continuing, the
Hospital may issue one or more Parity Obligations, or the Issuer, at
the request of the Hospital, and to the extent permitted by law, may in
its discretion use its best efforts to issue one or more series of
Additional Bonds for one or more of the purposes of (i) refunding or
advance refunding, entirely one or more series of Parity Obligations or
one or more series of Bonds outstanding hereunder, (ii) financing the
cost or estimated cost of completing the Project or additional
Improvements, (iii) financing the cost or estimated cost of acquiring
and/or constructing additional Improvements to the Hospital Facility or
other capital assets owned or to be owned by the Hospital, and, in each
case, obtaining additional funds to pay the costs to be incurred in
connection with such Additional Bonds or Parity Obligations, -to
establish reserves with respect thereto and to pay interest during the
estimated construction period of completing a construction project, -if
any, funding the Debt Service Reserve Fund and payment of other costs
related to the issuance of such Additional Bonds or Parity Obligations.
Each series of Additional Bonds issued hereunder shall be equal in
aggregate principal amount to the principal amount of the Additional
Note evidencing the loan being made from the proceeds of such
Additional Bonds.
Before any Additional Bonds are authenticated by the Trustee,
there shall be delivered to the Trustee those items required by Section
5.2 of the Agreement for the issuance of Additional Notes under the
Agreement. Before any Parity Obligations are issued, there shall be
delivered to the Trustee, those items required by Section 5.2 of the
Agreement for the issuance thereof under the Agreement. '
Any Additional Bonds issued in accordance with the terms of this
Section shall be secured by this Indenture and may bear such date or
dates, such interest rate or rates, and with such maturities,
redemption dates and premiums as the indenture supplemental hereto
authorizing the issuance thereof shall fix and determine, and shall be
deposited with the Trustee for authentication and delivery.
Section 208. Mutilated Lost Stolen, or Destroyed Bonds or
Coupons. In the event any Bond is mut!Z%d, lost, stolen or
destroyed, the Issuer may execute and the 'Trustee may authenticate a
new Bond of like date, maturity and denomination as that mutilated,
lost, stolen or destroyed (which new Bond shall have attached thereto
coupons corresponding in all respects to those, if any, on the Bond
mutilated, lost, stolen or destroyed), and in the event any coupon is
mutilated, lost, stolen or destroyed, the Issuer may execute a new
coupon corresponding in all respects to that mutilated, lost, stolen or
destroyed; provided, that, in the case of any mutilated coupon or Bond,
such mutilated Bond together with all coupons (if any) appertaining
thereto shall first be surrendered to the Issuer, and in the case of
any lost, stolen or destroyed coupon or Bond, there shall be first
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furnished to the Issuer and the Trustee evidence of such loss, theft or
destruction satisfactory to the Issuer and the Trustee, together with
indemnity satisfactory to them. In the event any such Bond shall have r coupon, the Issuer mayssuer and the Trustee may
matured, instead of issuing a duplicate Bond o
pay the same without surrender thereof. The I
charge the holder or owner of such Bond o
fees and expenses in this connection. Any Bond or coupon issuedr coupon with their reasonable
pursuant to this Section 208 shall be deemed part of the original
series of the Bond or coupon in respect of which it was issued and an
original additional contractual obligation of the Issuer.
Section 209. Registration of Bonds; Persons Treated as Owners.
Title to any coupon Bond and to any interest coupon shall pass by
delivery in the same manner as a negotiable instrument payable to
bearer. The Issuer shall cause books for the registration and for the
transfer of the Bonds as provided in this Indenture to be kept by the
Trustee
is
pintd the BonRegisrar
the Issuer.
Upon hsurrendersfor utransferted andaofoanyefully registeredtBondof
at the principal office of the Trustee, duly endorsed by, or
accompanied by written instrument or instruments of transfer in form
satisfactory to the Trustee and duly executed by the registered owner
or his attorney duly authorized in writing, the Issuer shall execute
and the Trustee shall authenticate and deliver in the name of the
transferee or transferees a new fully registered Bond or Bonds
same series and the same maturity for a like aggregate
fof the
principa
amount. Fully registered Bonds may be exchanged at said l
d office of the
Trustee or a like aggregate principal amount of coupon Bonds (or for a
like aggregate amount of fully registered Bonds of other
denominations) of the same series and authorized
the same maturity, and coupon
Bonds may be exchanged at said office of the Trustee for a like
aggregate principal amount of fully registered Bonds of authorized
denominations of the same series and the same maturity. All coupon
Bonds surrendered for exchange and delivered in exchange shall have
attached thereto all unmatured coupons appertaining thereto (together
with any matured coupons in default appertaining thereto). The Issuer
shall execute and the Trustee shall authenticate and deliver coupon
Bonds which the Bondholder making the exchange is entitled to receive,
bearing numbers not contemporaneously then outstanding. The execution
by the Issuer of any fully registered Bond without coupons of such
denomination shall constitute full and due authorization of such
denomination and the Trustee shall thereby be authorized to
authenticate and deliver such registered Bond. The Trustee shall not
be required to transfer or exchange any fully registered Bond during
the period of fifteen (15) days next preceding any interest payment
date of such Bond, nor to transfer or exchange any Bond after the
publication of or the mailing of notice calling such Bond for
redemption has been made, nor during aperiod of fifteen (15) days next
preceding publication of a notice of redemption of any Bonds. Each
Bondholder shall be entitled to one exchange of Bonds at no expense
within 90 days after the issuance of the Bonds except for the payment
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of any taxes occuring as a result of such exchange. Thereafter,
exchanges of Bonds shall be the expense of the Bondholder requesting
the same.
The Trustee shall not authenticate or deliver any coupon Bond
until all coupons thereon then matured (and as to which the interest is
not in default) shall have been cancelled. Bonds and coupons
surrendered for payment or redemption and Bonds purchased from any
moneys held by the Trustee hereunder or surrendered to the Trustee by
the Issuer or the Hospital shall be promptly cancelled and destroyed by
the Trustee. The Trustee shall deliver to the Issuer and the Hospital
a certificate of destruction in respect of all Bonds and coupons so
destroyed.
As to any fully registered Bond without coupons the person in
whose name the same shall be registered shall be deemed and regarded as
the absolute owner thereof for all purposes, and payment of either
principal or interest thereon shall be made only to or upon the order
of the registered owner thereof or his legal representative, but such
registration may be changed as hereinabove provided. All such payments
shall be valid and effectual to satisfy and discharge the liability
upon such Bond to the extent of the sum or sums so paid. The Issuer
and the Trustee or any paying agent may deem and treat the bearer of
any coupon Bond and the bearer of any coupon appertaining to any Bond
as the absolute owner of such Bond or coupon, as the case may be,
whether such Bond or coupon shall be overdue or not, for the purpose of
receiving payment thereof and for all other purposes whatsoever, and
neither the Issuer nor the Trustee nor any paying agent shall be
affected by any notice to the contrary.
ARTICLE III
Application of Series 1982 Bond Proceeds;
Construction Fund
Section 301. Deposit of Funds. Pursuant to the direction of the
Hospital set forth in section 2 -21 --of the Agreement, the Issuer shall
deposit with the Trustee all of the proceeds of the Series 1982 Bonds
(including any premium and accrued interest on such Series 1982 Bonds
from their date to their date of delivery) and the Trustee shall out of
such proceeds:
(a) Deposit to the credit of the Interest Account, an amount
equal to accrued interest on the Series 1982 Bonds, and the sum of
$ to capitalize a portion of the interest payable on the
Series 1982 Bonds during the Construction Period to the credit of the
Capitalized Interest Account;
sum of $
(b) Deposit to the credit of the Borrowed Funds Account the
;
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(c) Apply $ to the retirement of the Existing Debt;
and
(d) Deposit to the credit of the Construction Fund the
balance of the proceeds from the sale of the Series 1982 Bonds. Such
money is to be disbursed by the Trustee for the purposes and in the
manner set forth in Section 302 hereof.
The Trustee shall also concurrently deposit, from funds provided
by the Hospital, the sum of $ to the credit of the Funded
Depreciation Account.
Section 302. Construction Fund. The Issuer shall establish with
the Trustee a separate account to be known as the Mercy Hospital, Iowa
City, Iowa Project Construction Fund (the "Construction Fund") to the
credit of which a deposit is to be made pursuant to Section 301 hereof.
(a) Disbursements from the Construction Fund. Monies on
deposit in the Construction Fund shall be paid out from time to time by
the Trustee to or upon the Written Request of the Hospital in order to
pay or as reimbursement to the Hospital for payments made by it for the
costs of acquiring, constructing and equipping the Project, and for
payment of financing costs, fees and expenses incurred in connection
with the issuance of the Series 1982 Bonds, including the following
purposes (but, subject to the provisions of subparagraphs (d) and (e)
hereof, for no other purposes):
(1) Payment of the fees for filing financing statements
and any title curative documents that either the Hospital, the Trustee
or Independent Counsel may deem desirable to file for record in order
to comply with the provisions of the covenant against liens contained
in Section 2.19 of the Agreement; and the fees and expenses in
connection with any actions or proceedings that either the Bondholders,
the Hospital, the Trustee or Independent Counsel may deem desirable to
bring in order to perfect or protect the security interest of this
Indenture in the Pledged Property, the Series 1982 Note, the Agreement
and the payments to be made on the Series 1982 Note and otherwise under
the Agreement;
(2) Payment or reimbursement to the Hospital or the
Issuer, as the case may be, of such amounts as shall be necessary to
pay for or reimburse the Hospital or the Issuer for expenditures in
connection with (i) the preparation ofplans and specifications for the
Project (including any preliminary study or planning of the Project or
any aspect thereof), and payment of any architectural, engineering or
supervisory fees and expenses, (ii) costs of demolition of an existing
building, (iii) the acquisition of the land (if any) for and the
construction of the Project, including but not limited to labor,
services, materials and supplies used in construction, and all
construction, acquisition and installation expenses required to provide
utility services or other facilities, and all real or personal
properties deemed necessary in connection with the Project (including
architectural, engineering and supervisory services with respect to any
of the foregoing), (iv) the acquisition of equipment for the Project
and (v) any ether costs and expenses relating to the Project;
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(3) Payment of the cost of legal fees, rating agencies'
fees, trustee's fees, consultant's fees, financing costs, financial
advisory fees, accounting fees and expenses, title insurance premiums,
feasibility study costs, administrative costs of the Issuer and
printing and engraving costs incurred in connection with the
authorization, sale and issuance of the Series 1982 Bonds, the
preparation of the Agreement, this Indenture, and all other documents
in connection therewith;
(4) Payment to the Trustee, as such payments become
due, of the fees and expenses of the Trustee properly incurred
hereunder or under the Agreement that may become due during the
Construction Period, or reimbursement thereof if paid by the Hospital;
(5) To such extent as they shall not be paid by a
contractor for construction or installation with respect to any part of
the Project, payment of the premiums on all insurance required to be
taken out and maintained during the Construction Period under the
Agreement, or reimbursement thereof if paid by the Hospital;
(6) Payment of the taxes, assessments and other
charges, if any, referred to in Section 2.9 of the Agreement that may
become payable during the Construction Period, or reimbursement thereof
if paid by the Hospital;
(7) Payment of expenses incurred in seeking to enforce
any remedy against any contractor or subcontractor in respect of any
default under a contract relating to the Project.
the Project; (8) Payment of any other costs and expenses relating to
'
(b) Written Request of the Hospital. Monies on deposit in
the Construction Fund shall be paid out from time to time by the
Trustee to or upon the order of the Hospital in each case upon receipt
by the Trustee of the following:
(1) The Written Request of the Hospital;
(A) Stating that costs of an aggregate amount set
forth in such Written Request have been made or incurred and were
necessary for the constructing or equipping of the Project or acquiring
land therefor and were made or incurred in accordance with the
construction contracts, plans and specifications therefor then in
effect and on file with the Trustee;
(B) Stating that the amount paid or to be paid,
as set forth in such Written Request, is reasonable and represents a
part of the amount payable for the costs of constructing or equipping
the Project or acquiring land therefor and that such payment was not
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paid in advance of the time, if any, fixed for payment and was made in
accordance with the terms of any contracts applicable thereto and in
accordance with usual and customary practice under existing conditions;
(C) Stating that no part of the said costs of the
Project was included in any Written Request previously filed with the
Trustee under the provisions hereof;
(D) In the case of financing costs and expenses,
stating that the amount paid or to be paid is made as payment of or
reimbursement for payment of financing costs, financial advisory fees,
legal and accounting fees and expenses, rating agency fees, trustee's
fees, consultant's fees and title opinion fee, administrative costs of
the Issuer, printing and engraving costs and other costs and expenses
incurred in connection with the authorization, sale and issuance of the
Series 1982 Bonds, the preparation of the Agreement, this Indenture and
all other documents in connection therewith; and
(E) Stating that the amount remaining in the
Construction Fund, together with the amount of income which the
Hospital estimates it will earn from the investment of monies on
deposit in the Construction Fund and in the other Funds established
hereunder will, after payment of the amount requested in said Written
Request, be sufficient to pay the cost of completing the acquisition
and construction of the Project in accordance with the plans and
specifications therefor then in effect and on file with the Trustee;
(2) Except in the case of financing costs and expenses,
the acquisition of land and equipment, site preparation and excavation,
a certificate of an Tndependent Architect stating that he has read the
Written Request prepared responsive to subdivision (1) of subparagraph
(b) above and approves the payment to be made pursuant to said Written
Request as a payment or reimbursement for a portion of the costs of the
Project and that, in the opinion of the Independent Architect, the
funds remaining in the Construction Fund, together with the amount of
income which the Hospital estimates it will earn from the investment of
moneys on deposit in the Construction Fund and in the other Funds
established hereunder will, after payment of the amount requested in
said Written Request, be sufficient to pay the cost of completing the
acquisition and construction of the Project, all in accordance with the
construction contracts, plans and specifications and building permits
therefor approved by the Independent Architect and on file with the
Trustee. it is understood'and agreed that in giving such certificate
such Independent Architect may rely upon a certificate furnished by the
Hospital as to the amount of income to be earned from the investment of
moneys on deposit in Funds established hereunder;
(3) Any Written Request for payment for the purchase of
equipment shall be accompanied by a bill of sale for each item of
equipment evidencing unencumbered title to the equipment in the name of
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the Hospital and proof of the filing of financing statements covering
the equipment so purchased and perfecting the Trustee's security
interest in such equipment;
(4) Any Written Request for payment to be made to any
contractor with respect to the construction of the Project shall be
accompanied by copies of any required payment and performance bonds,
building permit or zoning approvals with respect to that portion of the
Project with respect to which the payment is being requested; provided,
however, that if copies of such documents have been previously.provided
to the Trustee, the Hospital shall not be required to provide the same
with such Written Requests.
To the extent that the Hospital leases from third parties or
otherwise provides equipment for the Project from sources other than
funds on deposit in the Construction Fund, the costs thereof shall not
be included in the costs referred to above.
(c) Progress Reports and Completion Certificate. The
Hospital shall cause to be submitted to the Trustee quarterly progress
reports concerning the Project and shall deliver to the Trustee within
ninety (90) days after the completion of the Project a completion
certificate of an Independent Architect:
(1) Stating that the Project has been fully completed
in accordance with the plans and specifications therefor, as then
amended, and the date of completion; and
(2) Stating that he has made such investigation of such
sources of information as are deemed by him to be necessary, including
pertinent records of the Hospital, and is of the opinion that the
Project has been fully paid for and that no claim or claims exist
against the Issuer or the Hospital or against the properties of either
out of which a lien based on furnishing labor or material for the
Project exists or might ripen; provided, however, there may be excepted
from the foregoing statement any claim or claims out of which a lien
exists or might ripen in the event that the Hospital intends to contest
such claim or claims, in which event such claim or claims shall be
described; provided, further, however, that it shall be stated that
funds are on deposit in the Construction Fund sufficient to make
payment of the full amount which might in any event be payable in order
to satisfy such claim or claims; and
(3) Stating that the Project is located on the Land.
In the event such certificate shall state that there is a claim or
claims in controversy which create or might ripen into a lien, there
shall be filed with the Issuer and the Trustee a certificate of the
Independent Architect when and as such claim or claims shall have been
fully paid.
(d) Disposition of Construction Fund Monies After
Completion. If after payment by the Trustee of all orders theretofore
tendered to the Trustee under the, provisions of subparagraph (b) of
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I1ICROFILMED BY
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this Section 302 and after receipt by the Trustee of the completion
certificate mentioned in subparagraph (c) of this Section there shall
remain any balance of monies in the Construction Fund, such monies
shall be deposited in the Principal Account;
(e) Investment of Construction Fund Monies. Monies on
deposit in the Construction Fund may be invested only in Qualified
Investments in accordance with the provisions of Section 2.21 of the
Agreement and the income therefrom shall be credited to the
Construction Fund during the Construction Period and thereafter shall
be credited to the Principal Account.
ARTICLE IV
Revenues and Funds
Section 401. Source of Payment of Bonds. The Bonds herein
authorized and all payments to be made by the Issuer hereunder are not
general obligations of the Issuer but are limited obligations payable
solely from the payments on the Notes and as provided herein and in the i
Agreement. The Bonds, as to both principal and interest, shall never
constitute an indebtedness of the Issuer, within the meaning of any
state constitutional provision or statutory limitation, and shall not li
constitute or give rise to a pecuniary liability of the Issuer or a
charge against its general credit or taxing powers, but shall be
payable solely from the revenues pledged for their payment as provided
in this Indenture, and the holders and owners of the Bonds and the
holders of any coupons appertaining thereto shall have no right to
taxi
power of the Issuer or of any such
compel the exercise of the tax
political subdivision in order to provide for the payment of the Bonds
or any such coupons. 1
Section 402. Creation of Funds. There are hereby created by and
in the name of the Issuer and ordered established with the Trustee,
trust funds to be designated, respectively, as follows:
(a) Mercy Hospital, Iowa City, Iowa, Project Bond Fund"
(the "Bond Fund"), in which there are hereby established three accounts
to be known, respectively, as the "Interest Account", the "Capitalized
Interest Account" and the "Principal Account";
(b) "Mercy Hospital, Iowa City, Iowa, Project Debt Service
Reserve Fund" (the "Debt Service Reserve Fund"), in which there are
hereby established two accounts to be known, respectively, as the
"Borrowed Funds Account" and the "Funded Depreciation Account";
(c) "Mercy Hospital, Iowa City, Iowa, Project Depreciation
Reserve Fund" (the "Depreciation Reserve Fund"); and
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(d) "Mercy Hospital, Iowa City, Iowa, Project Bond
Redemption Fund" (the Bond Redemption Fund").
Section 403. Application of Monies; De osit of Assi signed Revenues.
All mon;.es eposite wit t e Trustee pursuant to Section01 hereor,
or paid to the Trustee pursuant to Section 2.24 of the Agreement (or,
in the case of subparagraph (e) below, pursuant to Section 4.2 or 4.3
of the Agreement) shall be applied by the Trustee as follows:
(a) Interest Account: Pursuant to Section 301 hereof, the
accrued interest on the Series 1982 Bonds will be deposited in the
Interest Account. Such accrued interest shall be used to pay a portion
of the interest on the Series 1982 Bonds on December 1, 1982. Pursuant
to Section 2.24(a) of the Agreement, the Hospital is required to pay to
the Trustee for deposit in the Interest Account on the fifteenth day of
each month beginning with July 15, 1982, an amount equal to one-sixth
(1/6) of the interest to become due on the Bonds on the next succeeding
interest payment date thereon, less in each case any amount transferred
from the Capitalized interest Account to the Interest Account pursuant
to Subsection (f) hereof; provided, however, that no such deposit is
required if and to the extent that there is a sufficient amount already
on deposit in the Interest Account (including amounts transferred from
the Debt Service Reserve Fund and the Depreciation Reserve Fund)
available to pay such interest on the next ensuing interest payment
date. If on the fifteenth day of the month immediately preceding an
interest payment date on the Bonds, the amount then on deposit in the
Interest Account is not sufficient for payment of the interest due on
the Bonds on such next interest payment date, the Hospital is required
to pay forthwith such deficiency to the Trustee for deposit into the
Interest Account. Monies in the Interest Account shall be used solely
to pay interest on the Bonds as it becomes due;
(b) Principal Account: Pursuant to Section 2.24(b) of the
Agreement, the Hospital is required to pay to the Trustee for deposit
in the Principal Account on the fifteenth day of each month, beginning
with 15, 198, an amount equal to one -twelfth (1/12)
of the principal to become due on the Bonds and Parity obligations on
the next succeeding principal payment or mandatory sinking fund
redemption date on the Bonds; provided, however, that no such deposit
is required if and to the extent that there is already on deposit in
the Principal Account an amount (including amounts transferred from the
Construction Fund, the Depreciation Reserve Fund or the Debt Service
Reserve Fund) sufficient to pay such principal on the next ensuing
principal payment or mandatory sinking fund redemption date. if on the
fifteenth day of the month immediately preceding a principal payment or
mandatory sinking fund redemption date on the Bonds, the amount then on
deposit in the Principal Account is not sufficient for payment of the
principal due on the Bonds on such principal payment or mandatory
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sinking fund redemption date, the Hospital shall pay forthwith such
deficiency to the Trustee for deposit into the Principal Account.
Monies in the Principal Account shall be used solely to pay principal
on the Bonds as it becomes due;
(c) Debt Service Reserve Fund: The amount required to be
deposited in the Borrowed Funds Account of the Debt Service Reserve
Fund pursuant to Section 301 hereof will be deposited therein. On the
fifteenth day of any month the Hospital may deposit any amount in the
Funded Depreciation Account. At any time that the amounts on deposit
in the Debt Service Reserve Fund exceed the Maximum Annual Debt Service
on the Series 1982 Bonds and on any other Bonds or Parity Obligations
for which the deposits and recomputations required by Section 5.2 of
the Agreement have been made, an amount equal to such excess may be
transferred first from the Borrowed Funds Account and then from the
Funded Depreciation Account to the Interest Account, Principal Account
or Depreciation Reserve Fund, as directed by the Hospital. Pursuant to
Section 2.24(c) of the Agreement, the Hospital is required, at any time
the amount on deposit in the Debt Service Reserve Fund is less than 958
of the Maximum Annual Debt Service on the Series 1982 Bonds, and any
other Bonds or Parity Obligations for which the deposits and
recomputations required by Section 5.2 of the Agreement have been made,
to make up the deficiency between the amount so on deposit in the Debt
Service Reserve Fund and 1008 of such Maximum Annual Debt Service, to
the extent possible, as determined by the Trustee, in twelve (12) equal
monthly installments which shall be deposited in the Funded
Depreciation Account and shall be payable beginning on the fifteenth
day of the next succeeding month, following the determination of a
deficiency. Monies on deposit in the Borrowed Funds Account and the
Funded Depreciation Account shall be used, in the order listed, to make
up any deficiencies in the. Interest Account and the Principal Account,
in the order listed, with respect to the Series 1982 Bonds and any
other Bonds or Parity Obligation for which the deposits and
recomputations required by Section 5.2 of the Agreement have been made,
to the extent that monies on deposit in the Depreciation Reserve Fund
are insufficient to make up any such deficiency. In addition, on or
after 1, 20 , monies on deposit in the Debt Service
Reserve Fund may be used to—make the required deposits into the
Interest Account and the Principal Account with respect to the Series
1982 Bonds maturing on 1, 20 , so long as all of the
principal of, premium, if any, and interest on the Series 1982 Bonds,
and on any Additional Bonds and Parity Obligations for which the
deposits and recomputations required by Section 5.2 of the Agreement
have been made, coming due prior thereto, at maturity or upon
redemption or otherwise, have been paid or provision therefor has been
made as provided in this Indenture and any Parity Instrument;
(d) Depreciation Reserve Fund: Pursuant to Section 2.24(d)
of the Agreement, the Hospital is required to pay to the Trustee for
deposit in the Depreciation Reserve Fund on 15 of each
year from 15, 19 , to and including
15, 20 , after making the required deposits into the Interest Account,
Principal Account and Funded Depreciation Account, an amount equal to
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the "Depreciation Reserve Requirement" less the "Credits" (as defined
in Section 2.24 of the Agreement) not previously applied against the
amounts required to be deposited in the Depreciation Reserve Fund.
Monies from time to time on deposit in the Depreciation Reserve Fund
shall be first used to make up any deficiencies in the Interest Account
and the Principal Account, in that order, with respect to the Series
1982 Bonds and any Additional Bonds and Parity Obligations for which
the recomputation required by Section 5.2 of the Agreement have been
made. Thereafter, so long as no default exists under this Indenture or
the Agreement, monies from time to time on deposit in the Depreciation
'Reserve Fund may be withdrawn (i) by the Hospital upon its Written
Request to the Trustee certifying that the withdrawal is made to pay
for the "Acquisiton of Qualified Property" (as defined in Section 2.24
of the Agreement), such Written Request to be accompanied by _invoices
or other documents evidencing the Cost of such Qualified Property (as
I defined in Section 2.24 of the Agreement), or (ii) by the Trustee upon
a Written Request from the Hospital for the transfer of money from the
Depreciation Reserve Fund to the Principal Account to be applied to the
payment or mandatory redemption or prepayment of the Bonds and any
Parity Obligations or for the optional redemption or prepayment of the
Bonds and any Parity Obligations, as directed by the Hospital, provided
that monies so transferred shall be used only to pay the principal of,
and not interest or preimium on, Series 1982 Bonds only, unless
deposits into the Debt Service Reserve Fund and the recomputations with
respect to the Depreciation Reserve Requirement have been made by the
Hospital under Section 5.2 of the Agreement, in which case monies so
tt'ansferrEd may be used to pay the principal of, and not interest.or
premium on, the Additional Bonds or Parity obligations with respect to
which such deposits and recomputations were made;
(e) Bond Redemption Fund: In the event of prepayment of the
Notes by the Hospital, all funds to be applied to such prepayment shall
be deposited in the Bond Redemption Fund and together with any
investment income earned thereon, shall be used to redeem the Bonds in
accordance with the provisions of Article V hereof;
(f) Capitalized Interest Account: Amounts on deposit in the
Capitalized Interest Account shall be transferred by the Trustee to the
Interest Account in accordance with the following schedule:
Date of Transfer Amount of Transfer
Monies in the Capitalized Interest Account shall be used solely for the
payment of interest on the Series 1982 Bonds.
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(g) Deposit of Assigned Revenues: The Trustee shall use the
Assigned Revenues required to be deposited by the Hospital with the
Trustee pursuant to Section 2.1 of the Agreement to pay ratably, first,
the interest and, second, the principal due on the Bonds and any Parity
Obligations until all deficiencies in such payments of interest and
principal due on the Bonds and any Parity Obligations have been fully
restored, and shall thereafter use such Assigned Revenues to restore
any deficiencies in the remaining Funds and Accounts established
hereunder. At any time the Assigned Revenues are being so deposited
with the Trustee, the Trustee may, in its discretion, pay to the
Hospital, or allow the Hospital to retain, such portion of the Assigned
Revenues as shall be necessary to allow the Hospital to maintain the
operation of the Hospital Facility during the time that Assigned
Revenues are being so Ceposited with the Trustee.
Section 404. Investment oFunds. Monies in the Interest
Account, Principal Account, Capita Ized Interest Account, Borrowed
Funds Account, Funded Depreciation Account, Depreciation Reserve Fund,
Construction Fund and Bond Redemption Fund may be invested in Qualified
Investments, to the extent and in the manner provided for in Section
2.21 of the Agreement. All income from the investment of monies on
deposit in the Construction Fund shall be retained therein during the
Construction Period and thereafter shall be deposited in the Principal
Account. The income derived from the investment of monies on deposit
in the Bond Redemption Fund shall be applied to the redemption of
Bonds. The income derived from the investment of monies on deposit in
the remaining Funds and Accounts established hereunder, including the
Depreciation Reserve Fund, shall be transferred to the Construciton
Fund during the Construction Period and thereafter will be transferred
to or retained in the Depreciation Reserve Fund.
The Issuer and the Trustee jointly and severally covenant and
certify to each other and to and for the benefit of the purchasers of
the Bonds that no use will be made of the proceeds from the issue and
sale of the Bonds nor will use be made of moneys in all of the
aforementioned Funds and Accounts which, if such use had been
reasonably expected on the date of the Bonds, would have caused the
Bonds to be classified as arbitrage bonds within the meaning of Section
103(c) of the Internal Revenue Code. Pursuant to such covenant, the
Issuer and the Trustee obligate themselves. to comply throughout the
term of the issue of the Bonds with the requirements of Section 103(c)
of the Internal Revenue Code and any regulations promulgated or
proposed thereunder.
Section 405. Trust Funds. All monies and securities received by
the Trustee un er t e provisions of this Indenture, shall be trust
funds under the terms hereof and shall not be subject to lien or
attachment of any creditor of the Issuer or of the Hospital. Such
monies shall be held in trust and applied in accordance with the
provisions of this Indenture.
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ARTICLE V
Redemption of Bonds Before Maturity
Section 501. (a) Extraordinary Redemption of Bonds. In the
event that the Hospital Facility or any part thereof are damaged,
destroyed, condemned or taken, and Net Proceeds from insurance or
condemnation awards are deposited in the Bond Redemption Fund
established by Section 402 hereof pursuant to the provisions of Section
4.2 of the Agreement, such Net Proceeds shall be applied on the
earliest possible interest payment date after receipt thereof to the
redemption of the Bonds, in whole or in part, and if in part, in
inverse order of maturity, and within any maturity by lot in such
manner as may be designated by the Trustee, at 1008 of the principal
amount thereof plus accrued interest to the redemption date and without
Premium. If the Notes are to be prepaid in whole and all of the Bonds
and Parity Obligations are to be redeemed, the"Trustee shall transfer
all available monies in all Funds and Accounts established under this
Indenture to the Bond Redemption Fund;
(b) Optional Redemption of Series 1982 Bonds. The Series
1982 Bonds maturing on or after June 1, 1993, are also subject to
redemption prior to maturity on or after June 1, 1992, at the option of
the Issuer (at the direction of the Hospital), out of amounts prepaid
by the Hospital on the Series 1982 Note and deposited in the Bond
Redemption Fund, from time to time in whole, at any time, or in part,
on any interest payment date, in whole or in part, and if in part, in
inverse order of maturity and within any maturity by lot in such manner
as may be designated by the Trustee, at the redemption prices
(expressed as percentages of principal amount), plus accrued interest
to the date of redemption, as follows:
Redemption Dates Redemption Prices
On
or after
June
1,
1992
but
prior
On
or after
June
1,
1993
but
prior
On
or after
June
1,
1994
but
prior
On
or after
June
1,
1995
but
prior
On
June 1, 1996 and
thereafter
to
June
1,
1993
1028
to
June
1,
1994
101.58
to
June
1,
1995
1018
to
June
1,
1996
100.58
1008
In addition, all of the Series 1982 Bonds are subject to
redemption prior to maturity at the option of -the Issuer (at the
direction of the Hospital), out of amounts prepaid by the Hospital on
the Series 1982 Note from non -borrowed funds and deposited in the Bond
Redemption Fund, from time to time in whole, at any time, or in part,
on any interest payment date, in whole or in part (and if in part, in
the inverse order of maturity, and within any maturity by lot in such
manner as may be designated by the Trustee) at a redemption price of
1008 of the principal amount redeemed plus accrued interest to the
redemption date.
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(c) Mandatory Redemption of Series 1982 Bonds Maturing on
June 1, 2012. As and for a sinking fund for the retirement of Series
1982 Bonds maturing on June 1, 2012, the payments specified in Section
2.24(b) of the Agreement which are to be deposited in the Principal
Account on June 1, 1994, and on or prior to each June 1 thereafter to
and including June 1, 2012, shall include an amount sufficient to
redeem, by lot in such manner as may be designated by the Trustee, or
pay at maturity in the case of the June 1, 2012 payments (after credit
as provided below), the following principal amounts of the Series 1982
Bonds:
June 1
of the Years
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Principal
Amounts
At the option, to be exercised on or before the forty-fifth day
next preceding any such mandatory redemption date, the Hospital, on
behalf of the Issuer, may (i) deliver to the Trustee 'for cancellation
Series 1982 Bonds maturing on June 1, 2012, iri any aggregate principal
amount desired, with all unmatured coupons attached to any coupon
Series 1982 Bond maturing on June 1, 2012 so delivered, or (ii) receive
a credit in respect of its mandatory redemption obligation for any such
Series 1982 Bonds maturing*on June 1, 2012 which prior to said date
have been purchased (in the open market) or redeemed (otherwise than
through the operation of the sinking fund) and cancelled by the Trustee
and not theretofore applied as a credit against any mandatory
redemption obligation. Each such Series 1982 Bond maturing on June 1,
2012 so delivered or previously purchased or redeemed shall be credited
by the Trustee at 1008 of the principal amount thereof on the.
obligation of the Issuer on such mandatory redemption date and any
excess shall be credited on future sinking fund redemption obligations
in chronological order, and the principal amount of such Series 1982
Bonds maturing on June 1, 2012 to be redeemed by operation of the
sinking fund shall be accordingly reduced.
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The Hospital, on behalf of the Issuer, shall on or before the
forty-fifth day next preceding each mandatory redemption date furnish
the Trustee with its certificate indicating whether or not and to what
extent the provisions of clauses (i) and (ii) of the preceding paragraph
are to be availed of with respect to such mandatory redemption and
confirm that such fund's for the balance of the next succeeding
prescribed mandatory redemption of Series 1982 Bonds maturing on
June 1, 2012 will be paid on or before the fifteenth day prior to the
next succeeding mandatory redemption date.
(d) Special Optional Redemption.
Hospital shall elect to prepay the NoteIn the event that the
s In
to the provisions of
Section 4.4(a) of the Agreement, the monies derived from such
prepayment and deposited in the Bond Redemption Fund shall be applied
to the redemption of all of the Bonds at the time outstanding on the
earliest possible date, at a redemption price of 1008 of the
Principal
amount thereof plus accrued interest to the redemption date, and
without premium in the event that the Hospital shall elect to
the Notes pursuant to subsection (i) of said Section 4.4(a), andeatya
redemption price equal to the lesser of 8 of the principal amount
thereof or the then applicable redemption price or prices for the
Optional redemption of such Bonds plus accrued interest to -the
redemption date in the event that the Hospital shall elect to prepay
the Notes pursuant to subsection Provisions oo(ii) of said Section 4.4(a). In the
event that the Hospital shall elect to prepay the Notes pursuant to the
such prepaymenteand depositedinthe Agreement,
the
monies
und derived
from
the Bond applied to the redemption of all of the Bonds at the time outstanding
on the earliest possible date, at a redemption price of 1008 of the
principal amount thereof plus accrued interest to the redemption date,
and without premium.
Such monies shall be so applied not less than forty-five (45) days
nor more than two hundred (200) days after receipt of notice by the
Trustee of the Hospital's election to prepay the Notes in such events.
Section 502. Notice of Redem
Bonds notice tion. In the case of redemption of
or portions of fullo the call or any such redemption identifying the Bonds,
Y registered Bonds, to be redeemed shall be given by
Publication at least twice in a newspaper or financial journal of
general circulation in the City of Des Moines, Iowa and the City of New
York, New York, customarily published each business day, the first of
which shall be published not less than thirty (30) days and not more
than sixty (60) days prior to the redemption date, and in the case of
the redemption of such Bonds at the time registered (except to
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bearer), upon mailing a copy of the redemption notice by registered or
certified mail at least thirty (30) days and not more than sixty (60)
days prior to the date fixed for redemption to the registered owner of.
each Bond to be redeemed at the address shown on the registration
books, provided, however, that failure to give such notice by mailing,
or any defect therein, shall not affect the validity of any proceedings
for the redemption of any such Bonds. If all of such Bonds to be
redeemed are at that time registered (except to bearer), such
publication need not be made if such notice by mailing is so given.
If, because of the temporary or permanent suspension of the publication
or general circulation of such newspaper or financial journal or for
any other reason, it is impossible or impracticable to publish such
notice of call for redemption in the manner herein provided, then such
publication in lieu thereof as shall be made with the approval of the
Trustee shall constitute a sufficient publication of notice.
On and after the redemption date specified in the aforesaid
notice, such Bonds or portions thereof thus called, shall not bear
interest, shall no longer be protected by this Indenture and shall not
be deemed to be outstanding under the provisions of this Indenture and
the holders thereof shall have the right only to receive the redemption
price thereof plus accrued interest thereon to the dated fixed for
redemption.
Section 503. Cancellation. All Bonds which have been redeemed
shall be cancelled and cremated or otherwise destroyed by the Trustee
together with any unmatured coupons appertaining thereto and shall not
be reissued and a counterpart of the certificate of cremation or other
destruction evidencing such cremation or other destruction shall be
furnished by the Trustee to the Issuer and the Hospital, provided,
however, that one or more new fully registered Bonds shall be issued
for the unredeemed portion of any fully registered Bond without charge
to the.holder thereof.
Section 504. Partial Redemption of Fully Registered Bonds. If
less than all of the Bonds then outstanding are to be called for
redemption, then for all purposes in connectiCn with such redemption
and the selection by lot by the Trustee of the Bonds, or portions -of
fully registered Bonds to be redeemed, each $5,000 of principal amount
of denominations greater than $5,000 shall be treated as though it were
a separate bond of the denomination of $5,000. If it is determined that
one or more, but not all, of the $5,000 units of principal amount
represented by any such fully registered Bond are to be called for
redemption, then upon notice of intention to redeem such $5,000 unit or
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units, the owner of such registered Bond shall forthwith surrender such
Bond to the Trustee (i) for payment of 1008 of the principal amount of
the $5,000 unit br units ofprincipal amount called for redemption,
plus the redemption premium, if any, plus accrued interest to the date
fixed for the redemption, and (ii) for exchange for a new Bond or Bonds
for the unredeemed balance of such fully registered Bond as provided in
Section 503 hereof. If the owner of any such fully registered Bond of
a denomination greater than $5,000 shall fail to present such Bond to
the Trustee for payment and exchange as aforesaid, such Bond shall
nevertheless become due and payable on the date fixed for redemption to
the extent of the $5,000 unit or units of principal amount called for
redemption (and to that extent only); interest shall cease to accrue on
the portion of the principal amount of such Bond represented by such
$5,000 unit or units of principal amount on and after the date fixed
for redemption, provided that funds sufficient for the payment of the
redemption price shall have been deposited with the Trustee and shall
be available for the redemption of said $5,000 unit or units on the
date fixed for redemption; and, in such event, such Bond shall, to the
extent of the portion of its principal amount represented by such
$5,000 unit or units of principal amount, not be deemed to be
outstanding under the provisions of this Indenture, and the registered
owners thereof shall have the right only to receive the redemption
price thereof plus accrued interest thereon to the date fixed for
redemption, nor shall new Bonds thereafter be issued corresponding to
said unit or.units.
Section 505. Purchase of Bonds. The Trustee shall, if and to the
extent practicable, purchase Bonds for cancellation upon request of the
Hospital at such time, in such manner and at such price as may be
j specified by the Hospital. The Trustee may so purchase Bonds with any
monies then held by the Trustee and available, in accordance with the
terms hereof, for the redemption or
ss
amount set aside for payment of Bondsucalled forBonds redemption;in pr of any
rovidj that any limitations or restrictions on such redemption or redemption;
chaseed
contained in the Agreement or this Indenture shall be complied with.
The expenses of such purchase shall be deemed an expense of the Trustee
under Section 602 hereof.
Section 506. unpaid Coupons. All unpaid interest coupons which
appertain to Bonds so called for redemption and which shall have become
payable on or prior to the date fixed for redemption shall continue to
be payable to the bearers thereof severally and respectively upon the
presentation and surrender of such coupons as provided in Section 202.
Section 507. Non -presentment of Bonds or Coupons. In the event
any Bonds shall not be presented for payment when the principal thereof
becomes due, either at maturity or at the date fixed for redemption
thereof or otherwise, or in the event any coupon shall not be presented
for payment at the due date thereof, if funds sufficient to pay such
Bonds or coupons shall have been made available to the Trustee
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for the benefit of the holder or holders thereof, all liability of the
issuer to the holder thereof for the payment of such Bond or coupon, as
the case may be, shall forwith cease, determine and be completely
discharged, and thereupon it shall be the duty of the Trustee to hold
such fund or funds, without liability for interest thereon, for the
benefit of the holder of such Bond, or the bearer of such coupon, as
the case may be, who shall thereafter be restricted exclusively to such
fund or funds, for any claim of whatever nature on his part under this
Indenture or on, or with respect to, said Bond or coupon. While the
Trustee is so holding such unclaimed funds, the Trustee may invest such
funds in direct obligations of the United States of America, or
obligations the timely payment of -principal of and interest on which
are fully guaranteed by the United States of America, which are
redeemable at the option of the Trustee at any time and shall -pay to
the Hospital any investment income earned thereon.
Notwithstanding any provision of this Indenture, any monies
deposited with the Trustee in trust for the payment of the principal
of, premium, if any, or interest on any Bonds and remaining unclaimed
for five (5) years after the principal of all the Bonds outstanding
hereunder has become due and payable (whether at maturity or upon call.
for redemption or by declaration as provided in this Indenture) shall
then be repaid to the Hospital upon its Written Request, and the
holders of such Bonds shall thereafter be entitled to look only to the
Hospital for repayment thereof, and all liability of the Trustee with
respect to such monies shall thereupon cease; provided, however, that
before the repayment of such monies to the Hospital as aforesaid, the
Trustee may (at the cost of the Hospital) first publish a notice, in
such form as may be deemed appropriate by the Trustee, in respect of
the Bonds so payable and not presented and in respect of the provisions
relating to the repayment to the Hospital of the monies held for the
repayment thereof. Such notice shall be published at least once in a
newspaper or financial journal of general circulation published in the
City of New York, New York. In the event of the. repayment of any such
monies to the Hospital as aforesaid, the holders of the Bonds in
respect of which such monies were deposited shall thereafter be deemed
to be unsecured creditors of the Hospital for amounts equivalent to the
respective amounts deposited for the payment of such Bonds and so
repaid to the Hospital (without interest thereon). Notwithstanding the
foregoing, the Trustee shall, upon the Written Request of the Hospital,
repay such monies to the Hospital at any time earlier than five (5)
years if failure to repay such monies to the Hospital beyond such
earlier period shall give rise to the operation of any escheat statute
under applicable State Law.
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ARTICLE VI
General Covenants
Section 601. Payment of Principal and Interest. The Issuer
covenantit will promptly pa the �—
and interest on every Bond issued under thisclpa Indenturepatmthe �placeof if ,lyon
the dates and in the manner provided herein and in said Bonds and in
the coupons appertaining thereto according to the true intent and
meaning thereof. The principal, interest and premium, if any, on the
as Bonds are payable solely from the payments to be made on the Notes and
provided
yments shall e mad
directlyby the eHospital ntohthe gTrustee andcare reement whih ahereby specificallye
Pledged and assigned to the payment thereof in the manner and to the
extent herein specified, and nothing in the Bonds or coupons—or in this
Indenture should be considered as pledging any other funds.or assets of
the Issuer. The Bonds do not represent or constitute a debt of the
Issuer within the meaning of the provisions of the Constitution or
Statutes of the State of Iowa or a pledge of the full faith and credit
Of the Issuer or grant to the owners or holders thereof any right to
have the Issuer levy taxes or appropriate any funds for the payment of
the principal thereof or interest thereon.
Section 602. Performance of Covenants. The Issuer covenants that
it wi aat u ly per orm at a
undertakings, stipulations and times any in this and all covenants,
in any and every Bond executed, pauthenticated visions contandedelivered hereunder
and in all proceedings of its members pertaining thereto. The Issuer
represents that it is duly authorized under the Constitution and laws
of the State of Iowa to issue the Bonds authorized hereby and to
execute this Indenture, and to pledge and assign the Series 1982 Note
and assign the Agreement in the manner and to the extent herein set
forth; and that all action on its part for the issuance of the Bonds
and the execution and delivery of this Indenture have been duly and
effectively taken.
Section 603. Ownershi ; instruments of h
Issuer represen s t a i aw u y owns a eriesFurter Assurance. The
—and that
the pledge and assignment thereof and the assignment of Not-ethe Agreement
to the Trustee hereby made are valid and lawful. The Issuer covenants
that it will defend the title to the Series 1982 Note and its interest
in the Agreement to the Trustee, for the benefit of the holders and
owners of the Bonds and the bearers of the coupons appertaining
thereto, against the claims and demands of all persons whomsoever. The
Issuer covenants that it will do, execute, acknowledge and deliver or
cause to be done, executed, acknowledged and delivered, such indentures
supplemental hereto and such further acts, instruments and transfers as
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the Trustee may reasonably require for the better assuring,
transferring, pledging, assigning and confirming unto the Trustee, the
Series 1982 Note, the Agreement and all payments thereon and thereunder
pledged hereby to the payment of the principal of, premium, if any, and
interest on the Bonds.
Section 604. Recordation of Security Instruments. Pursuant to
the provisions of the Agreement, the Hospital has covenanted to cause
financing statements and all supplements thereto and other security
instruments as may be required from time to time to be kept recorded
and filed in such manner and in such places as may be required by law
in order to fully preserve and protect the lien hereof and the security
of the holders and owners of the Bonds and the bearers of the coupons
appertaining thereto and the rights of the Trustee hereunder.
Section T.
Inspection of Books. The Issuer covenants and
agrees that all books and documents in its possession relating to the
Hospital Facility and the revenues derived from the Hospital Facility
shall at all times be open to inspection by such accountants or other
agents as the Trustee may from time to time designate.
Section 606. Liswt of Bondholders. To the extent that such
information shall be made knon to the Issuer under the terms of this
Section, it will keep on file at the principal office of the Trustee a
list of names and addresses of the last known holders of all Bonds
payable to bearer and believed to be held by each of such last known
holders. To said list the Trustee shall add the names and addresses of
the holders of all registered Bonds as shown on the registration books
in the hands of the Trustee as Bond Registrar and all known holders of
Parity Obligations. Any holder of Bonds or Parity Obligations may
request that his name and address be placed on said list by filing a
written request with the Issuer or with the Trustee, which request
shall include a statement of the principal amount of Bonds held by such
holder and the numbers of such Bonds and/or Parity Obligations. The
Trustee shall be under no responsibility with regard to the accuracy of
said list. At reasonable times and under reasonable regulations
established by the Trustee, said list may be inspected and copied by
the Hospital, the Original Purchaser, or by holders and/or owners (or a
designated representative thereof) of twenty-five per cent (258) or
more in principal amount of Bonds and/or Parity Obligations then
outstanding, such ownership and the authority of such designated
representative to be evidenced to the satisfaction of the Trustee.
Section 607. Rights Under the Agreement. The Issuer agrees that
the Trustee in its name or 5 the name of the Issuer may enforce all
rights of the Issuer and all obligations of the Hospital under and
pursuant to the Agreement for and on behalf of the Bondholders, whether
or not the Issuer is in default hereunder, except for the Unassigned
Rights.
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Section 608. Designation of Additional PayingAgents. The
Trustee is hereby designated paying agent for an in respect to the
Series 1982 Bonds. The Issuer hereby covenants and agrees to cause the
necessary arrangements to be made through the Trustee for the
designation of alternate paying agents, if any, and for the making
available of funds hereunder for the payment of such of the Bonds and
coupons appertaining thereto as shall be presented when due at the
principal office of the Trustee, or its successor in trust hereunder,
or at the principal office of said alternate paying agents.
Section 609. Bonds to Remain Tax Exempt. The Issuer will not act
in any manner which would result in loss of tax exemption of the
interest on the Bonds otherwise afforded under Section 103(a) of the
Internal Revenue Code.
ARTICLE VII
Remedies
Section 701. Events of Default. Each of the following events is.
hereby declared an "event of default", that is to say, if:
(a) Payment of any installment of interest on any of the
Bonds or Parity Obligations shall not be made when the same is due and
payable; or
(b) Payment of the principal of or the redemption premiums,
if any, of any of the Bonds or Parity Obligations `shall not be made
when the same is due and payable, either at maturity or by proceedings
for redemption or otherwise; or
(c) The Issuer shall for any reason be rendered incapable of
fulfilling its obligations hereunder; or
(d) Any event of default as defined in Section 6.1 of the
Agreement shall occur; or
(e) The Issuer shall default in the due and punctual
performance of any other of the covenants,•conditions, agreements and
provisions contained in the Bonds or in this Indenture or any agreement
supplemental hereof on the part of the Issuer to be performed, and such
default shall continue for sixty (60) days after written notice
specifying such default and requiring the same to be remedied shall
have been given to the Issuer and the Hospital by the Trustee, which
may give such notice in its discretion and shall give such notice at
the written request of the holders of not less than twenty-five per
cent (258) in aggregate principal amount of the Bonds and Parity
Obligations then outstanding.
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Section 702. Acceleration. Upon the occurrence and continuance
of an eve default specified in Section 701 the Trustee may,
without any action on the part of the holders of Bonds and Parity
Obligations, and shall upon the written request of the holders of not
less than twenty-five per cent (258) in principal amount of the Bonds
and Parity Obligations then outstanding hereunder, and upon being
indemnified to its satisfaction, by notice in writing delivered to the
Issuer, declare the entire principal amount of the Bonds and Parity
Obligations then outstanding and the interest accrued thereon,
immediately due and payable, and the said entire principal and interest
shall thereupon become and be immediately due and payable, subject,
however, to the rights of the holders of them ajority in principal
amount of the Bonds a
notice to the Trusteenandatotthebligations Issuer, totaeusuchndeclaray written
nul
destroy its effect as hereinafter provided; and provided further that
on and
such declaration shall be annulled without action of the holders of the
Bonds and Parity Obligations if all arrears of payments of principal
(except such principal due only as a result of such declaration) with
interest at the rates borne by the respective Bonds and Parity
Obligations on all arrears of payment of principal until paid and all.
arrears of interest, and all expenses of the Trustee in connection with
such declaration, shall have been paid.
I Section 703. Remedies; Rights of Holders of Bonds and Par
Obligations. Upon the occurrence of an event of default the Tr
may pursue any available remedy by suit at law or in equity to
the payment of the principal of, premium, if any, and interest
Bonds and Parity Obligations then outstanding or to enforce any
obligations of the Issuer hereunder.
ustee
enforce
on the
If an event of default shall have occurred, and if requested so to
do by.the holders of not less than twenty-five per cent (258) in
i aggregate principal amount of Bonds and Parity Obligations then
outstanding and indemnified as provided in Section 801 hereof, the
Trustee shall be obliged to exercise such one or more of the rights and
powers ( conferred
counsel, shalldeem most expedient sinhthe rinterestsiof the1Bondholders
and the holders of the Parity Obligations.
No remedy by the terms of this Indenture conferred upon or
reserved to the Trustee (or to the holders of the Bonds and Parity
bbligations) is intended to be exclusive of any other remedy, but each
and every such remedy shall be cumulative and shall be in addition to
any other remedy given to the Trustee or to the holders of the Bonds
and Parity Obligations hereunder or now or hereafter existing at law or
in equity or by statute.
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No delay or omission to exercise any right or power accruing upon
any event of default shall impair any such right or power or shall be
construed to be a waiver.of any event of default or acquiescence
therein; and every such right and power may be exercised from time to
time and as often as may be deemed expedient.
No waiver of any event of default hereunder, whether by the
Trustee or by the holders of the Bonds and Parity Obligations, shall
extend to or shall affect any subsequent event of default or shall
impair any rights or remedies consequent thereon.
Section 704. Right of Holders of the Bonds and Parity Obligations
to Direct --Proceed- s. Anything t this Indenture to the contrary
notwithstanding, the holders of not less than a majority in aggregate
principal amount of Bonds and Parity Obligations then outstanding shall
have the right, at any time, by an instrument or instruments in writing
executed and delivered to the Trustee, to direct the time, the method
and place of conducting all proceedings to be taken in connection with
the enforcement of the terms and conditions of this Indenture, or for
the appointment of a receiver or any other proceedings hereunder;
provided, that such direction shall not be otherwise than in accordance
with the provisions of law and of this Indenture.
Section 705. Application of Monies. All monies received by the
Trustee pursuant to any right given or action taken under the
Provisions of this Article shall, after payment of the cost and
expenses of the proceedings resulting in the collection of such moneys
and of the expenses, liabilities and advances incurred or made by the
Trustee, be held in trust for the benefit of the holders of the Bonds
and Parity Obligations by the Trustee and shall be applied as follows:
(a) Unless the principal of all the Bonds and Parity
Obligations shall have become or shall have been declared due and
payable, all such monies shall be applied:
First --To the payment to the persons entitled thereto of
all installments of interest then due on the Bonds and Parity
Obligations in the order of the maturity of the installments of such
interest and, if the amount available shall not be sufficient to pay in
full any particular installment, then to the payment ratably, according
to the amounts due on such installment, to the persons entitled
t)iereto, without any discrimination or privilege; and
Second --To the payment to the persons entitled thereto
of the unpaid principal of and premium, if any, on any of the Bonds and
Parity Obligations which shall have become due (other than Bonds and
Parity Obligations called for redemption for the payment of which
monies are held pursuant to the provisions of this Indenture), in the
order of their due dates, with interest on such Bonds and Parity
Obligations from.the respective dates upon which they became due, and,
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if the amount available shall not be sufficient to pay in full Bonds
and Parity Obligations due on any particular date, together with such
interest, then to the payment ratably, according to the amount of
principal due on such date, to the persons entitled thereto without any
discrimination or privilege;
(b) If the principal of all the Bonds and Parity Obligations
shall have become due or shall have been declared due and payable, all
such monies shall be applied to the payment of the principal of,
premium, if any, and interest then due and unpaid upon the Bonds and
Parity Obligations, without preference or priority of principal over
interest or of interest over principal, or of any installment of
interest over any other installment of interest, or of any Bond or
Parity Obligation over any other Bond or Parity Obligation, ratably,
according to the amounts due respectively for principal of, premium, if
any, and interest, to the persons entitled thereto without any
discrimination or privilege;
(c) If the principal of all the Bonds and Parity Obligations
shall have been declared due and payable, and if such declaration shall
thereafter have been rescinded and annulled under the provisions of
this Article then subject to the provisions of subsection (b) of this
± Section in the event that the principal of all the Bonds and Parity
II Obligations shall later become due or be declared due and payable, the
monies shall be applied in accordance with the provisions of subsection
(a) of this Section.
Whenever monies are to be applied pursuant to the provisions of
this Section, such monies shall be applied at such times, and from time
to time, as the Trustee shall determine, having due regard to the
amount of such monies available for application and the likelihood of
additional monies becoming available for such application in the
future. Whenever the Trustee shall apply such funds, it shall fix the
date (which shall be an interest payment date unless it shall deem
another date more suitable) upon which such application is to be made
and upon such date interest on the amounts of principal to be paid on
such dates shall cease to accrue. The Trustee shall give such notice
as it may deem appropriate of the deposit with it of any such monies
and of the fixing of any such date, and shall not be required to make
payment to the bearer of any unpaid coupon or the holder of any Bond
or Parity Obligation until such coupon•or such Bond or Parity
Obligation and all unmatured coupons, if.any, appertaining to such Bond
or Parity Obligation shall be presented to the Trustee for appropriate
endorsement or for cancellation if fully paid.
Section 706. Remedies Vested in Trustee. All rights of action
(including the right to file proof of claims) under this Indenture or
under any of the Bonds or Parity Obligations or coupons may be enforced
by the Trustee without the possession of any of the Bonds or Parity
Obligations or coupons or the production thereof in any trial or other
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proceeding relating thereto and any such suit or proceeding instituted
by the Trustee shall be brought in its name as Trustee without the
necessity of joining as plaintiffs or defendants any holders of the
Bonds or Parity Obligations or bearers of the coupons, and any recovery
of judgment shall, subject to the provisions of Section 705 hereof, be
for the equal benefit of the holders of the outstanding Bonds and
Parity Obligations and the bearers of the outstanding coupons.
Section 707. Rights and Remedies of Holders of Bonds and Parity
Obligations. No holder or bearer of any Bond or'Parity Obligation or
coupon shall have any right to institute any suit, action or
proceeding in equity or at law for the enforcement of this Indenture or
for the execution of any trust thereof or for the appointment of a
receiver or any other remedy hereunder, unless a default has occurred
of which the Trustee has been notified as provided in Section -801, or
of which by said Section it is deemed to have notice, nor unless also
such default shall have become an event of default and the holders of
not less than twenty-five per cent (258) in aggregate principal amount
of Bonds and Parity Obligations then outstanding shall have made
written request to the Trustee and shall have offered reasonable
opportunity either to proceed to exercise the powers hereinbefore
granted or to institute such action, suit or proceeding in its own
name, nor unless also they have offered to the Trustee indemnity as
provided in Section 801 nor unless the Trustee shall thereafter fail or
refuse to exercise the powers hereinbefore granted, or to institute
such action, suit or proceeding in its, his or their own name or names.
Such notification, request and offer of indemnity are hereby declared
in every case at the option of the Trustee to be conditions precedent
to the execution of the powers and trusts of this Indenture, and to any
action or cause of action for the enforcement of this Indenture, or for
the appointment of.a receiver or for any other remedy hereunder; it
being understood and intended.that no one or more holders or bearers of
the Bonds or Parity Obligations or coupons shall have any right in any
manner whatsoever to affect, disturb or prejudice the lien of this
Indenture by its, his or their action or to enforce any right hereunder
except in the manner herein provided, and that all proceedings at law
or in equity shall be instituted, had and maintained in the manner
herein provided and for the equal benefit of the holders of all Bonds
and Parity Obligations then outstanding. Nothing contained in this
Indenture shall, however, affect or impair the right of any holder of
Bonds or Parity Obligations to enforce the covenants of the Issuer to
pay the principal of and interest on each of the Bonds and Parity
Obligations to the respective holders thereof at the time, place, from
the source and in the manner in said Bonds and Parity Obligations and
the appurtenant coupons expressed.
Section 708. Termination of Proceedings. In case the Trustee
shall have proceeded to enforce any right under this Indenture by the
appointment of a receiver, or otherwise, and such proceedings shall
have been discontinued or abandoned for any reason, or shall have been
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determined adversely, then and in every such case the Issuer, the
Hospital and the Trustee shall be restored to their former positions
and rights hereunder with respect to the Pledged Property, and all
rights, remedies and powers of the Trustee shall continue as if no such
proceedings had been taken.
Section 709. Waivers of Events of Default. The Trustee may in
its discretion waive any event of default hereunder and its
consequences'and rescind any.declaration of maturity of principal of
and interest on the Bonds and Parity Obligations, and shall do so upon
the written request of the holders of not less than a majority in
aggregate principal amount of all the Bonds and Parity Obligations then
outstanding; provided, however, that there shall not be waived (i) any
event of default in the payment of the principal of any outstanding
Bonds or Parity Obligations at the date of maturity specified therein,
or upon proceedings for mandatory redemption pursuant to Section 501(c)
hereof in the case of the Series 1982 Bonds or any mandatory sinking
fund payments required by any Parity Instruments or by any supplemental
indenture, or (ii) any default in the payment when due of the interest
on any such Bonds or Parity Obligations unless prior to such waiver or
rescission, all arrears of interest, with interest (to the extent
permitted by law) at the rate borne by the Bonds or Parity Obligations
in respect of which such default shall have occurred on overdue
installments of interest or all arrears of payments of principal and
premium, if any, when due, as the case may be, and all expenses of the
Trustee, in connection with such default shall have been paid or
provided for, and in case of any such waiver or rescission, or in case
any proceeding taken by the Trustee on account of any such default
shall have been discontinued or abandoned or determined adversely, then
and in every such case the Issuer, the Trustee and the holders of the
Bonds and Parity Obligations shall be restored to their former
positions and rights hereunder, respectively, but no such waiver or
rescission shall extend to any subsequent or other default, or impair
any right consequent thereon.
Section 710. Cooperation of Issuer. In the event of default
hereunder, the Issuer shall cooperate with the Trustee and use its best
efforts to protect the holders of the Bonds and Parity Obligations.
Section 711. Notice of Defaults; Opportunity of Issuer and
Hospital to Cure Defaults. Anything herein to the contrary
notwithstanding, no default (other than a default under Section 701(a)
or (b) hereof, to which this Section shall not be applicable) shall
constitute an event of default until actual notice of such default by
registered or certified mail shall be given by the Trustee or by the
holders of not less than twenty-five per cent (258) in aggregate
principal amount of the Bonds and Parity Obligations then outstanding
to the Hospital and the Issuer, and the Hospital and Issuer shall have
had thirty (30) days after receipt of such notice to correct said
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default or cause said default to be corrected, and shall not have
corrected said default or caused said default to be corrected within
the applicable period; provided, however, that if said default be such
that it cannot be corrected within the applicable period, it shall not
constitute an event of default if corrective action is instituted by
the Hospital or the Issuer, as the case may be, within the applicable
period and diligently pursued until the default is corrected.
With regard to any alleged default concerning which notice is
given to the Hospital under the provisions of this Section, the Issuer
hereby grants the Hospital full authority for account of the Issuer to
perform any covenant or obligation alleged in said notice to constitute
a default, in the name and stead of the Issuer, with full power to do
any and all things and acts to the same extent that the Issuer could do
and perform and such things and acts with power of substitution.
ARTICLE VIII
The Trustee
Section 801. Acceptance of the Trusts. The Trustee hereby
accepts the trusts imposed upon it by this Indenture, and agrees to
perform said trusts as a corporate trustee ordinarily would perform 1
said trusts under a corporate indenture, but no implied covenants or
obligations shall be read into this Indenture against the Trustee.
(a) The Trustee may execute any of the trusts or powers
hereof and perform any of its duties by or through attorneys, agents,
receivers or employees but shall be answerable for the conduct of the
same in accordance with the standard specified above, and shall be
entitled to advice of Counsel concerning all matters of trusts hereof
and the duties hereunder, and may in all cases pay such reasonable
compensation to all such attorneys, agents, receivers and employees as
may reasonably be employed in connection with the trusts hereof. The
Trustee may act upon the opinion or advice of Counsel (who may be
Counsel for the Issuer or the Hospital). The Trustee shall not be
responsible for any loss or damage resulting from any action or
non -action in good faith in reliance upon such opinion or advice;
f
(b) The Trustee shall not be responsible for any recital
herein, or in the Bonds or Parity Obligations (except in respect to the
certificate of the Trustee endorsed on the Bonds), or for insuring the
Hospital Facility or collecting any insurance monies, or for the
validity of the execution by the Issuer of this Indenture or of any
supplements hereto or instruments of further assurance, or for the
sufficiency of the security for the Bonds or Parity Obligations issued
hereunder or intended to be secured hereby, or for the value or title
of the Hospital Facility or otherwise as to the maintenance of the
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security hereof; and the Trustee shall not be bound to ascertain or
inquire as to the performance or observance of any covenants,
conditions or agreements on the part of the Issuer or on the part of
the Hospital under the Agreement; but the Trustee may require of the
Issuer or the Hospital full information and advice as to the
performance of the covenants, conditions and agreements aforesaid as to
the condition of the Hospital Facility. The Trustee shall have no
obligation to perform any of the duties of the Issuer under the
Agreement, and the Trustee shall not be responsible or liable for any
loss suffered in connection with any investment of funds made by it in
accordance with the provisions of this Indenture;
(c) The Trustee shall not be accountable for the use of any
Bonds authenticated or delivered hereunder. The Trustee may `become the
owner of Bonds and coupons secured hereby and Parity Obligations with
the same rights which it would have if not Trustee;
(d) The Trustee shall be protected in acting upon any
notice, request, consent, certificate, order, affidavit, letter,
telegram or other paper or document believed to be genuine and correct
and to have been signed or sent by the proper
action taken by the Trustee P Person or persons. Any
pursuant to this Indenture upon the request
or authority or consent of any person who at the time of making such
request or giving such authority or consent is the owner of any Bond
or Parity Obligation, shall be conclusive and binding upon all future
owners of the same Bond or Parity Obligation and upon Bonds or Parity
Obligations issued in exchange therefor or in place thereof;
(e) As to the existence or non-existence of any fact or as
to -the sufficiency or validity of any instrument, paper or proceeding,
the Trustee shall be entitled to rely upon a certificate signed on
behalf of the Issuer by its Mayor and attested by its City Clerk as
sufficient evidence of the facts therein contained and prior to the
occurrence of a default of which the Trustee has been notified as
provided in subsection (g) of this Section, or of which by said
subsection it is deemed to have notice, shall also be at liberty to
accept a similar certificate to the effect that any particular dealing,
transaction or action is necessary or expedient, but may at its
discretion secure such further evidence deemed necessary or advisable,
but shall in no case be bound to secure the same. The Trustee may
accept a certificate of the City Clerk of the Issuer under its seal to
the effect that an ordinance or resolution in the form therein set
forth has been adopted by the Issuer as conclusive evidence that such
ordinance or resolution has been duly adopted, and is in full force and
effect;
(f) The permissive right of the Trustee to do things
enumerated in this Indenture shall not be construed as a duty and the
Trustee shall not be answerable for other than its negligence or
willful default or misconduct;
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(g) The Trustee shall not be required to take notice or be
deemed to have notice of any event of default hereunder (other than
non-payment of the principal and interest on the Bonds or Parity
obligations) unless the Trustee shall be specifically notified in
writing of such default by the Issuer or by the holders of at least
twenty-five per cent (258) in aggregate principal amount of all Bonds
and Parity obligations then outstanding and all notices or other
instruments required by this Indenture to be delivered to the Trustee
must, in order to be effective, be delivered at the principal corporate
trust office of the Trustee, and in the absence of such notice so
delivered the Trustee may conclusively assume there is no default
except as aforesaid;
(h) The Trustee, shall not be personally liable far any
debts contracted or for damages to persons or to personal property
injured or damaged, or for salaries or nonfulfillment of contracts
during any period in which it may be in possession of or managing the
Hospital Facility;
(i) Subject to the limitations contained in the Agreement,
at any and all reasonable times and upon reasonable prior written
notice, the Trustee, and its duly authorized agents, attorneys,
experts, engineers, accountants and representatives, shall have the
right fully to inspect any and all of the Hospital Facility, including
all books, papers and records of the Issuer and the Hospital pertaining
to the Hospital Facility and the Bonds, and to take such memoranda from
and with regard thereto as may be desired;
(j) The Trustee shall not be required to give any bond or
surety in respect of the execution of the said trusts and powers or
otherwise in respect of the premises;
(k) Notwithstanding anything elsewhere in this Indenture
contained, the Trustee shall have the right, but shall not be required,
to demand, in respect of the authentication of any Bonds, the
withdrawal of any cash, the release of any property, or any action
whatsoever within the purview of this Indenture, any showings,
certificates, opinions, appraisals or other information, or corporate
action or evidence thereof, in addition to,that by the terms hereof
required as a condition of such action by the Trustee, deemed desirable
for the authentication of any Bonds, the withdrawal of any cash, or the
taking of any other action by the Trustee;
(1) Before taking the action under this Indenture, the
Trustee may require that a satisfactory indemnity bond be furnished for
the reimbursement of all expenses to which it may be put and to protect
it against all liability, except liability which is adjudicated to have
resulted from its negligence or willful default or misconduct in
connection with any action so taken;
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shall, until) usedloronies appliedcorvinvestedeasrhereinTustee or any paying agent
trust for the purposes for which they were receivedpdedbutlneed nothbed in
segregated from other funds except to the extent required by law.
Neither the Trustee nor any paying agent shall be under any liability
for interest on any monies received hereunder except such as may be
agreed upon;
any event of
efault
occurred and)beicontinuing, thedTrusteeunder shallthis exercisenture such ofshall
rights and powers vested in it by this Indenture and shall use the same
degree of care as a prudent man would exercise or use in the
circumstances in the conduct of his own affairs.
i Section 802. Fees, Char es, and Expenses of Trustee and Pa in
A ents. The Trustee and each Paying Agent shall be entitled to payment
and/or reimbursement for reasonable fees for its services rendered
hereunder and all advances, counsel fees and other expenses reasonably
and necessarily made or incurred by the Trustee in connection with such
sfor
ervices. The Trustee shall be entitled to payment and reimbursement
Bon dtRegistrarafor theSBondsan candgcouponse�s of hasThereinabovrustee as eaProv agent and.
an event of default, but only upon an event of default, theTrusteeided.Uanon
d
each Paying Agent shall have a right of payment prior to payment on
account of interest or principal of, premium, if any, on any Bond or
Parity Obligation for the foregoing advances, fees, costs and expenses
incurred.
Section 803. Notice to Bondholders if Default Occurs. If an
event of dult occurs of which the Trustee is by subsection (g) of
Section 801 hereof required to take notice or if notice of an event of
default be given as in said subsection (g) provided, then the Trustee
shall give written notice thereof by mail to the last known owners of
all Bonds and Parity Obligations then outstanding shown by the list of
holders of Bonds and Parity Obligations required by the terms of this
Indenture to be kept at the office of the Trustee.
Section 804. Intervention by Trustee. In any judicial proceeding
to which the is a party and which in the opinion of the Trustee
and its counsel has a substantial bearing on the interests of owners of
the Bonds or Parity Obligations, the Trustee may intervene on behalf of
holders of Bonds and Parity Obligations and, subject to the provisions
Of Section 801(1), shall do so if requested in writing by the owners of
at least twenty-five percent (258) in aggregate principal amount of all
Bonds and Parity Obligations then outstanding. The rights and
obligations of the Trustee under this Section are subject to the
approval of a court of competent jurisdiction.
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Section 805, Successor Trustee. Any corporation or association
into which the Trustee may be converted or merged, or with which it may
be consolidated, or to which it may sell or transfer its corporate
trust business and assets as a whole or substantially as a whole, or
any corporation or association resulting from any such conversion,
sale, merger, consolidation or transfer to which it is a party, ipso
facto, shall be and become successor Trustee hereunder and vested with
all of the title to the whole property or trust estate and all the
trusts, powers, discretions, immunities, privileges and all other
matters as was its predecessor, without the execution or filing of any
instrument or any further act, deed or conveyance on the part of any of
the parties hereto, anything herein to the contrary notwithstanding.
Section 806. Resignation by the Trustee. The Trustee and any
successor Trustee may at any time resign from the trusts hereby created
by giving .thirty (30) days' written notice to the Issuer and the
Hospital and by registered or certified mail to each registered owner
of Bonds and Parity Obligations then outstanding and to each holder of
Bonds and Parity Obligations as shown by the list of holders of Bonds
and Parity Obligations required by this Indenture to be kept at the
office of the Trustee, and such resignation shall take effect at the
end of such thirty (30) days, or upon the earlier appointment of a
successor or temporary Trustee by the holders of Bonds and Parity
Obligations or the Issuer as provided herein and successor or temporary
Trustee's acceptance of such appointment. Such notice to the Issuer
and the Hospital may be served personally or sent by registered mail.
Section 807. Removal of Trustee. The Trustee may be removed at
any time, by an instrument or concurrent instruments in writing
delivered to the Trustee and to the Issuer, and signed by the owners of
a majority in aggregate principal amount of Bonds and Parity
Obligations then outstanding.
Section 808. Appointment of Successor Trustee by the Holders of
++U� a„� rnri[ voii aeons; •rem orar Trustee. In case the Trustee
hereunder s all resign or be removed, or be dissolved, or shall be in
course of dissolution or liquidation, or otherwise become incapable of
acting hereunder, or in case it shall be taken under the control of any
public officer or officers, or of a receiver appointed by a court, a
successor may be appointed by the owners of a majority in aggregate
principal amount of Bonds and Parity Obligations then outstanding, by
an instrument or concurrent instruments in writing signed by such
owners, or by their attorneys in fact, duly authorized; provided,
nevertheless, that in case of such vacancy the Issuer by an instrument
executed by its Mayor and attested by its City Clerk under its seal,
may appoint a temporary Trustee to fill such vacancy until a successor
Trustee shall be appointed by the holders of Bonds and Parity
Obligations in the manner above provided; and any such temporary
Trustee so appointed by the Issuer shall immediately and without
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further act be superseded by the Trustee so appointed by such holders
of Bonds and Parity Obligations. Every such Trustee appointed pursuant
to the provisions of this Section shall be a trust company or bank in
good standing, within the State of Iowa, having a reported capital,
surplus and undivided profits of not less than $10,000,000, if there be
such an institution willing, qualified and able to accept the trust
upon reasonable or customary terms.
Section 809. Concerning Anv Successor Trustees. Every successor
Trustee appointed hereunder shall execute, acknowledge and deliver to
its or his predecessor and also to the Issuer and the Hospital an
instrument in writing accepting such appointment hereunder, and
thereupon such successor, without any further act, deed or conveyance,
shall become fully vested with all the estates, properties, rights,
powers, trusts, duties and obligations of its predecessor; but such
predecessor shall, nevertheless, on the written request of the Issuer.,
or of its successor, execute and deliver an instrument transferring to
such successor all the estates, properties, rights, powers and trusts
of such predecessor hereunder; and every predecessor Trustee shall
deliver all securities and moneys held by it as Trustee hereunder to
its successor. Should any instrument in writing from the Issuer be
required by any successor Trustee for more fully and certainly vesting
in such successor the estate, rights, powers and duties hereby vested
or intended to be vested in the predecessor any and all such
instruments in writing shall, on request, be executed, acknowledged and
delivered by the issuer. The resignation of any Trustee and the
instrument or instruments removing any Trustee and appointing a
successor hereunder, together with all other instruments provided for
in this Article shall be filed and/or recorded by the successor Trustee
in each recording office, if any, where the Indenture shall have been
filed and/or recorded.
Section 810. Trustee Protected in Relying Unon Resolution, etc.
The resolutions, ordinances, opinions, certificates and other
instruments provided for in this Indenture may be accepted by the
•
Trustee as conclusive evidence of the facts and conclusions stated
therein and shall be full warrant, protection and authority to the
Trustee for the release of property and the withdrawal of cash
hereunder and for the taking of or omitting to take any action required
under this Indenture.
Section 811. Successor Trustee as Trustee of Funds and Bond
Registrar. in the event of a change in the office of Trustee the
predecessor Trustee which has resigned or been removed shall cease to
be Trustee of the Funds and Accounts provided hereunder and Bond
Registrar and the successor Trustee shall become such Trustee and Bond
Registrar.
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Section 812. Trust Estate Ma be Vested in Se arate or
Co -Trustee. It is t e purpose o this In enture t at t ere shall be no
v>olat o of any law of any jurisdiction (including particularly the
law of Iowa) denying or restricting the right of banking corporations
or associations to transact business as the Trustee in such
jurisdiction. It is recognized that in case of litigation under this
Indenture or the Agreement, and in particular in case of the
enforcement of either on default, or in case the Trustee deems that by
reason of any present or future law of any jurisdiction it may not
exercise any of the powers, rights or remedies herein granted to the
Trustee or hold title to the trust estate, as herein granted, or take
any other action which may be desirable or necessary in connection
therewith, it may be necessary that the Trustee appoint an additional
individual or institution as a separate or co -trustee. The following
provisions of this Section are adapted to these ends.
In the event that the Trustee appoints an'additional individual or
institution as a separate or co -trustee, each and every remedy, power,
right, claim, demand, cause of•action, immunity, estate, title,
interest and lien expressed or intended by this Indenture to be
exercised by or vested in or conveyed to the Trustee with respect
thereto shall be exercisable by and vested in such separate or
co -trustee but only to the extent necessary to enable the separate or
co -trustee to exercise such powers, rights and remedies, and every
covenant and obligation necessary to the exercise thereof by such
separate or co -trustee shall run to and be enforceable by either of
them.
Should any deed, conveyance or instrument in writing from the
Issuer be ,required by the separate trustee or co -trustee so appointed
by the -Trustee for more fully and certainly vesting in and confirming
to him or it such properties, rights, powers, trusts, duties and
obligations, any and all such deeds, conveyances and instruments in
writing shall, on request, be executed, acknowledged and delivered by
the Issuer. In case any separate trustee or co -trustee, or a successor
to either, shall die, become incapable of acting, resign or be removed,
all the estates, properties, rights, powers, trusts, duties and
obligations of such separate trustee or co -trustee, so far as permitted
by law, shall vest in and be exercised by the Trustee until the
appointment of a new trustee or successor to such separate trustee or
co -trustee.
Section 813. Adoption of Certain Provisions of the Trust
Indenture Act or 19 Anyt ing heeein to te contrary
..in L• LL .. _
(a) There shall at all times be one or more trustees
hereunder, at least one of whom shall at all times be a corporation or
association organized and doing business under the laws of the United
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States or of any state or territory thereof or of the.District of
Columbia (in this Section called the institutional trustee) which (i)
is authorized under such laws to exercise corporate trust powers, and
(ii) is subject to supervision or examination by federal, state,
territorial or District of Columbia authority;
(b) The rights, powers, duties and obligations conferred
upon one or more separate or co -trustees from time to time appointed
hereunder shall be conferred or imposed upon and exercised or performed
by the institutional trustee and such separate or co -trustee jointly,
except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed, such institutional
trustee shall be incompetent or unqualified to perform such act or
acts, in which event such rights, powers, duties and obligations shall
be exercised and performed by such separate or co -trustee; and
(c) If any trustee hereunder has or shall acquire -any
conflicting interest such trustee shall, within ninety (90) days after
ascertaining that it has such conflicting interest, either eliminate
such conflicting interest or resign, such resignation to become
effective upon the apointment of a successor or temporary trustee and
such successor or temporary trustee's acceptance of such apointment,
and the obligor upon the indenture securities shall take prompt steps
to have a successor or temporary trustee appointed in the manner
provided in this Indenture. A trustee shall be deemed to have a
conflicting interest if such interest is a conflicting interest within
the meaning of Section 310(b)(1) to (9), inclusive, of the Federal
Trust Indenture Act of 1939, which Section 31O(b)(1) to (9) is
incororated herein by reference.
Section 814. Trustee and Issuer Required to Accept Directions and
Action of of Hospital. The Issuer and Trustee acknowledge that certain
actions or failureF to act by the Issuer under this Indenture may
create or result in an event of default under this Indenture, and the
Issuer hereby agrees that the Hospital may perform any and all acts or
take such action as may be necessary for and on behalf of the Issuer to
prevent or correct said event of default and the Trustee agrees that it
shall take or accept such performance by the Hospital as performed by
the Issuer in such event.
ARTICLE IX
Supplemental Indentures
entu
Holders of Bonds and Parity Obligations. The Issuer and the 'Trustee
may, without the consent of or notice to any of the holders of Bonds
and Parity Obligations, enter into an indenture or indentures
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supplemental to this Indenture, as shall not be inconsistent with the
terms and provisions hereof, for any one or more of the following
purposes:
(a) To provide for the issuance of Additional Bonds in
accordance with the provisions of Section 207 hereof;
(b) To cure any ambiguity or formal defect or omission in
this Indenture;
I
(c) To grant to or confer upon the Trustee for the benefit
of the holders of Bonds and Parity Obligations any additional rights,
remedies, powers or authority that may lawfully be granted to or
conferred upon such holders or the Trustee or either of them; and
(d) To subject to this Indenture additional revenues,
properties or collateral;
(e) To modify, amend or supplement this Indenture or any
indenture supplemental hereto in such manner, not prejudicial, in the
opinion of the Trustee, to the interest of the holders of the Bonds and j
Parity Obligations, as to permit the qualification hereof and thereof
under the Trust Indenture Act of 1939 or any similar federal statute
hereafter in effect or under any state blue sky law; and
(f) To conform this Indenture to any changes in the
( Agreement permitted by Article X hereof.
Section 902. Supplemental Indentures Requiring Consent of
Holders of nds and Parity Obl> ations. Exclusive of supplemental
indentures covered by Section 901 hereof and subject to the terms and
provisions contained in this Section, and not otherwise, the holders of
not less than a majority in aggregate principal amount of the Bonds and
Parity Obligations then outstanding shall have the right, from time to
time, anything contained in this Indenture to the contrary
notwithstanding, to consent to and approve the execution by the Issuer
and the Trustee of such other indenture or indentures supplemental
hereto as shall be deemed necessary and desirable by the Issuer for the
purpose of modifying, altering, amending, adding to or rescinding, in
any particular, any of the terms or provisions contained in - this
Indenture or in any supplemental indenture; provided, however, that
nothing in this Section contained shall permit or be construed as
permitting (i) an extension of the stated maturity or reduction in the
principal amount of, or reduction in the rate or extension of the time
— of paying of interest on, or reduction of any premium payable on the
redemption of, any Bonds, without the consent of the holder of such
Bond, or (ii) a reduction in the amount or extension of the time of any
payment required by any sinking fund applicable to any Bonds without
the consent of the holders of all the Bonds which would be affected by
the action to be taken, or (iii) the creation of any lien prior to or
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Anything herein to the contrary notwithstanding, a supplemental.
indenture under this Article which affects any rights of the Hospital
shall not become effective unless and until the Hospital shall have
consented in writing to the execution and delivery of such supplemental
indenture. In this regard, the Trustee shall cause notice of the
proposed execution and delivery of any such supplemental indenture
together with a copy of the proposed supplemental indenture to be
mailed by certified or registered mail to the Hospital at least fifteen
(15) days prior to the proposed date of execution and delivery of any
such supplemental indenture.
The Hospital shall be deemed to have consented to the execution
and delivery of any such supplemental indenture if the Trustee does not
receive a letter of protest or objection thereto signed by or on behalf
of the Hospital on or before the close of business of the Trustee on
the fifteenth day after the mailing of said notice and a copy of the
proposed supplemental indenture.
ARTICLE X
Amendments to the Agreement
the Agreement Not Requir
consent Or holders oI bonus ane rocs vuii auvua. i.. -••
Trustee with the consent o the Hospita s a , without the consent of
or notice to the holders of Bonds and Parity Obligations consent to any
amendment, change or modification of the Agreement as may be required
(i) by the provisions of the Agreement and this Indenture, including
particularly any amendments to Exhibit A to the Agreement required by
Section 2.20 of the Agreement and amendments to the Agreement relating
to the issuance of Additional Notes, (ii) for the purpose of curing any
ambiguity or formal defect or omission or (iii) in connection with any
other change therein which, in the judgment of the Trustee, is not to
the prejudice of the Trustee or the holders of the Bonds and Parity
Obligations.
1002. Amendments, etc., to the
Consent of Holders of Bonds and earity uD.Ligauons. rsxcepl IVC ",c
amendments, changes or modifications as provided in Section 1001
hereof, neither the Issuer nor the Trustee shall consent to any other
amendment, change or modification of the Agreement without the written
approval or consent of the holders of not less than a majority in
aggregate principal amount of the Bonds and Parity Obligations at the
time outstanding given and procured as provided in Section 902 hereof.
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Section 1003. No Amendment May Alter Notes. Under no
circumstances shall any amendment to the Agreement alter the Notes or
the payments of principal and interest thereon without the consent of
the holders of all the Bonds at the time outstanding.
Section 1004. Release of Land and Equipment. The provisions of
Section 2.19 of the Agreement are incorporated herein by this reference
thereto, and the Trustee agrees, if all the conditions of said Section
are complied with, to execute such releases of the property described
in said Section 2.19 as are permitted by said Section 2.19.
ARTICLE XI
Discharge of Lien
If the Issuer and the Hospital shall pay or cause to be paid the
principal of and interest on the Bonds and Parity Obligations at the
times and in the manner stipulated therein, herein and in any Parity
Instruments, and shall have paid or caused to be paid all fees and
expenses of the Trustee and each paying agent, and if the Issuer and
the Hospital shall keep, perform and observe all and singular the
covenants and promises in the Bonds and Parity Obligations and in this
Indenture and in any Parity Instruments expressed as to be kept,
performed and observed by it or on its part, then these presents and
the estate and rights hereby granted shall, at the direction of the
Hospital, cease, determine and be void, and thereupon the Trustee
shall cancel and discharge the lien of this Indenture and and execute
and deliver to the Issuer such instruments in writing as shall be
requisite to satisfy the lien hereof, and assign and deliver to the
Issuer any property at the time subject to the lien of this Indenture
which may then be in its possession, except amounts required to be paid
to the Hospital under Article IX of the Agreement and except funds held
by the Trustee for the payment of principal of and interest on the
Bonds and Parity Obligations.
All outstanding Bonds and Parity Obligations and all interest due
thereon shall prior to the maturity thereof be deemed to have been paid
within the meaning and with the effect expressed in the first paragraph
of this Section if, under circumstances which do not render interest on
the Bonds subject to federal income taxation, (i) there shall have been
deposited with the Trustee either monies in an amount which shall be
sufficient, or direct obligations of the United States of America, or
obligations the timely payment of principal of and interest on which
are fully guaranteed by the United States of America, the principal of
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and the interest on which when due will provide monies which, together
with monies, if any, deposited with the Trustee at the same time, shall
be sufficient, to pay when due the principal and interest due and to
become due on said Bonds and Parity Obligations on and prior to the
maturity date thereof, and (ii) the Issuer shall have given the Trustee
in form satisfactory to it irrevocable instructions to publish, as soon
as practicable, at least twice in a newspaper or financial journal of
general circulation published in the City of New York, New York, a
notice to the holders of such Bonds and Parity Obligations and coupons
that the deposit required by (i) above has been made with the Trustee
and that said Bonds and Parity Obligations and appurtenant coupons are
deemed to have been paid in accordance with this Section and stating
the date upon which monies are to be available for the payment of the
principal on said Bonds and Parity Obligations. Neither direct or
guaranteed obligations of the United States of America nor monies
deposited with the Trustee pursuant to this Section nor principal or
interest payments on any such securities shall be withdrawn or used for
any purpose other than, and shall be held in trust for, the payment of
the principal and interest on the Bonds for which such deposit was
made; provided that any cash received from such principal or interest
payments on such direct or guaranteed obligations of*the United States
of America deposited with the Trustee, if not then needed for such
purpose, shall, to the extent practicable, be reinvested in direct or
guaranteed obligations of the United States of America maturing at
times and in amounts sufficient to pay when due the principal and
interest to become due on said Bonds and Parity Obligations on and
prior to the maturity date thereof.
ARTICLE XII
Miscellaneous
Section 1201. Consents of Holders of Bonds and Parity
Obligations. Any consent, request, direction, approval, objection -or
other nsturment required by this Indenture to be exeucted by the
holders of Bonds or Parity Obligations may be in any number of
concurrent writings of similar tenor and may be executed by such
holders in person or by agent appointed in writing. Proof of the
execution of any such consent, request, direction, approval, objection
*or other instrument or of the writing appointing any such agent and of
the ownership of Bonds or Parity Obligations, if made in the following
manner, shall be sufficient for any of the purposes of this Indenture,
and shall be conclusive in favor of the Trustee with regard to any
action taken by it under such request or other instrument, namely:
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(a) The fact and date of the execution by any person of any
such writing may be proved by the certificate of any officer in any
jurisdiction who by law has power to take acknowledgments within such
jurisdiction that the person signing such writing acknowledged before
him the execution thereof, or by affidavit of any witness to such
execution;
(b) The fact of the holding by any person of Bonds and/or
Parity Obligations and/or coupons transferable by delivery and the
amounts and numbers of such Bonds and/or Parity Obligations, and the
date of the holding of the same, -may be proved by a certificate
executed by any trust company, bank or bankers, wherever situated,
stating that at the date thereof the party named therein did,exhibitto
an officer of such trust company or bank or to such banker, as the
property of such party, the Bonds and/or Parity Obligations and/or
coupons therein mentioned if such certificate shall be deemed by the
Trustee to be satisfactory. The Trustee may, in its discretion,
require evidence that such Bonds or Parity obligations have been
deposited with a bank, bankers or trust company, before taking any
action based on such ownership. In lieu of the foregoing the Trustee.
may accept other proofs as it shall deem appropriate;
(c) The ownership of Bonds and Parity Obligations registered
as to principal, or fully registered, shall be proved by the register
of such Bonds and Parity Obligations.
For all purposes of this Indenture and of the proceedings for the
enforcement hereof, such person shall be deemed to continue to be the
holder of such Bond or Parity Obligation until the Trustee shall have
received notice in writing to the contrary.
Section 1202. Limitation of Rights. With the exception of rights
herein expressly conferred, nothing expressed or mentioned in or to be
implied from this Indenture, or the Bonds or Parity Obligations is
intended or shall be construed to give to any person other than the
parties hereto, and the Hospital, and the holders of the Bonds and
Parity Obligations and the bearers of coupons appertaining thereto, any
legal or equitable right, remedy or claim under or in respect to this
Indenture or any covenants, conditions and provisions herein contained,
this Indenture and all of the covenants, conditions and provisions
.hereof being intended to be and being for the sole and exclusive
benefit of the parties hereto and the Hospital and the holders of the
Bonds and Parity Obligations and the bearers of such coupons as herein
provided.
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Section 1203. Sever_ ability, If any provision of this Indenture
shallbe held or deemed to be or shall, in fact, be inoperative or
unenforceable as applied in any particular case in any jurisdiction or
in all jurisdictions, or in all cases because it conflicts with any
other provision or provisions hereof or any constitution or statute or
rule of public policy, or for any other reason, such circumstances
shall not have the effect of rendering the provision in question
inoperative or unenforceable in any other case or circumstance, or of
rendering any other provision or provisions herein contained invalid,
inoperative, or unenforceable to any extent whatever.
The invalidity of any one or more phrases, sentences, clauses or
Sections in this Indenture contained, shall not affect the remaining
portions of this Indenture, or any part thereof.
Section 1204. Addresses for Notice and Demands. All notices,
demands, c— ercates or other communi
sufficcations hereunder shall be
postayegiven and shall be deemed given when mailed by first class
mail g prepaid, with proper address as indicated below. The
Issuer, the Hospital, and the Trustee may, by written notice given by.
each to the others, designate any address or addresses to which
notices, demands, certificates or other communications to them shall be
sent when required as contemplated by this Indenture. Until otherwise
provided by the respective parties, all notices, demands, certificates
and communications to each of them shall be'addressed as follows:
To the Issuer:
To the Hospital:
To the Trustee:
City of Iowa City
Civic Center
410 East Washington
Iowa City, Iowa 52240
ATTENTION: City Attorney
Mercy Hospital, Iowa City, Iowa
500 Market Street
Iowa City, Iowa 52240
ATTENTION:
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Section 1205. Trustee as Registrar and Payin Agent; Appointment
of Co -Paying Agent. The Trustee is hereby designated and agrees to act
as Bond Registrar and Paying Agent for and in respect of the Bonds and
Parity Obligations. is hereby appointed Co -Paying
Agent hereunder. Paying Agents appointed shall enjoy the same
protective provisions in the performance of their duties hereunder as
are specified in Section 801 hereof with respect to the Trustee insofar
as such provisions may be applicable.
Section 1206. Counterparts. This Indenture may be simultaneously
executed in several counterparts, each of which shall be an original
and all of which shall constitute but one and the same instrument.
Section 1207.i2
This Law. This Indenture shall be governed
exclusively by the applicable laws of the State of Iowa.
Section 1208. Immunity of Officers and Members. No recourse
shall be had for the payment of the principal of or premium or interest
on any of the Bonds or for any claim based thereon or upon any
obligation, covenant or agreement in this Indenture or in the Agreement
contained against any past, present or future officer or member of the
governing body of the Issuer, or any incorporator, officer, or member
of the governing body of any successor corporation, as such, either
directly or through the Issuer or any successor corporation, under any
rule of law or equity, statute or constitution or by the enforcement of
any assessment or penalty or otherwise, and all such liability of any
such incorporator, officer, or member of the governing body as such is
hereby expressly waived and released as a condition of and
consideration for the execution of this Indenture and issuance of such
Bonds.
Anything in this Indenture to the contrarynotwithstanding, it is
expressly understood and agreed by the parties hereto that (a) the
Issuer may rely conclusively on the truth and accuracy of any
certificate, opinion, notice of other instrument furnished to the
Issuer by the Trustee or the Hospital as to the existence of any fact
or state of affairs required hereunder to be noticed by the Issuer; (b)
the Issuer shall not be under any obligation hereunder to perform any
record-keeping or to provide any legal services it being understood
that such services shall be performed either by the Trustee or the
Hospital; (c) none of the provisions of this Indenture shall require
.the Issuer to expend or risk its own funds or to otherwise incur
financial liability in the performance of any of its duties or in the
exercise of any of its.rights or powers hereunder, unless it shall
first have been adequately indemnified to its satisfaction against the
cost, expenses and liability which may be incurred thereby.
Section 1209. Holidays. If any date for the payment of principal
Of, premium, i any, or interest on the Bonds is not a business day
then such payment shall be due on the first business day thereafter.
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IN WITNESS WHEREOF, the
Issuer has caused these presents to be
signed in its name and behalf
by its Mayor and attested by its City
Clerk and .its corporate seal
to be hereunto affixed, and to evidence
its acceptance of the Trusts
hereby created, the Trustee has caused
these presents to be signed
in its name and behalf, its official seal
to be hereunto affixed, and
the same to be attested by its duly
authorized officers, all as
of the day and year first above written.
i a
CITY OF IOWA CITY, IOWA
j
By
Mayor
ATTEST:
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City Clerk
(Seal)
as Trustee
By
Its
ATTEST:
Its
(Seal)
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MERCY HOSPITAL, IOWA CITY, IOWA i
Borrower
f � �
AND
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THE CITY OF IOWA CITY, IOWA F
Lender
LOAN AGREEMENT AND SECURITY AGREEMENT
(Securing Promissory Notes)
Dated as of June 1, 1982
The rights of the City of Iowa City, Iowa hereunder have been
assigned to, as Trustee under a Trust
Indenture dated as of June 1, 1982 from the City of Iowa City, Iowa.
This instrument was prepared by:
BELIN, HARRIS, HELMICK & HEARTNEY
2000 Financial Center
Des Moines, Iowa 50309
Telephone (515) 243-7100
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TABLE OF CONTENTS
Section
Parties .....................................................
Preliminary Statement .......................................
Granting Clauses ............................................
ARTICLE I
Definitions and Exhibits
1.1. Terms Defined ....................
1.2. Rules of Interpretation ...........................
1.3. Exhibits.........................................�
ARTICLE II
Particular Covenants of the Hospital
and the Issuer
2.1. Loan of original Proceeds by Issuer; Consent to
Assignment to Trustee; Deposit of Assigned
Revenues. • . ......•
2.2. Validity of Series 1982Note; Title to Pledged
Property and Security Interest; Truth of Recitals
2.3. Payment of Principal, Premium and Interest ........
2.4. Maintenance of Security Interest; Recording .......
2.5. Further Assurances; After -Acquired Property .......
2.6. Maintenance of Corporate Existence and Tax Status .
2.7. Consolidation and Merger ..........................
2.8. Financial Statements, Etc . ........................
2.9. Taxes, Charges and Assessments ....................
2.10. Liens .... ... ... ...............
2.11. Compliance with Orders, Ordinances, Etc. ..........
2.12. Permitted Contests ..................•••••
2.13. Use of the Hospital Facility ......................
2.14. Repairs, Maintenance and Alterations ..............
2.15. Removal of Equipment by the Hospital ..............
2.16. Insurance.......... .. ............
2.17. Issuer's'orTrustee's Right to Perform Hospital's
Covenants; Advances .
2.18. Indemnity .........................................
.......
2.19. Covenant Against Liens; Release of Hospital
Facilities; Disposition of Substituted Property .
2.20 Completion of Project; Payment of Expenses of
Issuance of Series 1982 Bonds; Amendment to
Exhibit A hereto... ............
...... .. ... ...
2.21. Funding of Indenture Funds; Investments ...........
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2.22.
2.23.
2.24:
2.25.
2.26.
2.27.
2.28.
2.29.
2.30.
2.31.
2.32.
2.33.
2.34.
3.1.
3.2.
3.3.
4.1.
4.2.
4.3.
4.4.
4.5
4.6.
4.7.
5.1.
5.2.
5.3.
Other Amounts Payable by the Hospital .............
Credits on Notes and Parity Obligations ...........
Payments to Trustee................................
Rate Covenant; Mortgage ...........................
Accreditation... .. .....
.. ....... . ...... ..........
Qualification for Third Party Reimbursement;
Permits and Licenses ............................
Additional Debt ...................................
Transfer of Assets to Non -Affiliates ...........
Transfer of Assets to Class II Affiliates .........
Transfer of Assets to Class I Affiliates;
Affiliate Guarantees ..........................
Related Facility Financing........................
Maintenance of Control Over Affiliates .............
Disposition of Excluded Property and Use of
Proceeds of Assigned Revenues ...................
ARTICLE III
Damage and Condemnation
Damage ............................................
Condemnation... ... ...
. ....... ............ .........
Other Provisions with Respect to Net Proceeds .....
ARTICLE IV
Prepayment of Notes
Prepayment Generally ..............................
Optional Prepayment in the Event of Damage or
Condemnation ....................................
Optional Prepayment of Notes ......................
Special Prepayment Option .........................
Notice of Prepayment ..............................
Effect of Partial Prepayment ......................
Amortization Schedules ............................
ARTICLES V
Additional Notes and Parity Obligations
Issuance of Additional Notes and Parity Obligations
Conditions to Issuance of Additional Notes and
Parity Obligations..............................
Issuer Not Obligated to Purchase Additional Notes .
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6.1.
6.2.
6.3.
6.4.
6.5.
6.6.
6.7.
6.8.
6.9.
ARTICLE VI
Events of Default and Remedies Therefor
Events of Default ......................
Payment of Defaulted Amounts on Demand ............
Trustee May Enforce Demand ........................
Appointment of Receiver ...........................
Remedies Cumulative ...............................
Delay or Omission Not a Waiver ... .... ...........
Waiver of Extension, Appraisement, Stay Laws ......
Remedies Subject to Provisions of Law .............
Remedies Under Uniform Commercial Code ............
ARTICLE VII
Immunity of Members, Officers and Directors
ARTICLE VIII
Supplements and Amendments to this Agreement
ARTICLE IX
Defeasance
ARTICLE X
Miscellaneous Provisions
10.1. Agreement for Benefit of Parties Hereto ...........
10.2. Severability ......................................
10.3. Limitation on Interest ............................
10.4.• Addresses for Notice and Demands ..................
10.5. Successors and Assigns ............................
10.6. Counterparts ......................................
10.7. Governing Law .....................................
Signatures ..................................................
EXHIBIT A --DESCRIPTION OF REAL ESTATE
EXHIBIT B --PROMISSORY NOTE, SERIES 1982
EXHIBIT C --DESCRIPTION OF THE PROJECT
EXHIBIT D --MORTGAGE
EXHIBIT E --AFFILIATE GUARANTY
EXHIBIT F --EXCLUDED PROPERTY
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6.1.
6.2.
6.3.
6.4.
6.5.
6.6.
6.7.
6.8.
6.9.
ARTICLE VI
Events of Default and Remedies Therefor
Events of Default ......................
Payment of Defaulted Amounts on Demand ............
Trustee May Enforce Demand ........................
Appointment of Receiver ...........................
Remedies Cumulative ...............................
Delay or Omission Not a Waiver ... .... ...........
Waiver of Extension, Appraisement, Stay Laws ......
Remedies Subject to Provisions of Law .............
Remedies Under Uniform Commercial Code ............
ARTICLE VII
Immunity of Members, Officers and Directors
ARTICLE VIII
Supplements and Amendments to this Agreement
ARTICLE IX
Defeasance
ARTICLE X
Miscellaneous Provisions
10.1. Agreement for Benefit of Parties Hereto ...........
10.2. Severability ......................................
10.3. Limitation on Interest ............................
10.4.• Addresses for Notice and Demands ..................
10.5. Successors and Assigns ............................
10.6. Counterparts ......................................
10.7. Governing Law .....................................
Signatures ..................................................
EXHIBIT A --DESCRIPTION OF REAL ESTATE
EXHIBIT B --PROMISSORY NOTE, SERIES 1982
EXHIBIT C --DESCRIPTION OF THE PROJECT
EXHIBIT D --MORTGAGE
EXHIBIT E --AFFILIATE GUARANTY
EXHIBIT F --EXCLUDED PROPERTY
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This is a LOAN AGREEMENT AND SECURITY AGREEMENT, dated as of June
1, 1982 (the "Agreement"), between MERCY HOSPITAL, I04IA CITY, IOWA, an
Iowa not-for-profit corporation (the "Hospital"), as Borrower, and THE
CITY OF IOWA CITY, IOWA (the "Issuer"), a municipal corporation of the
State of Iowa, as Lender.
PRELIMINARY STATEMENT
The Issuer is authorized and empowered by the provisions of
Chapter 419 of the Code of Iowa, 1981, as amended (the "Act"), to issue
revenue bonds and to loan the proceeds of such revenue bonds pursuant
to a loan agreement to one or more contracting parties, as defined in
the Act, to be used (i) to pay the cost of acquiring, by construction
or purchase, land, buildings, -improvements and equipment, or -any
interest therein, suitable for use of any voluntary nonprofit hospital
and (ii) to retire any existing indebtedness of a voluntary nonprofit
hospital.
The Hospital is a voluntary nonprofit hospital within the
meaning of the Act which presently owns and operates a hospital
facility located on the real estate described in Exhibit A attached
hereto (the "Existing Facility") which is in need of additions and
improvements and in order to improve the hospital and health care
services for the inhabitants of the Issuer and to lower the expense
thereof, the Hospital proposes to acquire land and construct certain
additions and improvements to and parking facilities for the Existing
Facility (the "Project") and to refund certain existing indebtedness of
the Hospital (the "Existing Debt"), as more fully described
hereinafter.
The
Series 1982s (Mercy tHospital 1Project) (the e"Series tal 11982 Bonds") Bonds,
nnthe
aggregate principal amount of $ pursuant to the Trust
Indenture dated as of June 1, 1982 (the "Indenture") from the Issuer to
, as Trustee (the "Trustee"), and
loan the
proceeds of the Series 1982 Bonds pursuant to the provisions
Of this Agreement to the Hospital for the purpose of defraying the cost
of the Project and to refund the Existing Debt.
The Hospital is the contracting party to this Agreement within the
meaning of the Act, and this Agreement provides for the repayment by
the Hospital of the loan of the proceeds of the Series 1982 Bonds and
further provides (i) for the Hospital's repayment obligations to be
evidenced by the Hospital's Promissory Note, Series 1982 (the "Series
1982 Note") in substantially the form attached hereto as Exhibit B and
(ii) for such loan and the Series 1982 Note to be secured by the
security interest herein provided.
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Pursuant to the Indenture the Issuer will assign the Series 1982
Note and its rights under this Agreement (other than its Unassigned
Rights, as hereinafter defined) as security for the Series 1982 Bonds.
The Series 1982 Bonds will be payable solely out of the payments to be
made by the Hospital on the Series 1982 Note, any other Notes issued
hereunder, and certain other payments, all as provided herein.
GRANTING CLAUSES
IN CONSIDERATION of the premises, the loan of the proceeds of the
Series 1982 Bonds to be made by the Issuer and of other good and
valuable consideration, the receipt whereof is hereby acknowledged and
in order to secure the payment of the principal of, premium, if any,
and interest payable on the Series 1982 Note, any, Additional•Notes
issued hereunder and any notes issued in substitution therefor (herein
collectively referred to as the "Notes") and Parity Obligations (as
defined herein) and the performance of all the covenants of the
Hospital contained herein, the Hospital has executed and delivered this
Agreement and by these presents does assign, and grant a security
interest in, to the Issuer and its successors and assigns forever, all
the Hospital's right, title and interest in, to and under any and all
of the following described property (herein called the "Pledged
Property");
DIVISION I
All fixtures, machinery, equipment, and other tangible personal
property (as defined in Article 9 of the Iowa Uniform Commercial Code)
now owned or hereafter acquired by the Hospital, and now or at any time
hereafter located on the real property described in Exhibit A hereto
(the "Land"), and all substitutions or replacements therefor, and all
fixtures, machinery, equipment, and other tangible personal property
which under the terms of this Agreement are to be subjected to the lien
hereof;
DIVISION II
The Assigned Revenues of the Hospital as defined herein; and
DIVISION III
Any and all other property of every kind and nature from time to
time hereafter, by delivery or by writing of any kind, conveyed,
pledged, assigned or transferred as and for additional security
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hereunder by the Hospital or by anyone on its behalf to the Issuer or
the Trustee, including without limitation, funds of the Hospital held
by the Trustee as security for the Bonds;
SUBJECT, HOWEVER, to Permitted Encumbrances, as defined in Article
I hereof;
TO HAVE AND TO HOLD all and singular, the Pledged Property,
whether now owned or hereafter acquired, unto the issuer, its
successors and assigns forever; provided, however, that this Agreement
is upon the express condition that if the Hospital shall pay or cause
to be paid all indebtedness secured hereby and shall keep, perform and
observe all and singular the,covenants and promises in the Notes, this
Agreement, Parity Obligations and Parity Instruments expressed to be
kept, performed and observed by the Hospital, then this Agreement and
the rights hereby granted shall cease, determine and be void; otherwise
to remain in full force and effect.
The Hospital and.the Issuer hereby further covenant and agree as
follows:
ARTICLE I
Definitions and Exhibits
Section 1.1. Terms Defined. As used in this Agreement, the
following terms shall haves a Tollowing meanings unless the context
clearly otherwise requires:
"Act" means Chapter 419 of the Code of Iowa, 1981, as now or
hereafter amended.
"Additional Bonds" means the additional parity Bonds authorized to
be issued by the Issuer pursuant to Section 207 of the indenture. to
finance the purchase of Additional Notes.
"Additional Notes" means the additional Promissory Notes
authorized to be issued by the Hospital on a parity with the Series
1982 Note pursuant to the provisions of Article V hereof.
"Affiliate" means an Iowa not-for-profit corporation or a foreign
corporation authorized to conduct affairs in the State of Iowa under
Chapters 504 or 504A, Code of Iowa, which directly or indirectly
through one or more intermediaries controls, or is controlled by, or is
under common control with, the Hospital, or an Iowa business
corporation or a foreign corporation authorized to conduct affairs in
the State of Iowa under the Iowa Business Corporation Act, Chapter
496A, Code of Iowa, 1008 of the stock of which is beneficially owned or
held directly or indirectly by the Hospital or by an Affiliate. The
term "control" means (a) the power to designate a majority of the
members of the Directing Body which are (i) the same as the members or
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directors of the Hospital, (ii) subject to election or appointment by
the Hospital, or (iii) subject to election or appointment by a
corporation which has the power to elect or appoint a majority of the
members of the Directing Body of the Hospital; or (b) the power to
elect or appoint a majority of the members of the Directing Body of the
Hospital. For the purposes of this definition, 'Directing Body' of a
corporation means such corporation's members if the members have
complete discretion to elect the corporation's directors, or the
corporation's directors if the corporation's members do not have such
discretion. In addition, for the purposes of this definition, a
corporation shall be deemed to have the power to elect or appoint a
majority of the members of the Directing Body of another corporation if
it can exercise such power directly or through the power to elect or
appoint a majority of the members of the Directing Body of one or more
intermediary corporations.
"Affiliate Guaranty" means a guarantee of the Notes and Parity
Obligations, including the granting of a security interest in
Unrestricted Receivables, in substantially the form attached hereto as
Exhibit E.
"Architect" means an architect, engineer or firm of architects or
engineers licensed by the State of Iowa, selected by the Hospital and
approved by the Trustee. The firm of Hansen Lind Meyer, P.C. of Iowa
City, Iowa, shall be deemed to be an Architect within the meaning
hereof.
"Assigned Revenues" means rents, issues, profits, income,
revenues and receipts derived by the Hospital from all sources,
including all monies, earnings, revenues, rights to the payment of
money and receivables and all accounts and assignable general
intangibles now owned or hereafter acquired by the Hospital and whether
or not derived from the use or operation of the Hospital Facility, and
all proceeds therefrom, whether cash or noncash, all as.defined in
Article 9 of the Iowa Uniform Commercial Code, as amended; excluding,
however, gifts, grants, bequests, donations and contributions to the
Hospital heretofore or hereafter made the uses of which are restricted
by their donors to uses inconsistent with the payment of debt service
on the Notes or Parity Obligations and the income and gains derived
therefrom.
"Authorized Hospital Representative" means such person at the
time, and from time to time, designated by written certificate of the
Hospital furnished to the Trustee containing the specimen signature of
such person and signed on behalf of the Hospital by its Chief Executive
Officer. Such certificate may designate an alternate or alternates.
"Bond Counsel" means a nationally recognized firm of municipal
bond attorneys acceptable to the Trustee and the Hospital.
"Bond" or "Bonds" means the bonds of all series from time to time
issued, authenticated and delivered under the Indenture, including the
Series 1982 Bonds and any Additional Bonds.
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"Bond Fund" means the fund by that name established by Section 402
of the Indenture.
"Bond Redemption Fund" means the fund by that name established by
Section 402 of the Indenture.
"Bond Year" means the period beginning on June 2 of each year and
ending on June 1 of the next succeeding year.
"Borrowed Funds Account" means the separate account by that name
in the Debt Service Reserve Fund established by Section 402 of the
Indenture.
"Capitalized Interest Account" means the separate account by that
name in the Bond Fund established by Section 402 of the Indenture.
"Certified Public Accountant" means a certified public accountant,
or a firm of certified public accountants, selected by the Hospital and
satisfactory to the Trustee.
"Class I Affiliate" means those Affiliates controlled directly or
indirectly by the Hospital or by one or more intermediaries controlled
by the Hospital.
"Class Ii Affiliate" means any Affiliate which is not a Class I
Affiliate.
"Construction Fund" means the fund by that name established by
Section 302 of the Indenture.
"Counsel" means an attorney duly admitted to practice law before
the highest court of any state and, without limitation, may include
legal counsel for either the Issuer or the Hospital.
"Debt Service Reserve Fund" means the fund by that name
established by Section 402 of the Indenture.
"Depreciation Reserve Fund" means the fund by that name
established in Section 402 of the Indenture.
"Equipment" means the fixtures and items of machinery, equipment
and other tangible personal property described in Division I of the
Granting Clauses hereof.
"Excluded Property" means the property described in Exhibit F
hereto and the proceeds of sale, lease or other disposition of such
property and the income and gain derived from the investment of such
proceeds.
"Existing Debt" means the existing debt of the Hospital evidenced
by notes payable to The Penn Mutual Life Insurance Company presently
outstanding in the principal amount of $
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'Existing
locatedontthe reallestateeans the describedxintExhibitpAtal attachedltnow
hey
reto.
"Fiscal Year" means the period beginning on July 1 of each
calendar year and ending on June 30 of the next succeeding calendar
year, or such other period as is established from time to time for
accounting purposes of the Hospital by its Board of Directors.
"Funded Depreciation Account" means the separate account by that
name in the Debt Service Reserve Fund created by Section 402 of the
Indenture.
"Government Securities" means bonds, notes, certificates of
indebtedness, treasury bills or other securities constituting direct
obligations of the United States of America and all securities or
obligations, the timely payment of all principal and interest on which
is fully guaranteed by the United States of America.
"Hospital" means Mercy Hospital, Iowa City, Iowa, an Iowa
not-for-profit corporation, and its successors and assigns. I --
"Hospital Consultant" means any nationally recognized hospital �.
consultant or consultants or any nationally recognized firm of
certified public accountants with experience in the preparation of
feasibility studies for use in connection with the financing of
hospitals selected by the Hospital and approved by the Trustee.
"Hospital Facility" means the Land, the Existing Facility, the
Project and all additions and improvements thereto.
"Improvements" means improvements, replacements, alterations,
additions, enlargements or expansions in, on or to the Hospital
Facility and any and all machinery and equipment for the Hospital
Facility (other than those included in the Project for which the Issuer
issued the Series 1982 Bonds or Additional Bonds for the completion
thereof).
"Indenture" means the Trust Indenture dated as of June 1, 1982
from the Issuer to the Trustee and all amendments and supplements'
thereto.
me
ns
Hospitaldeand,dein'Itheacaseaofnannindividual, notect or idirect, i
being andirector,n the
officer or employee of the Hospital and, in the case of a firm, not
having a partner, director, officer or employee who is a director,
officer or employee of the Hospital.
"Insurance Consultant" means an insurance consultant or firm of
insurance consultants selected by the Hospital and approved by the
Trustee.
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"Interest Account" means the separate account by that name in the
Bond Fund established by Section 402 of the Indenture.
"Internal Revenue Code" means the Internal Revenue Code of 1954,
as from time to time supplemented and amended and the regulations and
proposed regulations thereunder.
"Issuer" means the City of Iowa City, Iowa, and its successors and
assigns.
"Land" means the real estate described in Exhibit A hereto as from
time to time supplemented or amended.
"Maximum Annual Debt Service" means, as of any computation date,
with respect to the Bonds and Parity Obligations as to which"a
computation is to be made, the maximum amount of principal and interest
which will be payable on such Bonds and Parity Obligations in the then
current Bond Year or in any succeeding Bond Year, whether, in the case
of principal, at maturity or by mandatory redemption or prepayment,
assuming all such Bonds and Parity Obligations which are subject to
mandatory redemption or prepayment are duly redeemed or prepaid in
accordance with the requirements of the Indenture and any Parity
Instrument, and assuming that no such Bond or Parity Obligation is
otherwise redeemed or prepaid prior to its maturity.
"Mortgage" means the mortgage in the form attached hereto as
Exhibit D, which under certain circumstances, is required to be
executed and recorded pursuant to Section 2.25 hereof.
"Net Income Available for Debt Service" means the excess of
revenues over expenses as determined in accordance with generally
accepted accounting principles, disregarding, however, the following
items: (i) gains or losses resulting from the sale or other
disposition, not in the ordinary course of operations, of investments
or fixed or capital assets, (ii) the proceeds of any insurance other
than business interruption insurance, (iii) any extraordinary gains or
losses resulting from the advance refunding or early extinguishment of
debt of the Hospital, (iv) depreciation, amortization and interest on
the Notes and Parity Obligations and (v) the proceeds of gifts,
donations, grants, pledges, legacies, bequests, devises and
contributions received during the Fiscal Year with respect to which a
calculation is made, and expenses incurred during such Fiscal Year in
connection with the solicitation and collection of the same up to an
amount not to exceed the principal amount of gifts, donations, grants,
pledges, legacies, bequests, devises and contributions collected during
such Fiscal Year; provided, however, that donations or contributions
made by any Affiliate during such Fiscal Year shall not be disregarded
so long as the same were not restricted by such Affiliate to a
particular purpose which is inconsistent with their use for payments
required on the Notes and Parity Obligations.
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"Net Proceeds", when used with respect to any insurance or
condemnation award, means the gross proceedsfrom theexpinsurancenses or
ing
condemnation award remaining after payment
attorneys' fees and any expenses of the
Trustee
eedand the Issuer)
incurred in the collection of such gross
s.
"Notes" means the Series 1982 Note and any Additional Notes.
"Original Purchaser" means, with respect to each series of Bonds
or Parity Obligations, the direct purchasers thereof flicable,m the Ithe
as the er,
or the Hospital, case may be, for the
including, if app
investment bankers or bond dealers who underwrite, or arranges of such series, and, with
sale
investment
the Bands or Parity Obligation
respect to the Series 1982 Bonds, means John Nuveen & Co. Incorporated,
Chicago, Illinois.
"Outstanding" with reference to Bonds, means all Bonds theretofore
issued and not yet paid and discharged under the terms of the Indenture
and with reference to Notes and Parity Obligations, means all Notes and
Parity Obligations theretofore issued and and not yet paid and
discharged under the terms of this Agreement and Parity Instruments.
"Parity Instruments" means instruments creating and/or securing
i
Parity Obligations.
any obligations of the Hospital
"Parity Obligations" means
Article V hereof other than Additional
hereafter delivered pursuant to
Notes.
"Permitted Encumbrances" means, as of any particular time, (i) any
exception to title shown in Exhibit A hereto, (ii) liens for ad valorem
taxes and special assessments en
be ng contested ineaccordance reof not hwith
delinquent or, if delinquent, being
Section 2.12 hereof, (iii) this AgreemeiV, the denaccesspandtother
Instruments and the Mortgage, if any, (iv)utility,
easements and rights of way, mineral rights, restrictions and
exceptions that will not materially
ere r the
at thehHospitor al1Facility,
operations of the Hospital being
(v) such minor defects, irregularities, encumbrances, easements, rights
of way and clouds on title as normally exist with respect to properties
similar in character to the Hospital Facility and as do not in the
aggregate materially impair the property affected thereby for the
purpose for which it was acquired or is held by the Hospital, (vi)
zoning and building laws, ordinances or regulations and similar
restrictions and liens arising in connection with worker's
obligationsnoruliens, social nemployment nsecurity legislation, undetermsurance, taxes? assessment! inedtlions
and charges arising in the ordinary course of operation and not overdue
or, if overdue, being contested in accordance with Section 2.12 h
hereof
w as
eofand such other liens and charges at the time required by
condition precedent to the transaction of the business of the Hospital
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or the exercise of any privileges or licenses of the Hospital, (vii)
statutory rights under Section 291, Title 42 of the United States Code,
as a result of what are commonly known as Hill -Burton grants, and
similar rights under other Federal and Iowa statutes and laws, and
(viii) liens and security interests securing indebtedness permitted by
Section 2.28 of this Agreement.
"Pledged Property" means the property described in the Granting
Clauses hereof, plus any additional property which shall have been
subjected to the lien hereof pursuant thereto.
"Principal Account" means the separate account by that name in the
Bond Fund established by Section 402 of the Indenture.
"Project" means the remodeling of, and the improvements -to and
parking facilites for the Existing Facility, as described in the plans
and specifications prepared by Hansen Lind Meyer, P.C., together with
the acquisition of equipment and furnishings incidental thereto, and
the other equipment acquired for and improvements made to the Existing
Facility, as described in Exhibit C hereto.
"Qualified Investments" means investments in: (i) Government
Securities, (ii) obligations not constituting Government Securities
issued or fully guaranteed as to timely payment of principal and
interest by any person controlled or supervised by and acting as an
instrumentality of the United States of America pursuant to authority
granted by its Congress, (iii) certificates of deposit or time deposits
of any bank organized under the laws of any state or of the United
States of America having combined capital, surplus and undivided
profits of at least $10,000,000 and which is a member of the Federal
Deposit Insurance Corporation, if then in existence, provided that such
deposits may not exceed at any one time in the aggregate ten per cent
of the combined capital, surplus and undivided profits of any such bank
and (iv) repurchase agreements entered into by any bank described in
the foregoing clause (iii) fully secured by Government Securities or
obligations described in the foregoing clause (ii).
"Revenue Fund" means the Revenue Fund established by Section 402
of the Indenture.
"Series 1982 Bonds" means the Hospital Facility Revenue Bonds,
Series 1982 (Mercy Hospital Project) of the Issuer dated June 1, 1982
being issued under the Indenture in the aggregate principal amount of
"Series 1982 Note" means the Promissory Note, Series 1982, of the
Hospital dated June 1, 1982 in the principal sum of $
being issued by the Hospital to secure the payment of the Series 1982
Bonds. The Series 1982 Note is in substantially the form attached
hereto as Exhibit B.
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"State" means the State of Iowa.
"Tax Exempt Organization" means a nonprofit corporation organized
under the laws of one of the states of the United States or the
District of Columbia which is an organization described in Section
501(c)(3) of the Internal Revenue Code and exempt from federal income
taxes under Section 501(a) of the Internal Revenue Code or any
predecessor or successor provisions of similar import heretofore or
hereafter enacted.
"Transferable Asset Base" means, as of any time of computation,
the total unrestricted fund assets of the Hospital as shown in its most
recent audited financial statements less the amount of such assets
which comprise funds held by the Trustee under the Indenture and which
are associated with the Series 1982 Bonds and any other Bonds issued
under the Indenture.
"Trustee" means the trustee and/or co -trustee at the time
serving as such under the Indenture.
"Unassigned Rights", with respect to the Issuer, means the
Issuer's rights to decline to purchase Additional Notes as set forth in
Section 5.3 hereof; to execute and deliver supplements and amendments
to this Agreement pursuant to Article VIII hereof; to be reimbursed by
the Hospital for reasonable fees and expenses incurred by the Issuer,
as required by Sections 2.20 and 2.22 hereof; and to be indemnified by
the Hospital for any liability incurred by the Issuer as required by
Section 2.18 hereof; all of which rights are not assigned by the Issuer
to the Trustee pursuant to the Indenture, but for the protection of
which the Trustee may act on behalf of the Issuer.
"Unrestricted Receivables" means all accounts and assignable
general intangibles now owned or hereafter acquired by any Affiliate,
and all proceeds therefrom whether cash or noncash, all as defined in
Article 9 of the Iowa Uniform Commercial Code, as amended; excluding,
however, gifts, grants, bequests, donations and contributions to such
Affiliate heretofore or hereafter made, and the income and gains
derived therefrom, which are specifically restricted by the donor or
grantor to a particular purpose which is inconsistent with their use
for payments required on the Notes and Parity Obligations.
"Written Request" with reference to the Issuer, shall mean a
request in writing signed by the Mayor or City Clerk of the Issuer and
with reference to the Hospital, shall mean a request in writing signed
by the President or any Vice President of the Hospital, or any other
officer or officers designated by the Issuer or the Hospital, as the
case may be.
Section 1.2. Rules of Interpretation. For all purposes of this
Agreement, except as otherwise expressly provided or unless the context
otherwise requires:
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(a) "This Agreement" means this instrument as originally
executed and as it may from time to time be supplemented or amended
pursuant to the applicable provisions hereof;
(b) All references in this instrument to designated
"Articles", "Sections" and other subdivisions are to the designated
Articles, Sections and other subdivisions of this instrument as
originally executed. The words "herein", "hereof" and "hereunder" and
other words of similar import refer to this Agreement as a whole and
not to any particular Article, Section or other subdivision;
(c) The terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the
singular;
(d) All accounting terms not otherwise defined herein have
the meanings assigned to them in accordance with generally accepted
accounting principles;
(e) Any terms not defined herein but defined in the
Indenture shall have the same meaning herein;
(f) The terms defined elsewhere in this Agreement or in the
Indenture shall have the meanings therein prescribed for them;
(9) This Agreement shall be interpreted and construed in
accordance with the laws of the State of Iowa.
Section 1.3. Exhibits. The following Exhibits are attached to
and by refe—rence made a part of this Agreement:
Exhibit A: Legal description of the real estate on
which the Hospital Facility is located
Exhibit B: Form of Promissory Note, Series 1982
Exhibit C: Description of the Project
Exhibit D: Form of Mortgage
Exhibit E: Form of Affiliate Guaranty
Exhibit F: Description of the Excluded Property
W
ARTICLE II
Particular Covenants of the Hospital
and the Issuer
n 2.1. Loan of
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the execution and delivery hereof, the Issuer is issuing the Series
1982 Bonds and will loan the proceeds from the sale thereof to the
Hospital by making the deposits and payments specified in Section 301
of the Indenture. The Hospital's obligation to'repay said'loan shall
be evidenced by the Series 1982 Note which shall be in the same
principal amount as the aggregate principal amount of the Series 1982
Bonds, be dated the date of such Series 1982 Bonds, be expressed to
mature in installments of principal and interest on such dates and in
such amounts as shall be sufficient to pay the principal and interest
on such Series 1982 Bonds when due and shall concurrently with the
execution and delivery thereof be pledged and assigned by the Issuer to
the Trustee pursuant to the Indenture. The Hospital acknowledges and
consents to the assignment of the Series 1982 Note and the pledge and
assignment of the Issuer's rights hereunder to the Trustee pursuant to
the Indenture and the Issuer and Hospital agree that only the Trustee
may enforce the rights, remedies and privileges granted to the Issuer
hereunder other than Unassigned Rights.
The Hospital covenants and agrees that, unless on or prior to the
date that each monthly payment is due under Sections 2.24(a), (b) and
(c) hereof, and unless on or prior to the date that any other payment
hereunder is due (including payments on any Parity Obligations), it
shall have deposited with the Trustee (within five days from notice by
the Trustee of a failure to make such deposit) an amount sufficient to
enable the the Trustee to make the deposits required by Section 403(a),
(b) and (c) of the Indenture for such month and an amount equal to the
amount of such other payments due hereunder, it shall deliver daily to
the Trustee, so far as is practicable, commencing on that date, all of
its Assigned Revenues until such time as the total amount of the
Assigned Revenues delivered to the Trustee shall be an amount
sufficient to enable the Trustee to make such deposits for such month
and an amount equal to the amount of such other payments due hereunder,
at which time the Hospital may suspend the further delivery of its
Assigned Revenues. At any time that the Assigned Revenues are being
delivered to the Trustee pursuant to this Section, the Trustee may, in
its discretion, pay to the Hospital, or allow the Hospital to retain,
such portion of the Assigned Revenues as shall be necessary to enable
the Hospital to maintain the operation of the Hospital Facility during
the time that its Assigned Revenues are being delivered to the Trustee.
of Series 1982 Note: Ti
Property and Security Interest; Truth o Recitals. (a) The Hospital
is a not-for-profit corporation duly incorporated under the laws of and
in good standing in the State of Iowa; is duly authorized under the
laws of Iowa and all other applicable provisions of law and its
articles of incorporation and by-laws to create and issue the Series
1982 Note and to execute and deliver this Agreement, that all action on
its part necessary for the valid creation and issuance of the Series
1982 Note and the valid execution and delivery of .this Agreement has
been duly and effectively taken, and that the Series 1982 Note in the
hands of the holder thereof will be the legal and valid obligation of
the Hospital;
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(b) The Hospital represents and warrants that it is the
lawful owner and is now lawfully seized and possessed of the Pledged
Property (other than that not presently in existence), free and clear
of all liens, security interests, charges or encumbrances whatever
except Permitted Encumbrances, and has full power and lawful authority
to grant a security interest in the same to the Issuer; this Agreement
creates a valid security interest in the Pledged Property, subject only
to Permitted Encumbrances;
(c) The Hospital represents and warrants that it is the
lawful owner and is now lawfully seized and possessed of the Hospital
Facility (other than that not presently in existence), free and clear
of all liens and encumbrances except Permitted Encumbrances; and that
the Hospital has good and marketable fee simple title to the Land
subject only to Permitted Encumbrances, and will preserve, warrant and
defend the same against the claims of all persons and parties;
(d) The Hospital warrants that the recitals of fact and
statements contained in this Agreement with respect to the Hospital are
true.
Section 2.3. Pa ment of Princi al, Premium and Interest. The
Hospitaa wilT3uly an punctua y pay t e principa o , premium, if
any, and interest on the Notes and Parity Obligations at the dates and
the places and in the manner mentioned in the Notes, this Agreement,
any Parity obligations and any Parity Instruments, according to the
true intent and meaning thereof and hereof.
The Hospital covenants and agrees with and for the express benefit
of the Issuer, the Trustee and the holders of the Bonds that all
payments pursuant hereto and to the Notes shall be made by the Hospital
on or before the date the same become due, and the Hospital shall
perform all of its other obligations, covenants and agreements
hereunder, without notice or demand (except as provided herein), and
without abatement, deduction, reduction, diminution, waiver,
abrogation, set-off, counterclaim, recoupment, defense or other
modification or any right of termination or cancellation arising from
any'circumstance whatsoever, whether now existing or hereafter arising,
and regardless of any act of God, contingency, event or cause
whatsoever, and irrespective (without limitation) of whether the
Project shall have been started or completed, or whether the Hospital's
title to the Hospital Facility or to any part thereof is defective or
nonexistent, or whether the Hospital's Assigned Revenues are sufficient
to make such payments, and notwithstanding any damage to, or loss,
theft or destruction of, the Hospital Facility or any part thereof,
expiration of this Agreement, any failure of consideration or
frustration of purpose, the taking by eminent domain or otherwise of
title to or of the right of temporary use of, all or any part of the
Hospital Facility, legal curtailment of the Hospital's use thereof, any
assignment, novation, merger, consolidation, transfer of assets,
leasing or other similar transaction of or affecting the Hospital,
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whether with or without the approval of the Issuer, any change in the
tax or other laws of the United States of America, the State of Iowa,
or any political subdivision of either thereof, any change in the
Issuer's legal organization or status, or any default of the Issuer
hereunder, and regardless of the invalidity of any portion of this
Agreement; and the Hospital hereby waives, to the extent permitted by
law, the provisions of any statute or other law now or hereafter in
effect impairing or conflicting with any of its obligations, covenants
or agreements under this Agreement or which releases or purports to
release the Hospital therefrom. Nothing in this Agreement shall be
construed as a waiver by the Hospital of any rights or claims the
Hospital may have against the Issuer under this Agreement or otherwise,
but any recovery upon such rights and claims shall be had from the
Issuer separately, it being the intent of this Agreement that the
Hospital shall be unconditionally and absolutely obligated without
right of set-off or abatement, to perform fully all of its obligations,
agreements and covenants under this Agreement for the benefit of the
holders of the Bonds.
Section 2.4. Maintenance of Securit Interest; Recordin . (a)
The Hosp>ta wi 1, at its expense, to e a necessary action to
maintain and preserve the security interest granted in this Agreement
so long as any Note or Parity Obligation is outstanding;
(b) The Hospital will, forthwith after the execution and
delivery of this Agreement and thereafter from time to time, cause
financing statements in respect of this Agreement to be filed,
registered and recorded in such manner and in such places as may be
required by law in order to publish notice of and fully to protect the
lien and security interest hereof upon, and the title of the Hospital
to, the Pledged Property; and from time to time will perform or cause
to be performed any other act as provided by law and will execute or
cause to be executed any and all continuation statements and further
instruments that may be requested by the Issuer or the Trustee for such
publication and protection. Except to the extent it is exempt
therefrom, the Hospital will pay or cause to be'paid all filing,
registration and recording fees incident to such filing, registration
and recording, and all expenses incident to the preparation, execution
and acknowledgment of such instruments of further assurance, and all
federal or state fees and other similar fees, duties, imposts,
assessments and charges arising out of or in connection with the
execution and delivery of this Agreement and such instruments of
further assurance.
Section 2.5. Further Assurances; After -Acquired Property. (a)
The Hosp t� all do, execute, acknowledge and deliver, or cause to be
done, executed, acknowledged and delivered, all such further acts,
deeds, conveyances, security instruments, assignments, transfers,
pledges, and assurances as the Issuer reasonably may require for the
better assuring, conveying, pledging, assigning and confirming unto the
Issuer all and singular the Pledged Property as now or herea'kter
constituted;.
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(b) All right, title and interest of the Hospital in and to
all improvements, betterments, renewals, substitutions and replacements
of the Pledged Property or any part thereof, hereafter constructed or
acquired by the Hospital immediately upon such construction or
acquisition, and without any further pledging, conveyance or
assignment, shall become and be part of the Pledged Property and shall
be subject to the security interest granted in this Agreement and
Parity Instruments as fully and completely and with the same effect as
though now owned by the Hospital, but at any and all times the Hospital
will execute and deliver any and all such further assurances, security
instruments, pledges, conveyances or assignments therefor and other
instruments with respect thereto as may be necessary for the purpose of
expressly and specifically subjecting the same to the security interest
granted in this Agreement.
Section 2.6. Maintenance of Corporate Existence and Tax Status.'
The Hospita agrees that it will at all times take all legal steps
necessary to maintain its existence as a not-for-profit corporation and
that it will take no action or suffer any action to be taken by others
which will alter, change or destroy its status as a not-for-profit
corporation or its status as a Tax -Exempt Organization.
The Hospital further agrees that it will not use the Hospital
Facility, or permit the Hospital Facility to be used in such a way as
would result in the loss of tax exemption for interest on the Bonds
otherwise afforded under Section 103(a) of the Internal Revenue Code;
nor will it act in any manner which would adversely affect the tax free
nature for federal income tax purposes of the interest on the Bonds.
The Hospital further covenants that none of its revenues, income
or profits, whether realized or unrealized, will be distributed to any
of its officers or members, or inure to the benefit of any private
person, association or corporation (other than a Tax -Exempt
Organization), other than for the lawful corporate purposes of the
Hospital, provided, however, that the Hospital may pay to any person,
association or corporation the value of any service or product
performed for or supplied to the Hospital by such person, association
or corporation.
Section 2.7. Consolidation andMeer. The Hospital covenants
w
that it -VI - maintain its corporate existence and will not dissolve and
will not permit one or more other corporations to consolidate with or
merge into it, except that the Hospital may, without violating the
foregoing, consolidate with or merge into another corporation, or
permit one or more other corporations to consolidate with or merge into
it, if the corporation surviving such merger or resulting from such
consolidation, as the case may be:
(a) Is a domestic corporation (that is, a corporation
organized and existing under the laws of one of the states of the
United States of America or the District of Columbia) qualified to do
business in Iowa;
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(b) Is an entity of a nature such that its succession to the
position of the Hospital under this Agreement will not, in the opinion
of Bond Counsel, adversely affect the validity of the Bonds or the
Federal tax-exempt nature, of the interest payable on the Bonds and any
tax-exempt Parity Obligations;
(c) Immediately after such transaction will not be in
default under this Agreement or any Parity Instruments;
(d) Is, and immediately after such transaction will be a
Tax -Exempt Organization;
(e) Has the ability to incur at least one dollar of
i
additional debt under Section 2.28 hereof;
(f) Expressly assumes in writing all of the obligations of
the Hospital contained in this Agreement and in any Parity Instruments;
and
I
(g) If such is then required to retain any Hill -Burton funds
previously received by the Hospital, is a corporation which is
qualified to file an application for Hill -Burton funds or is approved
as a transferee by a state agency designated in accordance with Section
291(d) of Title 42 of the United States Code, as then amended.
Section 2.8. Financial Statements, Etc. The Hospital covenants
that it wiw'— ilr 1 keep proper books of records and accounts in which full,
true and correct entries will be made of all dealings or transactions
of or in relation to the business and affairs of the Hospital, in
accordance with generally accepted principles of accounting. In
addition, the Hospital will furnish the following to the Trustee, the
Original Purchaser (who shall not be obligated to take any action as a
result of the receipt of such information), to any rating agencies
which have rated any series of Bonds or Parity Obligations and to any
holder of $500,000 or more in aggregate principal amount of Bonds or
Parity Obligations then outstanding who shall request the same in
writing (all of the foregoing being hereinafter collectively referred
to as the "Recipients"):
(a) Within forty-five (45) days after the expiration of each
of the first three (3) quarterly fiscal periods of each Fiscal Year a
balance sheet of the Hospital as at the end of such period and a
statement of revenues and expenses of the Hospital during such period,
setting forth in comparative form the corresponding figures for the
corresponding period of the preceding Fiscal Year, all in reasonable
detail and certified, subject to year-end adjustment, by the chief
financial officer of the Hospital;
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(b) Within 120 days after the last day of each Fiscal Year
of the Hospital, the financial report of the Hospital certified by an
Independent Certified Public Accountant for such Fiscal Year and
containing those financial statements customarily prescribed for
hospitals, including a balance sheet as at the end of such Fiscal Year,
together with a separate written statement of the accountants reporting
on such statements that such accountants have obtained no knowledge of
any default by the Hospital in the fulfillment of any of the terms,
covenants, provisions or conditions of this Agreement, any Parity
Instruments and the Notes and any Parity Obligations, or, if such
accountants shall have obtained knowledge of any such default or
defaults and the nature thereof, they shall disclose the same; but such
accountants shall not be liable directly or indirectly to anyone for
failure to obtain knowledge of any default;
(c) Within 120 days after the last day of each Fiscal Year
of the Hospital a certificate of the President or the chief financial
officer or other authorized officer of the Hospital, stating that the
signer of the certificate has made a review of the activities of the
Hospital during the preceding Fiscal Year for the purpose of
determining whether or not the Hospital has complied with all of the
terms, provisions and conditions of this Agreement, any Parity
Instruments and the Notes and any Parity Obligations and that to the
best knowledge of such signer the Hospital has kept, observed,
performed and fulfilled each and every covenant, provision and
condition of this Agreement, any Parity Instruments and the Notes and
any Parity Obligations on its part to be performed and is not in
default in the performance or observance of any of the terms,
covenants, provisions or conditions hereof or thereof, or if the
Hospital shall be in default such certificate shall specify all such
defaults and the nature thereof of which the signer of the certificate
shall have knowledge; and
(d) Such additional information as any of the Recipients may
reasonably request concerning the Hospital in order to enable such
Recipient to determine whether the covenants, terms and provisions of
this Agreement, any Parity Instruments and the Notes and any Parity
Obligations have been complied with by the Hospital and for that
purpose all pertinent financial books, documents and vouchers (other
than patient, donor and personnel records) relating to its business,
affairs and properties shall at all times upon reasonable prior written
notice during regular business hours be open to the inspection of the
accountants or other agents (who may make copies of all or any part
thereof) who shall from time to time be designated and compensated by
any of the Recipients.
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Without limiting the foregoing, the Hospital will permit any of
the Recipients (or such persons as such parties may designate) to visit
and inspect, at their expense, any of the properties of the Hospital
and to discuss the affairs, finances and accounts of the Hospital with
its officers and Independent Certified Public Accountants, all upon
reasonable prior written notice and at such reasonable times and as
often as such Recipient may reasonably desire.
The Hospital further covenants and agrees that not more than
twenty (20) days after issuance and delivery of the Series 1962 Note
and thereafter, prior to the beginning of each Fiscal Year, it will
furnish the Trustee, the Original Purchaser (who shall not be obligated
to take any action as a result of the receipt of such information) and
any rating agencies which have rated any series of Bonds or Parity
Obligations then outstanding, an annual budget of anticipated revenues,
expenses and capital expenditures.
Section 2.9. Taxes Charges and Assessments. The Hospital
covenants and agrees, subject to the provisions of Section 2.12 hereof
relating to permitted contests, to pay or cause to be paid (when the
same shall become due or payable):
(a) All taxes and charges on account of the ownership, use,
occupancy or operation of the Hospital Facility, including but not
limited to all sales, use, occupation, real and personal property
taxes, all permit and inspection fees, occupation and license fees and
all water, gas, electric light, power or other utility charges assessed
or charged on or against the Hospital Facility or on account of the
Hospital's use or occupancy thereof or the activities conducted thereon
or therein; and
(b) All taxes, assessments and impositions, general and
special, ordinary and extraordinary, of every name and kind, which
shall be taxed, levied, imposed or assessed upon all or any part of the
Hospital Facility and of the Hospital or either of them in and to the
Hospital Facility.
If under applicable law any such tax, charge, fee, rate,
imposition or assessment may at the option of the taxpayer be paid in
installments, the Hospital may exercise such option.
Nothing contained herein shall be deemed to constitute an
admission by the Hospital that the Hospital is liable for any tax,
charge, fee, rate, imposition or assessment.
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Section 2.10. Liens. Subject to the provisions of Section 2.12
hereof, the Hospital will not create or permit to be created or remain
and will, at its cost and expense, promptly discharge all liens,
security interests, encumbrances and charges on the Hospital Facility
or any part thereof other than Permitted Encumbrances.
Section 2.11. Compliance with Orders Ordinances Etc. Subject
to the provis o of Section 2.12 hereof, the Hospital will, at its
sole cost and expense, comply with all present and future laws,
ordinance, orders, decrees, rules, regulations and requirements of
every duly constituted governmental authority, commission and court and
the officers thereof of which it has notice, and the failure -to comply
with which would materially and adversely affect the Hospital Facility
or the use, occupancy or condition thereof.
Section 2.12. Permitted Contests. The Hospital shall not be
required to pay any tax, charge, fee, rate, imposition or assessment
required to be paid under Section 29 hereof, nor to remove any lien,
security interest, encumbrance or charge required to be removed under
Section 2.10 hereof, nor to comply with any law, ordinance, order,
decree, rule, regulation or requirement referred to in Section 2.11
hereof, so long as the Hospital shall in good faith and at its cost and
expense contest the amount or validity thereof, or take other
appropriate action with respect thereto, in an appropriate manner or by
appropriate proceedings which shall operate during the pendency thereof
to prevent the collection of or other realization upon the tax, charge,
fee, rate, imposition, assessment, lien, security interest or
encumbrance so contested, and the sale, forfeiture or loss of the
Hospital Facility or any part thereof to satisfy the same; provided,
that no such contest or action shall subject the Issuer or the Trustee
to any liability unless the Hospital properly indemnifies the Issuer or
the Trustee, as the case may be. While any such matters are pending,
the Hospital shall have the right to pay, remove or cause to be
discharged or marked exempt the tax, charge, fee, rate, imposition,
assessment, lien, security interest or encumbrance being contested.
Each such contest shall be promptly prosecuted to final conclusion or
settlement, and the Hospital will pay, and save the Issuer and the
Trustee harmless against, all losses, judgments, decrees and costs
(including attorneys' fees and expenses in connection therewith) and
will, promptly after the final determination or settlement of such
contest or action, pay and discharge the amounts which shall be levied,
assessed or imposed or determined to be payable therein, together with
all penalties, fines, interests, costs and expenses thereon or in
connection therewith.
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Section 2.13. Use of the Hospital Facility. The Hospital will
use the Ho� 1 Facility only in furtherance of the lawful corporate
purposes of the Hospital.
Unless the Hospital is in default hereunder, the Hospital shall
have the sole right to manage the Hospital Facility in accordance with
the provisions hereof without interference from the Trustee or the
Issuer including, but not limited to, the sole right Trustee
control,
direct, supervise or coordinate all activities, functions, and tasks of
the Hospital's agents, servants or employees; to process, select,
appoint, reject, terminate, and in all other ways deal with all
professional and paraprofessional staff members, whether employees or
independent contractors, and to determine all policies regarding such
staffing, activities, manner of functioning and to cause such reviews
and supervision of the quality of the patient care rendered at the
Hospital Facility as the Hospital in its sole discretion shall deem
fit, and in general the Hospital shall have the sole and exclusive
right and authority to operate, manage, control, direct and supervise
its affairs. Further, unless the Hospital is in default hereunder, the
Issuer shall have no right to control, direct, supervise or coordinate
such activities or such matters. In addition, unless the Hospital is
in default hereunder, it shall be entitled to remain in full
possession, enjoyment and control of all of the Hospital Facility and
all earnings, revenues and income therefrom, other than moneys required
to be paid by the Hospital under this Agreement.
Notwithstanding any provision to the contrary contained in the
Articles of Incorporation or in the By -Laws of the Hospital, the
Hospital shall (i) admit individuals in its hospital facilities.without
regard to race, sex, national origin or religious belief, and treat
such individuals provided such individuals execute written patient
consents to treatment, (ii) respect, permit and not interfere with the
religious beliefs of persons admitted and treated, except as the same
may be required for proper medical treatment and (iii) not be engaged
in sectarian instruction (except for pastoral services of the kind
Permitted or provided by hospitals generally). The Hospital further
agrees that it will not use the Hospital Facility or any part thereof
for sectarian instruction or primarily as a place of religious worship
or as a facility used primarily in connection with any part of the
Program of a school or department of divinity for any religious
denomination or for the training of priests, mihisters, rabbis or other
similar persons in the field ofreligion. Notwithstanding the payment
of all of the Notes, and notwithstanding the termination of this
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Agreement, the Hospital agrees that it will continue to comply with the
restriction stated in the preceding sentence on the sectarian use of
the Hospital Facility. To the extent required by law the Hospital will
permit the Issuer to inspect the Hospital Facility in order to
determine whether the Hospital has complied with the provisions of this
paragraph and such right of inspection shall survive the termination of
this Agreement.
The foregoing restrictions, however, shall not be construed to
prevent the Hospital from (i) maintaining a chapel for the use of
patients, employees and visitors.as part of the Hospital Facility, (ii)
conducting medical education programs on any subject with one or more
institutions, whether or not sectarian, or seminars or meetings
explaining the operating policies of the Hospital with regard to
abortions or other medical or surgical services, or (iii) implementing
pastoral care programs of the kind permitted or provided by hospitals
generally. In addition to the foregoing, nothing contained in this
Section 2.13 or in any other provision whatsoever of this Agreement
shall be deemed to require the Hospital to practice euthanasia or to
perform any abortion, sterilization or any other medical or surgical
operation or to conduct its medical and surgical affairs in any manner
contrary to the principles and beliefs of the Roman Catholic Church,
including Ethical and Religious Directives for Catholic Health
Facilities or similar guidelines promulgated by the National Council of
Catholic Bishops, Washington, D.C., it being the intent hereof to
reserve to the Hospital full discretion to formulate and implement its
medical and surgical policies.
Section 2.14. Repairs, Maintenance and Alterations. The Hospital
will at its own cost and expense keep the Hospital Facility in good
repair and order, reasonable wear and tear excepted, and in as
reasonably safe condition as its operation will permit and will make
all necessary repairs thereto, interior and exterior, structural and.
nonstructural, ordinary as well as extraordinary and foreseen as well
as unforeseen, and all necessary replacements or renewals.
The Hospital shall have the right from time to time at its sole
cost and expense to make additions, alterations and changes, whether
structural or nonstructural (hereinafter collectively referred to as
"alterations") in or to such Hospital Facility, subject, however, in
all cases to the following conditions:
(a) No alteration of any kind shall be made which would
result in a violation of the provisions of Section 2.13 hereof; and
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(b) No building or buildings constituting a part of such
Hospital Facility shall be demolished or removed, nor shall any
alteration to such Hospital Facility be made which would substantially
impair the structural strength, utility or market value thereof,
without in each case the prior written consent of the Trustee thereto.
With respect to any repairs, construction, restoration,
replacement or alterations performed upon the Hospital Facility by the
Hospital during the term hereof, in accordance with or as required by
any provisions hereof, the Hospital agrees that:
(a) No work in connection therewith shall be undertaken
until the Hospital shall have procured and paid for, so far as the same
may be required, from time to time, all municipal and other
governmental.permits and authorizations from the various municipal
departments and governmental subdivisions having jurisdiction; and
(b) All work in connection therewith shall be done promptly
and in good workmanlike manner and in compliance with the building and
zoning laws of the Issuer or other governmental subdivision wherein the
Hospital Facility is situated, and with all applicable laws,
ordinancds, orders, rules, regulations and requirements of all federal,
state and municipal governments and the appropriate departments,
commissions, boards and officers thereof, and shall not violate the
provisions of any policy of insurance covering the Hospital Facility,
and the work shall be prosecuted with reasonable dispatch, unavoidable
delays excepted.
Section 2.15. Removal of Equipment by the Hospital. So long as
the Hospital is not in default hereunder, in any instance where the
Hospital in its sound discretion determines that any item of Equipment
(whether movable or fixed) included within the Pledged Property has
become inadequate, obsolete, worn out, unsuitable, undesirable or
unnecessary for the operation of the Hospital Facility, the Hospital
may, at its expense, remove and dispose of it, free and clear of the
security interest herein granted or the lien of the Mortgage, if any
then exists, provided that such removal (and any substitution therefor)
shall not impair the operational integrity and unity of the Hospital
Facility. So long as the Hospital is not in default hereunder, the net
proceeds received by the Hospital from the sale or other disposition of
such Equipment, including any value allowed for trade purposes, shall
belong to the Hospital. The foregoing shall not be deemed to permit
the Hospital to subject any such Equipment to any lien or security
interest not permitted by clause (f) of Section 2.28 hereof.
Section 2.16. Insurance. The Hospital shall maintain the
follow ng Insurance at tis sole cost and expense:
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(a) Insurance against loss and/or damage to the Hospital
Facility and equipment under a policy or policies covering such risks
as are ordinarily insured against by similar hospitals, including,
without limiting the generality of the foregoing, fire, lightning,
windstorm, hail, explosion, riot, riot attending a strike, civil
commotion, damage from aircraft, smoke and uniform standard extended
coverage and vandalism and malicious mischief endorsements limited only
as may be provided in the standard form of such endorsement at the time
in use in the State. Such insurance shall be for the lesser of (i) 908
of the full insurable value of the Hospital Facility and equipment, or
(ii) the optional redemption price on the next succeeding redemption
date of all Notes and Parity Obligations outstanding, but any such
policy may have a deductible amount of not more than $100,000, or such
greater amount as may be recommended by an Independent Insurance
Consultant to be actuarially sound. No policy of insurance shall be so
written that the proceeds thereof will produce less than the minimum
coverage required by the preceding sentence, by reason of co-insurance
provisions or otherwise. The term "full insurable value" shall mean
the actual replacement cost of the Hospital Facility and equipment
(excluding foundation and excavation costs and costs of underground
flues, pipes, drains and other uninsurable items) and shall be
determined from time to time at the request of the Trustee, but not
more frequently than once every five years, by an Architect,
contractor, appraiser or appraisal company or one of the insurers, in
any case, selected and paid for by the Hospital and approved by the
Trustee;
(b) Comprehensive general accident and public liability
insurance (including coverage for all losses arising from the ownership
or use of any vehicle) providing coverage limits of not less than
$1,000,000 per occurrence and an annual aggregate limitation of not
less than $1,000,000 and with a deductible amount of not more than
$100,000 per occurrence;
(c) Worker's compensation insurance respecting all employees
of the Hospital in such amount as is customarily carried by like
organizations engaged in like activities of comparable size and
liability exposure;
(d) Use and occupancy insurance on the Hospital Facility and
any other buildings, the revenues of which are pledged to the payment
of the Notes and any Parity Obligations in an amount sufficient to
enable the Hospital to pay the principal of and interest on the Notes
and any Parity Obligations out of the proceeds of such insurance during
the time, up to not less than twelve (12) months, that the Hospital
experiences a substantial loss in revenues as a result of loss of use
caused by the perils covered by fire and extended coverage insurance;
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(e) Professional liability insurance providing coverage with
respect to the Hospital Facility and any other facilities operated by
the Hospital with limits of not less than $1,000,000 for any claim and
not less than $3,000,000 in annual aggregate coverage; provided,
however, that if under applicable law the liability of the Hospital for
malpractice is limited as to amount, then the limits of such policy
need not exceed the amounts to which the liability of the Hospital for
malpractice is limited by applicable law;
(f) During the Construction Period and any period of
construction of Improvements, builders' risk insurance on a full
completed value basis; provided, however, that such builders' risk
insurance need not be maintained to the extent that the risks covered
by such insurance have been insured against by contractors working on
such construction or under policies maintained pursuant to
subparagraphs (a), (b) and (c) hereof.
In lieu of maintaining the insurance required by subparagraphs
(b), (c) and (e) above with commercial insurance companies, the
Hospital may self -insure through a self-insurance trust so long as the
Hospital obtains an opinion of an Independent Insurance Consultant as
to actuarial soundness thereof. The Hospital may also, if it
determines that neither maintaining such insurance with such companies
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nor self insuring through payments to such a trust is any longer in the
best interests of the Hospital, retain an Independent Insurance
Consultant acceptable to the Trustee to make recommendations regarding
alternatives to such insurance. If the Independent Insurance
Consultant recommends an alternative risk management program, the Board
of Directors of the Hospital may adopt such program which may include,
without limitation: the right to self -insure in whole or in part
through methods other than payments to such a trust; to organize
captive insurance companies either solely or in connection with other
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hospitals or health care institutions or organizations; to participate
in programs of captive insurance companies organized by others; to
participate in mutual or cooperative insurance or other risk management
programs with other hospitals and health care institutions; to
participate in or enter into agreements with local, state or federal
governments in.order to achieve such insurance; to take advantage of
state or federal statutes or laws now or hereafter in existence
limiting liability; or to participate in other alternative risk
management programs as shall be recommended by the Independent
j
Insurance Consultant.
Each policy of insurance obtained pursuant hereto shall (i) be
issued by one or more recognized, financially sound and responsible
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insurance companies or statutory insurance plans qualified under the
laws of the State to assume the risks covered by such policy, and (ii)
provide that such policy shall not be cancelled or modified without -at
least ten (10) days' prior written notice to the Trustee and each
assured named therein. Each policy of insurance obtained pursuant to
subparagraphs (a), (d) and (f) above shall name the Trustee as an
additional assured, as its interests may appear, and shall contain a
standard loss payable clause in favor of the Trustee. Any policy
obtained pursuant to subparagraphs (a), (d) and (f) above shall, to the
extent obtainable on such terms at reasonable cost, further provide
that any loss thereunder shall be payable to the Trustee
notwithstanding any act or negligence of the Hospital which might
otherwise invalidate said insurance, and the Trustee shall have the
exclusive right to receive the proceeds from such insurance paid by
reason of such additional coverage and to receipt for claims
thereunder. The Net Proceeds of insurance carried pursuant to the
provisions of subparagraphs (a) and (f) hereof shall be applied as
provided in Article III hereof. The Net Proceeds of insurance carried
pursuant to the provisions of subparagraph (d) hereof shall be
deposited in the Bond Fund with any such proceeds in excess of the
required deposit to such Fund to be paid to the Hospital by the
Trustee. The Net Proceeds of insurance carried pursuant to the
provisions of subparagraphs (b), (c) and (e) hereof shall be applied to
the extinguishment or satisfaction of the liability with respect to
which such insurance proceeds have been paid.
Upon the delivery of this Agreement and thereafter not less than
fifteen (15) days prior to the expiration dates of any policies, a
certificate issued by the insurer of the policies provided for above
shall be delivered by the Hospital to the Trustee. To the extent that
the Hospital has decided to provide any of the insurance required
herein through a self insurance program, any certificate that may
otherwise be required hereunder may be issued by an Independent
Insurance Consultant. If requested in writing by the Trustee, the
Hospital shall furnish the Trustee with the schedule of payment dates
and receipted bills or other evidence satisfactory to the Trustee of
the payment when due of all premiums for all policies of insurance or
all payments with respect to a self insurance program at any time
required to be maintained hereunder. Upon reasonable prior written
notice the Hospital will permit the Trustee to visit the offices of the
Hospital and inspect the Hospital's insurance records including all
policies of insurance maintained pursuant to this Section and all
documents relating to any self insurance program and to make copies of
all or any part thereof.
Any of the foregoing insurance maintained by the Hospital pursuant
hereto may be evidenced by one or more blanket insurance policies
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covering such Hospital Facility and other property or assets of the
Hospital, provided that any such policy shall in all respects comply
with the requirements of this Section.
Section 2.17. Issuer's or Trustee's Right to Perform Hospital's
Covenants, Advances. In the event the Hospital shall fail to—(iTj
perform any covenant contained in Section 2.9 hereof, (ii) remove any
lien, security interest, encumbrance or charge pursuant to Section 2.10
hereof, (iii) maintain the Hospital Facility in repair pursuant to
Section 2.14 hereof, (iv) procure the insurance required by Section
2.16 hereof, or (v) fail to make any other payment or perform any other
act required to be performed hereunder, then and in each such case
(unless the same is being contested or other appropriate action is
being taken with respect thereto pursuant to Section 2.12 hereof) the
Issuer or Trustee, upon not less than fifteen (15) days prior written
notice to the Hospital, may (but shall not be obligated to) remedy such
default for the account of the Hospital and make advances for that
purpose. No such performance or advance shall operate to release the
Hospital from any such default and any sums so advanced by the Issuer
or Trustee shall be repayable by the Hospital on demand and shall bear
interest from the date of the advance until repaid at the rate of 18
per annum over the announced annual rate of interest then charged by
the Trustee on 90 -day unsecured commercial loans to its prime
commercial borrowers.
Section 2.18. Indemnity. The Hospital will pay, and will
protect, indemnify demnify and save the Issuer (including any of its officers,
officials, employees and duly authorized agents) and the Trustee
harmless from and against all liabilities, losses, damages, costs,
expenses (including attorneys' fees and expenses of attorneys for the
Issuer and the Trustee so long as such attorneys have been designated
by the Hospital and approved by the Issuer, or the Trustee, as the case
may be), causes of action,. suits, claims, demands and judgments of any
nature arising from:
(a) Any injury to or death of any person or damage to
Property in or upon the Hospital Facility, or resulting from or
connected with the use, non-use, condition or occupancy of the Hospital
Facility or a part thereof;
(b) Violation of any agreement or condition of this
Agreement, except by the issuer or the Trustee;
(c) Violation of any contract,agreement or restriction by
the Hospital relating to the Hospital Facility;
(d) Violation of any law, ordinance or regulation arising
out of the ownership, occupancy or use of the Hospital Facility or a
part thereof;
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(e) The construction and acquisition of the Project and any
Improvements or the failure to acquire or construct the Project and any
Improvements; and
(f) Any statement or information concerning the Hospital,
its officers and members or the Hospital Facility, contained in any
final official statement or prospectus furnished to purchasers of any
Bonds or Parity Obligations, that is untrue or incorrect in any
material respect, and any omission from any such official statement or
prospectus of any statement or information which should be contained
therein for the purpose for which the same is to be used or which is
necessary to make the statements therein concerning the Hospital, its
officers and members or the Hospital Facility not misleading in any
material respect, provided that:
(1) Any such final official statement or prospectus is
approved in writing by the Hospital;
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(2) In the event of settlement of any litigation
commenced or threatened, arising from a claim based upon any such
untrue statement or omission, such indemnity shall be limited to the
aggregate amount paid under a settlement effected with the written
consent of the Hospital;
(3) The Issuer or the Trustee shall promptly notify the
Hospital in writing of any claim or action brought against the Issuer
or the Trustee, in respect of which indemnity may be sought against the
i
Hospital, setting forth the particulars of such claim or action;
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(4) The Hospital may employ separate counsel in any
such action and participate in the defense thereof at its own expense.
Notwithstanding the fact that it is the intention of the parties
that the Issuer (including any of its officers, officials, duly
authorized agents or employees) shall not incur any pecuniary liability
by reason of the terms of this Agreement or the Indenture, or the
undertakings required of the Issuer under this Agreement or the
Indenture, by reason of the issuance of the Bonds, by reason of the
execution of this Agreement and the Indenture, or by reason of the
performance of any act required of the Issuer under this Agreement or
the Indenture, nevertheless if the Issuer should incur any such
pecuniary liability then in such event the Hospital. shall indemnify and
hold harmless the Issuer (including any of its officers, officials,
duly authorized agents or employees) against all claims by or on behalf
of any person, firm or corporation, arising out of the same and all
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costs and expenses incurred in connection with any such claim or in
connection with any action or proceeding brought thereon (including
attorneys' fees and expenses of the Issuer), and upon notice from the
Issuer, the Hospital shall defend the Issuer (including any of its
officers, officials, duly authorized agents or employees) in any such
action or proceeding.
The foregoing shall not be construed to prohibit the Hospital from
pursuing its remedies against either the Issuer or the Trustee for
damages to the Hospital resulting from personal injury or property
damage caused by the negligent or willful acts of either the Issuer or
the Trustee.
Section 2.19. Covenant Against Liens; Release of Hospital
Facilities; ris osition of Substituted Pro ert So long as any of the
Notes an Parity 0 igations are our_stan ing, the Hospital shall keep
free and clear from all liens and encumbrances, other than Permitted
Encumbrances, the Hospital Facility and the land on which the Hospital
Facility is situated, except for portions of the Hospital Facility or
land which, in the opinion of an independent Hospital Consultant, are
not essential to the efficient operation of the Hospital Facility or
the absence of which in the opinion of an Independent Hospital
Consultant would not materially adversely impair the Hospital's ability
to satisfy its rate covenant under Section 2.25 hereof.
Except for Permitted Encumbrances and except for the rights of the
Hospital under Section 2.15 hereof to dispose of movable or fixed
equipment and except for the rights of the Hospital under Section 2.31
or Section 2.34 hereof, the Hospital will not sell, lease, transfer or
otherwise dispose of all or any part of the Hospital Facility or other
property subject to the lien or security interest hereof or of the
Mortgage, if any (other than Assigned Revenues), except as provided in
this Section:
(a) Release for Substituted Property
So long as no default shall have occurred and be continuing
under this Agreement or under the Indenture the Trustee shall release,
without the prior consent of any of the Bondholders, any portion of the
Hospital Facility or other property subject to the lien or security
interest of this Agreement or of the Mortgage, if any shall then be in
existence (other than the Assigned Revenues), upon receipt by the
Trustee of the following:
(1) Written Re uest of Has ital. A Written Request of the
Hospital for suc re ease, escri ing the
Qroperty to be released
(referred to in this Section 2.19 as the "Released Property");
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(2) Certificate of Hospital. A certificate of'the Hospital
to the Trustee certifying:
(A) The fair market value of the Released Property and
of the property (referred to in this Section 2.19 as the "Substituted
Property") other than cash to be substituted for the Released Property
pursuant to the terms hereof;
` (B) A description of the disposition to be made of the
Released Property and the consideration (which may include cash) to be
received for the Released Property and the fair market value of such
1 consideration other than cash;
I
` (C) That the disposition of the Released Property and
the substitution therefor of the Substituted Property will not
materially adversely affect the operations of the remaining Hospital
Facility or the ability of the Hospital to satisfy its obligations I
under the Notes and this Agreement"and will not materially adversely
affect the Hospital's Net Income Available for Debt Service; j
(D) That the Substituted Property other than cash or i
investment securities is necessary or useful to the operation of the
Hospital Facility;
(E) That the cash or the fair market value of the 1
Substituted Property together with cash, if any, to be received is at
least equal to the fair market value of the Released Property;
(F) That the execution and delivery of the release by s
I. the Trustee and the subjection of the Substituted Property to the i
provisions of this Agreement will not result in.a default hereunder or
under the Indenture; and
ji
(G) That all necessary permits and authorizations of
all federal, state and local governmental bodies and agencies have been
granted or that no such permits or authorizations are required.
(3) Appraisal of Released Property. An appraisal of the
fair market value of the Released Property by a member of the American
Institute of Real Estate Appraisers (an "MAI appraiser") if the
Released Property is real property, or by another expert acceptable to I
the Trustee (which acceptance shall not be unreasonably withheld) if
the Released Property is not real property;
(4) A raisal of Substituted Pro ert .. An appraisal of the
fair market value o the Substituted Property by an MAI appraiser if
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the Substituted Property is real property, or by another expert
acceptable to the.Trustee (which acceptance shall not be unreasonably
withheld) if the Substituted Property is not real property;
(5) Documents of Conveyance. A supplement to this Agreement
(including necessary amendments to ExFibit A hereof), the Indenture (if
necessary) and other documents reasonably requested by, and in form
satisfactory to the Trustee necessary to subject the Substituted
Property to the provisions of this Agreement to the extent legally
possible and, if the Substituted Property is real property, to the lien
of the Mortgage, if any shall then exist;
(6) Certificate of Hospital Consultant. If the fair market
value of the Released Property when added to the fair market -value of
other property released pursuant to the provisions of Section 2.19(a)
and (b) hereof within the same twelve month period is in excess of
$250,000 or represents in excess of 1.258 of the Hospital's gross
patient service revenues for the preceding Fiscal Year, whichever is
greater, a certificate of an Independent Certified Public Accountant or
independent Hospital Consultant to the effect set forth in paragraph
(a)(2)(C) of this Section 2.19; and
(7) Opinion of Counsel. A letter or letters of opinion
addressed to the Trustee rom Counsel selected by the Hospital and
acceptable to the Trustee to the effect that:
(A) The release of the property requested by the
Hospital is legally authorized hereunder;
(B) The Substituted Property is subject to the
provisions of this Agreement and, if the Substituted Property is real
property, to the lien of the Mortgage, if any shall then exist and
further, if the Substituted Property is real property, the Hospital has
good and marketable fee simple title to the Substituted Property,
subject only to Permitted Encumbrances;
(C) The execution and delivery of the requested release
and the acceptance of the Substituted Property will not violate any
provisions of this Agreement or of the Indenture including, without
limitation, the provisions of Section 609 of the Indenture relating to
tax exemption of the Bonds; all necessary action required to be taken
by the Hospital and by the Issuer to effect the release of the Released
Property and the conveyance of the Substituted Property have been
taken;
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(D) The supplemental amendment hereto, the supplemental
Indenture, supplement to the Mortgage, if any, and all other documents
required to effect the release of the Released Property and
substitution therefor of the Substituted Property have been duly
authorized, executed and delivered and are binding upon the parties
executing and delivering the same in accordance with their respective
terms, subject to customary exceptions for laws affecting creditors'
rights and the availability of equitable remedies; and
(E) To the knowledge of such Counsel all permits and
authorizations of all federal, state and local governmental bodies and
agencies have been granted, or that no such permits or authorizations
are required.
(b) Release Without Substitution
In addition, so long as no default shall have occurred and be
continuing under this Agreement or under the Indenture, the Trustee
shall release, without the prior consent of the Bondholders, any
portion of the Hospital Facility or other property subject to the lien
or security interest of this Agreement or of the Mortgage, if any shall
then be in existence (other than Assigned Revenues), upon receipt by
the Trustee of the following:
(1) Written Re nest of the Hospital. A written request of
the Hospital for suc ANEW, descri ing the property to be released
(referred to in this Section 2.19 as the "Released Property");
(2) Certificate of the Hospital. A certificate of the
Hospital to the Trustee certirying:
(A) That the original cost of the Released Property
plus the original cost of the Hospital Facility or other property
subject to the lien or security interest hereof or of the Mortgage, if
any then exists (other than Assigned Revenues) previously released
under the provisions of this subsection 2.19(b) in such Fiscal Year is
less than 58 of the original cost of the Hospital's property, plant and
equipment (other than property, plant and equipment which is Excluded
Property) as shown on the asset side of the balance sheet in the last
audited financial statements of the Hospital delivered pursuant to
Section 2.8 hereof;
(B) That the original cost of the Released Property
plus the original cost of the Hospital Facility or other property
subject to the lien or security interest hereof or of the Mortgage, if
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CEDAR RAPIDS • DES MOINES Ij
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any then exists (other than Assigned Revenues) previously released
under the provisions of this subsection 2.19(b) during the term of this
Agreement is less than 108 of the original cost of the Hospital's
property, plant and equipment (other than property, plant and equipment
which is Excluded Property) as shown on the asset side of the balance
sheet in the last audited financial statements of the Hospital
delivered pursuant to Section 2.8 hereof;
(C) That less than 58 of the gross operating revenues
of the Hospital in each of the two preceding Fiscal Years was
attributable to the operations of the Released Property;
(D) (i) that the Net Income Available for Debt Service
of the Hospital less the net income attributable to the Released
Property in the prior Fiscal Year or in any twelve consecutive months
of the eighteen months immediately preceding such release was at least
1508 of the Maximum Annual Debt Service prior to such release and (ii)
that the estimated annual Net Income Available for Debt Service of the
Hospital less the net income attributable to the Released Property for
each of the first two Fiscal Years following the estimated date of such
release will equal at least 1508 of the Maximum Annual Debt Service in
such respective years;
(E) that the execution and delivery of the release by
the Trustee will not result in a default hereunder or under the
Indenture; and
(F) that all necessary permits and authorizations of
all federal, state and local governmental bodies and agencies have been
granted or that no such permits or authorizations are required.
(3)_ Appraisal of Released Property. An appraisal of the
fair market value of the Released Property as described in paragraph
(a)(3) of this Section.
(4) Certificate of Hospital Consultant. A certificate of an
Independent Hosppital�onsu an o e e ec set forth in
subparagraphs (b)(2)(A), (b)(2)(B), (b)(2)(C), and (b)(2)(D)(i) of this
Section.
(5) 0 inion of Counsel. A letter or letters of opinion
addressed to the Trustee rom Counsel selected by the Hospital and
acceptable to the Trustee to the effect described in subparagraphs
(a)(7)(A), (a)(7)(C), (a)(7)(D) and (a)(7)(E) of this Section, except
as such subparagraphs refer to Substituted Property.
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4777
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,
_V
(c) Disposition of Substituted Property. The Hospital agrees
that (i) the Trustee shall invest any cash delivered to it as
Substituted Property in Qualified Investments pursuant to a Written
Request of the Hospital and any such cash and Qualified Investments
shall be held by the Trustee in a separate trust account for the
benefit and security of the outstanding Bonds; (ii) all income from
Qualified investments pursuant to this Section 2.19(c) shall be added
to the funds held pursuant to this Section 2.19(c); (iii) funds from
time to time on deposit with the Trustee pursuant to this Section
2.19(c) shall be used to make up any deficiencies in the Interest
Account, Principal Account, Debt Service Reserve Fund and Depreciation
Reserve Fund under the Indenture, in the order listed, and to
the extent funds are used to make up such deficiencies, the Hospital
will make payment directly to the Trustee for deposit in such trust
account in the amount of any such deficiencies forthwith; and (iv) upon
the Written Request of the Hospital and provided that no default shall
have occurred and be continuing under the Indenture, any funds held by
the Trustee pursuant to this Section 2.19(c) shall be transferred by
the Trustee to the Bond Redemption Fund for disposition in accordance
with Article V of the Indenture.
(d) Effect of Release. Pursuant to the provisions of this
Section, the effect of a release of property from the lien and security
interest of this Agreement or of the Mortgage, if any then exists,
shall be as follows:
3
(1) Real Proert . If the Released Property is described in
Exhibit A hereto, it s a be deleted from said description, and any
amendments hereto and to the Indenture necessary to carry out such
purpose shall be executed by the Hospital, the Issuer and the Trustee;
(2) E ui ment. If the Released Property is subject to the
lien and securi y in Brest of this Agreement, such lien and security
interest shall be terminated and any required termination statement (or
partial release of collateral) shall be executed by the necessary
parties and duly filed in the appropriate places; and
(3) Mortgaged Property. If the Released Property is subject
to a Mortgage pursuant to Section 2.25 hereof that has been executed
and recorded, a release therefrom shall be executed by the necessary
parties and recorded in the appropriate places.
Section 2.20. Completion of Project, Payment of Ex enses of
Issuance o Series 192g Bon s; Amen ment to ExhiFit A. T e Hospital
agrees to complete the Project and to pay for all the costs thereof and
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to be liable and pay for any recording expenses, trustee's acceptance
fees, legal fees, printing expenses and other fees and expenses
incurred or to be incurred by or on behalf of the Issuer in connection
with or as an incident to the issuance and sale of the Series 1982
Bonds.
If any portion of the Project is located or to be located on real
estate not described in Exhibit A hereto, Exhibit A hereto shall be
amended to include such real estate therein.
Section 2.21. Fundin of Indenture Funds; Investments. The
Hospita ere y irects t e Issuer an t e Trustee to dispose of the
proceeds from the sale of the Series 1982 Bonds in the manner specified
in Section 301 of the Indenture. The Hospital further covenants and
agrees to deposit in the Construction Fund an amount sufficient to pay
all of the remaining costs of the Project, if any, as the same become
due in cash or Qualified Investments, and all gifts, grants
(governmental or otherwise), loan proceeds or other funds designated,
received or borrowed for the acquisition or construction of the
Project, or as reimbursement for the costs of the Project, when and as
the same are received.
All monies in the Interest Account, Principal Account, Capitalized
Interest Account, Borrowed Funds Account, Funded Depreciation Account,
Depreciation Reserve Fund, Construction Fund and Bond Redemption Fund
may, at the written direction of the Hospital, be invested in Qualified
Investments. The income derived from the investment of monies on
deposit in the above referred to Funds and Accounts except for the
Depreciation Reserve Fund and the Bond Redemption Fund, shall be
transferred or retained in the Construction Fund during the
Construction Period and thereafter shall be deposited in the Principal
Account. The income derived from the investment of monies on deposit
in the Bond Redemption Fund shall be applied to the redemption of
Bonds. The income derived from the investment of monies on deposit in
the Depreciation Reserve Fund, shall be transferred to the Construction
Fund during the Construction Period, and thereafter will be retained in
the Depreciation Reserve Fund.
Any such investments shall be held by or under the control of the
Trustee and shall mature at such times as it is anticipated that monies
from the particular fund or account will be required for the purposes
of the Indenture, but in any event within two (2) years of the date of
investment except for investments made with monies on deposit in the
Debt Service Reserve Fund and the Depreciation Reserve Fund which shall
mature or be redeemable at the option of the Trustee within (10) ten
Years of the date of investment. The Trustee is hereby authorized to
trade with itself in the purchase and sale of securities for such
investments.
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For the purpose of determining the amount from time to time on
deposit in any of said Funds or Accounts, such investments shall be
valued at the market value thereof, plus accrued interest to the date
on which the Hospital's right is fully vested. The Trustee shall cause
such investments to be valued annually with 1, 1983 as the
first valuation date.
The Issuer (in reliance on the Hospital's covenants and
representations) and the Hospital further covenant that they will not,
and will not cause the Trustee to, make any investment or do any other
act or thing during the period that any Bonds or tax-exempt Parity
Obligations are outstanding which would cause the Bonds or such Parity
Obligations to become or be classified as.arbitrage bonds within the
meaning of Section 103(c) of the Internal Revenue Code. It is further
understood and agreed that the Trustee shall not be required -at any
time to make any such investment.or to do any such act.
On the basis of the foregoing, and the expectations, facts,
estimates and circumstances in existence as of the date hereof, it is
not expected that the proceeds of the Series 1982 Bonds will be used in
any manner that would cause the Series 1982 Bonds to be "arbitrage
bonds" under Section 103(c) of the Internal Revenue Code and
regulations promulgated thereunder. To the best knowledge and belief
of the Issuer and the Hospital, there are no expectations, facts,
estimates or circumstances that would materially change such
expectation.
Section 2.22. Other Amounts Payable by the Hospital. The
Hospil agrees to pay directly to the Tru
tastee (i) an amount equal to
the annual fee of the Trustee for the ordinary services of the Trustee,
as trustee, rendered and its ordinary expenses incurred under the
indenture, as and when the same become due, (ii) the reasonable fees,
charges and expenses of the Trustee, and any paying agent on the Bonds
for acting as paying agent as provided in the Indenture, as and when
the same become due, (iii) the reasonable fees, charges and expenses of
the Trustee or any paying agent for the necessary extraordinary
services rendered by it and extraordinary expenses incurred by it under
the Indenture, as and when the same become due; provided, however, that
the Hospital may,'without creating a default hereunder, contest in good
faith the necessity for any such extraordinary services and expenses
and the reasonableness of any such fees, charges or expenses.
The Hospital further agrees to pay directly to the Issuer the
reasonable expenses of the Issuer relating to the Project including
attorney's fees incurred with respect thereto; provided, however, that
the Hospital may, without creating a default hereunder, contest in good
faith the necessity for any such expenses and fees and the
reasonableness of any such expenses and fees.
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CEDAR RAPIDS DES MOINES I
-As
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Section 2.23. Credits on Notes and Parity Obligations.
Notwithstanding any provision contained in this Agreement or in the
Indenture to the contrary, in addition to any credits on the Notes
resulting from the payment or prepayment thereof from other sources:
(a) Any monies deposited by the Trustee in the Principal
Account shall be credited against the obligation of the Hospital to pay
the principal of the Notes as the same becomes due;
(b) Any monies deposited by the Trustee in the Interest
Account shall be credited against the obligation of the Hospital to pay
interest on the Notes as the same becomes due;
(c) The principal amount of Bonds of any series acquired by
the Hospital and delivered to the Trustee or acquired by the -Trustee
and cancelled, shall be credited against the obligation of the Hospital
to pay the principal installment of the Note of the corresponding
series maturing on the maturity date of the Bonds so acquired and
delivered or cancelled; and
(d) If the Notes are to be prepaid in whole pursuant to
Section 4.2 hereof and all the Bonds are to be redeemed pursuant to the
Indenture, the amount of any monies transferred by the Trustee from any
Fund or Account created in the Indenture to the Bond Redemption Fund
shall be credited against the obligation of the Hospital to pay
interest or principal on the Notes, as the case may be, as the same
becomes due.
The Hospital shall receive similar credits against its
obligation to pay principal or interest on any Parity Obligation as set
forth in (a) through (d) above for monies deposited or transferred to
the Interest Account or Principal Account or for Parity Obligations
acquired and delivered to the Trustee or acquired by the Trustee and
cancelled.
Section 2.24. P
!a yments to Trustee. The Hospital covenants and
agrees to I'make the following payments to the Trustee for deposit into
the following Funds and Accounts established by the Indenture on the
following dates:
(a) Interest Account De osits:. Initial deposits to the
credit of the Interest Account an to t e Capitalized Interest Account
are to be made under the provisions of Section 301 of the Indenture.
On the fifteenth day of each month beginning with July 15, 1982, an
amount equal to one-sixth of the interest to become due on the next
ensuing interest payment date on the Bonds, less in each case any
amount transferred from the Capitalized Interest Account to the
Interest Account pursuant to Section 403(f) of the Indenture; provided,
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however, that no such deposit shall be required if and to the extent
that there is a sufficient amount already on deposit in the Interest
Account (including amounts transferred from the Debt Service Reserve
Fund and the Depreciation Reserve Fund) available to pay such interest
on the next ensuing interest payment date. If on the fifteenth day of
the month immediately preceding an interest payment date on the Bonds,
the amount then on deposit in the Interest Account is not sufficient
for payment of the interest due on the Bonds on such next interest
Payment date, the Hospital shall pay forthwith such deficiency to the
Trustee for deposit into the Interest Account;
(b) Principal Account Deposits: On the fifteenth day of
each month beginning with 15, 198
p an amount equal to
one -twelfth of the
princi al to become due on the next ensuing
principal payment or mandatory sinking fund redemption date -On the
Bonds; provided, however, that no such deposit shall be required if and
to the extent that there is a sufficient amount available on deposit in
the Principal Account (including amounts transferred from the
Construction Fund, the Depreciation Reserve Fund or the Debt Service
Reserve Fund) in an amount sufficient to pay such principal on the next
ensuing principal payment or mandatory sinking fund redemption date.
If on the fifteenth day of the month immediately preceding a principal
payment or mandatory sinking fund redemption date on the Bonds, the
amount then on deposit in the Principal Account is not sufficient for
payment of the principal due on the Bonds on such principal payment or
mandatory sinking fund redemption date, the Hospital shall pay
forthwith such deficiency to the Trustee for deposit into the Principal
Account;
(c) Debt Service Reserve Fund Deposits: An initial deposit
to the credit of the Borrowed Funds Account in the amount of $
is to be made under the provisions of Section 301 of the Indenture. An
initial deposit of $ to the credit of the Funded Depreciation
Account is also to be made under the provisions of Section 301 of the
Indenture. On the fifteenth day of any month the Hospital may deposit
any amount in the Funded Depreciation Account. At any time that the
amounts on deposit in the Debt Service Reserve Fund exceed the Maximum
Annual Debt Service on the Series 1982 Bonds and any other Bonds or
Parity Obligations for which the deposits and recomputations required
by Section 5.2(a)(10) hereof have been made, an amount equal to such
excess may be transferred first from the Borrowed Funds Account and
then from the Funded Depreciation Account to the Interest Account,
Principal Account or Depreciation Reserve Fund, as directed by the
Hospital. if at any time the amount on deposit in the Debt Service
Reserve Fund is for any reason less than 958 of the Maximum Annual Debt
Service on the Series 1982 Bonds and any other Bonds or Parity
Obligations for which the deposits and recomputations required by
Section 5.2(a)(10) hereof have been made, the deficiency between the
amount so on deposit in the Debt Service Reserve Fund and 100% of such
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I4ICROFILIIEO :B;YJORM-MIC RBCEDAR RAPIDS • DENES i
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Maximum Annual Debt Service shall, to the extent possible, as
determined by the Trustee, promptly be restored by the Hospital in
twelve (12) equal monthly installments which shall be deposited in the
Funded Depreciation Account and shall be payable beginning on the
fifteenth day of the next succeeding month following the determination
of a deficiency. Monies on deposit in the Borrowed Funds Account and
the Funded Depreciation Account shall be used, in the order listed, to
make up any deficiencies in the Interest Account and the Principal
Account, in the order listed, with respect to the Series 1982 Bonds and
any other Bonds or Parity Obligations for which the deposits and
recomputations required by Section 5.2(a)(10) hereof have been made, to
the extent that monies on deposit in the Depreciation Reserve Fund are
insufficient to make up any such deficiency. In addition, oR or after
1, 20 , monies on deposit in the Debt Service Reserve Fund
may be used to maw the required deposits into the Interest Account and
the Principal Account with respect to the Series 1982 Bonds maturing on
1, 20 , so long as all of the principal of, premium, if
any, and interest on the Series 1982 Bonds and on any Additional Bonds
and Parity Obligations for which the deposits and recomputations
required by Section 5.2(a)(1O) hereof have been made, coming due prior
thereto, at maturity or upon redemption or otherwise, have been paid or
provision therefor has been made as provided in the Indenture and any
Parity Instrument.
(d) Depreciation Reserve Fund Deposits: On 15
of each year, from 5, 98 to and including 15,
20 , after making the required deposits into the Interest Account,
Principal Account and Funded Depreciation Account, the Hospital shall
pay to the Trustee, and the Trustee shall deposit into the Depreciation
Reserve Fund, an amount equal to the "Depreciation Reserve Requirement"
less the "Credits" (hereinafter defined) not previously applied against
the amounts required to be deposited in the Depreciation Reserve Fund.
Monies from time to time on deposit in the Depreciation Reserve Fund
shall be first used to make up any deficiencies in the Interest Account
and the Principal Account, in that order, with respect to the Series
1982 Bonds and any Additional Bonds and Parity Obligations for which
the recomputation required by Section 5.2(a)(10) hereof have been made.
Thereafter, so long as no default exists under the Indenture or this
Agreement, monies from time to time on deposit in the Depreciation
Reserve Fund may be withdrawn (i) by the Hospital upon its Written
Request to the Trustee certifying that the withdrawal is made to pay
for the "Acquisition of Qualified Property" (hereinafter defined), such
Written Request to be accompanied by invoices or other documents
evidencing the Cost of such Qualified Property (as hereinafter
141CROFILMED BY !
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defined), or (ii) by the Trustee upon a Written Request from the
Hospital for the transfer of money from the Depreciation Reserve Fund
to the Principal Account to be applied to the payment or mandatory
redemption or prepayment of the Bonds and any Parity Obligations or for
the optional redemption or prepayment of the Bonds and any Parity
Obligations, as directed by the Hospital, provided; that monies so
transferred shall be used to pay the principal of, and not interest or
premium on, Series 1982 Bonds only, unless deposits into the Debt
Service Reserve Fund and the recomputations with respect to the
Depreciation Reserve Requirement have been made by the Hospital under
Section 5.2(a)(10), in which case monies so transferred may be used to
pay the principal of, and not interest or premium on, the Additional
Bonds or Parity Obligations with respect to which such deposits and
recomputations were made. As used in this Agreement and the Indenture,
the following terms shall have the meanings hereinafter set forth:
(1) "Qualified Property" shall mean any personal or
real property necessary or useful in the operation of the Hospital
Facility and of a type the depreciation charges for which are allowable
costs under Medicare and Medicaid, or any governmental program
substantially supplementing or replacing Medicare or Medicaid, or
reimbursement regulations then in effect under Medicare or Medicaid or
such other governmental programs, or the regulations in effect at the
time of any abandonment of Medicare or Medicaid or such other
governmental programs;
(2) "Acquisition of Qualified Property" shall mean the
Purchase, repair, replacement, renewal or construction of Qualified
Property, whether such acquisition is by outright purchase,
lease -purchase or conditional sale and irrespective of whether payment
therefor is made in installments or in a lump sum;
(3) "Cost of Qualified Property" shall mean the amount
from time to time after 1, 1982, paid by the Hospital for
the Acquisition of Qualified Property, other than amounts paid therefor
by withdrawal from the Depreciation Reserve Fund or with borrowed
funds, including the proceeds of the Series 1982 Bonds, as certified by
the chief financial officer of the Hospital; provided, however, that
the Cost of Qualified Property with respect to any item shall not
exceed the portion of such payment which is both included for cost
reimbursement purposes in the depreciable basis of such item and which,
bn a straight-line basis of depreciation, is recoverable prior to the
final maturity of any Bonds or Parity Obligations then outstanding. On
or prior to 15 of each year, commencing 15,
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198_, the Hospital shall deliver to the Trustee a certificate of its
chief financial officer certifying the amount of Cost of Qualified
Property which was paid for by the Hospital during the period from
1, 1982 to the end of the fiscal year immediately preceding
the fiscal year in which such certificate is delivered to the Trustee
and which has not theretofore been applied as Credits against the
amount required to be deposited in the Depreciation Reserve Fund. Such
amount of Cost of Qualified Property not theretofore so applied which
is not applied as a Credit against the amount required to be deposited
in the Depreciation Reserve Fund on such
be
carried forward from year to year -and shall b— applied5ashalcredit
against amounts subsequently required to be so deposited;
paid or transferred intodthe"Princi alshallaAccounttheum (i) all amounts
principal amount of an into.
paid P (otther than the
redemption of such Bonds), andor redeemed through the optional
roert
previously applied as Credits, as1certified the tbyftile achief dfinancial not
officer of the Hospital to the Trustee pursuant to subparagraph (3)
above, and (iii) the principal amount of any Bonds or Parity
Obligations not yet due and payable which have been acquired by the
Hospital if such Bonds or Parity Obligations are delivered to the
Trustee and cancelled, and (iv) all investment income which is
deposited into the Depreciation Reserve Fund as provided in Section
2.21 hereof;
amount of
(5) "Depreciation Reserve Requirement" shall mean the
$ provided, however, that if the Depreciation
Reserve Requirement is recomputed in the event of the issuance of
Additional Bonds or Parity Obligations as provided in Section
5.2(a)(10), it shall be recomputed as follows: the Trustee shall
divide the principal amount of such Additional Bonds or Parity
obligations by the number of complete fiscal years such Additional
Bonds or Parity Obligations will be outstanding and the Depreciation
Reserve Requirement will be increased by such quotient in each such
fiscal year. in making the above calculation, the Trustee shall not,
to the extent that the proceeds of such Additional Bonds or Parity
Obligations are used for construction purposes, take into account any
fiscal years in which such construction is anticipated (as determined
by the Financial Feasibility Study delivered in connection with such
Additional Bonds or Parity Obligations), and shall subtract from the
amount so calculated for any fiscal year the principal amount of Bonds
or Parity Obligations maturing on the first day of the next fiscal year
which have been refunded and which have not been applied previously as
a Credit.
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Section 2.25. Rate Covenant; Mort a e. The Hospital covenants
and agrees to operate t e Hospita Facility and any other facilities
which it may operate as revenue producing health care facilities on a
non-discriminatory basis, and, subject to applicable restrictions and
requirements imposed by law, to charge such fees, rates, charges and
rents for the use of the Hospital Facility and any other facilities the
Hospital may operate and to exercise such skill and diligence as will
provide Assigned Revenues, together with other available funds,
sufficient to pay promptly all expenses of operation, maintenance and
repair of the Hospital Facility and any other facilities which the
Hospital may operate and to provide all payments required to be made by
the Hospital under this Agreement.
Beginning with the Fiscal Year ending June 30, 1985, the Hospital
will charge such rates, fees, charges and rents so that the average of
the Hospital's Net Income Available for Debt Service for the two (2)
immediately preceding Fiscal Years is not less than 1258 of the
Maximum Annual Debt Service on the Series 1982 Bonds, any Additional
Bonds and any Parity Obligations; provided, that such rates, fees,
charges and rents shall produce Net Income Available for Debt Service
in an amount not less than 1008 of the Maximum Annual Debt Service in
each such Fiscal Year; and provided further, that in the event that the
Hospital is prohibited by law from charging such rates, fees, charges
and rents so that the average of the Hospital's Net Income Available
for Debt Service for the two (2) immediately preceding Fiscal Years is
not less than 1258 of the Maximum Annual Debt Service, the Hospital
shall be required to charge only such rates, fees, charges and rents as
are sufficient to produce in each such Fiscal Year the maximum amount
of Net Income Available for Debt Service which is permitted by law, but
in no event shall the Hospital be permitted hereunder to charge such
rates, fees, charges and rents as shall produce Net Income Available
for Debt Service in any Fiscal Year which is less than 1008 of the
Maximum Annual Debt Service.
For the purpose of determining whether or not the foregoing rate
covenant is being complied with, the principal and interest
requirements on Additional Bonds and Parity Obligations shall not be
included in the computation of Maximum Annual Debt Service until the
Fiscal Year in which the principal and interest thereon first becomes
payable from sources other than the proceeds of the Additional Bonds or
Parity Obligations. If in any Fiscal Year for which the foregoing
computation is being made, less than all of the principal of and
interest on the Additional Bonds or Parity Obligations is being paid
out of the proceeds of such Additional Bonds or Parity Obligations,
then that amount which is not being so paid shall be included in the
computation of Maximum Annual Debt Service.
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CEDAR RAPIDS DES MOIYES ' �
The Hospital further covenants and agrees that it will, from time
to time as often as necessary, revise the rates, fees, rents and
charges aforesaid in such manner as may be necessary or proper so that
the Net Income Available for Debt Service will be sufficient to meet
the requirements of this Agreement, and further, that it will, in order
to comply with the provisions of this Agreement, take all action within
its power to obtain approvals of any regulatory or supervisory
authority to implement any rates, fees, rents and charges required by
this Agreement.
If, in any Fiscal Year, Net Income Available for Debt Service
shall be less than as hereinabove required, the Hospital shall, within
ninety (90) days after the end of such Fiscal Year, retain an
Independent Hospital Consultant to make recommendations with respect to
the operation of the Hospital Facility and any other facilities which
the Hospital may operate and with respect to such rates, fees, rents
and charges. A copy of the Independent Hospital Consultant's report
and recommendations shall be filed with the Issuer, the Hospital, the
Trustee, the Original Purchaser (who shall have no obligation to take
any action as a result of the receipt thereof), any rating agencies
which have rated any series of Bonds and Parity Obligations, and any
holder of any Bonds and Parity Obligations requesting a copy of the
same, and the Hospital shall take such action as shall be in conformity
with such recommendations, unless the Board of Directors of the
Hospital shall determine that the action so recommended is not
feasible, and submits to the Issuer, the Trustee, the Original
Purchaser (who shall have no obligation to take any action as a result
of the receipt of such information), any rating agencies which have
rated any series of Bonds or Parity Obligations, and any holder of any
Bonds and Parity Obligations requesting a copy of the same, an
alternative plan to remedy the deficiency in Net Income Available for
Debt Service, and such alternative plan is approved by the Trustee.
The foregoing covenant shall not be construed to prohibit the
Hospital from serving indigent patients to the extent required for it
to continue its qualification as a Tax -Exempt Organization, or to the
extent required by the Hill -Burton Act, or from otherwise serving
patients at reduced rates so long as such service does not prevent the
Hospital from satisfying the other requirements of this Section.
If in any Fiscal Year subsequent to the completion of the Project,
the Net Income Available for Debt Service as shown on the Hospital's
annual audit for such Fiscal Year is less than 1509 of the maximum
Annual Debt Service, or if at any time an event of default shall have
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occurred, then the Hospital agrees to promptly execute and record the
Mortgage and deliver to the Trustee a title opinion issued by
Independent Counsel opining that the Mortgage creates a valid first
mortgage lien on the Land, subject only to Permitted Encumbrances. The
Hospital hereby appoints the Trustee as its attorney-in-fact to execute
and record the Mortgage pursuant hereto.
Section 2.26. Accreditation. The Hospital has been accredited by
the Joint Commission on 'Accreditation of Hospitals and will use its
best efforts (so long as the Hospital believes the same to be in the
best interests of the Hospital and the holders of Bonds and Parity
Obligations) to maintain such accreditation by the Joint Commission or
its successors. The Hospital shall be required to send to the Trustee
a certified copy of its accreditation documents or, in lieu thereof,
immediately upon any loss of accreditation, a certified statement by
the Hospital that the Hospital is no longer accredited. Such
certification shall set forth the reasons for non -accreditation.
Section 2.27. Qualification for Third Part Reimbursement;
Permits an Licenses. The Hospita covenants to o tarn an renew from
time to time, as necessary, all permits, licenses and other
governmental approvals necessary for the operation of the Hospital
Facility and any other facilities which the Hospital may operate which
are subject to such licensure, and to maintain its status as a
provider of health care services eligible for reimbursement under Blue
Cross, Medicare, Medicaid and equivalent insurance programs, unless
failure to do so shall be deemed by the Hospital to be in the best
interests of the Hospital and the holders of the Bonds and Parity
Obligations.
Section 2.28. Additional Debt. The Hospital covenants and agrees
that after t7 eissuance or the Bonds it will not incur, assume or
guaranty any indebtedness or liabilities of any kind (including without
limitation any indebtedness shown on the liability side of the balance
sheet determined in accordance with the generally accepted accounting
principles and also including any rentals payable by the Hospital as
lessee under any lease agreement) except for:
(a) Obligations and liabilities payable or incurred under
the provisions of this Agreement and any supplement hereto;
(b) Indebtedness.evidenced by Notes or Parity Obligations;
(c) Liabilities under the Indenture and any Parity
Instrument, and any supplements thereto;
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(d) Contractual liabilities for which committed funds are
available in a construction fund or otherwise;
(e) Liabilities or indebtedness incurred in the ordinary
course of business;
(f) Such other obligations, including obligations
represented by lease payments, measured in the case of true leases by
rental due and payable within two (2) years of the date of incurrence,
and measured in the case of capital leases by the amount required to be
shown on the liability side of the balance sheet determined in
accordance with generally accepted accounting principles, in an amount
which does not exceed fifteen percent (158) of the adjusted ,gross
revenues of the Hospital for the preceding Fiscal Year; provided that
such indebtedness shall not be secured by any lien on any of the
Property subject to the covenant against liens contained in Section
2.19 of this Agreement.
The term "adjusted gross revenues", as used in this Section, means
the gross operating revenues of the Hospital for the relevant Fiscal
Year, less bad debt allowances, contractual adjustments with third
party payors and adjustments for free services.
Section 2.29. Transfer of Assets to Non -Affiliates. The Hospital
agrees a except as ereina er an as o erwifi provided in this
Agreement and except for sales in the ordinary course of, and pursuant
to the reasonable requirements of, the Hospital's activities and upon
fair and reasonable terms no less favorable to the Hospital than are
obtainable in a comparable arm's-length transaction, and except as
otherwise expressly provided in this Section 2.29 or in Section 2.30,
Section 2.31 or Section 2.34 hereof, it will not sell, lease, or
otherwise dispose of any of its properties or assets.
Notwithstanding the foregoing paragraph, and so long as no default
shall have occurred or be occasioned and be continuing under this
Agreement or under the indenture, the Hospital, without the prior
written consent of any of the Bondholders, may transfer its properties
or assets (the "Transferred Property") to parties which are not
Affiliates if the Cumulative Amount of Transferred Property Disposed of
Pursuant to Section 2.29 does not exceed the greater of (i) $2,000,000
or (ii) five percent (58) of the Transferable Asset Base. For purposes
of this Section 2.29, the "Cumulative. Amount of Transferred Property
Disposed of Pursuant to Section 2.29" shall be determined by adding the
value of Transferred Property previously disposed of pursuant to this
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Section and the value of the Transferred Property proposed to be
disposed of pursuant to this Section and subtracting therefrom the
value (the "Non Affiliate Transfer Credits") of any properties or
assets (the "Received Property") which were previously received or are
simultaneously being received by the Hospital from any transferee of
Transferred Property disposed of pursuant to this Section.
Not less than 10 days prior to any disposition of Transferred
Property under this Section 2.29, the Hospital shall deliver to the
Trustee the following:
(a) a certification of the Hospital as to (i) the amount of
Transferred Property previously disposed of, and proposed to be
disposed of, under this Section 2.29, and (ii) the amount of Non
Affiliate Transfer Credits, if any;
(b) a written opinion of Counsel acceptable to the Trustee to the
effect that: (i) such disposition will not adversely affect the
Hospital's status as a Tax Exempt Organization which is not a private
foundation as defined in Section 509(a) of the Internal Revenue Code;.
(ii) the transferee of the Transferred Property is not an Affiliate;
(iii) the conditions precedent to the disposition of the Transferred
i Property imposed by this Agreement have been satisfied; (iv) to the
knowledge of such Counsel after due inquiry no default or event of
default will result from such disposition under the terms and
provisions of this Agreement or of any other mortgage, agreement or
other instrument known to such Counsel after due inquiry by which the
Hospital or its property are or may be bound; and (v) to the best
knowledge of such Counsel such disposition is not subject to any
authorization, consent, approval or review by any governmental body or
regulatory authority not theretofore obtained or effected, as required
and as specified in such opinion; and
(c) a written opinion of Bond Counsel to the effect that such
disposition will not adversely affect the validity of the Bonds or the
exemption from Federal income tax of the interest paid on the Bonds or
any other such tax exempt Parity Obligations, which opinion may rely on
the related opinion of Counsel as to matters set forth therein.
For the purposes of this Section 2.29, the value of the
Transferred Property referred to herein shall be deemed to be the book
value thereof as shown on the asset side of the balance sheet in the
audited financial statements of the Hospital for the Fiscal Year
immediately preceding the time of original disposition thereof and the
value of Received Property referred to herein shall be the fair market
value thereof at the time it is received by the Hospital.
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Section 2.30. Transfer of Assets to Class II Affiliates.
Notwithstanding he first paragraph of Section 2.29 hereof, and so long
as no default shall have occurred or be occasioned and be continuing
under this Agreement or under the Indenture, the Hospital, without the
prior written consent of any of the Bondholders, may dispose of
Transferred Property (as referred to in Section 2.29) in transactions
with Class II Affiliates subject to the following conditions:
(A) the Cumulative Amount of Transferred Property Disposed Of
shall not exceed the greater of (i) $2,000,000 or (ii) twenty percent
(206) of the Transferable Asset Base; and
(B) in the case of dispositions of Transferred Property pursuant
to the limitation set forth in (A)(ii) above, (i) pro forma financial
statements for the most recent Fiscal Year for which an audit has been
completed, but giving effect to the proposed disposition of Transferred
Property, must indicate that Net Income Available for Debt Service
would be not less than 1506 of Maximum Annual Debt Service, and (ii)
immediately after such transfer, the Hospital shall have available for
use cash reserves in an amount sufficient to pay Fifteen Days Operating
Expenses (as hereinafter defined) of the Hospital. As used herein, the
term Fifteen Days Operating Expenses shall mean the operating expenses
of the Hospital for the Fiscal Year immediately preceding, excluding
interest, depreciation and amortization divided by 365 and multiplied
by 15.
For purposes of this Section 2.30, the "Cumulative Amount of
Transferred Property Disposed Of" shall be determined by adding the
Cumulative Amount of Transferred Property Disposed of Pursuant to
Section 2.29 to the value of all of the Transferred Property previously
disposed of pursuant to this Section and the value of the Transferred
Property proposed to be disposed of pursuant to this Section and
subtracting therefrom the value (the "Class II Affiliate Transfer
Credits") of any properties or assets (the "Received Property") which
were previously received or are simultaneously being received by the
Hospital from any transferee of Transferred Property disposed of
pursuant to this Section.
Not less than 10 days prior
Property under this Section 2.30,
Trustee the following:
to any disposition of Transferred
the Hospital shall deliver to the
(a) a certification of the Hospital as to (i) the amount of
Transferred Property previously disposed of under this Section and
Section 2.29, (ii) the amount of Transferred Property proposed to be
disposed of under this Section, and (iii) the amount of Non Affiliate
Transfer Credits, and Class II Affiliate Tranfer Credits, if any;
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(b) if the Cumulative Amount of Transferred Property Disposed Of
exceeds $2,000,000, or, as a result of the proposed disposition, will
exceed $2,000,000, the certificate of an Independent Certified Public
Accountant as to the matters required in (B) above;
(c) an appraisal of the fair market value of the portion of the
Transferred Property (and Received Property if any is being received by
the Hospital simultaneously with the disposition of the Transferred
Property) which is real property by a Member of the American Institute
of Real Estate Appraisers (MAI) and an appraisal of the fair market
value of the portion of the Transferred Property (and Received Property
if any is being received by the Hospital simultaneously with the
disposition of the Transferred Property) which is not cash qr real
property by an expert acceptable to the Trustee;
(d) a written opinion of Counsel acceptable to the Trustee to the
effect that: (i) such disposition will not adversely affect the
Hospital's status as a Tax Exempt Organization which is not a private
foundation as defined in Section 509(a) of the Internal Revenue Code;
(ii) the transferee of the Transferred Property is a Class II
Affiliate; (iii) the conditions precedent to the disposition of the
Transferred Property imposed by this Agreement have been satisfied;
(iv) to the knowledge of such Counsel after due inquiry no default or
event of default will result from such disposition under the terms and
provisions of this Agreement or of any other mortgage, agreement or l
other instrument known to such Counsel after due inquiry by which the
Hospital or its property are or may be bound; and (v) to the best
knowledge of such Counsel such disposition is not subject to any
authorization, consent, approval or review by any governmental body or
regulatory authority not theretofore obtained or effected, as required
and as specified in such opinion; and
(e) a written opinion of Bond Counsel to the effect that such
disposition will not adversely affect the validity of the Bonds or the
exemption from Federal income tax of the interest paid on the Bonds or
any other such tax exempt Parity Obligations, which opinion may rely on
the related opinion of Counsel as to matters set forth therein.
For the purposes of this Section 2.30, the value of the
Transferred Property referred to herein shall be determined at the time
of original disposition thereof and shall be the greater of the fair
market value thereof or the book value of such property as shown on the
asset side of the balance sheet in the audited financial statements of
the Hospital for the Fiscal Year immediately preceding the time of
original disposition thereof and the value of Received Property
referred to herein shall be the fair market value thereof at the time
it is received by the Hospital.
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Section 2.31. Transfers of Assets to Class I Affiliates;
Affiliate Guaranties. Notwithstanding the first paragraph of Section
2.29, and so long as no default shall have occurred or be occasioned
Hospital, without theand be continuing under this Agreement or under the Indenture, the
prior written consent of any of the Bondholders,
may dispose of Transferred Property (as referred to in Section 2.29) in
transactions with Class I Affiliates subject to the following
conditions:
(A) for that portion of the Transferred Property which is not
also Released Property as referred to in Section 2.19 hereof, such
disposition incorporates binding restrictions on use as set forth in
the third paragraph of Section 2.13 of this Agreement;
(B) any such Transferred Property which is subject to the lien or
security interest of this Agreement or of the Mortgage, if any then
exists, shall remain subject to such lien or security interest, and any
Assigned Revenues of the Hospital transferred to a Class I Affiliate
under this Agreement shall remain subject to the security interest
granted hereby and no Assigned Revenues shall be transferred to a Class
I Affiliate unless such Class I Affiliate agrees in writing, in form
and substance acceptable to the Trustee, to maintain such security
interest in such transferred Assigned Revenues and executes and
delivers any document, including but not limited to any financing
statements, and takes any and all other actions necessary to effect the
same;
(C) the Affiliate executes an Affiliate Guaranty; and
(D) the requirements of the following paragraph regarding
delivery of appraisals, reports, opinions and similar materials are
satisfied.
Not less than 10 days prior to any disposition of Transferred
Property.under this Section 2.31, the Hospital shall deliver to the
Trustee the following:
(i) an -appraisal of the fair market value of the portion of
the Transferred Property which is real property by a Member of the
American Institute of Real Estate Appraisers (MAI) and an appraisal of
the fair market value of the portion of the Transferred Property which
is not real property by an expert acceptable to the Trustee;
i
(ii) a written opinion of Counsel acceptable to the Trustee
to the effect that: (a) such disposition will not adversely affect the
Hospital's status as a Tax Exempt Organization which is not a private
foundation as defined in Section 509(a) of the Internal Revenue Code;
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(b) the transferee of the Transferred Property is a Class I Affiliate;
(c) the Affiliate Guaranty involved is valid, binding and enforceable
in accordance with its terms (subject to customary exceptions for laws
affecting creditors' rights and the availability of equitable remedies)
at least to the extent of the appraised fair market value of the
Transferred Property determined as provided above; (d) the conditions
precedent to the disposition of the Transferred Property imposed by
this Agreement have been satisfied; (e) to the knowledge of such
Counsel after due inquiry no default or event of default will result
from such disposition under the terms and provisions of this Agreement
or of any other mortgage, agreement or other instrument known to such
Counsel after due inquiry by which the Hospital or its property are or
may be bound; and (f) to the best knowledge of such Counsel such
disposition is not subject to any authorization, consent, approval or
review by any governmental body or regulatory authority not theretofore
obtained or effected, as required and as specified in such opinion; and
(iii) a written opinion of Bond Counsel to the effect that
such disposition will not adversely affect the validity of the Bonds or
the exemption from Federal income tax of the interest paid on the Bonds
or any other such tax exempt Parity Obligations, which opinion may rely
on the related opinion of Counsel as to matters set forth therein.
For the purposes of this Section 2.31, the value of the
Transferred Property referred to herein shall be determined at the time
of the original disposition thereof and shall be the greater of the
fair market value thereof or the book value of such property as shown
on the asset side of the balance sheet in the last audited financial
statements of the Hospital delivered pursuant to Section 2.8 hereof.
Section 2.32. Related Facility Financing. In determining the
amount o indebtedness incurred pursuant to Section 2.28(f) hereof, the
Hospital may elect to have any liability or contingent liability
incurred by it in connection with Related Facility Financings up to the
Related Facility Financing Cap valued at the rate of 508 of the amount
thereof. To the extent that the aggregate amount of such liabilities
or contingent liabilities exceed the Related Facility Financing Cap,
such excess shall be valued at 1008 of the amount thereof. A Related
Facility Financing shall mean any transaction in which the Hospital has
incurred, assumed or guaranteed an indebtedness or liability of any
kind (including without limitation any indebtedness shown on the
liability side of the balance sheet determined in accordance with
generally accepted accounting principles and also including any rentals
payable by the Hospital as lessee under any lease agreement) in
connection with the acquisition, construction or equipping of satellite
hospital facilities, ambulatory care centers, medical office buildings,
clinics or health care related activities. The Related Facility
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Financing Cap means the difference between (a) $4400000 and (b) the
amount by which the Cumulative Amount of Transferred Property Disposed
Of (as defined in Section 2.30 hereof) exceeds $2,000,000.
To make an election under this Section 2.32, the Hospital shall
provide the Trustee with a certificate signed by an authorized officer
of the Hospital stating (a) that the Hospital is making an election
pursuant to this Section, (b) that the Hospital has entered or intends
to enter into a Related Facility Financing and the amount of the
indebtedness, liability or contingent liability incurred or to be
incurred in connection therewith, (c) the outstanding amount of any
indebtedness, liability or contingent liability in connection with
Related Facility Financings for which an election has previously been
made pursuant to this Section, (d) the amount by which the Cumulative
Amount of Transferred Property Disposed Of exceeds $2,000,000, and (e)
the amount of the Related Facility Financing Cap. The Hospital shall
also provide.the Trustee with such other documents or showings as the
Trustee may request in order to determine whether the Hospital is
entitled to an election pursuant to this Section.
Section 2.33. Maintenance of Control Over Affiliates. The
Hospita covenants an agrees that during t e term o any Affiliate
Guaranty it will maintain control over all Class I Affiliates which are
parties to any such Affiliate Guaranty in the manner and to the extent
required to cause such Affiliate to continue as an Affiliate within the
definition of such term set forth in Article I hereof.
I
Section 2.34.
-��1 as no event of de auTt shall
have occurred and be continuing, the Hospital shall have the right to
sell, lease or otherwise dispose of the Excluded Property without
restriction free of the lien and security interest hereof or of the
default Mortgage, a
ny ltshallhahen exists. In
as no
veoccurredandbeaddition, so continuing, thegHospitalvshallfhave
the right to use the proceeds of Assigned Revenues to carry on its
business in accordance with sound business practices and to dispose of
such proceeds without regard to Section 2.19 hereof.
ARTICLE III
Damage and Condemnation
Section 3.1. Dama_4e. The Hospital agrees to notify the Trustee
immed ate y in case of damage estimated to exceed $200,000 in amount to
the Hospital Facility resulting from fire or other casualty. In the
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event any such damage does not exceed $200,000, the Hospital (i) will
forthwith repair, reconstruct and restore or replace the Hospital
Facility to substantially the same condition as it existed prior to the
event causing such damage and will apply the Net Proceeds of any
insurance relating to such damage received by the Hospital from the
Trustee to the payment or reimbursement of the costs of such repair,
reconstruction and restoration or replacement; or (ii) will deposit the
Net Proceeds into the Depreciation Reserve Fund to be used to make
capital improvements at or additions to the Hospital Facility. So long
as the Hospital is not in default hereunder, the Trustee agrees to pay
over the Net Proceeds of any insurance relating to such damage to the
Hospital upon its Written Request therefor.
In the event any such damage is'estimated to exceed $200,000 in
amount, the Hospital shall within ninety (90) days after the receipt by
the Trustee of the Net Proceeds of any insurance relating to such
damage elect one of the following two options by written notice of such
election to the Trustee:
i
(a) Option A --Repair and Restoration. The Hospital may I
elect to repair, reconstruct and restore or replace the Hospital i
Facility. In such event the Hospital shall proceed forthwith to
repair, reconstruct and restore or replace the Hospital Facility to
substantially the same condition as it existed prior to the event
causing such damage and will apply the Net Proceeds of any insurance
relating to such damage received by the Hospital from the Trustee to
the payment or reimbursement of the costs of such repair,
reconstruction and restoration or replacement. So long as the Hospital
is not in default hereunder, any Net Proceeds of insurance relating to
such damage received by the Trustee shall be released from time to time
by the Trustee to the Hospital upon the receipt of the written Request
., of the Hospital specifying the expenditures made or to be made or the
indebtedness incurred in connection with such repair, reconstruction
and restoration or replacement and stating that such Net Proceeds,
together with any other monies legally available for such purposes,
will be sufficient to complete such repair, reconstruction and
restoration or replacement.
In the event the Hospital shall elect this Option A the
Hospital shall complete the repair, reconstruction and restoration or
replacement of the Hospital Facility, whether or not the Net Proceeds
of insurance received by the Hospital for such purposes are sufficient
to pay for the same.
tion
of Notes an
Parity Obiations.
The Hospital)may pelect Bto-haveythe tNet Proceedsd
dpayable asla9result of
such damage applied to the prepayment of the Notes and Parity
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Obligations; proded, however, that the Hospital may elect to prepay
less than all of ti heNotes and Parity Obligations only if the Hospital
certifies to the Trustee in writing that: (i) the property damaged is
not essential to the Hospital's use or occupancy of the Hospital
Facility; or (ii) the Hospital Facility has been restored to a
condition substantially equivalent to its condition prior to such
damage; or (iii) suitable land, improvements or equipment of
substantially equal utility value have been acquired for the Hospital's
delivered saareport t the Htopthe lHospital ytoothe leffectothat, inohislopinion,
after taking into account any prepayments to be made by the Hospital
Pursuant to this Option H, the Hospital Facility was not damaged or
destroyed to such an extent that the Net Income Available for Debt
Service of the Hospital will be materially adversely affected.
Whenever the Hospital elects to prepay Notes and Parity Obligations
under this option the Hospital shall, in its notice of election to the
Trustee, direct the Trustee to apply such Net Proceeds, when and as
received, to the prepayment of Notes and Parity Obligations in the
manner specified in Section.4.2 hereof.
Section 3.2. Condemnation. The Hospital, immediately upon
obtaining now edge o t e
condemnation or taking of tinstitution of any proceedings for the
he Hospital Facility or any portion thereof
for public or quasi -public use, shall notify the Trustee of the
Pendency of such proceedings. The Trustee may participate in any such
proceedings, and the Hospital from time to time will deliver or cause
to be delivered to the Trustee all instruments requested by it to
permit such participation. The Hospital hereby irrevocably assigns to
the Trustee all right, title and interest of the Hospital in and to any
Net Proceeds of any award, compensation or damages
referred to as an "award") payable i(hereinafter
n connection with any such
condemnation or taking during the term hereof. Such Net Proceeds shall
be repaid by the Trustee to the Hospital only in accordance with the
provisions of this Section 3.2.
In the event that such award is less than $200,000 the Trustee, at
the Written Request of the Hospital, shall pay the amount of such award
to the Hospital and such funds may be used by the Hospital for any
general corporate purpose.
In the event of any such condemnation or taking where the award is
0
receipt ofrthe raward, elect tone al soflthewfollowingetwo(optionsithin nint90) daysbyater the
fwritten
notice of such election to the Trustee:
(a) Option A --Repairs, Improvements and Substitutions. The
Hospital may elect to use the Net Proceeds of the award made in
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connection with such condemnation or taking for repairs and
improvements to such Hospital Facility not so condemned or taken or for
substitutions therefor. In such event, so long as the Hospital is not
in default hereunder, the Hospital shall have the right to receive such
Net Proceeds from the Trustee from time to time upon the receipt by the
Trustee of:
(1) The Written Request of the Hospital specifying the
expenditures made or to be made or the indebtedness incurred in
connection with such repairs, improvements or substitutions and stating
that such Net Proceeds, together with any other monies legally
available for such purposes, will be sufficient to complete such
repairs, improvements or substitutions; and
(2) The written approval of the expenditures -set forth
in such Request by an Independent Architect.
The Hospital agrees to apply any such Net Proceeds so received
solely to the purposes specified in such Written Request and to
complete such repairs and improvements to the Hospital Facility whether
or not the Net Proceeds are sufficient to pay for the same.
In the event that the Hospital does not receive the necessary
governmental permits and approvals to effect the repairs, substitutions
or improvements, the Hospital may withdraw its election under this
Option A and elect Option B below.
In the event there are excess Net Proceeds remaining after payment
for such repairs and improvements, such Net Proceeds shall be applied 1
to the prepayment of the Notes as provided in Section 4.2 hereof and
may be applied to the prepayment of Parity obligations.
(b) Option B --Prepayment of Notes and Parity Obligations.
The Hospital may elect to have the Net Proceeds payable as a result of
such taking or condemnation applied to the prepayment of the Notes and
Parity Obligations; provided, however, that the Hospital may elect to
prepay less than all of the Notes and Parity Obligations only if the
Hospital certifies to the Trustee in writing that: (i) the property
condemned or taken is not essential to the Hospital's use or occupancy
of the Hospital Facility; or (ii) the Hospital Facility has been
restored to a condition substantially equivalent to its condition prior
to such condemnation or taking; or (iii) suitable land or improvements
of substantially equal utility value have been acquired for the
Hospital's operations at the Hospital Facility; or (iv) a Hospital
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Consultant has delivered a report to the Hospital to
thebeffect made thathet in
his opinion, after taking account of any prepayments
Hospital pursuant to this Option B, the Hospital Facility was not
condemned to such extent that the Net Income Available for Debt Service
of the Hospital will be materially adversely affected. Whenever the
Hospital elects to prepay Notes and Parity Obligations under this
option the Hospital shall, in its notice of election to the Trustee
direct the Trustee to apply such Net Proceeds, when and as received, to
the prepayment of the Notes and Parity Obligations in the manner
specified in Section 4.2 hereof.
Section 3.3. Other Provisions with Res ect to Net Proceeds. The
Net Procee s o any insurance or con emna ion awar receive y the
the
Issuer, the Trustee, or the Hospital, shall be deposited with
Trustee and held in a special trust account and invested or reinvested
in Qualified Investments subject to the Hospital's right to receive the
same pursuant ,to Sections 3.1(a) and 3.2(a) hereof. Any such Net
Proceeds not so paid to the Hospital shall be applied to the prepayment
i ied in Section 4.2 hereof and to the
of the Notes in the manner specif
prepayment of Parity Obligations. ti
;i
ARTICLE IV
Prepayment of Notes
/ Section 4.1. Pre avment Generall No prepayment of the Notes
may be ma a except o
tie ex en aaTY the manner expressly permitted
by this Agreement.
Section 4.2. Optional Prepayment In the Event of Damage or
Condemnation. The Hospital shall have the right to Have the Notes and
Parity Obligations prepaid in whole or in part from the Net Proceeds of
of. In
insurance or condemnation pursuant to Sectionslor 3
lessthanall hofethe Notes
the event that the Hospital elects to prepay
or Parity Obligations from the Net Proceeds of insurance or
condemnation, the Hospital shall have the right to designate, in such
notice of election or otherwise, whether and to what extent Notes or
Parity Obligations are to be prepaid. In the absence of any such
designation such prepayment shall be applied ratably and
l of the Outstanding Notes and Parity Obligations.
proportionately on al
Any prepayment made on any Note or Parity Obligation shall be applied 7
to the installments of Principal due thereon in the inverse order of
the maturity thereof.
I
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Section 4.3. Optional Pre ayment of Notes. In addition to the
prepayment of any Note made pursuant to Section 4.2 hereof, the
Hospital may, at its option, prepay any Note in whole or in part (but
if in part, then in units of $5,000 or any integral multiple thereof
with a minimum prepayment of $100,000) by paying to the Trustee an
amount sufficient to redeem all or a portion of the corresponding
series of Bonds (as the Hospital may designate), at the redemption
prices, and at the times therefor specified in the Indenture. In the
event that less than all of any series of Bonds is to be redeemed under
this Section, any amount prepaid to redeem serial Bonds shall be
credited against the installment or installments of principal due on
the Note corresponding to the maturities of the Bonds to be redeemed.
Section 4.4. SSPecial Prepayment Option. (a) In addition to the
rightssoo p—repayment described and re erred to in Sections 4.2 and 4.3
hereof, the Hospital shall also have the option at any time to prepay
all, but not less than all, of the Notes in such amount as is necessary
to redeem all outstanding Bonds in the event that: (i) the Hospital is
ordered or, in the opinion of Independent Counsel, is required, by
legislative, judicial or administrative action of the United States or
of the State of Iowa or any agency, department or subdivision thereof,
or otherwise, to operate the Hospital Facility in a manner contrary to
the principles and beliefs of the Roman Catholic Church including
Ethical and Religious Directives for Catholic Health Facilities or
similar guidelines promulgated by the National Council of Catholic
Bishops, Washington, D.C., including the provision of medical treatment
and surgical procedures inconsistent with such directives; or (ii) the
Hospital determines in good faith that there exists a substantial
possibility that the Hospital will be legally required so to operate
the Hospital Facility; and in each case such legislative, judicial or
administrative action is applicable to the Hospital because the
Hospital is a party to this Agreement or to the financing herein
contemplated;
(b) In addition to the rights of prepayment described and
referred to in Sections 4.2, 4.3 and 4.4(a) hereof, the Hospital shall
also have the option at any time to prepay, all but not less than all,
of the Notes in such amount as is necessary to redeem all outstanding
Bonds in the event that the Hospital is required, as a result of its
being a party to this Agreement, to disclose to any court or
governmental unit or agency any records or other information which the
Hospital deems to be private, privileged or confidential;
(c) Upon receipt by the Trustee of a written notice from the
Hospital of its exercise of its rights of prepayment under this Section
4.4, the Hospital and the Trustee shall forthwith fix a date for the
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redemption of all outstanding Bonds, not less than forty-five (45) days
nor more than two hundred (200) days from the receipt of such notice,
and the Trustee shall advise the Hospital in writing of the redemption
date so fixed. The Hospital shall thereupon be obligated, at least
thirty (30) days before the specified redemption date, to deposit with
the Trustee an amount of cash sufficient to redeem or prepay all
outstanding Bonds on the redemption date with interest accrued to such
date, and to pay and discharge all other obligations of the Hospital
under this Agreement.
Section 4.5. Notice of Pre ayment. The Hospital shall give the
Trustee not ess than orty- ive mays prior written notice of any
prepayment of the Notes which notice shall designate the date of
prepayment and the amount thereof and direct the redemption of Bonds of
the series and in the amounts corresponding to the Note or Notes to be
prepaid. Such notice may be contained in any notice of election given
pursuant to either Section 3.1(b) or 3.2(b) hereof.
Section 4.6. Effect of Partial Pre a ent. Upon any partial
prepayment the Notes, eac installment of interest which shall
thereafter be payable on the Notes shall be reduced, taking into f
account the interest rate or rates on the Bonds remaining outstanding
after the redemption of Bonds from the proceeds of such partial
prepayment so that the interest remaining payable on the Notes shall be
sufficient to pay the interest on such outstanding Bonds when due.
i
Section 4.7. Amortization Schedules. On the date of any partial
prepayme�riy Note, the rus ee sa deliver to the Hospital two i
copies of an amortization schedule with respect to such Note then
outstanding setting forth the amounts of the installments to be paid on
such Note after the date of such partial prepayment and the unpaid
principal balance of such Note after payment of each such installment.
ARTICLE V
Additional Notes and Parity Obligations
Section 5.1. Issuance of Additional Notes and Parity Obligations.
So long as no event of default (as defined in Section 6.1 hereof) has
occurred and is continuing, the Hospital from time to time may, with
the consent of the Issuer, issue and sell to the Issuer (but only to
the Issuer) one or more Notes in addition to the Series 1982 Note
(herein referred to as "Additional Notes") or, in the alternative, the
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Hospital from time to time may issue and sell one or more Parity
Obligations to any person or persons on the terms and conditions set
forth herein. Additional Notes or Parity Obligations may be issued for
one or more of the following purposes (and for the purpose of securing
funds deemed necessary to establish reserves therefor for debt service
and capitalized interest, if any, and to pay the expenses of the
issuance thereof):
(a) Obtaining funds to redeem any outstanding series of
Notes or Parity Obligations if such Notes or Parity Obligations are
then redeemable;
(b) Obtaining funds for the advance refunding of Jany
outstanding series of Notes or Parity Obligations, regardless of
whether such Notes or•Parity Obligations are redeemable at such time;
(c) Financing the cost or estimated cost of completing the
Project or additional Improvements; or
(d) Financing the cost or estimated cost of acquiring and/or
constructing additional Improvements or other capital assets owned or
to be owned by the Hospital.
The principal amount of any Additional Notes or Parity
Obligations issued pursuant to either of the foregoing clauses (a) or
(b) shall not exceed the unpaid principal amount of the Notes or Parity
Obligations being redeemed or refunded, as the case may be, together
with any prepayment premium payable in connection therewith, accrued
and unpaid interest thereon to the date of redemption or maturity and
the amount of any funds deemed necessary to establish reserves for such
Additional Notes or Parity Obligations and to pay expenses of the
issuance thereof.
The principal amount of any Additional Note or Parity
Obligation issued pursuant to the foregoing clause (c) shall not exceed
the cost or estimated cost of completing the Project, together with the
amount of any funds deemed necessary to establish reserves for such
Additional Note or Parity Obligation, to pay interest thereon during
the estimated remaining construction period, if any, of the Project, to
pay expenses of issuance thereof and any other similar costs.
Additional Notes and Parity Obligations must be payable as to
the principal on July 1 and as to interest on January 1 and July 1 of
each year, and such interest or principal or any other payments with
respect to such Additional Notes or Parity Obligations shall be payable
by the Hospital at the office of the Trustee. In other respects any
such Additional Note or Parity Obligation may bear interest at any rate
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lawful at the time of issuance thereof and may mature over any lawful
period of time not exceeding forty (40) years from the date of
issuance, all as may be agreed upon by the Hospital and the purchaser
thereof. It is understood and agreed, however, that any Additional
Note shall (i) be substantially in the form of the Series 1982 Note
attached hereto as Exhibit B (with appropriate variations or
insertions), (ii) be pledged and assigned by the Issuer to the Trustee
as security for a corresponding series of Additional Bonds concurrently
issued and sold under the Indenture for the purpose of obtaining funds
to make a loan to the Hospital to be evidenced by such Additional Note,
(iii) be issued in the same principal amount as such corresponding
series of Additional Bonds, (iv) be issued with the same final maturity
date as such corresponding series of Additional Bonds, (v) be issued
with the same rate or rates of interest payable at the same time or
times as such corresponding series of Additional Bonds, and (vi)
require payments of installments of principal in the same amounts and
at the same time as any payments and redemptions of such corresponding
series of Additional Bonds. '
Additional Notes shall be authorized by a supplement to this
Agreement. Parity Obligations shall be authorized by such Parity i
Instruments as may be entered into by the Hospital and the purchaser or j
purchasers thereof or a trustee acting for the benefit of such
purchaser or purchasers. Upon the issuance and sale of any Additional
Notes or Parity Obligations the same shall, together with any Note or +
+ Parity Obligation then outstanding, be equally and ratably secured by j
the lien of this Agreement on the Pledged Property and any other
property pledged or assigned as collateral for the Notes and Parity j
Obligations pursuant to a Parity Instrument. i
Section 5.2. Conditions to Issuance of Additional Notes and i
Parit 0�6Iigatlons. a Prior to the issuance an sale o any
Additional Notes or Parity Obligations, and as a condition precedent
thereto, the following documents and showings shall be executed and
delivered to the Trustee:
i I
(1) A valid and effective amendment to this
j Agreement providing for the inclusion within the Pledged Property of
any fixtures, machinery, equipment and other tangible personal property
to be acquired from the proceeds of the Additional Notes or Parity
Obligations; providing for an adjustment to the obligations of the
Hospital under Section 2.24 hereof to increase the amounts required to
be deposited by the Hospital in the Principal Account, Interest
Account, Debt Service Reserve Fund, if any, and Depreciation Reserve
Fund, if any, in order to provide for payment of such Additional Notes
or Parity Obligations; and providing for the inclusion within the
covenant against liens contained in Section 2.19 hereof of any real
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estate and interests therein and any buildings, structures, facilities,
improvements and related real property to be acquired from the proceeds
of the Additional Notes or Parity Obligations;
(2) If Additional Notes are being issued, a valid
and effective supplemental indenture providing for the issuance of such
new series of Additonal Bonds being issued and sold to finance the
purchase of such Additional Notes, and pledging and assigning the
additional amounts to be paid by the Hospital under this Agreement and
any additional security interests created by the amendment to this
Agreement to the payment of the Bonds, including such Additional Bonds,
subject to the rights of the Hospital under this Agreement;
(3) If Additional Notes are being issued, a copy,
duly certified by the City Clerk of the Issuer, of the resolution of
the Issuer theretofore adopted and approved authorizing the execution
and delivery of such supplemental indenture, such amendment to this
suance of such Additional Bonds;
Agreement, and the isi
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(4) If Additional Notes are being issued, a request
and authorization to the Trustee on behalf of the Issuer and signed by
such Additional Bonds to the Original Purchaser
its Mayor to deliver
thereof upon payment to the Trustee, for the account of the Issuer, of
a specified sum plus any accrued interest. The proceeds of such
Additional Bonds shall be paid over to the Trustee and deposited in the
manner provided by the supplemental indenture; l
(5) A certificate signed by the President of the
Hospital to the effect that no event of default under the Indenture,
any Parity Instrument or this Agreement has occurred and is continuing
or will result from the issuance of such Additional Notes or Parity
Obligations;
(6) If Additional Notes are being issued, the j
Additional Notes executed by the Hospital and endorsed by the Issuer to
the Trustee;
(7) Either:
(A) An opinion of an Independent Certified
Public Accountant to the effect that the average of the Hospital's Net
Income Available for Debt Service (with adjustments as hereinafter
provided) for the two (2) Fiscal Years immediately preceding the date
on which such Additional Note or Parity Obligation is to be issued was
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at least 130% of the Maximum Annual Debt Service with respect to all
Bonds and Parity Obligations outstanding at the time of such opinion
and the Parity Obligations proposed to be issued or the Additional
Bonds proposed to be issued concurrently with and corresponding to such
Additional Notes; or
(B) (i) an opinion of an Independent Certified
Public Accountant stating that the average of the Hospital's Net Income
Available for Debt Service (with adjustments as hereinafter provided)
for the two (2) Fiscal Years immediately preceding the issuance of such
Additional Notes or Parity Obligations was not less than 1258 of the
Maximum Annual Debt Service with respect to the Bonds and Parity
Obligations outstanding at the time of such opinion, exclusive of the
Additional Bonds or Parity Obligations proposed to be issued, and (ii)
a Financial Feasibility Study prepared or reported on by an Independent
Hospital Consultant to the effect that the Net Income Available for
Debt Service to be obtained by the Hospital for each of the two (2)
Fiscal Years beginning with the first complete Fiscal Year commencing
after the estimated completion of the construction, acquisition or
equipping financed thereby, or if the proceeds of the Additional Bonds
or Parity Obligations are to be used for purposes other than
construction, acquisition or equipping of facilities, that the Net
Income Available for Debt Service to be obtained by the Hospital for
each of the two (2) complete Fiscal Years following the issuance of the
Additional Notes or Parity Obligations, will equal not less than 1258
of the Maximum Annual Debt service with respect to the Bonds and Parity
Obligations outstanding at the time of such opinion and such Additional
Bonds or Parity Obligations proposed to be issued, and setting forth in
detail all calculations of such Net Income Available for Debt Service
and such Maximum Annual Debt Service;
provided, however, that no opinion (other than the opinion required by
subsection (a) (8) hereof) shall be required if the Additional Notes
or Parity Obligations are being issued for the purpose of financing the
refunding or refinancing of Notes or Parity Obligations and related
financing costs, capitalized interest and Debt Service Reserve Fund
deposit, or for the purpose of financing the cost of completing the
Project or any additional Improvements and related financing costs,
capitalized interest and Debt Service Reserve Fund deposit, provided
that in the case of Additional Notes or Parity Obligations being issued
to complete the acquisition, construction and equipping of the Project
or any additional Improvements, such Additional Notes or Parity
Obligations are being issued in a principal amount not to exceed
158 of the principal amount of the series of Notes or Parity
Obligations initially issued to finance the cost of the Project or the
additional Improvements. If, in the future, applicable laws or
regulations prevent the Hospital from generating the Net Income
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Available for Debt Service specified in this subsection, the conditions
of this subsection will be deemed satisfied, provided that a Financial
Feasibilty Study is prepared or reported on by an Independent Hospital
Consultant and concludes that such applicable laws or regulations (i)
permitted the Hospital to generate Net Income Available for Debt
Service (with adjustments as hereinafter provided) for each of the
preceding two (2) Fiscal Years at least equal to 1008 of the Maximum
Annual Debt Service on the Bonds and Parity Obligations then
outstanding, and (ii) permit the Hospital's forecasted Net Income
Available for Debt Service for each of the two (2) full Fiscal Years
immediately following the issuance of the Additional Notes or Parity
Obligations to equal at least 1008 of the Maximum Annual Debt Service
with respect to the Bonds and Parity Obligations outstanding�at the
time of such opinion and the Parity Obligations proposed to be issued
or the Additional Bonds proposed to be issued concurrently with and
corresponding to.such Additional Notes. For the purposes of this
subsection 5.2(a)(7) in determining the Hospital's Net Income Available
for Debt Service for any preceding Fiscal Year, there shall be
subtracted therefrom any donations or contributions made by any
Affiliate during such Fiscal Year to the extent that such donations or
contributions were taken into account in otherwise determining the
Hospital's Net Income Available for Debt Service;
(8) If the proceeds of the Additional Notes or Parity
Obligations are to be used for the purpose of refunding or refinancing
less than all of the Notes or Parity Obligations, an opinion of an
Independent Certified Public Accountant to the effect that the Maximum
Annual Debt Service with respect to the Notes and Parity Obligations to
be outstanding after the issuance of such Additional Notes or Parity
Obligations will not exceed the Maximum Annual Debt Service with
respect thereto prior to such issuance, or one of the opinions required
by subsection (7) (A) or (B) hereof;
(9) If Additional Notes are being issued, an opinion of
Bond Counsel to the effect that the issuance of such Additional Bonds
will not affect the tax exempt status of the Bonds then outstanding;
(10) If, under the terms of the supplemental indenture
referred to in (2) above, or under the terms of any Parity Instrument,
the monies on deposit in the Debt Service Reserve Fund and the
Depreciation Reserve Fund are to be available for the payment of
principal of and interest on such Additional Bonds or Parity
Obligations, as the case may be, then, concurrently with the issuance
of such Additional Bonds or Parity Obligations, as the case may be, (i)
the amount on deposit in the Debt Service Reserve Fund shall be
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(c) In the event that the Hospital shall issue Parity
Obligations, the Hospital, the Issuer and the Trustee shall execute and
deliver such instruments, including supplements to this Agreement and
the Indenture, as may be required in the opinion of Independent Counsel
to recognize and establish the pari passu status of such Parity
Obligations.
(d) Subject to the provisions of subsection (a)(10) hereof,
it is the intent hereof that the rights and remedies of the holders of
the Bonds and Parity Obligations be equal and pari passu and nothing
contained herein or in any supplement to the Indenture or in any Parity
Instrument shall be deemed to give to the holders of any Bonds or
Parity Obligations any rights or remedies superior or inferior to the
rights and remedies of the holder and holders of any other Bonds or
Parity Obligations; provided, however, that in the event of any
disagreement between the Trustee and the holder or holders of any
Parity Obligations concerning the remedies to be pursued in the event
of a default the Trustee shall have the right to direct the remedies to
be pursued. Any Parity Instrument shall expressly provide for events
of default and remedies therefor identical to those provided for in the
Indenture.
Section 5.3. Issuer Not Obli ated to Purchase Additional Notes. !'
Nothing contained in t >.s Agreement snail e interprets as creating
l any obligation on the part of the Issuer to purchase any Additional
Note, it being the intent hereof to reserve to the Issuer full and
complete discretion to decline or agree to such purchase.
ARTICLE VI
Events of Default and Remedies Therefor
Section 6.1. Events of Default. The occurrence and continuance
of any o t e ollowing events sa constitute an "event of default"
hereunder:
(a) Failure of the Hospital to pay any installment of
interest or principal, or any premium, on any Note or Parity Obligation
when the same shall become due and payable, whether at maturity or upon
any date fixed for prepayment or by acceleration or otherwise; or
(b) Failure of the Hospital to make a monthly payment to the
Trustee required by subparagraph (a) or (b) of Section 2.24 hereof for
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a period of five (5) days after the Trustee shall have given written
notice of such failure or for fifteen (15) days after any such payment
is due and payable without regard to notice; or
(c) Failure of the Hospital to observe or perform any of the
covenants or conditions contained in Section 2.6, 2.7, 2.19 or 2.28
hereof; or
(d) Default under any Parity Obligation or Parity
Instrument; or
(e) Failure of the Hospital to perform any other convenant,
condition or provision hereof and to remedy such default within sixty
(60) days after notice thereof from the Trustee to the Hospital unless
the nature of the default is such that it cannot be remedied within the
sixty-day period and the Trustee agrees in writing to an extension of
time and the Hospital institutes corrective action within the period
agreed upon and diligently pursues such action until the default is
remedied; or
(f) Any judgment, writ or warrant of attachment or of any
similar process in an amount in excess of $50,000 shall be entered or
filed against the Hospital or against any of its property and remains
unvacated, unpaid, unbonded, unstayed, uninsured, or uncontested in
good faith for a period of one hundred and twenty (120) days; or
(9) If the Hospital admits insolvency or bankruptcy or its
inability to pay its debts as they mature, or makes an assignment for
the benefit of creditors or applies for or consents to the appointment
of a trustee or receiver for the Hospital, or for the major part of tis
Property; or
(h) If a trustee or receiver is appointed for the Hospital
or for the major part of its property and is not discharged -within
sixty (60) days after such appointment; or
(i) If bankruptcy, reorganization, arrangement, insolvency
or liquidation proceedings, or other proceedings for relief under any
bankruptcy law or similar law for the relief of debtors are instituted
by or against the Hospital (other than bankruptcy proceedings
instituted by the Hospital against third parties), and if instituted
against the Hospital are allowed against the Hospital or are consented
to or are not dismissed, stayed or otherwise nullified within sixty
(60) days after such institution.
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During the occurrence and continuance of any event of default
hereunder, the Trustee shall have the following rights and remedies, in
addition to any other remedies herein or by law provided:
(1) Acceleration of Maturity; Waiver of Event of
Default and Rescission of Acceleration. The Trustee may, by written
notice to the Hospital, declare the principal of the Notes and Parity
Obligations (if not then due and payable) to be due and payable
immediately, and upon any such declaration the principal of the Notes
and Parity Obligations shall become and be immediately due and payable,
anything in the Notes and Parity Obligations or in this Agreement
contained to the contrary notwithstanding. This provision, however, is
subject to the condition that if, at any time after the principal of
the Notes and Parity Obligations shall have been so declared and become
due and payable all arrears of interest and of principal payable prior
to such acceleration, if any, upon the Notes and Parity Obligations and
the expenses of the Issuer shall be paid by the Hospital, and every
other default in the observance or performance of any covenant,
condition or agreement in the Notes and Parity Obligations or in this
Agreement contained shall be made good, or be secured, to the
satisfaction of the Trustee or provision deemed by the Trustee to be
adequate shall be made therefor, then and in every such case the
Trustee by written notice to the Hospital may waive the event of
default by reason of which the principal of the Notes and Parity
Obligations shall have been so declared and become due and payable, and
may rescind and annul such declaration and its consequences; but no
such waiver, rescission or annulment shall extend to or affect any
subsequent event of default or impair any right consequent thereon;
(2) Right to Bring Suit, Etc. The Trustee
may in its discretion, proceed to protect and enforce its rights by a
suit or suits in equity or at law, whether for damages or for the
specific performance of any convenant or agreement contained in the
Notes or Parity Obligations or in this Agreement or any Parity
Instrument, or in aid of the execution of any power herein granted,
provided, however that all costs incurred by the Trustee under this
Article shall be paid to the Trustee by the Hospital on demand.
Section 6.2. Payment of Defaulted Amounts on Demand. In case the
Hos pita s a .
(a) Fail to pay any installment of interest on the Notes or
Parity Obligations, when and as the same shall become due and payable,
as therein and herein expressed; or
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(b) Fail to pay the principal of the Notes and Parity
Obligations, when and as the same shall become due and payable, whether
at maturity or upon designation for prepayment or by declaration, or
otherwise;
then upon written demand of the Issuer or the Trustee, the Hospital
will pay to the Trustee the whole amount which then shall have become
due and payable on the Notes and Parity Obligations for interest or
principal or both, as the case may be, with interest at the rate borne
by the Bonds and Parity Obligations on all principal which shall have
become due and payable on the Notes and Parity Obligations until paid, ;
and in addition thereto such further amount as shall be sufficient to
cover the cost and expenses of collection, including a reasonable
compensation to the Issuer, the Trustee and their agents, attorneys and
counsel, and any expenses or liabilities incurred by the Issuer or the
Trustee hereunder.
Section 6.3. Trustee May Enforce Demand. In case the Hospital
shall ave al_ ed to pay suc principa and interest and other amounts )
upon demand, the Trustee may institute such actions or proceedings at i
law or in equity for the collection of the amounts so due and unpaid,
and may prosecute any such action or proceedings to judgment or final 3
decree, and may enforce any such judgment or final decree against the
Hospital and collect the monies adjudged or decreed to be payable out
of the property of the Hospital, wherever situated, in the manner
provided by law.
The Trustee shall, if permitted by law, be entitled to'recover
judgment as aforesaid either before or after or during the pendency of J
any proceedings for the enforcement of this Agreement; and the right of `
the Trustee to recover such judgment shall not be affected by the
exercise of any right, power or remedy for the enforcement of the
provisions of this Agreement. j
No recovery of any judgment by the Trustee shall affect any lien,
rights, powers or remedies of the Issuer or the Trustee hereunder, but
such lien, rights, powers or remedies of the Issuer and the Trustee
shall continue unimpaired as before.
Any monies thus collected by the Trustee under this Section shall
be applied by the Trustee as provided in Section 705 of the Indenture.
Section 6.4. Appointment of Receiver. The Hospital further '
covenants teat upon theai p ing�y event of default and
thereafter during the continuance of such event of default unless the
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same shall have been waived as hereinbefore provided, the Issuer and
the Trustee shall be entitled, to the extent permitted by law, as a
matter or right if they shall so elect, (i) forthwith and without
declaring the principal of the Notes and Parity Obligations to be due
and payable, or (ii) after declaring the same to be due and payable, or
(iii) upon the filing of a complaint to foreclose this Agreement or to
enforce the specific performance hereof or in aid thereof or upon the
commencement of any other judicial proceedings to enforce any right of
the Issuer and the Trustee, to the appointment of a receiver or
receivers of the Pledged Property and of all the earnings, revenues,
rents, issues, profits and income thereof, with such powers as the
court making such appointment shall confer, which may comprise any or
all of the powers which the Issuer or the Trustee is authorized to
exercise under this Article. The Hospital, if requested so'to do by
the Issuer or the Trustee, will consent to the appointment of any such
receiver as aforesaid to the extent it may lawfully do so.
Section 6.5. Remedies Cumulative. No remedy herein conferred
upon or reserved to the Issuer or the Trustee is intended to be
exclusive of any other remedy or remedies, and each and every such
remedy shall be cumulative, and shall be in addition to every other
remedy given hereunder or now or hereafter existing at law or in equity
or by statute.
Section 6.6. Delay or Omission Not a Waiver. No delay or
omission o the Issuer or tie Trustee to exercise.any right or power
accruing upon any event of default shall impair any such right or power
or shall be construed to be a waiver of any such event of default or an
acquiescence therein; and every power and remedy given by this
Agreement to the Issuer or the Trustee may be exercised from time to
time and as often as may be deemed expedient by the Issuer or the
Trustee.
Section 6.7. Waiver of Extension, Appraisement, Stay Laws. To
the extent pe m tted by law, the Hospital will not during the
continuance of any event of default•hereunder insist upon, or plead, or
in any manner whatever claim or take any benefit or advantage of, any
stay or extension law wherever enacted, now or at any time hereafter in
force, which may affect the covenants and terms of performance of this
Agreement; and, to the extent permitted by law, the Hospital hereby
expressly waives all benefits or advantages of any such law or laws and
covenants not to hinder, delay or impede the execution of any power
herein granted or delegated to the Issuer or the Trustee but to suffer
and permit the execution of every power as though no such law or laws
had been made or enacted.
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Section 6.8. Remedies Subject to Provisions of Law. All rights,
remedies and powers provided by th�.s Article may be exercised only to
the extent that the exercise thereof does not violate any applicable
provision of law in the premises, and all the provisions of this
Article are intended to be subject to all applicable mandatory
provisions of law which may be controlling in the premises and to be
limited to the extent necessary so that they will not render this
Agreement invalid or unenforceable under the provisions of any
applicable law.
'Section 6.9. Remedies Under Uniform Commercial Code. In
addition to any other remedies provided for hereby or by law the Issuer
and the Trustee shall have the rights of a secured party and the
Hospital shall have the rights of a debtor under the Unifornr'Commercial
Code of Iowa with respect to this Agreement upon the occurrence and
continuance of an event of default hereunder.
ARTICLE VII
Immunity of Members, Officers and Directors
No recourse shall be had for the payment of the principal of, or
premium, if any, or the interest on, any Note, or for any claim based
thereon or on this Agreement or any agreement supplemental hereto,
against any member, director, official, employee, duly authorized agent
or officer, past, present or future, of the Hospital, the Issuer, the
Board of Directors of the Hospital or the City Council of the Issuer,
or of any predecessor or successor corporation or issuer, as such,
either directly, or through the Hospital or the Issuer or any such
predecessor or successor corporation or issuer,whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability, whether at
common law, in equity, by any constitution, statute or otherwise, of
members, directors, or officers, as such, being released as a condition
of and consideration for the execution and delivery of this Agreement
and of the issuance of the Notes.
ARTICLE VIII
Supplements and Amendments to this Agreement
Subsequent to the issuance of the Bonds and prior to their payment
in full or provision for such payment in accordance with the provisions
of the Indenture, this Agreement may not be amended, supplemented,
altered or terminated except as provided in Article X of the Indenture.
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ARTICLE IX
Defeasance
If the Hospital shall pay and discharge or provide, in a manner
satisfactory to the Issuer and the Trustee, for the payment and
discharge of the whole amount of the principal of, premium, if any, and
interest
on the Notes and Parity Obligations at the time outstanding,
and shall pay or cause to be paid all other sums payable hereunder, or
{
shall make arrangements satisfactory to the Trustee for such payment
and discharge, and if provision shall have.been made for the
satisfaction and discharge of the Indenture as provided therein, then
and in that case all property, rights, and interest hereby conveyed or
assigned or pledged shall revert to the Hospital, and the estate,
right, title and interest of the Issuer therein shall thereupon cease,
terminate and become void; and this Agreement, and the covenants of the
Hospital contained herein, shall be discharged and the Issuer in such
case on demand of the Hospital and at its cost and expense, shall
execute and deliver to the Hospital and shall cause the Trustee to
execute and deliver to the Hospital a proper instrument or proper
instruments acknowledging the satisfaction and termination of this
Agreement, and shall assign and transfer or cause to be assigned or i
transferred, and shall deliver or cause to be delivered, to the
Hospital, all property, including money, then held by the Issuer or the
Trustee (other than monies deposited with the Trustee for the payment
of the principal of and premium, if any, or interest on the Notes and
Parity Obligations) together with the Notes and Parity Obligations j
marked paid or cancelled.
Y
E
ARTICLE X
Miscellaneous Provisions
k
Section 10.1. Agreement for Benefit of Parties Hereto. Nothing
in this Agreement, express or imp ie , is inten a or shall be
construed to confer upon, or to give to, any person other than the
parties hereto and the holder of the Notes and Parity Obligations, any
right, remedy or claim under or by reason of this Agreement or any
covenant, condition or stipulation hereof; and the covenants,
stipulations and agreements in this Agreement contained are and shall
be for the sole and exclusive benefit of the parties hereto, their
successors and assigns, and the holders of the Notes and Parity
.Obligations.
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Section 10 2, Severability. In case any one or more of the
Provisions contained in this Agreement or in the Notes shall be
invalid, illegal or unenforceable in any respect, the validity,
legality and unenforceability of the remaining provisions contained
herein and therein shall not in any way be affected or impaired
thereby.
Section 10.3. Limitation on Interest. No provision of this' i
Agreement oro the Notes s a e- construed to require the payment or
Permit the collection of interest in excess of the maximum permitted by
law. If any excess of interest in such respect is herein or in the
Notes provided for, or shall be adjudicated to be so provided for
herein or in the Notes, neither the Hospital nor its successors or
assigns shall be obligated to pay such interest in excess of the amount
permitted by law, and the right to demand the payment of any such
excess shall be and hereby is waived. This provision shall control any
provisions of this Agreement and the Notes inconsistent with this
provision.
Section 10.4. Addresses for Notice and Demands. All notices,
demands, cerci xcates or other communications hereunder shall be
sufficiently given and shall be deemed given when mailed by registered
or certified mail, postage prepaid, with the address as indicated
below. The Issuer, the Hospital, and the Trustee may, by written
notice given by each to the others, designate any other address or
addresses to which notices, demands, certificates or other
communications to them shall be sent when required as contemplated by
this Agreement. Until otherwise provided by the respective parties,
all notices, demands, certificates and communications to each of them
shall be addressed as follows:
To the Issuer: City of Iowa City
Civic Center
410 East Washington
Iowa City, Iowa 52240
Attention: City Attorney
To the Hospital: Mercy. Hospital, Iowa City, Iowa
500 Market Street
Iowa City, Iowa 52240
Attention:
To the Trustee:
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Section 10.5. Successors and Assigns. Whenever in this Agreement
any of the parts s hereto is named 0r referred to, the successors and
assigns of such party shall be deemed to be included and all the
covenants, promises and agreements in this Agreement contained by or on
behalf of the Hospital, or by or on behalf of the Issuer, shall bind
and inure to the benefit of the respective successors and assigns,
whether so expressed or not.
Section 10.6. Counterparts. This Agreement is being executed in
any number oFcounte—rpa`rt-s—,—e-a—c'F of which is an original and all of
which are identical: Each counterpart of this Agreement is to be
deemed an original hereof and all counterparts collectively are to be
deemed but one instrument.
Section 10.7. Governing Law. It is the intention of the parties
hereto that t tris Agreements the rights and obligations of the
parties hereunder and the Notes and the rights and obligations of the
parties thereunder, shall be governed by and construed and enforced in 1
accordance with, the laws of Iowa.
Section 10.8. Delegation of Duties by the Issuer. It is agreed
that under the terms of this Agreement and also under the terms of the
Indenture the Issuer has delegated certain of its duties hereunder to
the Hospital and to the Trustee. The fact of such delegation shall be
deemed a sufficient compliance by the Issuer to satisfy the duties so
delegated and the Issuer shall not be liable in any way by reason of
acts done or omitted by the Hospital, the Authorized Hospital
Representative or the Trustee. The Issuer shall have the right at all
times to act in reliance upon the authorization, representation or
certification of the Authorized Hospital Representative or the Trustee. i
IN WITNESS WHEREOF, the Hospital and the Issuer have caused this
Agreement to be executed in their respective corporate names and their `
respective corporate seals to be hereunto affixed and attested by their
duly authorized officers all as of the date first above written.
MERCY HOSPITAL, IOWA CITY, IOWA
By
ATTEST:
(Seal) ,
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DESCRIPTION OF REAL ESTATE
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EXHIBIT B
PROMISSORY NOTE, SERIES 1982
FOR VALUE RECEIVED, the undersigned, MERCY HOSPITAL, IOWA CITY,
IOWA, an Iowa not-for-profit corporation (the "Hospital"), hereby
Promises to pay to the order of the City of Iowa City, Iowa, a
municipal corporation created under the laws of the State of Iowa (the
"Issuer"), the principal sum of
Dollars (g ),
of the years in payable 1 in installments on June of each
the respective amounts set forth below. Interest is
payable on June 1 and December 1 of each year commencing December 1,
1982.
Principal Installment '
Payment Dates
(June 1 of the Years) -Principal Amounts Interest
Rates
1984
1985 $ 8
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
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The principal of, premium, if any, and interest on this note are
payable at the office of , the Trustee (the
Trustee"), under the Trust Indenture ate as of June 1, 1982 (the
"Indenture") from the Issuer, or at the office of any successor trustee
under the Indenture.
This note constitutes the Promissory Note, Series 1982 of the
Hospital issued under a Loan and Security Agreement dated as of June 1,
1982 (the "Agreement"), made bythe Hospital to the Issuer, to which
Agreement reference is hereby made for a statement of the terms and
conditions on which the loan evidenced hereby has been made, for a
description of the circumstances under which there shall be credits
allowed against the installments of principal and interest on this
note, and for a description of the terms and conditions upon—which this
note may or must be prepaid, in whole or in part, or its maturity
accelerated.
ATTEST:
MERCY HOSPITAL, IOWA CITY, IOWA
By
President
Secretary
(Seal)
FOR VALUE RECEIVED, pay without recourse to the order of
as Trustee (the "Trustee") under the Trust Indenture
hereafter mentioned. The undersigned City of Iowa City, Iowa, hereby
assigns all of its right, title and interest in and to the above note
to the Trustee, or to its successor or successors as Trustee, under.
that certain Trust Indenture dated as of June 1, 1982, from the
undersigned to the Trustee, securing the Hospital Revenue Bonds, Series
1982 (Mercy Hospital Project), issued and outstanding under said
Indenture.
Dated: 1, 1982.
CITY OF IOWA CITY, IOWA
By
ATTEST: Mayor
City Clerk
(Seal)
VAM
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DESCRIPTION OF THE PROJECT
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DESCRIPTION OF THE PROJECT
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MARKED COPY
BOND PURCHASE AGREEMENT
I
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June _, 1982
City of Iowa City
Civic Center
410 East Washington
Iowa City, Iowa 52240
Mercy Hospital
500 Market Street
Iowa City, Iowa 52240
Re: Hospital Facility Revenue Bonds, D (S
Series 1982 (Mercy Hospital Project), d
of the City of Iowa City Iowa
Gentlemen:
The Managing Underwriter on behalf of itself and the other
Underwriters hereby proposes to enter into the following agreement,
subject to the acceptance of this agreement by the Issuer and
approval thereof by the Hospital on or before 9 P.M., Central
—Scmicese Time, on June _, 1982.
Section 1.' Definitions. The following terms shall have the
following meanings 1n this Agreement unless another meaning is
plainly intended:
(a) "Accountants" means Peat, Marwick, Mitchell & Co.,
independent certified public accountants;
(b) "Agreement" means this Bond Purchase Agreement
between the Underwriters and the Issuer and approved by -the
Hospital;
(c) "Bond Counsel" means Belin, Harris, Helmick and
Heartney, Des Moines, Iowa.
(d) "Bonds" mean $ Hospital -Facility Revenue
Bonds, Series 1982(Mercy Hospital Project) of the Issuer
dated June 1, 1982. The Bonds shall be issued under and
f secured as provided in the Indenture and shall mature on
1 of each of the years and in the principal amounts and
bear interest at the rates set forth in Schedule II hereto,
and shall be subject to mandatory redemption as set forth in
Schedule II;
(e) "Closing" refers to the transaction at which the
Bonds are delivered by the Issuer to the Underwriters, and
paid for by the Underwriters, pursuant to this Agreement;
it
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(f) "Closing Documents" mean the documents described
in Section 8 hereof and required to be delivered to the
Managing Underwriter at the Closing;
(g) "Code" means the Internal Revenue Code of 1954, as
amended, and the regulations thereunder;
(h) "Existing Indebtedness" means the indebtedness of
the Hospital to The Penn Mutual Life Insurance Company
presently outstanding in the principal amount of $
(i) "Feasibility Study" means that cert ai "Report on
Study of Financial Feasibility", dated as of
Aal ,
1982, prepared by Peat, Marwick, Mitchell & Co., r lati.ng o
the Hospital and its projected revenues;
(j) "Final Comfort Letter" means a letter from the
Accountants to the Governing Body of the Hospital and the
Underwriters, in form and content satisfactory to the Manag-
ing Underwriter, dated not earlier than five business days
prior to the date of Closing, in substantially the form set
forth in Exhibit B attached hereto;
(k) "Governing Body" means, with respect to the Issuer,
the City Council of the Issuer, or, with respect to the
Hospital,.the Board of Directors of the Hospital, or the
successor to the powers of either such body;
(1) "Hospital" shall mean Mercy Hospital, Iowa City,
Iowa, an Iowa non-profit corporation or any successor cor-
poration;
(m) "Hospital's Counsel" means Phelan, Tucker, Boyle &
Mullen, Iowa City, Iowa.
(n) "Indenture" means that certain Trust Indenture
dated as of June 1, 1982, between the Issuer and the Trustee;
(o) "Initial Comfort Letter" means a letter from the
Accountants to the Governing Bodies of the Hospital and the
Underwriters, in form and content satisfactory to the Manag-
ing Underwriter, dated not earlier than five business days
prior to the date hereof, in substantially the form set
forth in Exhibit A attached hereto;'
(p) "Issuer" means the City of Iowa City, Iowa, a
municipal corporation duly created and existing under the
laws of the State of Iowa;
(q) "Issuer's Counsel" meansJ"04r JaYtseyl
wa CI ;
(r) "Loan Agreement" means that certain Loan Agreement
and Security Agreement dated as of June 1, 1982, between the
Hospital and the Issuer;
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(s) "Managing Underwriter" means John Nuveen & Co.
Incorporated, Chicago, Illinois.
(t) "Mortgage" means the mortgage in the form attached
as Exhibit D to the Loan Agreement;
(u) "Note" means the note issued by the Hospital pur-
suant to the Loan Agreement;
(v) "Official Statement" means the Official Statement
of the Issuer with respect to the Bonds, substantially in
the form of the Preliminary Official Statement dated as of
, 1982, including the cover page and all
appendicesexhibits, maps, letters and statements included
therein or attached thereto, and all supplements thereto,
with such changes as shall be approved by the Managing
Underwriter and the Issuer;.
(w) "Project" means the construction of certain improve-
ments to the Hospital as more particularly described in the
Official Statement;
(x) "Real Property" means that certain real property
more particularly described in the ibits ached to the
Loan Agreemen LA
(y) "Trustee" means f1 ,
(z) "Underwriters" mean the Managing Underwriter and
the other Underwriters listed on Schedule I attached hereto;
(aa) "Underwriters' Counsel" means Borge and Pitt,
Chicago, Illinois.
Section 2. Purchase Price. Upon the terms and conditions
and upon the basis of the representations herein set forth, the
Underwriters, jointly and severally, hereby agree to purchase
from the Issuer and the Issuer hereby agrees to sell to the
Underwriters all, but not less than all, of the Bonds at an
aggregate purchase price of $ plus accrued interest at
the respective interest rates from June 1, 1982, to the date of
Closing.
Section 3. Representations of Issuer. The Issuer repre-
sents to the Underwriters that: (a) on the date hereof and on
the date of the Closing, the statements and information contained
are and will be true and complete in all material respects, and
the Official Statement does not omit any statements or information
with respect to the Issuer which are necessary to make the state-
ments and information therein, in light of the circumstances
under which they are made, not misleading in any material respect;
(b) when delivered to and paid for by the Underwriters at the
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Closing in accordance with the provisions o is Agreement, the
B nds will have been duly authorized, executed, authenticated,
issued an e were na �= �• `e ria}}d ad ham• ,
+ ry q
obria, ;,... a_4 the c•-ka=aete=—r-e`e—red ea a he
z o= r -it l e4 to the b ene&z—aa4_-A--
ti_ _� (c) the Issuer is empowered and has
been duly authorized to enter into this Agreement, the Indenture
and the Loan Agreement; (d) the execution and delivery of this
Agreement, the Indenture and the Loan Agreement, and compliance
with the provisions hereof and thereof, under the circumstances
contemplated herein and therein, will not in any material respect
conflict with or constitute on the part of the Issuer a breach of
or default under any agreement or other instrument to which the
Issuer is a party, or court order or any consent decree to which
the Issuer is subject; (e) the execution and delivery of the
Official Statement have been duly authorized by the Issue and
(f) there is no controversy or litigation of any nature pending
or, to the best of the knowledge of the undersigned Mayor of the
Issuer, threatened restraining or enjoining the issuance, sale,
execution or delivery of the Bonds, or in any way contesting or
affecting the validity of the Bonds or any proceedings of the
Issuer taken with respect to the issuance or sale thereof, or the
pledge or application of any money or security provided for the
payment of the Bonds or the existence or powers of the Issuer.
Section 4. Representations of Hospital. The Hospital
represents to the Underwriters and the Issuer that: (a) on the
date hereof and on the date of the Closing, the statements and
information contained in the Official Statement, insofar as they
relate to the Hospital, are and will be true and complete in all
material respects, and the Official Statement does not omit any
.statement or information with respect to the Hospital which is
necessary to make the statements and information therein, in
light of the circumstances under which they are made, not mislead-
ing in any material respect; (b) the -Official Statement does not
and will not omit any information with respect to the Hospital's
business, properties and affairs which might in a material respect
adversely or unfavorably affect the transactions contemplated by
the Official Statement; (c) the Hospital is and will be at the
date of Closing a duly incorporated Iowa non-profit corporation
and an organization described in Section 501(c)(3) of the Code,
and exempt from federal income taxation under Section 501(a) of
the Code; (d) the Hospital is empowered and has been duly author-
ized to approve this Agreement; (e) the execution and delivery of
this Agreement, the Note and the Loan Agreement, and compliance
with the provisions hereof and thereof, under the circumstances
contemplated herein and therein, will not in any material respect
conflict with or constitute on the part of the Hospital a breach
of or default (with due notice or the passage of time or both)
under the Articles of Incorporation of the Hospital or its by-laws
or any indenture, mortgage, deed of trust, loan agreement, contract
or other agreement or other instrument to which the Hospital is a
party, or any existing law, administrative regulation, court
order or consent decree to which the Hospital is subject or by
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which it or any of its properties are otherwise subject or bound;.
(f) the data used and the rationale and assumptions employed in
the preparation of the Feasibility Study were reasonable, were
not in conflict with information available to the Hospital and
were complete in all material respects; (g) subsequent to the
date of the Feasibility Study, there have been no material adverse
changes in the assets, liabilities or condition of the Hospital,
financial or otherwise, from that contemplated by the Feasibility
Study, and neither the business nor the properties of the Hospital
have been adversely affected in any substantial way as the result
of any fire, explosion, accident, strike, riot, flood, windstorm,
earthquake, embargo, war or Act of God or of the public enemy;
(h) the execution and delivery of the Official Statement have
been duly authorized by the Hospital; and (i) except as is des-
cribed in the official Statement, there is no action, suit,
litigation, proceeding, inquiry or investigation at law or in
equity or by or before any judicial or administrative court,
agency, body or other entity, pending or to the best of the
knowledge of the undersigned President or Secretary, threatened
against the Hospital or any of its properties, or any basis
therefor, wherein an unfavorable decision, ruling or finding (1)
would adversely affect the validity or enforceability of the Loan
Agreement, the Note or this Agreement, (2) might result in any
materially adverse change in the business, properties, assets,
liability or condition (financial or other) of the Hospital,'(3)
would otherwise adversely affect the ability of the Hospital to
comply with its obligations under the Loan Agreement, the Note or
this Agreement, or adversely affect the.transactions contemplated
by the Official Statement or (4)would exceed the amount of the
Hospital's malpractice liability insurance described in the offi-
cial Statement or the total revenues held under the Hospital's
applicable self-insurance program.
Section 5. Official Statement. The Issuer shall deliver to
the Underwriters', on or before the Closing, 3 copies of the offi-
cial Statement executed on behalf of the Issuer and on behalf of
the Hospital by their duly authorized officers. The Issuer and
the Hospital agree that the Official Statement and copies of the
Loan Agreement and the Indenture may be used by the Underwriters
in the public offering of the Bonds; and that they will cooperate
with the Underwriters if the Underwriters decide to qualify the
Bonds under the securities acts of any states and will furnish
the Underwriters with copies of resolutions, applications, reports
and other documents, certified as appropriate, as shall be neces-
sary in the reasonable judgment of Underwriters' Counsel to
effect such registration or confirmation of exemption from regis-
tration, provided, however, that the Issuer shall not be required
with respect to the offer or sale of the Bonds to file written
consents to suit or written consents to service of process in any
jurisdiction.
Section 6. Comfort Letters and Financial Statements. This
AgreemeenT subjec— t in all .respects to the deliverT p of the
Initial Comfort Letter and the financial statements described in
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Section 8( ) hereof to the Managing Underwriter no later than the
day prior to the date of this Agreement. The Hospital will cause
the Final Comfort Letter to be delivered to the Managing Underwriter
on the day prior to the date of Closing.
Section 7. Closing, Delivery and Payment. The Closing
shall be held at 10:00 o'clock A.M., July _, 1982, at the offices
F°nai 4n, N ' is, HalmiGI; & Hear-tney, Dee E4e��tes, -_a, or at
h other time and place as shall be mutually agreeable to the
ties hereto. At the Closing the Underwriters will accept the
ivery of the Bonds from the Issuer, and will make payment
refor as provided herein in federal funds or other immediately
ilable funds upon tender of the Bonds to the Underwriters by
Issuer, and delivery to the Managing Underwriter of all of
Closing Documents. The Bonds shall be made available to the
Managing Underwriter in Chicago, Illinois, for checking and
packaging at least one business day prior to Closing.
Section 8. Closing Documents. The Closing Documents shall
consist of the following, each properly executed, certified or
otherwise verified, dated as of or prior to the date of Closing,
and in such form, as may be satisfactory to Bond Counsel, the
Managing Underwriter, and Underwriters' Counsel including, but
not ,'}mited to, the matters hereinafter set forth:
Q��'"( a ) the Indenture;
L�, (b) the Loan Agreement;
l� (c) the Note;
(d) evidence of the satisfaction and discharge of the
mortgage securing the Existing Indebtedness;
(e) the Issuer's closing certificate confirming the
following information: (i) the representations made by the
Issuer herein; (ii) that there is no litigation pending or
threatened to restrain or enjoin the issuance or delivery of
the Bonds, or in any way contesting or affecting any author-
ity for the issuance of the Bonds, or the validity of the
Bonds, the Indenture, the Loan Agreement or this Agreement,
or in any way contesting the corporate existence or the
powers of the Issuer; (iii) the application -o€ the proceeds
of the sale of the Bonds as.described in the Indenture; and
(iv) the adoption and present effectiveness of all resolu-
tions of its Governing Body considered necessary, in the
opinion of Bond Counsel, in connection with the transactions
contemplated hereby, together with copies of said resolutions
certified by the City Clerk of the Issuer;
(f) the Hospital's closing certificate confirming (i)
the representations and warranties made by the Hospital
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herein; (ii) that there is no litigation pending or threat-
ened to restrain or enjoin the transactions contemplated by
this Agreement, the Note or the Loan Agreement, or question-
ing the validity thereof, or in any way contesting the
corporate existence or powers of the Hospital; (iii) that
the Hospital has marketable fee simple title to the Real
Property, free from any encumbrances other than Permitted
Encumbrances as defined in the Loan Agreement; and (iv) the
adoption and present effectiveness of all resolutions of its
Governing Body considered necessary, in the opinion of Bond
Counsel, in connection with the transactions contemplated
hereby, together with copies of those resolutions certified
by the Secretary of the Hospital;
(g) the Hospital's articles of incorporation and a
certificate of corporate existence and good standing, certi-
fied by the proper authorities of the State of Iowa and a
copy of the Hospital's By -Laws certified by its Secretary;
(h) the unqualified approving opinion of Bond Counsel
to the effect that: (i) the Issuer has the power to issue
the Bonds under the laws of the State of Iowa; (ii) the
Bonds have been duly authorized by the Governing Body of the
Issuer and all conditions precedent to the issuance of the
Bonds have been fulfilled; (iii) the Bonds are the valid,
legal and binding limited obligations of the Issuer; (iv)
the Indenture and the Loan Agreement have been duly autho-
rized, executed and delivered by the Issuer and the Hospital
and constitute valid and binding agreements of such parties,
except to the extent limited by bankruptcy, reorganization
or other laws of general application relating to or affecting
the enforcement of creditors' rights and by the application
of equitable remedies if equitable remedies are sought; (v)
the Nor-tqaq �*ed by 4j -4e_ and assuming
e execution ana e every tkeeaf by the Hospital or its
attorney-in-fact upon the occurrence of certain conditions
specified in the Loan Agreement would, under present laws
constitute the valid and binding agreement of the Hospital
enforceable in accordance with its terms except to the
extent limited by bankruptcy, reorganization or other laws
of general application relating to or affecting the enforce-
ment of creditors' rights and by the application of equitable
remedies if equitable remedies are sought; (vi) the in-
formation contained in the official Statement in Appendix C
and under the headings entitled "The Bonds" and "Tax Exemp-
tion" are accurate statements or summaries of the matters
set forth therein and fairly present the information pur-
ported to be shown; (vii) the Bonds are exempt from reg-
istration pursuant to the Securities Act of 1933, as amended,
and the Indenture is exempt from qualification as an inden-
ture pursuant to the Trust Indenture Act of 1939, as amended;
(viii) the Bonds, the Indenture and the Loan Agreement
conform as to form and tenor with the terms and provisions
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IAICROFILMED BY
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thereof as summarized and set out in the Official Statement
and (ix) on the date of the delivery of the Bonds interest
thereon is exempt from present federal income taxes;
(i) an opinion of the Hospital's Counsel to the effect
that: (i) this Agreement, the Loan Agreement and the Note
have each been duly authorized, executed and delivered by
and are valid and binding upon the Hospital enforceable in
accordance with their terms except to the extent limited by
bankruptcy, reorganization or other laws of general applica-
tion relating to or affecting the enforcement of creditors'
rights and by the application of equitable remedies if
equitable remedies are sought; (ii) this Agreement, the Loan
Agreement and the Note may be entered into and performed by
the Hospital without constituting a violation of, conflict
with or breach of any of the provisions, terms or conditions
of or default by the Hospital under its articles of incorpo-
ration or by-laws or, to the best of their knowledge after
due inquiry, any agreement or instrument to which it is a
party or by which it is bound or any existing law, regulation,
court order or consent decree to which the Hospital is
subject and subject to the qualification that enforcement of
the indemnification provisions of this Agreement may be
limited by federal or state securities laws as the same may
have been interpreted by judicial decisions; (iii) the
Hospital as obtain approvals, consents, authorizations
a :i3 or other orders of all municipal, state or federal regulatory
ell'
authorities required for. the consummation of the transactions
contemplated by this Agreement and the Loan Agreement; (iv)
the Hospital is a private non-profit corporation, no part of
the net earnings of which inure to the benefit of any private
shareholder or individual and which has corporate authority
to own and operate hospital facilities; (v) the Hospital is
duly organized, validly existing and in good standing under
the laws of the State of Iowa; (vi) the Hospital is duly
licensed•and legally qualified to operate and maintain the
Hospital Facility (as defined in the Loan Agreement); (vii)
the Hospital is a corporation described in Section 501(c)(3)
of the Code, is exempt from federal income tax under Section
501(a) of the Code and is not a "private foundation" as
defined in Section 509(a) of the Code; (viii) the Hospital
has all necessary corporate power and authority to conduct
the business now being conducted by it and as -contemplated
by the Loan Agreement, and to enter'into this Agreement and
the Loan Agreement; (ix) nothing has come to their attention
which would lead them to believe that the statements and
information contained in the Official Statement, insofar as
they relate to the Hospital, its properties and affairs,
contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein, or
necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading;
(x) except as described in the Official Statement, there is
no litigation or proceedings currently pending against the
Hospital or, to the best of their knowledge threatened against
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{lja tta� ,rA14t. sR V1t4VXNvc jgjur c -m W -4-O,(" .Tpy rA,.` -Crx--t
'' lnie lJs� Lt ° a�tiP `.48acuc� lt�7h�y^r r
the Hospita except for litigation in which the probable
recoveries and the estimated costs and expenses of defense
will be entirely within the Hospital's applicable insurance
policy limits (subject to applicable deductibles) or are not
in excess of the total reserves held under the Hospital's
applicable self-insurance program; (xi) the Hospital has
good and marketable fee simple title to the Real Property,
subject only to the encumbrances permitted by the Indenture
and the Loan Agreement, which opinion may be rendered in
9 reliance upon
Upe plats of survey of the Real
Property prepared by an Iowa registered land surveyor dated
no earlier than 1982; (xii) the execution and
delivery of the Mortgage by the Hospital or its attorney-in-
fact, upon the occurrence of certain conditions specified in
the Loan Agreement, and the performance of the provisions
thereof, have been duly authorized by all necessary corporate
action by the Hospital (requiring no further corporate
action by the Hospital) and, assuming the execution and
delivery thereof by the Hospital or its attorney-in-fact as
provided in the Loan Agreement, would, under present law,
constitute the valid and binding agreement of the Hospital
enforceable in accordance with its terms except to the
extent limited by bankruptcy, reorganization or other laws a
of general application relating to or affecting the enforce-
ment of creditors' rights and by the application of a itable
remedies if equitable remedies are sought; xiii) the execu-
tion and delivery by the Hospital of the Mortgage, if present-
ly made, and compliance with the provisions thereof, would
not constitute, as of the date of Closing, a breach of or
default by the Hospital under its articles of incorporation
or by-laws, or to the best of their knowledge after due
inquiry, any agreement or instrument to which the Hospital
is a party or by which it or its property is bound or any
existing law, regulation, court order or consent decree to
which the Hospital or its property is subjec
(j) an opinion of Issuer's Counsel to the effect that
(i) the Issuer is a municipal corporation duly created and
existing under the laws of the State -of Iowa, --and has all
the necessary power and authority to issue the Bonds and
enter into this Agreement, the Indenture and the Loan Agree-
ment; (ii) the Bonds, this Agreement, the Indenture and the
oan Agreement have been duly authorized, executed and
delivere y rhe Issuer =^4 ;;C�4 + , d
L�--=4agrFearflents BE—issue• - r
, (111) r
12 '}—-)--{iv)r nothing has come to his attention which
would lead him to believe that the Officia StatementP�
contains an untrue
statement of amaterial fact, or omits to state a material
977
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CEDAR RAPIDS •DES M019E5
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fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under
which they were made, not misleading; and ( to the best o
his knowledge, no litigation or proceeding is threatened or
pending against or affecting the Issuer to restrain or
enjoin the issuance or delivery of the Bonds or in any way
contesting or affecting any authority for the issuance of
the Bonds, or the validity of the Bonds, the Indenture, the
Loan Agreement or this Agreement, or in any way contesting
the corporate existence or the powers of the Issuer;
(k) TA owner' 'tle policy r 'nder, pay a to
le Trus e, i an amo t e al to th prin 'pal amo t f
Bond assu 'ng th the spital as tit to Re 1per subjec onl to Permi ed ncumbranc de ribe i denture and a Loan Agreem nt;
0-71) a copy of the Feasibility Study manually signed by
Peat, Marwick, Mitchell & Co., together with their consent
to the use of such Feasibility Study in the Official State-
ment —�and to the references to their firm therein;
(�1) a copy o£ all historical financial statements
included in the official Statement, together with the report
issued in connection therewith, manually signed by the
Accountants, and the Accountants' consent to the use of
their report in the Official Statement and to the references
tottheeir firm therein; '
(5 (;E) a copy of the ruling or determination letter of
the Internal Revenue Service to the effect that the Hospital
is an organization described in Section 501(c)(3) of the
Code;
N ( ) an appropriate certification in form and substance
satisfactory to Bond Counsel, pursuant to the requirements
of Section 103(c) of the Code;
0 ( ) a copy of any permits or licenses which the Hospi-
tal is required to have in order to operate the Hospital
Facility (as defined in the Loan Agreement);
07-4) evidence satisfactory to the Managing Underwriter
that Moody's Investors Service, Inc. and Standard & Poor's
Corporation have assigned ratings for the Bonds as set forth
in the Official Statement and that such ratings have not
been modified or withdrawn; and
( ) such additional legal opinions, certificates,
in truments and other documents as the Managing Underwriter,
Underwriters' Counsel or Bond Counsel may reasonably request
to evidence: compliance by the Issuer and the Hospital with
legal requirements; the truth and accuracy, as of the date
of Closing, of the respective representations contained
herein and in the Official Statement; and the due perfor-
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_;A
e
mance or satisfaction by them of all agreements to be per-
formed by them and all conditions to be satisfied by them at
or prior to the Closing.
Section 9. Termination �J Underwriters. This Agreement may
be terminated th
by e Underwriters upon written notification by
the Managing Underwriter if any of the following shall occur:
(i) this Agreement shall not have been accepted by the Issuer or
shall not have been approved by the Hospital within the time
herein provided; (ii) the signed Official Statement and the
Comfort Letter shall not have been provided within the time
required by this Agreement; (iii) the Bonds and all of the Closing
Documents shall not have been delivered as provided herein as of
1:00 O'clock P.M. on the date of Closing; (iv) legislation shall
be enacted, or actively considered for enactment, or a court
decision announced, or a ruling, regulation or decision by or on
behalf of a governmental agency having jurisdiction of the subject
matter shall be made, to the effect that the revenues or other
income of the general character to be derived by the Issuer or by
any similar body under the Loan Agreement or similar instrument,
or interest on obligations of the general character of the Bonds
shall not be exempt from Federal income taxes, or that securities
of the general character of the Bonds shall not be exempt from
registration under the Securities Act of 1933, or that the Inden-
ture shall not be exempt from qualification under the Trust
Indenture Act of 1939; (v) there shall exist any event or circum-
stance which, in the opinion of the Managing Underwriter, either
makes untrue or incorrect in a material respect any statement or
information contained in the Official Statement, or is not reflect-
ed in the Official Statement but should be reflected therein in
order to make the statements and information contained therein
not misleading in a material respect; (vi) there shall have
occurred any outbreak of hostilities or other national or interna-
tional calamity or crisis, the effect of such outbreak, calamity
or crisis on the financial markets of the United States of America
being such as, in the reasonable opinion of the Managing Underwriter,
would make it impracticable for the Underwriters to sell the
Bonds; (vii) there shall be in force a general suspension of
trading on the New York Stock Exchange, or minimum or maximum
prices for trading on the New York Stock Exchange shall have been
fixed and be in force; (viii) in the reasonable judgment of the
Managing Underwriter the market price of the Bonds, or the market
price generally of obligations of the general character of the
Bonds, might be adversely affected because: (a) additional material
restrictions not in force as of the date hereof shall have been
imposed upon trading in securities generally by any governmental
authority or by any national securities exchange, or (b) the New
York Stock Exchange or other national securities exchange, or any
governmental authority, shall impose, as to the Bonds or similar
obligations, any material restrictions not now in force, or in-
crease materially those now in force, with respect to the exten-
sion of credit by, or the charge to the net capital requirements
of, underwriters; or (ix) a general banking moratorium shall have
been declared by either Federal, Illinois, Iowa or New York
authorities having jurisdiction, and shall be in force.
MICROFILMED BY
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Section 10. Termination by Issuer. This Agreement may be
termii7a-t'ed in—writTng by—the I_ssu�erin the event that the Under-
writers shall fail to accept delivery of the Bonds on the closing
date upon tender thereof to the underwriters by the Issuer, and
delivery to the Managing Underwriter of all of the Closing Docu-
ments.
Section 11. Changes Affecting the Official Statement After
the CC � —After the closing, and so long as the Underwri—ters
or any participating dealer shall be offering Bonds which consti-
tute the whole or a part of their unsold participations, the
Issuer will not adopt any amendment of or supplement to the'Offi-
cial Statement except with the written consent of the Managing
Underwriter and the Hospital; and if any event relating to or
affecting the Issuer or the Hospital shall occur the result of
which shall make it necessary, in the opinion of the managing
Underwriter or Underwriters' Counsel, to amend or supplement the
Official Statement in order to make it not misleading in the
light of the circumstances existing at that time, the Hospital,
on behalf of the Issuer, shall forthwith prepare and furnish to.
the Underwriters a reasonable number of copies of an amendment of
or supplement to the official Statement in form and substance
satisfactory to the Managing Underwriter, so that it then will
not contain an untrue statement of a material fact or omit to
state a material fact necessary to make the statements'therein,
in the light of the circumstances existing at that.time, not
misleading; provided, however, that the Issuer shall authorize
the distribution of any such.amendment or supplement, which
authorization shall not be un easonably withheld. The obligations
of the Issuer set forth in this Section 11 shall not require the
Issuer to monitor the business and affairs of the Hospital and
shall be carried out at the sole expense of the Hospital.
Section 12. Meggs. Except as hereinafter specifically
proviEe—dall 'j�pens costs of the Hospital and the Issuer
incident to the performance of their obligations in connection
with the authorization, issuance and sale of the Bonds, including
fees of accountants, consultants, Issuer's counsel, Hospital's
Counsel, Bond Counsel, the Trustee and rating agencies, a
expenses of recording ;;;;d tit3 - a 4 - nv&r-&Pree)�and the expenses of
printing the Bonds and the official Statement shall be paid by
the Hospital. The Underwriters shall pay the fees and expenses
incurred in connection with the qualification or -registration of
the Bonds for "blue sky" purposes (but only to the extent such
qualification or registration is requested by the Underwriters or
their counsel), the fees and expenses of their counsel and all
other expenses incurred by them in connection with the offering
and distribution of the Bonds. The terms and provisions of this
Section 12 shall survive and be binding upon the parties hereto
notwithstanding the termination of this Agreement pursuant to
Section 9 or Section 10 hereof.
Section 13. Notices. Any notice or other communication to
be given—to tH-e isgu—erand the Hospital under this Agreement may
be given by delivering the same in writing to their respective
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CEDAR RAPIDS DES MOINES
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am
9
\".1- I _.�.
0
_'V
I
2P p
-/-P"''•1SE6cY/L 44
15)
addresses set forth above; and any such notice or other communi-
cation to be given to the Underwriters may be given by delivering
the same in writing to the Managing Underwriter at 209 South
LaSalle Street, Chicago, Illinois 60604 Attention: Robert G.
Serafini.
Section 14.Parties and Interests; Hospital's Undertakings;
Survival of Representations. Thris Agreement is made solely for
the benef t of the Issuer,'the Hospital and the Underwriters,
including the successors and assigns of any of the Underwriters,
and no other person, partnership, association or corporation
shall acquire or have any rights hereunder or by virtue hereof.
The Hospital has joined in this Agreement solely for the purpose
of approving the undertakings hereunder of the Issuer and the
Underwriters, and to make the respective representations, indemni-
ties and consents expressly stated herein with respect to the
Hospital. Except as otherwise expressly limited by Section 11
hereof with respect to the duration of the duties of the Issuer
to provide amendments or supplements to the Official Statement,
all representations and agreements by the Issuer and the Hospital
in this Agreement shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of
the -Underwriters, and shall survive the delivery of and payment
for the Bonds.
Section 15. Indemnification �y the Hospital. JThe Hospital
agrees to indemnify and hold harmless the Issuer and Underwriters,
and any person who controls any of the Underwriters within the
meaning of the Securities Act of 1933, against any and all losses,
claims, damages and liabilities arising out of any statement or
information contained in the Official Statement relating to the
Hospital, its properties and revenues that is untrue in any
material respect, or the omission therefrom of any information
which should be contained therein which is necessary to make the
statements therein, in the light of the circumstances under which
they are made, nor misleading in any material respect and to the
extent of the aggregate amount paid in settlement of any litiga-
tion commenced or threatened arising from a claim based upon any
such untrue statement or omission if such settlement is effected
with the written consent of the Hospital. In case any claim
shall be made or action brought against the Issuer or any of the
Underwriters or any controlling person (as aforesaid) based upon
the official Statement, in respect of which indemnity may be
sought against the Hospital, the:Issuer or the Underwriters, as
the case may be, shall promptly notify the Hospital in writing
setting forth the particulars of such claim or action and the
Hospital shall assume the defense thereof including the retaining
of counsel (who shall be satisfactory to the Issuer and the
Underwriters) and the payment of all expenses. If the Issuer or
the Underwriters are advised in an opinion of counsel that there
may be legal defenses available to the Issuer or the Underwriters -
which are adverse to or in conflict with those available to the
Hospital, or that the defense of the Issuer or the Hospital
should be handled by separate counsel, the Hospital shall not
have the right to assume such defense of the Issuer or the Under-
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writers, as the case may be, but shall be responsible for the
reasonable fees and expenses of counsel retained by the Issuer or
the Underwriters, as the case may be, in assuming its or their
own defense, and provided also that if the Hospital shall have
failed to assume the defense of such action or to retain counsel
satisfactory to the Issuer or the Underwriters, as the case may
be, within a reasonable time after notice of the commencement of
such action, the fees and expenses of counsel retained by the
Issuer or the Underwriters, as the case may be, shall be paid by
the Hospital. Notwithstanding, and in addition to, any of the
foregoing, the Issuer and the Underwriters or any such controlling
person shall have the right to retain separate counsel in any
such action and to participate in the defense thereof, but the
reasonable fees and expenses of such counsel shall be at the
expense of the party retaining such counsel unless the retaining
of such counsel has been specifically authorized by the Hospital
in writing.
JOHN NUVEEN & CO. INCORPORATED
i
By
Vice President
Accepted by CITY OF IOWA CITY,
IOWA
k on June _, 1982
By
Mayor
(SEAL)
ATTEST:
City Clerk
(SEAL)
ATTEST:
Secretary
Approved by MERCY HOSPITAL,
IOWA CITY, IOWA
on June 1982
By
President
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7
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EXHIBIT A
(Letterhead of Peat, Marwick, Mitchell & Co.)
June _, 1982
(Date not more than 5 days prior
to the date of the Bond Purchase
Agreement)
Board of Directors
Mercy Hospital
500 Market Street
I
Iowa City, Iowa 52240 i
John Nuveen & Co. j Inco as representative of the eeseveral.Underwriters
209 South LaSalle Street
Chicago, Illinois 60604
Gentlemen:
This letter is writtenursuant to the re
tions 1 and 8 of the Bond Purchase Agreement datedeJunes of Sec-
tions
A among John Nuveen & Co. Incorporated on behalf of itself—and lthe,
other underwriters specified therein ("Underwriters"), the City
of Iowa City, Iowa ("Issuer") and Mercy Hospital, Iowa City,
Iowa, an Iowa non-profit corporation ("Hospital"), relating to
the sale by the Issuer to the Underwriters of $
' pal amount of Hospital Facility Revenue Bonds, Series 1982 princi-
pal
i
Hospital Project) ("Bonds"), of the Issuer.
We have examined the audited financial statements of the
Hospital as of June 30, 1981, and for the five years then ended, i
included in the Issuer's Preliminary Official Statement dated
June , 1982 ("Official Statement"), relating to the Bonds; ,our
report with respect thereto is also included in such Official
Statement. In connection with the Official Statement:
1. We are independent certified public accountants with
respect to the.Hospital within the meaning of Rule 101
of the Code of Professional Ethics of the American
Institute of Certified Public -Accountants.
2. We have not examined any financial statements of the
Hospital as of any date or for any period subsequent to
June 30, 1981; although we have made an examination for
the year ended June 30, 1981, the purpose (and therefore
the scope) of such examination was to enable us to
express our opinion on the financial statements as of I
June 30, 1981, and for the year then ended, but not on
the financial statements for any interim period within
or subsequent to such year. Therefore, we are unable
A-1
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to and do not express any opinion on the unaudited
balance sheet as of , 1981; interim state-
ment of revenues and expenses for the months then
ended and the interim statements of revenues and expen-
ses for the -.month period ended
198 , includedin the Official Statement; or on the
financial position, results of operations, or changes
in financial position as of any date or for any period
subsequent to June 30, 1981.
3. For the purposes of this letter, we have read the
minutes of the Board of Directors, Finance Committee
and Executive Committee of the Hospital for the period
from June 30, 1981, to 1982, as set
forth in the minute books at June , 1982 [day preced-
ing date of Comfort Letter], the Secretary of the
Hospital having advised us that the minutes of all such
meetings for the period were set forth therein, and
carried out other procedures to June , 1982 [day
preceding date of Comfort Letter] (our work did not
extend to the period 1982, to
1982, inclusive), as follows:
a. With respect to the - month periods lended
we
1981, and
have:
(1) read the.unaudited statements of revenues and
expenses for these periods included in the
Official Statement;
(2) read the unaudited balance sheet as of
. , 1982, included in the Official Statement;
and
(3) made inquiries of officials of the Hospital
who have primary responsibility for financial
and accounting matters as to whether the un-
audited financial statements referred to un-
der 3.a.(1) and (2) above are fairly presented
in conformity with generally accepted account-
ing principles applied on a basis substan-
tially consistent with that of -the audited
financial statements,in the Official State-
ment.
b. With respect to the period from� 1, 1982,
to , 1982 [period covered by un-
audited financial statements not included in the
Official Statement and attached as Exhibits to
Comfort Letter], we have:
A-2
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1 141CROFIIMED BY
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(1) read the incomplete unaudited financial statements
(incomplete in that relevant footnotes and a
statement of changes in financial position are not
available) of the Hospital as of
1982, and 1981 (Exhibits A and B, respectively,
attached hereto), furnished to us by the Hospital,
officials of the Hospital who have primary responsi-
bility for financial and accounting matters having
advised us that no such financial statements as of
any date or for any period subsequent to
1982 (date of Exhibit A], were avll-
able; and
(2) made inquiries of officials of the Hospital who V
have primary responsibility for financial and
accounting matters as to whether the unaudited
financial statements referred to in 3.b.(1) above
are fairly presented in conformity with generally
accepted accounting principles applied on a basis
substantially consistent with that of the audited i
financial statements included in the Official
Statement.
The foregoing procedures do not constitute an examina-
tion made in accordance with generally accepted audit-
ing standards. Further, such procedures would not nec-
essarily reveal matters of significance with respect to
the comments in the following paragraph. Accordingly,
we make no representations as to the sufficiency of the
foregoing procedures for your purposes.
4. Nothing has come to our attention as a result of the
foregoing procedures, however, that caused us to be-
lieve that:
a. the unaudited financial statements referred to in
3.a.(1) and (2) above, included in the Official
Statement, are not fairly presented in conformity
with generally accepted accounting principles
applied on a basis substantially consistent with
that of the audited financial statements included 1
in the Official Statement; or
Y
b. (1) at 1982 (date of Exhibit A), there
was anychange in the long-term debt of the Cor-
poration, other than as occasioned by scheduled
repayments of such indebtedness, or any decrease t
in net current assets as compared with the amounts
shown in the June 30, 1981, audited financial
statements included in the Official Statement, or
(2) at 1982 (date of Exhibit A), there
was any decrease in the balances of the several
A-3
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funds as compared with the amounts shown in the
June 30, 1981, audited financial statements included
in the Official Statement, or (3) for the period
from July 1, 1981, to 1982 [date of
Exhibit A], there was any decrease, as compared
with the corresponding period in the preceding
year, in the Net Income Available for Debt Service
(as defined in the Official Statement) of the
Hospital or the fund balances; except in all
instances for changes which the Official Statement
discloses have occurred or may occur.
5. As mentioned under 3.b. above, officials of the Hospital
who have primary responsibility for financial and
accounting matters have advised us that no statements
as of any date or for any period subsequent to
1982 [date of Exhibit A], are available;.
acc— o d ugly, the procedures carried out by us with i
respect to changes in financial statement items after
1982 [date of Exhibit A], have; of i
necessity, een even more limited than those with
respect to the periods referred to in 3. above. We
have made inquiries of officials of the Hospital who )
have primary responsibility for financial and account-
ing matters as to whether (1) there was any change at
1982 [day preceding date of Comfort {
Letter], in the long-term debt of the Hospital other
than occasioned by scheduled repayments of such indebt-
edness, or any decrease in net current assets as com-
pared with the amounts shown in the
1982 [date of Exhibit A], unaudited financial state-
ments furnished to us by the Hospital, or (2) at
1982 [day preceding date of Comfort Letter ,
there was any decrease in the balances of the several `
funds as compared with the amounts shown in the
1982 [date•of Exhibit A], unaudited financial
statements furnished to us by the Hospital, or (3) for
the period from 1982 [day after date of
Exhibit A], to 1982 [day preceding.date
of Comfort Letter], there was any decrease, as compared
with the corresponding period in the preceding year, in c
the Net Income Available for Debt Service (as defined
in the Official Statement) of the Hospital or the fund
balances. On the basis of these inquiries and our
reading of the minutes described in 3. above, nothing
came to our attention that caused us to believe that
there was any such change or decrease, except in all
instances for changes which the Official Statement
discloses have occurred or may occur.
6. This letter is solely for the information, and assist -
ante to, the Underwriters in conducting and documenting
its investigation of the affairs of the Hospital in
connection with the offering of,the securities covered
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EXHIBIT B
(Letterhead of Peat, Marwick, Mitchell & Co.)
1982 [This date
s alai-1not be more than 5 days
prior to the date of Closing]
Board of Directors
Mercy Hospital
500 Market Street
Iowa City, Iowa 52240
i John Nuveen & Co. Incorporated,
as representative of the several Underwriters
209 South LaSalle Street
Chicago, Illinois 60604
Gentlemen:
We refer to our letter of June 1982, relating to the
Preliminary Official Statement of the City of Iowa City, Iowa.
We reaffirm as of the date hereof (and as though made on the date
hereof) all statements made in that letter, except that, for the
. purpose of this letter:
1. The reference to the Preliminary Official Statement in
the second paragraph on page 1 of that letter is changed
to the Official Statement dated 1982.
2. The reading of the minutes described in paragraph 3 of I
that letter had been carried out through
1982.
3. The reference to 1982, in paragraph 5 "of
that letter is changed to 1982.
4. This letter is solely for the information of, and
assistance to, the underwriters in conducting and
documenting their investigation of the -affairs of the
Hospital in connection.with the offering of the secur-
ities covered by the Official Statement, and is not to
be used, circulated, quoted or otherwise referred to
for any other purpose, including but not limited to the
purchase or sale of securities, nor is it to be re-
ferred to in whole or in part in the Official Statement
or any other document, except that reference may be
made to it in the underwriting agreement or in any list
B-1
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of closing documents pertaining to the offering of.the
securities covered by the Official Statement.
very truly yours,
PEAT,, MARWICK, MITCHELL & CO.
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Schedule 'I
John Nuveen & Co. Incorporated
Dain Bosworth Incorporated
R.G. Dickinson & Co.
Securities Corporation of Iowa
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*Final Maturity
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schedule II
Maturities
of Bonds
Mandatory Redemption
Requirements for
Bonds Maturing
34w_ 1, 2012
1
Principal
Amount
1
" 1994
$
2004
1995
2005
1996
.t
2006
1997
2007
1998
2008
1999
2009
2000
2010
2001
2011
2002
2012*
2003
*Final Maturity
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EXHIBIT D
TO
LOAN AGREEMENT AND SECURITY AGREEMENT
MORTGAGE
MERCY HOSPITAL, IOWA CITY, IOWA
Mortgagor
and
Trustee
Dated as of
This instrument was prepared by:
BELIN,HARRIS, HELMICK 6 HEARTNEY
2000 Financial Center
Des Moines, Iowa 50309
Telephone (515) 243-7100
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EXHIBIT D
TO
LOAN AGREEMENT AND SECURITY AGREEMENT
MORTGAGE
MERCY HOSPITAL, IOWA CITY, IOWA
Mortgagor
and
Trustee
Dated as of
This instrument was prepared by:
BELIN,HARRIS, HELMICK 6 HEARTNEY
2000 Financial Center
Des Moines, Iowa 50309
Telephone (515) 243-7100
M........... RY
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'DORM'"MICR+LAB
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THIS MORTGAGE (the "Mortgage"), made as of the first day of
, 1982, by and between Mercy Hospital, Iowa City, Iowa, as
Mortgagor, an Iowa not-for-profit corporation (the "Hospital") and
, a national banking
association duly organized and existing by virtue of the laws of the
United States, and its successors and assigns (the "Trustee"), as
Trustee under the Indenture of Trust, dated as of even date herewith
(the "Indenture") between the Trustee and the City of Iowa City, Iowa
(the "Issuer").
WITNESSETH:
WHEREAS, pursuant to the provisions of Chapter 419 of the Code of
Iowa, 1.981, as amended (the "Act") the Issuer has entered into a Loan
Agreement, dated as of even date herewith (the "Agreement") with the
Hospital pursuant to which the Issuer has issued its Hospital Facility
Revenue Bonds (Mercy Hospital Project), Series 1982, in the principal
amount of $ (the "Series 1982 Bonds"), to provide funds to
finance in part the acquisition by construction or purchase of certain
additions and improvements to and parking facilities (the "Project")
for the Mortgagor's hospital facility located on the real estate
described in Exhibit A attached hereto and to refund certain
indebtedness of the Mortgagor (the "Existing Debt") all as more fully
described in the Agreement; and
WHEREAS, pursuant to the Agreement, the Issuer has loaned the
proceeds from the sale of the Series 1982 Bonds to the Hospital and the
Hospital'will pay the Issuer sums sufficient to pay the principal of
and interest and premium, if any, on the Series 1982 Bonds as and when
the same become due; and
WHEREAS, pursuant to the Agreement, the Hospital has issued its
i Promissory Note, Series 1982 (the "Series 1982 Note") to evidence its
obligation to repay the loan of the proceeds of the Series 1982 Bonds
to it under the Agreement; and
WHEREAS, the Agreement authorizes the Hospital, with the consent
of the Issuer, to issue and sell to the Issuer one or more Additional
Notes (the"Additional Notes") (the Series 1982 Note and the Additional
Notes are sometimes hereinafter referred to as the "Notes"), or in the
alternative, to issue one or more Parity obligations (the "Parity
'Obligations") for the purposes and subject to the conditions set forth
in the Agreement; and
WHEREAS, any such Additional Notes or Parity Obligations so issued
are of equal standing with the Series 1982 Note, equally and ratably
secured by this Mortgage; and
WHEREAS, the last stated maturity of the Series 1982 Note is
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GRANTING CLAUSES
NOW, THEREFORE, for the purposes of securing the payment of all
amounts now or hereafter advanced under the Agreement, owing under
the Bonds, the Agreement, or this Mortgage and the faithful performance
of all covenants, conditions, stipulations and agreements in the Bonds,
the Agreement and this Mortgage contained, and in consideration of the
premises, the loan of the proceeds of the Bonds by the Issuer, and as
an inducement to the purchase of the Bonds by all who shall at any time
become holders thereof, and other good and valuable consideration the
receipt whereof is hereby acknowledged, the Hospital has executed and
delivered this Mortgage to the Trustee and the Hospital does hereby
grant, bargain, sell, convey, transfer, assign, set over, mortgage,
grant a security interest in, and warrant to the Trustee, its
successors and assigns forever, all and singular the following
described properties, whether now owned or hereafter acquired (herein
collectively called the "Mortgaged Property"):
All of the tracts or parcels of land located in Johnson County,
Iowa, and more particularly described in Exhibit 1 attached hereto and
made a part hereof (the "Land") and the entire interest of the Hospital i
in and to all buildings, structures, improvements and appurtenances now
standing or at any time hereafter constructed or placed upon the Land
including all right, title and interest of the Hospital, if any, in and �I
to all building materials, building equipment and fixtures of every
kind and nature whatsoever on the Land or in any building, structure or
improvement now or hereafter constructed on the Land and the reversion
or reversions, remainder or remainders, in and to the Land, and
together with the entire interest of the Hospital in and to all and
singular the tenements, hereditaments, easements, rights of way,
rights, privileges and appurtenances to the Land, belonging or in any
wise appertaining thereto, including without limitation, the entire
right, title and interest of the Hospital in and to and under any
streets, boulevards, avenues, ways, alleys, gores or strips of land
adjoining the Land, and all claims or demands whatsoever of the
Hospital either at law or in equity, in possession or expectancy of, in
and to the Land, it being the intention of the parties hereto that, so
far as may be permitted by law, all property of the character
hereinabove described, which is now owned or is hereafter acquired by
the Hospital and is affixed or attached to the Land shall be and remain
or become and constitute a portion of the Land and the security covered
by and subject to the lien of this Mortgage, and, subject to the terms j
and conditions of this'Mortgage, together with all rents, income,
revenues, issues and profits thereof;
SUBJECT, HOWEVER, to Permitted Encumbrances as defined in the
Agreement.
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TO HAVE AND TO HOLD all and singular, the Mortgaged Property,
whether now owned or hereafter acquired, unto the Trustee, its
successors and assigns forever; provided, however, that this Mortgage
is upon the express condition that if the Hospital shall pay or cause
to be paid all indebtedness secured hereby and shall keep, perform and
observe all and singular the covenants and promises in the Agreement
and in this Mortgage expressed to be kept, performed and observed by
the Hospital, then this Mortgage and the rights hereby granted shall
cease, determine and be void, otherwise to remain in full force and
effect.
As additional security for the payment of the Bonds, the Hospital
hereby further covenants, warrants and agrees with the Trustee as
follows:
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TO HAVE AND TO HOLD all and singular, the Mortgaged Property,
whether now owned or hereafter acquired, unto the Trustee, its
successors and assigns forever; provided, however, that this Mortgage
is upon the express condition that if the Hospital shall pay or cause
to be paid all indebtedness secured hereby and shall keep, perform and
observe all and singular the covenants and promises in the Agreement
and in this Mortgage expressed to be kept, performed and observed by
the Hospital, then this Mortgage and the rights hereby granted shall
cease, determine and be void, otherwise to remain in full force and
effect.
As additional security for the payment of the Bonds, the Hospital
hereby further covenants, warrants and agrees with the Trustee as
follows:
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SECTION 1. Terms Defined.
All words and phrases defined in the Agreement and the Indenture
shall have the same meaning in this Mortgage, unless the context
clearly otherwise requires.
i
SECTION 2. Title to the Mortgaged Property and the Status of
the Lien of this Mort a e, Maintenance of Lien; Recordin Further i
Assurance; After -Acquired Property.
(a) The Hospital is lawfully seized of the fee simple title in
and to the Land and the Hospital has a good right to grant and convey
the same; the lien of this Mortgage is a first, prior and superior lien
and encumbrance on the Land, subject only to Permitted Encumbrances,
and the Hospital hereby warrants and will defend fee simple title I
thereto against the lawful claims of all persons, subject only to such
Permitted Encumbrances.
(b) The lien created by this Mortgage is a first and prior lien !
on the above described Mortgaged Property and the Hospital will keep
said premises and the rights, privileges and appurtenances thereto free
from all lien claims of every kind whether superior or inferior to the
lien of this Mortgage, except Permitted Encumbrances, and if any such
lienbe filed, the Hospital, within twenty (20) days after such filing
shall cause same to be discharged by payment or bonding or adequate
reserves being maintained with the Trustee in escrow. The Hospital
further agrees to protect and defend the title and possession of the
Mortgaged Property so that this Mortgage shall be and remain a first
lien thereon until the Bonds be fully paid, or if foreclosure sale be
had hereunder so that the purchaser at said sale shall acquire good
title in fee simple to said premises free and clear of all liens and
encumbrances, except Permitted Encumbrances.
(c) The Hospital will, at its expense, take all necessary action
to maintain and preserve the lien and security interest of this
Mortgage so long as any of the Bonds remain outstanding.
(d) The Hospital will, forthwith after the execution and delivery
of this Mortgage and thereafter from time to time, cause this Mortgage
and any financing statements in respect thereof to be filed, registered
and recorded in such manner and in such places as may be required by
law in order to publish notice of and fully to protect the lien hereof
upon, and the title of the Hospital to, the Mortgaged Property; and
from time to time will perform or cause to be performed any other act
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as provided by law and will execute or cause to be executed any and all
continuation statements and further instruments that may be requested
by the Trustee for such publication and protection. Except to the
extent that it is exempt therefrom, the Hospital will pay or cause to
be paid all filing, registration and all expenses incident to the
preparation, execution and acknowledgment of this assurance, and all
federal or state fees and other similar fees, duties, imposts,
assessments and charges arising out of or in connection with the
execution and delivery of this Mortgage and such instruments of further
assurance;
(e) The Hospital will do, execute, acknowledge and deliver, or
cause to be done, executed, acknowledged and delivered, all `such
further acts, deeds, conveyances, mortgages, assignments, transfers and
assurances as the Trustee reasonably may require for the better
assuring, conveying, mortgaging, assigning and confirming unto the
Trustee all and singular the Mortgaged Property as now or hereafter
constituted; and
(f) All right, title and interest of the Hospital in and to all'
improvements, betterments, renewals, substitutions and replacements of
the Mortgaged Property or any part thereof, hereafter constructed or
acquired by the Hospital, immediately upon such construction or
acquisition, and without any further mortgaging, conveyance or
assignment, shall become and be part of the Mortgaged Property and
shall be subject to the lien of this Mortgage as fully and completely
and with the same effect as though now owned by the Hospital, but at
any and all times the Hospital will execute and deliver to the Trustee
any and all such further assurances, mortgages, conveyances or
assignments therefor and other instruments with respect thereto as the
Trustee may reasonably require for the purpose of expressly and
specifically subjecting the same to the lien of this Mortgage.
SECTION 3. Inspection of the Mortgaged ProAert
The Issuer or the Trustee is authorized by itself, its agents or
workmen to enter at any time upon any part of the Mortgaged Property
for the purpose of inspecting the same and for the purpose of
performing any of the acts it is authorized to perform under the terms
of this Mortgage.
SECTION 4. Compliance with Laws.
The Hospital shall furnish and keep in force a Certificate of
Occupancy, or its equivalent, and shall comply with all laws,
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ordinances, regulations, covenants, conditions and restrictions
affecting the Mortgaged Property and shall not suffer or permit any act
to be done in or upon the Mortgaged Property in violation thereof,
unless and to the extent the same are being contested in good faith by
appropriate proceedings and in a manner not to jeopardize the Mortgaged
Property or the lien or priority of this Mortgage or the Indenture or
subject the Issuer or the Trustee to any liability.
SECTION 5. Defaults, Events of Default.
If any of the following defaults occur, it is hereby declared to
constitute an "Event of Default":
(a) The occurrence of an "Event of Default" under the Agreement
or the Indenture;
(b) The failure of the Hospital to observe and perform any
covenant, condition or agreement on its part to be observed or
performed in this Mortgage (other than an occurrence which may sooner
constitute an Event of Default under the Agreement) for a period of
thirty days after written notice specifying such failure and requesting
that it be remedied, given to the Hospital by the Issuer or the
Trustee, unless the Trustee shall agree in writing to an extension of
such time prior to its expiration.
SECTION 6. Remedies on Default.
Upon the occurrence of an Event of Default the Trustee may, at its
option:
(a) declare the principal of the Notes and Parity Obligations to
be due and payable immediately, upon the same terms and conditions and
in the manner provided for in Section 6.1 of the Agreement;
(b) institute proceedings for the collection at law or in equity
of any and all indebtedness due under the provisions of the Agreement
and this Mortgage;
(c) at any time in its sole discretion either by its agents,
attorneys, employees or by a receiver,to be appointed by a court and
without regard to the adequacy of any security for the indebtedness
hereby secured, either with or without process of law, forcibly.or
otherwise, enter upon and take possession of the Mortgaged Property or
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any part thereof, expel and remove any persons, goods or chattels
occupying or upon the same, do and perform any act that the Trustee may
deem necessary or proper to conserve the value thereof, and to collect
and receive all earnings, revenues, rents, issues and profits
therefrom, including those past due and unpaid, as well as those
accruing thereunder, to manage and control the same, and to lease the
same or any part thereof. The Hospital further agrees that the Trustee
may also take possession of, and use any and all personal property
contained in the Mortgaged Property and used by the Hospital in the
operation, rental or leasing of the Mortgaged Property or any part
thereof. The expense (including receiver's fees, if any, and
compensation to any agent appointed by the Trustee, and counsel fees
and costs and disbursements) incurred in taking possession and
effecting such collection, shall be deemed a portion of the expense of
this Mortgage secured hereby. Neither the collection of such rents,
issues and profits and the application or release thereof as aforesaid
shall cure or waive any default. After deducting all attorneys fees
and expenses incurred in connection herewith, the Trustee shall:
(1) in case the principal of the Notes and Parity
Obligations shall not have become due, first, to the payment of the
installments of principal and interest thereon, when and as the same
shall become payable, and second, to the payment of any other sums
required to be paid by the Hospital under the Agreement and any Parity
Instruments; or
(2) in case the principal of the Notes and Parity
Obligations shall have become due by declaration or otherwise, in the
order of priorities and amounts set forth in (d) hereof; or
(3) in case the principal of the Notes and Parity
Obligations shall have become due and there exists no default in the
payment of any installment of interest or principal on the Notes and
Parity Obligations, then to the remedying of any other event of default
then existing;
(d) immediately cause this Mortgage to be foreclosed in the
manner prescribed by law and, upon the commencement of foreclosure
proceedings shall be entitled to have a receiver appointed at once or
at any time thereafter, either before or after sale, without notice and
without requiring bond, and without regard to the solvency or
insolvency of any person liable for payment of the indebtedness secured
hereby, and without regard to the then value of the Mortgaged Property
(the provisions for the appointment of a receiver and assignment of
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rents being an express condition upon which the loan hereby secured is
made) for the benefit of the Trustee, with power to rent the same and
to collect the rents, issues and profits of the Mortgaged Property, due
and to become due, during the pendency of such foreclosure suit and in
the case of a sale and deficiency, during the full statutory period of
redemption whether there be redemption or not, as well as during any
future times when the Hospital, except for the intervention of such
receiver, would be entitled to collect such rents, issues and profits
and shall have all other powers which may be necessary or are usual in
such cases for the protection, possession, control, management and
operation of the Mortgaged Property during the whole of said period.
Any amount so collected by such receiver, whether prior to or following
foreclosure, shall be paid to the Trustee and applied as follows:
i
FIRST: To the payment of the costs and expenses of such
sale, including reasonable attorneys fees, and the expenses of any
judicial proceedings wherein the same may be made, and of all expenses,
liabilities and advances made or incurred by the Trustee as permitted
by the Agreement, together with interest on all advances made by the
Trustee as provided in the Agreement, and to the payment of all taxes,
assessments or liens prior to the lien of this Mortgage, except any
taxes, assessments, liens, or other charges, subject to which the
property shall have been sold.
SECOND: To the payment of the whole amount then due, owing
and unpaid upon the Notes and Parity Obligations for principal,
interest and premium, if any; and in case such proceeds shall be
insufficient to pay in full the whole amount so due, owing or unpaid
upon the Notes and Parity Obligations, then ratably according to the
aggregate of such principal and the accrued and unpaid interest and
premium, if any, without preference or priority as between principal,
interest or premium; such application to be made upon presentation of
the Notes and Parity Obligations and the notation thereon of the
payment, if partially paid, or the surrender and cancellation thereof,
if fully paid.
THIRD: To the payment of any other sums required to be paid
by the Hospital pursuant to any provisions of the Agreement, this
Mortgage, the Notes or any Parity Instruments.
FOURTH: To the payment of the surplus, if any, to the
Hospital, its successors or assigns, upon the Written Request of the
Hospital or to whosoever may be lawfully entitled to receive the same
upon its written request, or as any court of competent jurisdiction may
direct.
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In case of any sale under this Mortgage by virtue of judicial
Proceedings or otherwise, the Mortgaged Property may be sold in one
parcel, as an entirety or in such parcels, manner or order as the
Trustee in its sole discretion may elect, and the Hospital waives any
and all rights which the Hospital may have to insist upon the sale of
the Mortgaged Property in one parcel or separate parcels.
In the event of foreclosure of this Mortgage and sale of the
property in sheriff's sale on special execution in said foreclosure
proceedings, the period of one year for redemption from said sale
provided by the statutes of the State of Iowa shall be reduced to six
months, provided the Trustee waives in said foreclosure proceedings any
rights to a deficiency judgment against the Hospital which may arise
out of the foreclosure proceedings.
It is further agreed that the period of redemption after a
foreclosure of this Mortgage shall be reduced to sixty days if both of
the following contingencies develop: (1) the Court finds affirmatively
that said real estate has been abandoned by the Hospital and those
Persons personally liable under this Mortgage at the time of such
foreclosure; and (2) the Trustee in such action files an election to
waive any deficiency judgment against the Hospital or its successor in
interest in such action.
Any sale or sales under this Section shall operate, after any
applicable redemption period, to divest all estate, right, title,
interest, claim or demand whatsoever, whether at law or in equity, of
the Hospital in and to the premises, property, privileges and rights so
sold, and shall be a perpetual bar both at law and in equity against
the Hospital, its successors and assigns and against any and all
persons claiming or who may claim the same, or any part thereof, from,
through or under the Hospital, its heirs, successors or assigns.
SECTION 7. Non -Waiver.
Acceptance by the Trustee of any sum in payment or part payment of
any indebtedness secured hereby after the same is due or after
foreclosure proceedings are filed shall not constitute a waiver of the
right to require prompt payment when due of all the sums so secured nor
shall such acceptance cure or waive any remaining default or invalidate
any foreclosure proceedings for any such remaining default or prejudice
any of the rights of the Issuer or the Trustee under this Mortgage.
Further, the failure of the Trustee to insist upon the strict
performance of any of the covenants or agreements of the Hospital
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contained in this Mortgage, or the delay by the Trustee in the
enforcement of any of its remedies herein contained upon any default of
the Hospital, shall never constitute a waiver of any requirement or
obligation of the Hospital or right or remedy of the Trustee contained
in or based upon said covenants or agreements.
SECTION 8. Remedies Cumulative.
No remedy herein or in the Agreement or in any Parity Instrument
conferred upon or reserved to the.Trustee or the Issuer is intended to
be exclusive of any other remedy or remedies, and each and every such
remedy shall be cumulative and shall be in addition to every other
remedy given hereunder or now or hereafter existing at law or in equity
or by statute. In addition, no recovery of any judgment by the Issuer
or the Trustee and no levy of any execution under any judgment upon the
Mortgaged Property or upon any other property shall affect the lien
created by this Mortgage upon the Mortgaged Property or any part
thereof or any lien, rights, powers or remedies of the Trustee
hereunder, but such lien, rights, powers or remedies of the Trustee
shall continue unimpaired as before.
SECTION 9. Waiver of Certain Rights and Remedies.
To the full extent that it may lawfully so agree, in the case of a
default on its part in the performance of the obligations imposed upon
it by the terms of this Mortgage, any Parity Instrument, and the
Agreement, neither the Hospital nor anyone claiming through or under it
shall or will set up, claim or seek to take advantage of any stay,
statute of limitation, extension or redemption laws, redemption periods
or grace periods now or hereafter in force and affecting the Mortgaged
Property and the covenants, terms and remedies under the Mortgage, any
Parity Instrument, the Bonds and the Agreement, in order to prevent or
hinder enforcement, foreclosure, sale, confirmation of sale, or
conveyance of said Mortgaged Property. If applicable and if permitted
by law, the Hospital hereby waives and releases any and all rights and
remedies related to marshalling of liens and assets, redemption and
statutes of limitations, and any stay or extension law affecting the
covenants, terms and remedies under the Mortgage.
SECTION 10. Severability.
If any provision hereof should be held unenforceable or void,
then such provision shall be deemed separable from the remaining
provisions and shall in no way affect the validity of this Mortgage.
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All rights, remedies and powers provided by this Mortgage may be
exercised only to the extent that the exercise thereof does not violate
any applicable provision of law in the premises, and all the provisions
of this Mortgage are intended to be subject to all applicable mandatory
provisions of law which may be controlling in the premises and to be
limited to the extent necessary so that they will not render this
Mortgage invalid or unenforceable under the provisions of any
applicable law.
SECTION 11. Construction.
This Mortgage shall be construed according to the laws.of the
State of Iowa.
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SECTION 12. Amendments, Changes and Modifications.
The Hospital and the Trustee may from time to time enter into
amendments, changes and modifications of this Mortgage, but only in the
manner provided in Article X of the Indenture
Agreement. for amendments to the f
SECTION 13. Addresses for Notice and Demands.
All notices, demands, certificates or other communications
hereunder shall be sufficiently given and shall be deemed given when
mailed by registered or certified mail, postage prepaid, with proper
' address as indicated in Section 10.4 of the Agreement.
SECTION 14. Discharge of Lien.
,
If the Hospital shall pay and discharge or provide, in a manner
satisfactory to the Trustee, for the payment and discharge of the whole
amount of all sums payable hereunder and under the Agreement or any j
Parity Instrument, or shall make arrangements satisfactory to the
Trustee for such payment and discharge, then and in that case all
property, rights and interest hereby conveyed or assigned or pledged
shall revert to'the Hospital, as its respective interests may appear,
and the estate, right, title and interest of the Trustee therein shall
thereupon cease, terminate and become void; and this Mortgage, and the
covenants of the Hospital contained herein, shall be discharged and the
Trustee in such case on demand of the Hospital and at the Hospital's
cost and expense, shall execute and deliver to the Hospital a proper
instrument or proper instruments acknowledging the satisfaction and
termination of this Mortgage, and shall convey, assign and transfer or
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cause to be conveyed, assigned or transferred, and shall deliver or
cause to be delivered, to the Hospital, as its respective interests may
appear, all property, including money, then held by the Trustee
hereunder.
SECTION 15. Acceptance of Trusts.
The Trustee hereby accepts the trusts imposed upon it by this
Mortgage and agrees to perform said trusts but only upon and subject to
the terms and conditions set forth in Article VIII of the Indenture
insofar as they may be applicable hereto.
SECTION 16. Concerning Any Successor Trustee.
Every successor Trustee appointed under the Indenture shall
thereupon automatically be and become successor Trustee hereunder and
shall execute, acknowledge and deliver to its or his predecessor and
also to the Hospital an instrument in writing accepting such
appointment hereunder and thereupon such successor, without any further
act, deed or conveyance, shall become fully vested with all the
estates, properties, rights, powers, trusts, duties and obligations of
its predecessors hereunder; but such predecessor shall, nevertheless,
on the written request of the successor Trustee, execute and deliver an
instrument transferring to such successor all the estates, properties,
rights, powers and trusts of such predecessor hereunder; and every
predecessor Trustee shall deliver all securities and moneys held by it
as Trustee hereunder to its successor. Should any instrument in
writing from the Hospital be required by any successor Trustee for more
fully and certainly vesting in such successor the estate, rights,
powers and duties hereby vested or intended to be vested in the
predecessor, any and all such instruments in writing shall, on request,
be executed, acknowledged and delivered by the Hospital. The
resignation of any Trustee and the instrument or instruments removing
any Trustee and appointing a successor hereunder, together with all
other instruments provided for in this Section, shall be filed or
recorded by the successor Trustee in each recording office where the
Mortgage shall have been filed or recorded.
SECTION 17. Separate or Co -Trustees.
It is recognized that in certain instances an individual or
institution may be appointed as a separate or co -trustee under Section
812 of the Indenture. In the event of any such appointment of an
additional individual or institution as a separate or co -trustee, each
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and every remedy, power, right, claim, demand, cause of action,
immunity, estate, title, interest and lien expressed or intended by
this Mortgage to be exercised by or vested in or conveyed to the
Trustee hereunder shall be exercisable by and vested in such separate
or co -trustee appointed under Section 812 of the Indenture, but only to
the extent necessary to enable such separate or co -trustee to exercise
such powers, rights and remedies, and every covenant and obligation
necessary to the exercise thereof by such separate or co -trustee shall
run to and be enforceable by either of them. Should any instrument in
writing from the Hospital be required by the separate trustee or
co -trustee so appointed for more fully and certainly vesting in and
confirming to him or it such properties, rights, powers, trusts, duties
and obligations, any and all such instruments in writing shall, on
request, be executed, acknowledged and delivered by the Hospital. In
case any separate trustee or co -trustee, or a successor to either,
shall die, become incapable of acting, resign or be removed, all the
estates, properties, rights, powers, trusts, duties and obligations of
such separate trustee or co -trustee, so far as permitted by law, shall
vest in and be exercised by the Trustee until the appointment of a new
trustee or successor to such separate trustee or co -trustee.
SECTION 18. Indemnification of the Trustee.
So long as the Trustee is not in possession of the Mortgaged
Property, the Hospital agrees to indemnify and save harmless the
Trustee against any and all losses, injuries, claims, damages or
injuries to persons or property, demands and expenses, including legal
expenses, of whatsoever kind and nature and by whomsoever made arising
from or in any manner directly or indirectly growing out of (a) the use
and occupancy or nonuse of the Mortgaged Property or any equipment or
facilities thereon or used in connection therewith by anyone
whomsoever, (b) any repairs, construction, restoration, replacements,
alterations, remodeling on or to the Mortgaged Property, or any part
thereof, or any equipment or facilities therein or thereon, and (c) the
condition of the Mortgaged Property including any adjoining sidewalks,
ways or alleys and any equipment or facilities at any time located
thereon or used in connection therewith.
SECTION 19. Execution Counterparts.
This Mortgage may be simultaneously executed in several
counterparts, each of which shall be an original and all of which shall
constitute but one and the same instrument.
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IN WITNESS WHEREOF, the Hospital and the Trustee have caused these
presents to be signed and 'sealed in their names and behalf by their
duly authorized officers, all as of the day and year first above
written.
MERCY HOSPITAL, IOWA CITY, IOWA
By
(Name) I (Title)
ATTEST:
(Name) I (Title)
(Seal)
"TRUSTEE"
By -
(Name) (Title)
ATTEST:
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STATE OF
SS:
COUNTY OF
On this day of 19 , before me, the
undersigned, a Notary Public ±n a^ nor the State of ,
personally appeared and , to me
personally known, who being by me duly sworn did say that they are the
and , respectively, of Mercy Hospital, Iowa
City, Iowa, the Corporation executing the within and foregoing Mortgage
to which this is attached; that the seal affixed thereto is the seal of
the said Corporation; that said instrument was signed on behalf of said
Corporation by authority of its Board of Directors and that the said
and , as such officers, acknowledge the
execution of said instrument to be the voluntary act and deed of said
Corporation, by it and by them voluntarily executed.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal
this day of , 19_
Notary Public
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STATE OF
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COUNTY OF
On this day of , 19 , before me, the
undersigned, a o ary Public>n and the ITate of
personally appeared and , to me
personally known, who beim g by me duly.sworn did say that they are the
and , respectively, of
the national banking association
executing the within and foregoing Mortgage to which this is attached;
that the seal affixed thereto is the seal of the said national banking
association; that said instrument was signed on behalf of said national
banking association by authority of its Board of - Directors and that the
said and , as such officers, acknowledge
the execution of said instrument to be the voluntary act and deed of
said national banking association by it and by them voluntarily
executed.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal
this day of , 19_.
Notary Public
(Seal)
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EXHIBIT E
[Form of Affiliate Guaranty]
AFFILIATE GUARANTY AGREEMENT
Dated as of
BETWEEN
(Name of Affiliate]
MERCY HOSPITAL, IOWA CITY, IOWA
AND
As Trustee
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EXHIBIT E
[Form of Affiliate Guaranty]
AFFILIATE GUARANTY AGREEMENT
Dated as of
BETWEEN
(Name of Affiliate]
MERCY HOSPITAL, IOWA CITY, IOWA
AND
As Trustee
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AFFILIATE GUARANTY AGREEMENT
TABLE OF CONTENTS
(This Table of Contents is not a part of
this Affiliate Guaranty and is only for convenience of reference)
Parties ......................................................
Preliminary Statement .......................................
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ARTICLE I
Section
1.1.
Definitions ..................................
ARTICLE II
Representations
Section
2.1.
Representations and Warranties by the Affiliate
ARTICLE III
Affiliate Transfer Documents and Related Matters
Section
3.1.
Affiliate Transfer Documents .................
Section
3.2.
Changes in or Amendments to Affiliate
Transfer Documents .........................
Section
3.3.
Enforcement of Affiliate Transfer Documents ..
ARTICLE IV
Covenants and Agreements of Affiliate and Hospital
Section
4.1.
Guarantee of Notes and Parity Obligations ....
Section
4.2.
Affiliate's Obligation Unconditional .........
Section
4.3.
Subordination ................................
Section
4.4.
No Set -Off ...................................
Section
4.5.
Direct Proceedings ...........................
Section
4.6.
Waiver of Notice .............................
Section
4.7.
Investment of Funds; Arbitrage ...............
Section
4.8.
Right of Trustee and Others to Enforce
Affiliate Guaranty .........................
Section
4.9.
Limitation on Guaranty Obligation ............
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ARTICLE V
'Covenants Relating to the Use and
Operation of the Transferred Property
Section 5.1. Taxes, Charges and Assessments ...............
Section 5.2. Liens ........................................
Section 5.3. Compliance with Orders, Ordinances, Etc. .....
Section 5.4. Permitted Contests ...........................
Section 5.5. Use of the Hospital Facilities ...............
Section 5.6. Repairs, Maintenance and Alterations .........
Section 5.7. Removal of Equipment in the Hospital
Facilities .................................
Section 5.8. Installation of Equipment ..............
Section 5.9. Liability, Casualty and Other Insurance ......
Section 5.10. Right to Perform Affiliate's Covenants;
Advances ...................................
Section 5.11. Net Proceeds from Condemnation ...............
ARTICLE VI
Particular Covenants of the Affiliate
Section 6.1. Maintenance of Corporate Existence and Status
Section 6.2. Merger, Etc . .................................
Section 6.3. Further Assurances; Additional Property ......
Section 6.4. Financial Statements., Etc . ...................
Section 6.5. Permitted Indebtedness .......................
Section 6.6. Indemnity ....................................
Section 6.7. Rates and Charges ............................
ARTICLE VII
Events of Default and Remedies Therefor
Section 7.1. Events of Default ............................
Section 7.2. Trustee May Enforce Demand ...................
Section 7.3. Remedies Cumulative ..........................
Section 7.4. Delay or Omission Not a Waiver ...............
Section 7.5. Waiver of Extension, Appraisement, Stay, Laws
Section 7.6. Remedies Subject to Provisions of Law ........
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ARTICLE VIII
Supplements and Amendments to this Affiliate Guaranty;
Release and Substitution of Property;
Transfers of Assets to and Transactions with Affiliates
Section 8.1. Supplements and Amendments to this Affiliate
Guaranty.......
Section 8.2. Conditions for Release and Discharge of.......
Affiliate Guaranty ..............
Section 8.3. Disposition of Transferred Property Upon
Dissolution of Affiliate ...................
ARTICLE IX
Miscellaneous Provisions
Section
Section 9.2. Provisions With Resof Affiliate
ecttotParitylOObligations
Section 9.3. Affiliate Guaranty for Benefit of Parties
Hereto .........
Section 9.4. Severability....................................................... ..
Section 9.5. Notices ...........
Section 9.6. Successors and Assigns• .......................
Section 9.7. Counterparts
Section 9.8. Governing Law ......
Section 9.9. Immunity of Officers, Employees and ..
Aldermen of the Issuer and the Affiliate ...
SIGNATURES.....................
..............................
EXHIBIT A Appraisals With Description of Transferred
EXHIBIT B Opinion
Property
f
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nselrequirby ent Section 2'31
edbyAgreement
Section 2.3.1
EXHIBIT C Opinion of Bond Counsel required by
Agreement Section 2.31
EXHIBIT D Financial Statements of Affiliate
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This is an AFFILIATE GUARANTY AGREEMENT dated as of
(herein, together with all supplements and amendments hereto, referred
to as "this Affiliate Guaranty"), between
a corporation (the "Affiliate"), Mercy Hospital, Iowa City,
Iowa, a Iowa not-for-profit corporation (the "Hospital") and
"Trustee") under the Trust Indenture dated as,s
ofJunes1, 1982tee (herein,
together with all supplements and amendments thereto, referred to as
the "Indenture") from the City of Iowa City, Iowa (the "Issuer") to the
Trustee.
PRELIMINARY STATEMENT
The Issuer has heretofore issued its Hospital Facility Revenue
Bonds, Series 1982 (Mercy Hospital Project) in the aggregate principal
amount of $ (the "Series 1982 Bonds") (herein, together with
all Additional Bonds issued under the Indenture referred to as the
"Bonds") the proceeds of which were loaned to the Hospital pursuant to
a Loan Agreement and Security Agreement dated as of June 1, 1982
(herein, together with all supplements and amendments thereto, referred
to as the "Agreement") between the Hospital and the Issuer which
Agreement has been assigned by the Issuer to the Trustee as security
for the payment of the Bonds. The loan of the Bond proceeds to the
Hospital is evidenced by the Hospital's Promissory Note, Series 1982
(the "Series 1982 Note") dated as of June 1, 1982 in the principal
amount of $ (herein, together with all Additional Notes issued
under the Agreement, referred to as the "Notes"). The Bonds, together
with any Parity Obligations (as defined in the Indenture), issued by
the Hospital pursuant to the provisions of the Agreement are and will
be equally and ratably secured by the Agreement and by the lien, if
any, on, and security interest granted thereby in and to, the Pledged
Property described therein.
In accordance with the provisions of Section 2.31 of the
Agreement, the Hospital may transfer certain of its properties and
assets subject to certain conditions specified therein, and pursuant
thereto the Hospital is transferring to the Affiliate certain
properties and assets (herein called the "Transferred Property")
described in the appraisals attached hereto as Exhibit A. The
Transferred Property is being conveyed and transferred to the Affiliate
by means of certain deeds and other transfer documents (the "Affiliate
Transfer Documents") more fully described in Section 3.1 of this
Affiliate Guaranty. Pursuant to the terms of the Affiliate Transfer
Documents the Transferred Property, if any, which is subject to the
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lien or security interest of the Agreement, and is described and valued
on Exhibithereto, is being conveyed and transferred to the Affiliate
subject to such lien and security interests. The Affiliate Transfer
Documents also contain, as a condition subsequent, provisions for the
reversion of title to the Transferred Property to the Hospital upon
dissolution of the Affiliate.
Attached hereto as Exhibits are the respective documents and
showings, including Appraisals, Accountant's Certificate, Hospital
Consultant Certificate, and Opinions of Counsel required under Section
2.31 of the Agreement and current financial statements of the
Affiliate, which Exhibits are incorporated herein and made apart
hereof.
In consideration of the conveyance and transfer to it of the
Transferred Property pursuant to the provisions of Section 2.31 of the
Agreement, the Affiliate is executing and delivering this Affiliate
Guaranty and has taken all action necessary thereto.
(The foregoing Preliminary Statement shall be appropriately
revised to reflect any amendments of the documents referred to therein
and the issuance of any Additional Bonds, Additional Notes or Parity
Obligations.]
NOW, THEREFORE, the Hospital, the Trustee and the Affiliate hereby
covenant and agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. The terms used in this Affiliate Guaranty, unless
the context requires otherwise, shall have the same meanings.as set
forth in the Indenture and the Agreement and the definitions set forth
in the Agreement and Indenture are hereby incorporated herein by
reference as if set forth herein in full.
ARTICLE II
REPRESENTATIONS
SECTION 2.1. Re resentations and Warranties b the Affiliate.
The Affiliate makes t e o low ng representations an warrant es as the
basis for its covenants herein:
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(a) The Affiliate is a not-for-profit corporation duly
incorporated under the laws of the State of Iowa, is in good standing
and duly authorized to conduct its business in Iowa, is duly authorized
and has full power under the laws of Iowa and all other applicable
provisions of law and its Articles of Incorporation and Bylaws to enter
into, execute and deliver this Affiliate Guaranty and all action on its
part necessary for the valid execution and delivery of this Affiliate
Guaranty has been duly and effectively taken; and this Affilite
Guaranty will be the legal and valid obligation of the Affiliate. [The
foregoing provision shall be appropriately revised if the Affiliate is
a for profit affiliate or foreign corporation authorized to conduct
affairs in the State of Iowa under Chapters 504 or 504A, Code of Iowa.]
the consummation hexecution
udelivery
ionofthetransactionscontGuaranty,
nty,
contemplated hereby, and the
fulfillment of the terms and conditions hereof do not and will not
conflict with or result in a breach of any of the terms or conditions
of any corporate restriction or of any agreement or instrument to which
the Affiliate is now a party, and do not and will not constitute a
default under any of the foregoing or result in the creation or
imposition of any lien, charge or encumbrance of any nature upon any of
the property or assets of the Affiliate; the Affiliate has good and
marketable title to the Transferred Property and is the lawful owner
and is now lawfully possessed of the Transferred Property free and
clear of all liens, security interests, charges and encumbrances
whatsoever (except that the Transferred Property, if any, described in
Exhibit A hereto, is and shall remain subject to the lien, if any, and
security interest of the Agreement and to the lien of the Mortgage, if
any, created pursuant to Section 2.25 of the Agreement and may be
subject to Permitted Encumbrances as defined in the Agreement); the
Affiliate has full power and lawful authority to enter into and perform
this Affiliate Guaranty, which has been duly executed and delivered for
and on behalf of the Affiliate by its officers thereunto duly
authorized and is the legal, valid and binding agreement of the
Affiliate enforceable in accordance with its terms; and the recitals of
fact and statements contained in this Affiliate Guaranty with respect
to the Affiliate and the Transferred Property are true.
(c) The Affiliate represents and warrants that... [here
insert description of relationship which qualifies the Affiliate as an
"Affiliate" as defined in the Agreement]... and that it therefor
qualifies as a Class I Affiliate and permitted transferee of the
Transferred Property under Section 2.31 of the Agreement.
(d) The Affiliate has all necessary licenses and permits to
occupy and operate and use the Transferred Property.
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(e) There are no litigation or proceedings or investigations
pending or, to the knowledge of the Affiliate, threatened against the
Affiliate, except litigation in which the probable recoveries and the
estimated costs and expenses of defense, in the opinion of counsel to
the Affiliate, will be entirely within the Affiliate's applicable
insurance policy limits (subject to applicable deductibles) or are
entirely covered by available reserve's maintained under the Affiliate's
applicable self-insurance program and except litigation which if
adversely determined will, in the opinion of counsel to the Affiliate,
not have a material adverse effect on the Affiliate's condition,
financial or otherwise.
(f) Attached hereto as Exhibit F are the audited financial
statements ...[insert specific descriptions]... of the Affiliate for
each of the fiscal years ended I through the end of the
Affiliate's last fiscal year, including a combined balance sheet as of
of each of said years, all prepared and certified by
, independent public accountants, which correctly and
fairly present the financial condition of the Affiliate as of said
dates, and the results of the operations of the Affiliate for each of
such periods, respectively, all in accordance with generally accepted
accounting principles consistently applied except as stated in the
notes thereto, and there has been no material adverse change in the
condition, financial or otherwise, of the Affiliate since the end of
its last fiscal year from that set forth in said balance sheet as of
said date except as follows: ...[insert description of any material
adverse changes]...
(g) The Affiliate has not heretofore engaged in, and the
consummation of the transactions herein provided for and compliance by
the Affiliate with the provisions of this Affiliate Guaranty will not
involve, any prohibited transaction within the meaning of the Employees
Retirement Income Security Act of 1974, as amended (herein sometimes
referred to as "ERISA") or Section 4975 of the Internal Revenue Code.
No "employee pension benefits plans", as defined in ERISA (herein
sometimes referred to as "Plans"), maintained by the Affiliate, nor any
trusts created thereunder, have incurred any "accumulated funding
deficiency" as defined in Section 302 of ERISA nor does the present
value of all benefits vested under all Plans exceed, as of ,
(the last annual valuation date), the value of the assets of the
Plans allocable to such vested benefits.
(h) The Exhibits attached hereto, including the financial
statements referred -to in paragraph (f) of this Section do not, nor
does this Affiliate Guaranty, or any written statement furnished by the
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Affiliate to the Hospital,or the Trustee in connection therewith,
contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements contained therein or
herein not misleading. There is no fact which the Affiliate has not
disclosed to the Hospital and the Trustee in writing which materially
affects adversely or, so far as the Affiliate can now foresee, will
materially affect adversely the financial condition of the Affiliate,
its tax exempt status, if any, its status as a Class I Affiliate of the
Hospital, its ability to own and operate the Transferred Property or
its other properties or its ability to make the payments under and
otherwise perform this Affiliate Guaranty.
ARTICLE III
AFFILIATE TRANSFER DOCUMENTS AND RELATED MATTERS
SECTION 3.1. Affiliate Transfer Documents. [Insert
description , all ocumeIts re sting to trans er including deeds,
bills of salee, operating and lease agreements, and all governmental
licenses, permits and approvals, if any, required for the transfer]...
SECTION 3.2. Chan es in or Amendments to Affiliate Transfer
Documents. The Affi* Aospitawith the prior written
consent of the Trustee, make, authorize or permit such changes or
amendments in the Affiliate Transfer Documents as the Affiliate and the
Hospital may reasonably determine necessary or desirable, provided that
no such change or amendment shall impair or adversely affect the
obligations of the Affiliate or the Hospital hereunder or the ability
of the Affiliate to perform and comply with the terms and conditions
hereof or the ability of the Hospital to perform and comply with the
terms and conditions of the Agreement. A copy of each such change in
or amendment to the Affiliate Transfer Documents shall be filed
promptly with the Trustee.
SECTION 3.3. Enforcement ofAffiliate Transfer Documents. In the
event of a default y t e A iliate hereunder or under any of the
Affiliate Transfer Documents or under any other contract or any other
agreement between the Affiliate and the Hospital, or in the event of a
material breach of any representation or warranty by the Affiliate
herein or in any such Affiliate Tranfer Document or other agreement,
the Hospital shall notify the Trustee thereof, and shall promptly
proceed, either separately or in conjunction with others, to pursue
diligently the remedies of the Hospital against the Affiliate hereunder
or thereunder for the benefit of the Hospital, the Issuer and the
Trustee.
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ARTICLE IV
COVENANTS AND AGREEMENTS OF
AFFILIATE AND HOSPITAL
SECTION 4.1. Guarant of Notes and ParityObli ations. The
Affiliate hereby unconditiona ly guarantees to the Trustee and to any
other holder of any Note or Parity Obligation, whether as a result of
pledge, assignment or other transfer, subject to the provisions of
Section 4.9 hereof, (a) the full and prompt payment of the principal of
and premium, if any, on the Notes and Parity Obligations when and as
the same shall become due, whether at the stated maturity thereof, by
acceleration, or otherwise, and (b) the full and prompt payment of any
interest on any Note or Parity Obligation when and as the same shall
become due. All payments by the Affiliate shall be paid in lawful
money of the United States of America. Each and every default in
payment of the principal of, premium, if any, or interest on any Note
or Parity Obligation shall give rise to a separate cause of action
hereunder, and separate suits may be brought hereunder as each cause of
action arises.. {
SECTION 4.2. Affiliate's Obji ations Unconditional. The
obligations of the i -late un et is A > -late Guaranty shall be
absolute and unconditional and shall remain in full force and effect as
long as there are any Notes or Parity Obligations outstanding, and
during such time the obligations of the Affiliate hereunder shall not
be affected, modified or impaired upon the happening from time to time
of any event, including, without limitation, any of the following,
whether or not with notice to, or the consent of, the Affiliate:
(a) The compromise, settlement, release or termination of
any or all of the obligations, covenants or agreements of the Hospital
under the Indenture, the Agreement, the Mortgage, if any then exists,
Parity Instruments, the Notes or this Affiliate Guaranty; or
(b) The failure to give notice to the Affiliate of the
occurrence of an event of default by the Hospital under any terms and
provisions of this Affiliate Guaranty, the Indenture, the Agreement,
the Mortgage, if any then exists, Parity Instruments or the Notes; or
(c) The assignment or mortgaging or the purported assignment
or mortgaging of all or any part of the right, title and interest of
the Issuer or the Hospital in the Pledged Property other than pursuant
to Section of the Agreement; or
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(d) The waiver of the payment, performance or observance by
the Trustee, the Issuer or the Hospital of any of the obligations,
covenants or agreements of any of them contained in the Indenture, the
Agreement, the Mortgage, if any then exists, Parity Instruments, the
Notes or this Affiliate Guaranty; or
(e) The extension of the time for payment of any principal
of, premium, if any, or interest on any Note or Parity Obligation or
under the Agreement or this Affiliate Guaranty or of the time for
performance of any other obligations, covenants or agreements under or
arising out of the Indenture, the Agreement, the Mortgage, if any then
exists, Parity Instruments, the Notes or this Affiliate Guaranty or the
extension or the renewal of any thereof, whether or not with notice to
the Affiliate; or
(f) The modification or amendment (whether material or
otherwise) of any obligation, covenant or agreement set forth in the
Indenture, the Agreement, the Mortgage, if any then exists, Parity
Instruments, the Notes or this Affiliate Guaranty; or
(g) The taking or the omission of any of the actions
referred to in the Indenture, the Agreement, the Mortgage, if any then
exists, Parity Instruments, the Notes or this Affiliate Guaranty; or
(h) Any failure, omission, delay or lack on the part of the
Issuer, the Trustee or any other holder of any Note or Parity
Obligation to enforce, assert or exercise any right, power or remedy
conferred on the Issuer, the Trustee or any other holder of any Note or
Parity Obligation in this Affiliate Guaranty, the Indenture, the
Agreement, the Mortgage, if any then exists, Parity Instruments or the
Notes, or any other act or acts on the part of the Issuer, the Trustee,
any other holder of any Note or Parity Obligation, or any of the
holders from time to time of any of the Bonds issued under the
Indenture or of the interest coupons appertaining thereto; or
(i) The voluntary or involuntary liquidation, dissolution,
sale or other disposition of all or substantially all the assets,
marshalling of.assets and liabilities, receivership, insolvency,
bankruptcy, assignment for the benefit of creditors, reorganization,
arrangement, composition with creditors or readjustment of, or other
similar proceedings affecting the Hospital or the Issuer or any of the
assets of either of them or any allegation or contest of the validity
of this Affiliate Guaranty, the Indenture, the Agreement, the Mortgage,
if any then exists, Parity Instruments, or any Note in any such
proceeding; or
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(j) The release or discharge of the Trustee, the Hospital or
the Issuer from the performance or observance of any obligation,
covenant or agreement contained in any Note, the Agreement, the
Mortgage, if any then exists, Parity Instruments, or the Indenture by
operation of law; or
(k) To the extent permitted by law, the release or discharge
of the Hospital from the performance or observance of any obligation,
covenant or agreement contained in this Affiliate Guaranty by operation
of law; or
(1) The default or failure of the Trustee, the Issuer, or
the Hospital fully to perform any of its obligations set forth in this
Affiliate Guaranty, the Agreement, Parity Instruments, or any Note.
SECTION 4.3. Subordination. The Affiliate agrees that, so long
as this Affiliate Guaranty is in effect, upon the occurrence of a
default by the Hospital under the Agreement or Parity Instruments and
so long as such 'default is continuing, all indebtedness and obligations
of the Hospital held by or owing to the Affiliate shall be subordinated
to the Notes and Parity Obligations, and the Affiliate will not demand
or receive payment thereof and any payments made during the occurrence
of any default shall be held by the Affiliate in trust for the benefit
of the Trustee or any other holder of a Note or the holder of any
Parity Obligation; provided, however, that so long as no default by the
Hospital under the Agreement or Parity Instrument shall have happened
or be continuing, the Affiliate shall be entitled to receive payment on
any indebtedness or obligation owing to the Affiliate by the Hospital,
and to use and dispose of any such moneys received without obligation
to account therefor to the Trustee or any other holder of a Note or
Parity Obligation or the Hospital.
SECTION 4.4. No Set -Off. No set-off, counterclaim, reduction or
diminution of any o igation, or any defense of any kind or nature
which the Affiliate has or may have against the Hospital or which the
Affiliate or the Hospital has or may have against the Issuer, the
Trustee or any other holder of any Note or Parity Obligation, shall be
available hereunder to the Affiliate against the Trustee or any other
holder of a Note or Parity Obligation.
SECTION 4.5. Direct Proceeding. In the event of a default in the
payment of principal -o- or premium, if any, on any Note or Parity
Obligation when and as the same shall become due, whether at the stated
maturity thereof, by acceleration, or otherwise, or in the event of a
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default in the payment of any interest on any Note or Parity Obligation
when and as the same shall become due, the Trustee or any other holder
of a Note or Parity Obligation may proceed first directly against the
Affiliate under this Affiliate Guaranty without proceeding against or
exhausting any other remedies which it may have against any other
person, firm or corporation and without resorting to any other security
held by the Trustee or other holder of a Note or Parity Obligation.
SECTION 4.6. Waiver of Notice. The Affiliate hereby expressly
waives notice from t e Trustee arLd any other holder of a Note or Parity
Obligation, or the holders from time to time of any of the Bonds issued
under the Indenture or the interest coupons appertaining thereto of
their acceptance of and reliance on this Affiliate Guaranty. To the
extent permitted by applicable law, the Affiliate agrees to pay all
costs, expenses and fees, including all reasonable attorneys' fees,
which may be incurred by the Trustee or the holder of any Parity
Obligation in enforcing or attempting to enforce this Affiliate
Guaranty following any default on the part of the Affiliate hereunder,
whether the same shall be enforced by suit or otherwise.
SECTION 4.7. Investment of Funds; Arbitra e. The Affiliate and
the Hospital covenant an agree tat t ey wi not take any action or
fail to take any action, including without limitation any action with
respect to the investment of the proceeds of any Bonds issued under the
Indenture or any other moneys or securities deposited with the Trustee
pursuant thereto or with respect to the payments derived from the Notes
and Parity Obligations and under the Agreement or this Affiliate
Guaranty or with respect to the purchase of other obligations of the
Issuer, which may result in constituting the Bonds "arbitrage bonds"
within the meaning of such term as used in Section 103(c) of the
Internal Revenue Code. The Affiliate and'the Hospital covenant that
neither of them nor any related person, as defined in Section
103(b)(6)(C) of said Internal Revenue Code, shall, pursuant to an
arrangement, formal or informal, purchase obligations of the Issuer in
an amount related to the amount of any Note or Parity Obligation
delivered in connection with a transaction contemplated by the
Agreement.
SECTION 4.8. Ri ht of Trustee and Others to Enforce Affiliate
Guaranty. The parties ereto agree t at t is A i ia.te Guaranty and
all of the rights, interests, powers, privileges and benefits accruing
to or vested in the Hospital or the Trustee under this Affiliate
Guaranty may be protected and enforced in conformity with the Indenture
and are hereby assigned by.the Hospital to the Trustee as additional
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security for the Notes and Parity Obligations and the Bonds and may be
exercised, protected and enforced for or on behalf of the holders of
the Bonds in conformity with the provisions of this Affiliate Guaranty
and the Indenture; subject to the condition that, except as expressly
set forth herein, the Trustee shall not be responsible or liable in any
manner or to any extent for the exercise of any right or remedy under,
or the performance of any of the covenants or provisions of, this
Affiliate Guaranty or the Agreement or any Affiliate Transfer Document
or any other contract or agreement with the Affiliate to be exercised
or performed by the Hospital, unless and until the Trustee shall
otherwise elect by instrument in writing delivered to the Affiliate and
the Hospital and then only to the extent that the Trustee shall so
elect.
If an event of default shall have occurred, and if requested so to
do by the holders of twenty-five per cent (258) in aggregate principal
amount of Bonds then outstanding and indemnified as provided in Section
801 of the Indenture, the Trustee shall be obliged to exercise such one
or more of the rights and powers conferred by Article VII of the
Indenture as the Trustee, being advised by counsel, shall deem most
expedient in the interests of the holders of the Bonds. i
SECTION 4.9. Limitation on Affiliate Guaranty. Notwithstanding
any other provision o t is Affiliate Guaranty, recovery against the
Affiliate hereunder shall be limited to the fair market value of the
Transferred Property either at the time of the transfer to the
Affiliate or at the time of realization upon this Affiliate Guaranty,
whichever is higher; provided that the obligations of the Affiliate
hereunder shall not be reduced or diminished as the Notes or Parity
Obligations are repaid unless and until no Notes or Parity Obligations
are outstanding, in either case as provided in Section 4.2 hereof, or
this Affiliate Guaranty is otherwise discharged as provided in Section
8.2 hereof.
ARTICLE V
COVENANTS RELATING TO THE USE AND
OPERATION OF THE TRANSFERRED PROPERTY
SECTION 5.1. Taxes, Char es and Assessments. The Affiliate
covenants and agrees!:16sect to the provisions of Section 5.4 hereof
relating to permitted contests, to pay or cause to be paid (when the
same shall become due and payable):
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(a) All taxes and charges on account of the ownership, use,
occupancy or operation of the Transferred Property, including but not
limited to all sales, use, occupation, real and personal property
taxes, all permit and inspection fees, occupation and license fees and
all water, gas, electric light, power or other utility charges assessed
or charged on or against the Transferred Property or on account of the
use or occupancy thereof or the activities conducted thereon or
therein; and
(b) All taxes, assessments and impositions, general and
special, ordinary and extraordinary, of every name and kind, which
shall be taxed, levied, imposed or assessed during the term of this
Affiliate Guaranty upon all or any part of the Transferred Property, or
the interest of the Trustee and the Hospital and the Affiliate or any
of them in and to the Transferred Property, or upon the Trustee's and
the Hospital's and Affiliate's interest, or the interest of any of them
in this Affiliate Guaranty or the amounts payable hereunder.
If under applicable law any such tax, charge, fee, rate,
imposition or assessment may at the option of the taxpayer be paid in
installments, the Affiliate may exercise such option.
SECTION 5.2. Liens. Subject to the provisions of Section 5.4
hereof relating to permitted contests and Section 6.5 hereof relating
to permitted indebtedness, the Affiliate will not create or permit to
be created or remain and will, at its cost and expense, promptly
discharge all liens, security interests, encumbrances and charges on
the Transferred Property or any part thereof other than Permitted
Encumbrances.
SECTION 5.3. Compliance with Orders, Ordinances, Etc. Subject to
the provisions of Section 5.4 hereo re ating to permits contests,
the Affiliate will, at its sole cost and expense, comply with all
present and future laws, ordinances, orders, decrees, rules,
regulations and requirements of every duly constituted governmental
authority, commission and court and the officers thereof of which it
has notice, and the failure to comply with which would materially and
adversely affect the Transferred Property or the use, occupancy or
condition thereof.
SECTION 5.4. Permitted Contests. The Affiliate shall not be
required to pay any tax, charge or assessment required to be paid under
Section 5.1 hereof, nor to remove any lien, security interest, charge
or encumbrance required to be removed under Section 5.2 hereof, nor to
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comply with any law, ordinance, rule, order, decree, regulation or
requirement referred to in'Section 5.3 hereof, so long as the Affiliate
shall contest, in good faith and at its cost and expense, in its own
name and behalf, the amount or validity thereof, or take other
appropriate action with respect thereto, in an appropriate manner or by
appropriate proceedings which shall operate during the pendency thereof
to prevent the collection of or other realization upon the tax,
assessment, security interest, charge, lien or encumbrance so
contested, and the sale, forfeiture, or loss of the Transferred
Property or any part thereof to satisfy the same; provided, that no
such contest or action shall subject the Trustee to any liability
unless the Affiliate properly indemnifies the Trustee. while any such
matters are pending, the Affiliate shall have the right to pay, remove
or cause to be discharged or marked exempt the tax, assessment,
security interest, charge, lien or encumbrance being contested. Each
such contest shall be promptly prosecuted to final conclusion (subject
to the right of the Affiliate with the concurrence of the Hospital to
settle any such contest; provided that in connection with any such
settlement the Affiliate shall not incur any indebtedness not permitted
by Section 6.5 hereof), and in any.event the Affiliate will pay and
save the Trustee harmless against all losses, judgments, decrees and
costs (including attorneys' fees and expenses in connection therewith)
and will, promptly after the final determination of such contest or
action or settlement thereof, pay and discharge the amounts which shall
be levied, assessed or imposed or determined to be payable therein,
together with all penalties, fines, interests, costs and expenses
thereon or incurred in connection therewith.
If the Trustee shall notify the Affiliate that, in the opinion of
Counsel, by nonpayment of any of the foregoing items the lien of the
Agreement as to any substantial part of the Transferred Property or the
Hospital Facility will be materially endangered or the Transferred
Property or the Hospital Facility or any substantial part thereof will
be subject to imminent loss or forfeiture, then the Affiliate shall
promptly pay all such unpaid items and cause them to be satisfied and
discharged.
SECTION 5.5. Use of the Transferred Pro rty. The Affiliate will
not cause, suffer or permit the Trans erred Property which constitutes
any part of the Hospital Facility, as defined in the Agreement, to be
used other than in accord with the provisions of Section 2.13 of the
Agreement and only in furtherance of the lawful corporate purposes of
the Hospital and will otherwise not take any action or fail to take any
action with respect .to the Hospital Facility which would in any way
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impair, interfere with or adversely affect the performance under the
Agreement or cause the Hospital to be in default thereunder. The
Affiliate covenants and agrees that it will at all times maintain,
preserve and keep all of its properties, including the Transferred
Property, and each part thereof and all personal property used in
connection therewith in good condition, repair and working order and
will from time to time make all necessary and proper repairs,
replacements, additions, betterments and improvements thereto so that
the operations and business pertaining to the Hospital Facility and
every part thereof shall at all times be conducted properly and
advantageously.
The Affiliate will permit the Hospital to make inspections of the
Hospital Facility to determine compliance with the provisions of this
Affiliate Guaranty.
The Affiliate further agrees that it will not use any of the
Transferred Property which was acquired, constructed, rebuilt,
replaced, remodeled, renovated or equipped, in whole or in part, out of
the loan of Bond proceeds or out of the proceeds of any loan
refinanced, in whole or in part; from the proceeds of the Bonds or
suffer or permit such properties to be used (i) in violation of the
covenant of the Hospital set forth in the third paragraph of Section
2.13 of the Agreement or (ii) in an unrelated trade or business as
defined in Section 513(a) of the Internal Revenue Code, or by any
nonexempt person, in any manner or to any extent which would result in
the loss of tax exemption of interest on the Bonds otherwise afforded
under Section 103(a) of the Internal Revenue Code. This covenant shall
be included in the Affiliate Transfer Documents and survive the
termination hereof and of the Agreement and the payment in full of the
Notes.
The Affiliate further agrees that it will not, in any substantial
way, engage in any business or activities other than that of
maintaining and operating the Transferred Property or any other
Property transferred or leased to the Affiliate pursuant to an
Affiliate Guaranty and related activities incident thereto, and in
furtherance thereof, in accordance with this Affiliate Guaranty and the
Affiliate Transfer Documents, and will not organize or acquire any
subsidiary other than wholly owned subsidiaries provided that any such
subsidiary shall incur indebtedness for borrowed money only from the
Hospital or an Affiliate; it being understood that the Affiliate may
invest in or participate with other coprorations, subject to the other
provisions hereof, in shared laundry, laboratory or other similar
service organizations.
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SECTION 5.6. Repairs Maintenance and Alterations. The Affiliate
will, at its own cost and expense, keep all of its properties,
including the Transferred Property, and each part thereof and all
equipment therein and personal property used in connection therewith in
good repair and working order, reasonable wear and tear excepted, and
in as reasonably safe condition as its operation will permit and will
make all necessary repairs thereto, interior and exterior, structural
and non-structural, ordinary as well as extraordinary and foreseen as
well as unforeseen, and all necessary replacements or renewals.
The Affiliate shall have the right, from time to time at its sole
cost and expense and with the concurrence of the Hospital, tp make
additions, alterations and changes, whether structural or
non-structural (hereinafter collectively referred to as "alterations")
in and to the Transferred Property, if any, which constitutes any part
of the Hospital Facility under the Agreement, subject, however, in all
cases to the conditions set forth in Section 2.14 of the Agreement,
provided that no alteration of any kind shall be made which would
result in a violation of the provisions hereof or of the Agreement.
SECTION 5.7. Removal of Equipment in the Hospital Facilit . The
Affiliate may, at Its expense, remove an ispose- o�cy �cem 0�
equipment used at the Hospital Facility only with the concurrence of
the Hospital and only in accordance with the provisions of Section 2.15
of the Agreement. Both the Hospital and the Affiliate must make the
determinations and comply with the provisions of Section 2.15 of the
Agreement.
SECTION 5.8. Installation of Equipment b the Affiliate. The
Affiliate may, from time to time in its sole discretion and at its own
cost and expense, install or place other equipment and tangible
personal property in the Transferred Property, if any, constituting any
part of the Hospital Facility and may remove such equipment and
tangible personal property in accord with the provisions of Section 5.7
hereof at any time at its own cost and expense, whether or not the same
shall have been affixed or annexed to the Hospital Facility, but any
damage caused to the Hospital Facility by any such removal shall be
restored at the sole cost and expense of the Affiliate.
SECTION 5.9. Liabilit Casualt and Other Insurance. The
Affiliate shall maintain, or cause to a ma�.ntaine , except as
hereinafter provided, the following insurance at its sole cost and
expense:
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(a) Insurance against loss and/or damage to the Transferred
Property constituting any part of the Hospital Facility (other than
Assigned Revenues) under a policy or policies covering such risks as
are ordinarily insured against lightning, windstorm, hail, explosion,
riot, riot attending a strike, civil commotion, damage from aircraft,
smoke and uniform standard extended coverage and vandalism and
malicious mischief endorsements, limited only as may be provided in the
standard form of such endorsements at the time in use in the State of
Iowa. Such insurance shall be for the lesser of (i) 90% of the full
insurable value of such Transferred Property or (ii) the full amount of
the Affiliate's guarantee obligation hereunder but any such policy may
have a deductible amount of not more than $25,000. No policy of
insurance shall be so written that the proceeds thereof will produce
less than the minimum coverage required by the preceding sentence, by
reason of co-insurance provisions or otherwise. The term "full
insurable value" shall mean the actual replacement cost of such
Transferred Property (excluding foundation and excavation costs and
costs of underground flues, pipes, drains and other uninsurable items)
and shall be determined from time to time at the request of the
Trustee, but not more frequently than once every five years, by an
Architect, contractor, appraiser or appraisal company or one of the
insurers, in any case, selected and paid for by the Affiliate and
approved by the Hospital and the Trustee;
(b) Comprehensive general accident and public liability
insurance (including coverage for all losses arising from the ownership
or use of any vehicle), of the types and in the amounts provided in
Section 2.16(b) of the Agreement;
(c) Professional liability insurance (if such coverage is
applicable to the Affiliate's operations), including malpractice, with
limits of $1,000,OOC or more per occurrence and $3,000,000 or more in
the aggregate per year, provided, however, that if under applicable law
the liability of the Affiliate for malpractice is limited as to amount,
then the limits of such policy need not exceed such amount;
(d) Use and occupancy insurance on the portion of the
Transferred Property, if any, constituting a part of the Hospital
Facility to protect the Affiliate from a loss in revenues as a result
of the loss of use of such Transferred Property caused by the perils
covered by fire and extended coverage insurance in an amount, together
with the insurance maintained by the Hospital under Section 2.16(d) of
the Agreement, not less than the use and occupancy insurance required
to be maintained by -the Hospital under such Section;
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(e) Worker's compensation insurance respecting all employees
of the Affiliate and all persons engaged in work on the Transferred
Property constituting a part of the Hospital Facility in such amount as
is customarily carried by like organizations engaged in like activities
of comparable size and liability exposure; provided that the Affiliate,
with the concurrence of the Hospital, may be self-insured with respect
to all or any part of its liability for worker's compensation.
Each policy of insurance obtained pursuant hereto shall (i) be
issued by one or more recognized,•financially sound and responsible
insurance companies qualified or authorized under the laws of the State
of Iowa to assume the risks covered by such policy, (ii) name the
Trustee, the Affiliate, and the Hospital as assureds, as their
respective interests may appear, and (iii) provide that such policy
shall not be cancelled without at least 10 days prior written notice to
each assured named therein. Any policy obtained pursuant to
subparagraph (a) above shall further provide that any loss thereunder
shall be payable to the Trustee notwithstanding any act or negligence
of the Hospital or of the Affiliate which might otherwise invalidate
said insurance, and the Trustee shall have the exclusive right to
receive the proceeds from such insurance and to receipt for claims
thereunder. Such Net Proceeds shall be applied as provided in Section
3.1 of the Agreement to the repair and restoration of the Hospital
Facility. As to the insurance required by subparagraphs (b), (c) and
(e) above, the Net Proceeds shall be payable directly to the Affiliate.
As to the insurance required by subparagraph (d), the policy or
policies shall provide that the Net Proceeds of such insurance shall be
deposited in the Bond Fund under the Indenture and shall be credited
against the obligation of the Hospital to pay interest or principal on
the Notes and Parity Obligations, as the case may be, as the same
become due.
Upon delivery of this Affiliate Guaranty and thereafter not less
than 15 days prior to the expiration dates of any policies, the
Affiliate shall furnish to the Trustee certificates issued by the
respective insurers of the policies provided for herein to evidence
that it is covered by all of the insurance required by this Affiliate
Guaranty. If requested in writing by the Trustee, the Affiliate shall
furnish the Trustee with the schedule of premium payment dates and
receipted bills or other evidence satisfactory to the Trustee of the
payment when due of all premiums for all policies of insurance at any
time required to be maintained hereunder. Upon reasonable prior
written notice the Affiliate will permit the Trustee to visit the
offices of the Affiliate and inspect the Affiliate's insurance records
including all policies of insurance maintained pursuant to this Section
and to make copies of all or any part thereof.
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In lieu of separate policies, the Affiliate and the Hospital may
maintain a single policy, blanket or umbrella policies, or a
combination thereof, having the coverage required herein and in Section
2.16 of the Agreement.
The Affiliate may self insure for the liabilities set forth in
subparagraphs (b), (c) and (e)'above if an Independent Insurance
Consultant determines that such self insurance is prudent under the
circumstances. Furthermore, none of the insurance required by this
Section shall be required to be maintained by the Affiliate in any case
where according to the report of the Independent Insurance Consultant
the risk is adequately covered by insurance maintained by the Hospital
under Section 2.16 of the Agreement.
SECTION 5.10. Right to Perform Affiliate's Covenants: Advances.
In the event the Affiliate shall fail to (i) perform any covenant
contained in Section 5.1 hereof, (ii) remove any lien, security
interest, encumbrance or charge pursuant hereto, (iii) maintain the
Hospital Facility in repair pursuant hereto, (iv) procure the insurance
required hereby, in the manner herein described or (v) fail to make any
other payment or perform any other act required to be performed
hereunder, then and in each such case the Hospital as principal obligor
shall immediately remedy such default, and in the event the Hospital
fails to so remedy such default, the Trustee, upon not less than 15
days prior written notice to the Hospital or the Affiliate, may (but
shall not be obligated to) remedy such default for the account of the
Hospital and for the Affiliate and make advances for that purpose. No
such performance or advance shall operate to release the Affiliate or
the Hospital from any such default and any sums so advance by the
Trustee shall be repayable by the Affiliate hereunder and by the
Hospital as principal obligor in accord with Section 2.17 of the
Agreement.
SECTION 5.11. Net Proceeds from Condemnation. The Net
Proceedings of any award, compensation or amages payable in connection
with any condemnation or taking for any public or quasi -public use of
any portion of the Transferred Property constituting part of the
Hospital Facility shall be applied in accordance with Section•3.2 of
the Agreement.
ARTICLE VI
PARTICULAR COVENANTS OF THE AFFILIATE
SECTION 6.1. Maintenance of Corporate Existence and Status. The
Affiliate agrees that it will at all t mes maintain its existence as an
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Iowa not-for-profit corporation, or a foreign corporation authorized to
conduct affairs in the State of Iowa under the Chapter 504 or 504A,
Code of Iowa, and a Class I Affiliate of the Hospital, as defined in
the Agreement and that it will neither take any action nor suffer any
action to be taken by others which will alter, change or destroy its
status as a not-for-profit corporation. The Affiliate further
covenants that none of its revenues, income or profits, whether
realized or unrealized, will be distributed to any of its members,
directors or officers or inure to the benefit of any private person,
association or corporation, other. than for the lawful corporate
purposes of the Affiliate; provided, however, that the Affiliate may
pay to any person, association or corporation the value of any service
or product performed for or supplied to the Affiliate by such person,
association or corporation.
The Affiliate further agrees that it will not act or fail to act
in any other manner which would adversely affect the tax free nature
for federal income tax purposes of the interest earned by the holders
of the Bonds or any tax-exempt Parity Obligations. [The foregoing
Section 6.1 shall be appropriately amended if the Affiliate is a for
profit Affiliate.]
SECTION 6.2. Merger, Etc. The Affiliate agrees that it will not
merge into, or conso i ate with one or more corporations unless such
merger is with the Hospital or with another Class I Affiliate and, if
such merger is with another Class I Affiliate, the Hospital has
consented to such merger and the surviving entity assumes the
obligations under this Affiliate Guaranty. Except as provided in
Section 5.7 hereof, the Affiliate will not transfer all or any part of
its properties and assets unless the transferee entity shall be the (i)
Hospital or (ii) another Class I Affiliate and prior to such transfer
to another Class I Affiliate the conditions of Section 2.31 of the
Agreement are all complied with to the same extent and effect as though
such transfer was being made by the Hospital and such transfer is made
in the ordinary course of, and pursuant to the reasonable requirements
of the transferor Affiliate's activities and upon fair and reasonable
terms no less favorable to the transferor Affiliate than would obtain
in a comparable arms -length transaction. No such consolidation or
merger shall be permitted if it would (i) adversely affect the validity
of the Bonds or the exemption from Federal income tax of the interest
paid on the Bonds or any tax-exempt Parity Obligations or (ii) result
in any default in the performance or observance of any of the terms,
covenants or agreements of the Indenture or the Agreement or this
Affiliate Guaranty or under the provisions of any agreement securing
any Permitted Indebtedness, as set forth in Section 6.5 hereof. With
respect to the matters set forth in clause (i) above, the parties may
rely upon the written opinion of Bond Counsel.
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SECTION 6.3. Further Assurances; Additional Property.
(a) The Affilate will do, execute, acknowledge and deliver,
or cause to be done, executed, acknowledged and delivered, all such
further acts, deeds, conveyances, assignments, transfers, assurances
and, if required under the provisions of Section 2.25 of the Agreement,
mortgages as the Trustee reasonably may require for the better
assuring, assigning, confirming and, pursuant to said Section 2.25,
mortgaging unto the Trustee its successors and assigns all and singular
the Pledged Property as now or hereafter constituted.
(b) All right, title and interest of the Affiliate in and to
all improvements, betterments, renewals, substitutions and replacements
of the Pledged Property or any part thereof, hereafter constructed or
acquired by the Affiliate, immediately upon such construction or
acquisition, and without any further mortgaging, conveyance or
assignment, shall become and be part of the Pledged Property (and of
the Transferred Property) and shall be subject to the lien and security
interest of the Agreement and Parity Instruments and of the Mortgage,
if any, as fully and completely and with the same effect as though
owned by the Hospital at the time the Agreement was executed, but at
any and all times the Affiliate will execute and deliver any and all
such further assurances, conveyances, assignments and, if required by
the provisions of Section 2.25 of the Agreement, mortgages, therefor
and other instruments with respect thereto as may be necessary for the
purpose of expressly and specifically subjecting the same to the lien
and security interest of the Agreement.
(c) In the event that a Mortgage is required to be executed
under the provisions of Section 2.25 of the Agreement, the Affiliate
hereby irrevocably appoints the Trustee as its attorney-in-fact to
execute, deliver and record such Mortgage.
SECTION 6.4. Financial Statements, Etc. Section 2.8 of the
Agreement is hereby incorporate ere n b
y reference as if set forth
herein provided that the references in such Section 2.8 to Hospital
shall be deemed to refer to the Affiliate, that all certificates of
compliance required by Section 2.8 shall cover compliance with the
provisions hereof and that the Hospital shall be entitled to receive
the same information from the Affiliate and to make the same
investigations as the Trustee under Section 2.8.
SECTION 6.5. Permitted Indebtedness. The Affiliate covenants and
agrees that it will not assume, incur, guarantee or otherwise become
obligated in any manner for any indebtedness of liabilities of any kind
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(including without limitation any indebtedness shown on the liability
side of the balance sheet determined in accordance with generally
accepted accounting principles) except for:
(a) The liabilities payable to the Trustee under the
provisions of this or any other Affiliate Guaranty;
(b) Liabilities (other than for borrowed money and other
than rents payable under lease agreements) incurred in the regular
operation of the Affiliate; and
(c) Liabilities for borrowed money and rents payable under
lease agreements, both payable solely to the Hospital.
SECTION 6.6. Indemnit . The Affiliate will pay, and will
protect, indemnify a�the Hospital, the Issuer and the Trustee
harmless from and against any and all liabilities, losses, damages,
costs and expenses (including attorneys' fees and expenses of the
Affiliate, the Hospital, the Issuer and the Trustee), causes of action,
suits, claims, demands and judgments of whatsoever kind and nature
(including those arising or resulting from any injury to or death of
any person or damage to property) arising from or in any manner
directly or indirectly growing out of or connected with the following
but which are not the result of negligence by the indemnified party:
(a) The use, non-use, condition or occupancy of any part of
the Transferred Property constituting the Hospital Facility or a part
thereof, any repairs, construction, alterations, renovation,
relocation, remodeling and equipping thereof.or thereto or the
condition of any part of the Transferred Property constituting a part
of the Hospital Facility including adjoining sidewalks, streets or
alleys and any equipment or facilities at any time located on any part
of the Transferred Property constituting a part of the Hospital
Facility or used in connection therewith;
(b) Violation of any agreement, warranty, covenant or
condition of this Affiliate Guaranty, except by the Hospital or the
Trustee;
(c) Violation of any contract, agreement or restriction by
the Affiliate relating to any part of the Transferred Property
constituting a part of the Hospital Facility;
(d) Violation of any law, ordinance, regulation or court
order affecting any part of the Transferred Property constituting the
Hospital Facility or a part thereof or the ownership, occupancy or use
thereof; and
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(e) Any statement or information concerning the Affiliate,
its officers and members, or any part of the Transferred Property
constituting the Hospital Facility contained in any official statement,
prospectus certificate, agreement or other instrument furnished by the
Affiliate to the Hospital, the Trustee or any other person that is
untrue or incorrect in any material respect, and any omission therefrom
of any statement or information which should be contained therein for
the purpose for which the same is to be used or which is necessary to
make the statements therein concerning the Affiliate, its officers and
members, not misleading in any material respect, provided that:
(1) In the event of settlement of any litigation
commenced or threatened, arising from a claim based upon any such
untrue statement or omission, such indemnity shall be limited to the
aggregate amount paid under a settlement effected with the written
consent of the Affiliate;
(2) Such indemnity shall extend to each person, if any,
who "controls" the indemnified person, as that term is defined in
Section 15 of the Securities Act of 1933, as amended;
The
fied
to in t
sentence of this3Section lshall 1p omptlyson notifyethedAffiliate inirst writing
of any claim or action brought against such person or against any
person who controls such indemnified person as aforesaid, in respect of
which indemnity may be sought against the Affiliate, setting forth the
particulars of such claim or action, and the Affiliate will assume the
defense thereof, including the employment of counsel and the payment of
all expenses; and
may employ separate counseldinnany esuchrson action andh controlling person
partici
defense thereof, but the fees and expenses of such Counselpate shallnnotebe
payable by the Affiliate unless such employment has been specifically
authorized by the Affiliate.
SECTION 6.7. Rates and Charges. The Affiliate covenants and
agrees to cooperate with the Hospital in order that the Hospital
Facility shall be operated as a revenue producing health care facility
on a non-discriminatory basis, with such fees and rates for the
Affiliate's and the Hospital's facilities and services being charged
and such skill and dilligence being exercised as to provide income to
the Hospital from the Hospital Facility together with other funds
available to the Hospital sufficient to pay promptly all payments of
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principal and interest on the Notes and Parity Obligations, expenses of
operation, maintenance and repair of the Hospital Facility and to
provide all other payments required to be made by the Hospital under
the Agreement to the extent permitted by law. The Affiliate further
covenants and agrees that it will cooperate with the Hospital, from
time to time as often as necessary, to the extent permited by law, to
revise such rates, fees and charges in such manner as may be necessary
or proper to comply with the provisions of this Section. If any
Hospital Consultant's report prepared in accordance with Section 2.25
of the Agreement shall contain recommendations with respect to the
Transferred Property or otherwise pertaining to the Affiliate and its
relationship to the Hospital (including, without limitation any of its
contractual relationships with the Hospital), the Affiliate shall
cooperate with the Hospital in implementing the recommendations of the
Hospital Consultant.
ARTICLE VIZ
Events of Default and Remedies Therefor
SECTION 7.1. Events of Default. The occurrence and continuance
of any of the following events sa constitute an "event of default"
hereunder:
(a) Failure of the Hospital or the Affiliate to pay any
installment of interest or principal, or any premium, on any Note or
Parity Obligation, when the same shall become due and payable, whether
at maturity, upon any date fixed for prepayment or by acceleration or
otherwise; or
(b) Failure of the Affiliate to comply with or perform any
of the covenants, conditions, or provisions hereof and to remedy such
default within 60 days after notice thereof from the Hospital, the
Trustee or the holders of at least 25% in aggregate principal amount of
the Bonds outstanding under the Indenture to the Affiliate; or
(c) If any representation or warranty made by the Affiliate
herein or in any statement or certificate furnished, in connection with
the sale of any Bond to the Hospital, the Trustee or any holder of any
Bond, or otherwise furnished pursuant hereto proves untrue in any
material respect as of the date of the issuance or making thereof and
shall not be made good within 30 days after notice thereof to the
Affiliate by the Hospital, the Trustee, or the holders of not less than
25% in aggregate principal amount of Bonds outstanding; or
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(d) Any judgment, writ or warrant of attachment or of any
similar process in an amount in excess of $25,000 shall be entered or
filed against the Affiliate or against any of its property and remains
unvacated, unpaid, unbonded, unstayed or uncontested in good faith for
a period of 120 days; or
(e) If the Affiliate admits insolvency or bankruptcy or its
inability to pay its debts as they mature, or is generally not paying
its debts as such debts become due, or makes an assignment for the
benefit of creditors or applies for or consents to the appointment of a
trustee, custodian or receiver for the Affiliate, or for the major part
of its property; or
(f) If a trustee, custodian or receiver is appointed for the
Affiliate or for the major part of its property and is not discharged
within 60 days after such appointment; or
(g) If bankruptcy, reorganization, arrangement, insolvency
or liquidation proceedings, proceedings under Title 11 of the United.
States Code, as amended, or other proceedings for relief under any
bankruptcy law or similar law for the relief of debtors are instituted
by or against the Affiliate (other than bankruptcy proceedings
instituted by the Affiliate against third parties), and if instituted
against the Affiliate, are allowed against the Affiliate or are
consented to or are not dismissed, stayed or otherwise nullified within
60 days after such institution; or
(h) If payment of any installment of interest or principal,
or any premium, on any Bond or Parity Obligation shall not be made when
the same shall become due and payable under the provisions of the
Indenture or Parity Instrument; or
(i) If an event of default shall occur under the Agreement.
Upon the occurrence and during the continuance of any event of
default hereunder, the Trustee; as the holder of the Notes and as
assignee of the Agreement from the Issuer under the Indenture, shall
have and may pursue any available remedy including a suit at law or in
equity to enforce the obligations of the Affiliate hereunder to pay the
principal of, premium, if any, and interest on the Notes outstanding,
including without limitation the exercise of all rights and remedies
under the Agreement or the Mortgage, if any then exists, including
foreclosure of the Agreement or the Mortgage, if any then exists,
against any part or all of the Transferred Property subject thereto.
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If an event of default shall have occurred, and if it shall have
been requested so to do by the holders of not less than twenty-five
per cent (258) in aggregate principal amount of Bonds then outstanding
and shall have been indemnified as provided in Section 801 of the
Indenture, the Trustee shall be obligated to exercise such one or more
of the rights and powers conferred by this Affiliate Guaranty and the
Indenture with respect thereto as the Trustee shall deem most expedient
in the interests of the holders of Bonds; provided, however, that the
Trustee shall have the right to decline to comply with any such request
if the Trustee shall be advised by Counsel that the action so requested
may not lawfully be taken or the Trustee in good faith shall determine
that such action would be unjustly prejudicial to the holders of Bonds
not parties to such request.
The Trustee, in its sole discretion, shall have the right to
proceed first directly against the Affiliate under this Affiliate
Guaranty without proceeding against, or exhausting any other remedies
which it may have against the Hospital, or any other person, firm or
corporation (including without limitation any other Affiliate) and
without resorting to the Notes, the Hospital, any Transferred Property
or any other security held by the Trustee for the security of the Bonds
under the Indenture.
The Affiliate hereby expressly waives notice from the Trustee or
the holders from time to time of any of the Bonds issued under the
Indenture of their acceptance and reliance on this Affiliate Guaranty
or of any default or action or inaction under or pursuant to the Bonds,
the Notes, the Agreement, the Indenture or the Mortgae, if any then
exists. To the extent permitted by applicable law, the Affiliate
agrees to pay all costs, expenses and fees, including all reasonable
attorneys' fees, which may be incurred by the Trustee in enforcing or
attempting to enforce this Affiliate Guaranty following any default on
the part of the Affiliate hereunder, whether the same shall be enforced
by suit or otherwise.
No waiver of default or event of default, hereunder or under the
Agreement, whether by the Trustee or by the holders of Bonds, shall
extend to or shall affect any subsequent default or event of default or
shall impair any rights or remedies consequent thereon.
SECTION 7.2. Trustee May Enforce Demand. In case the Affiliate
shall have failed to pay such principal and interest and other amounts
upon demand, the Trustee, in its own name and subject to and in
accordance with the provisions of the Indenture, shall be entitled and
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empowered to institute such actions or proceedings at law or in equity
for the collection of the amounts sO due and unpaid, and may prosecute
any such action or proceedings to judgment or final decree, and may
enforce any such judgment or final decree against the Affiliate and
collect the moneys adjudged or decreed to be payable out of the
property of the Affiliate wherever situated, in the manner provided by
law.
The Trustee shall, if permitted by law, be entitled to recover
judgment as aforesaid either before or after or during the pendency of
orytheolienl fsthefor
Mort anporifment any;oandthe
therov rightooE thethe
Trusteee�oent
recover such judgment shall not be affected by any entry or Tale under
the Mortgage or by the exercise of any other right, power or remedy for
the enforcement of the provisions of the Mortgage or the Agreement or
the foreclosure of the lien thereof; and in case of a sale of the
Pledged Property and of the application of the proceeds of sale, as in
Section 6.3 of the Agreement provided, to the payment of the debt
thereby secured, the Trustee shall be entitled to enforce payment of
and to receive all amounts then remaining due and unpaid upon the Notes
then outstanding, and shall be entitled to recover judgment hereunder
for any portion of the debt remaining unpaid, with interest.
No recovery of any judgment by the Trustee and no levy of an
execution under any judgment hereunder upon any property of the
Affiliate or upon the Pledged Property or upon any other property,
shall affect the lien and security interest of the Agreement upon the
Pledged Property or any part thereof, or any lien, rights, powers or
remedies of the Trustee hereunder, but such lien, rights, powers or
remedies of the Trustee shall continue unimpaired as before.
Any monlys collected by the Trustee under this Affiliate Guaranty
shall be applied by the Trustee as follows:
FIRST: To the payment of all advances by the Trustee with
interest from the date of advance until repaid at a rate equal to 1%
per annum over the publically announced annual rate of interest then
charged by the Trustee on 90 -day unsecured commercial loans to its
prime commercial borrowers, and all expenses and disbursements.
SECOND: To the payment of the whole amount then due, owing and
unpaid upon the Notes and Parity Obligations for principal, interest
and premium, if any; and in case such proceeds shall be insufficient to
pay in full the whole amount so due, then ratably according to the
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aggregate of such principal and the accrued and unpaid interest and
premium, if any, without preference or priority as between principal,
interest or premium; such application to be made upon presentation of
the Notes and Parity Obligations and the notation thereon of the
payment, if partially paid, or the surrender and cancellation thereof,
if fully paid.
THIRD: To the payment of any other sums required to be paid by
the Affiliate pursuant to any provisions of this Affiliate Guaranty.
FOURTH: To the payment of the surplus, if any, to the Affiliate
its successors or assigns, upon the written request of the Affiliate or
to whosoever may be lawfully entitled to receive the same upon its
written request, or as any court of competent jurisdiction may direct.
SECTION
herein cnfrre
upon orreserved toRtmed'Trustee uistM tended to beyexclusiveoofeanyd
other remedy or remedies, and each and every such remedy shall be
cumulative, and shall be in addition to every other remedy given
hereunder or under the Agreement or now or hereafter existing at law or
in equity or by statute.
SECTION 7.4. Delay or Omission Not a Waiver. No delay or
omission of the Trustee o exercise any right -or power accruing upon
any event of default shall impair any such right or power, or shall be
construed to be a waiver of any such event of default or by
acquiescence therein; and every power and remedy given by this
Affiliate Guaranty to the Trustee may be exercised from time to time
and as often as may be deemed expedient by the Trustee.
SECTION 7.5. Waiver of Extension, A rathe extent permitteisement, stay, Laws. To , Affiliate
will not, during the
continuance of any event of default hereunder, insist upon, or plead, or
in any manner whatever claim or take any benefit or advantage of any
stay or extension law wherever enacted, now or at any time hereafter in
force, which may affect the covenants and terms of performance of this
Affiliate Guaranty or the Agreement; nor claim, take or insist upon any
benefit or advantage of any law now or hereafter in force providing for
the valuation or appraisement of the Transferred Property or the
Pledged Property, or any part thereof, prior to any sale or sales
thereof which may be made pursuant to any provision herein contained,
or pursuant to the decree, judgment or order of any court of competent
jurisdiction; nor after any such sale or sales, claim or exercise any
right under any statute heretofore or hereafter enacted by the United
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States of America or by any state or territory, or -otherwise, to redeem
the property so sold or any part thereof; and the Affiliate hereby
expressly waives all benefits or advantage of any such law or laws and
covenants not to hinder, delay or impede the execution of any power
herein granted or delegated to the Trustee, but to suffer and permit
the execution of every power as though no such law or laws had been
made or enacted.
SECTION 7.6. Remedies Subject to Provisions of Law. All rights,
remedies and powers provided by this Article may be exercised only to
the extent that the exercise thereof does not violate any applicable
provision of law in the premises, and all the provisions of ,law in the
premises, and all the provisions of this Article are intended to be
subject to all applicable mandatory provisions of law which may be
controlling in the premises and to be limited to the extent necessary
so that they will not render this Affiliate Guaranty invalid, or
unenforceable under the provisions of any applicable law.
ARTICLE VIII
i
Supplements and Amendments to this Affiliate Guaranty;
Release and Discharge of Affiliate
SECTION 8.1. Supplements and Amendments to the Affiliate
Guaranty. The Hospital, with the consent of the Trustee, may from time
to time enter into such supplements and amendments to this Affiliate
Guaranty as to them may seem necessary or desirable to effectuate the
purposes or intent hereof; provided, however, that no such amendment
shall be effective if not adopted in accordance with the terms of
Article X of the Indenture.
SECTION 8.2. Conditions for Release and Dischar a of Affiliate
Guaranty. So long as nodefault shall have occurre an a cont nu ng
under this Affiliate Guaranty or under the Agreement or the Indenture,
the Trustee, without the prior consent of any of the holders of the
Bonds, shall consent to the termination of this Affiliate Guaranty and
the release and discharge of the Affiliate from all further liability
hereunder only (i) in the event the Affiliate deposits with the
Hospital or the Trustee cash in an amount equal to the value of the
Transferred Property at the time of its transfer from the Hospital as
such value was determined pursuant to Section 2.31 of the Agreement
(hereinafter referred to as the "Value of the Transferred Property");
provided, that, in the event any part or all of the Transferred
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Property acquired by such Affiliate in connection with the execution
and delivery of this Affiliate Guaranty shall constitute a part of the
Hospital Facility or other property subject to the lien or security
interest of the Agreement, this Affiliate Guaranty may be discharged
only if the Affiliate reconveys such portion of the Transferred
Property to the Hospital or secures the release of the lien and
security interest of the Agreement with respect to such portion of the
Transferred Property in compliance with the provisions of Section
2.19(a) of the Agreement, in which case the Affiliate shall receive
credit against its obligation to deposit cash to secure the release of
this Affiliate Guaranty to the extent of the fair market value of such
portion of the Transferred Property at the time of such deposit (if
such portion of the Transferred Property is reconveyed to the Hospital)
or to the extent of the money deposited with the Trustee,•pursuant to
Section 2.19(a) of the Agreement, as the case may be and in case any
property, other than cash, is transferred to the Hospital to secure
such release and discharge and (ii) upon receipt by the Trustee of the
following:
(a) Written Request of Affiliate. A Written Request of the
Affiliate for suc re ease and dis-cTa-rge, describing the Transferred
Property, if any, to be conveyed and transferred to the Hospital
(referred to in this Section 8.2 as the "Reconveyed Property");
(b) Certificate of Affiliate. A certificate of the
Affiliate to the Trustee cernying:
(1) The fair market value of the Reconveyed Property
and of the cash to be deposited with the Hospital or the Trustee for
the release and discharge of this Affiliate Guaranty pursuant to the
terms hereof;
(2) The fair market value of the Reconveyed Property
together with cash, if any, or all cash to be received is at least
equal to the Value of the Transferred Property;
(3) The release and discharge by the Trustee of this
Affiliate Guaranty will not result in a default under the Agreement or
the Indenture; and
(4) All required permits and authorizations of all
federal, state and local governmental bodies and agencies have been
granted, or that no such permits or authorizations are required.
(c) Appraisals of Reconveyed Property. An appraisal of the
fair market value of the Reconveye Property y a member of the
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American Institute of Real Estate Appraisers (an "MAI appraiser") if
the Reconveyed Prperty is real property, or by another expert
acceptable to the Trustee if the Reconveyed Property is not real
property;
(d) Documents of Conveyance. A supplement to the Agreement,
the Indenture (it necessary) an other documents reasonably requested
by, and in form satisfactory to, the Trustee in connection with the
reconveyance of the Reconveyed Property to the Hospital necessary to
subject the Reconveyed Property to the lien of the Agreement, and if
the Reconveyed Property is real property, to the lien of the Mortgage,
if any then exists; and
(e) Opinion of Counsel. A letter of opinion addressed to
the Trustee from Counsel for the Hospital who is satisfactory to the
Trustee to the effect that:
(1) The release and discharge of this Affiliate
Guaranty requested by the Affiliate is authorized hereunder;
(2) The Reconveyed Property is subject to the lien of
the Agreement, and if the Reconveyed Property is real property, to the
lien of the Mortgage, if any then exists, and further, if the
Reconveyed Property is real property, the Hospital has good and
marketable fee simple title to the Reconveyed Property, subject only to
Permitted Encumbrances;
(3) The execution and delivery of the requested release
will not violate any provisions of the Agreement or of the Indenture
including, without limitation, the provisions of the Indenture and the
Agreement relating to "arbitrage bonds"; all necessary action required
to be taken by the Affiliate and by the Issuer to effect the release of
the Affiliate herefrom and the conveyance of the Reconveyed Property
have been taken;
(4) All documents required to effect the reconveyance
of the Reconveyed Property have been duly authorized, executed and
delivered and are binding upon the parties executing and delivering the
same in accordance with their respective terms, subject to customary
exceptions regarding bankruptcy, creditors' rights generally and
equitable remedies; and
(5) To the knowledge of such Counsel all permits and
authorizations of all federal, state and local governmental bodies and
agencies have been granted, or that no such permits or authorizations
are required.
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SECTION 8.3. Dis osition of Transferred Pro ert U on Dissolution
of Affiliate. Upon dissolution o the A iVate all Trans erre
Property then owned by the Affiliate shall be transferred to the
Hospital as its sole and absolute property and the Affiliate Transfer
Documents and Affiliate's Articles of Incorporation shall so provide.
ARTICLE IX
Miscellaneous Provisions
SECTION 9.1. Relationship of Affiliate to Hospital. The Hospital
reserves to itself the exc usive right to exerc�.se, in its sole
discretion, all rights, privileges and options conferred upon the
Hospital under the provisions of the Agreement with respect to such
part or all of the Transferred Property which shall constitute part or
all of the Transferred Property which shall constitute part of the
Hospital Facility and the Affiliate agrees, if and to the extent
requested by the Hospital, to join in the exercise of any such rights,.
privileges and options and to execute and deliver all such documents
and agreements with respect thereto as the Hospital shall deem
necessary or desirable. Notwithstanding the execution and delivery of
this Affiliate Guaranty the Hospital shall remain liable for all
obligations and undertakings of the Hospital under the Agreement and
all Notes and Parity Obligations issued thereunder from time to time,
as principal and not as a surety or guarantor, it being understood and
agreed that to the extent any such obligations or undertakings are
performed by the Affiliate hereunder such performance shall constitute
performance thereof by the Hospital for purposes of the Agreement. The
Affiliate agrees that it will at all times cooperate with the Hospital
in carrying out the Hospital's obligations and undertakings under the
Agreement and that it will not take any action or omit to take any
action which action or omission shall impair or otherwise interfere
with the performance by the Hospital of any of the Hospital's
obligations and undertakings under the Agreement or the Notes or Parity
Obligations outstanding thereunder from time to time, or which would
cause or result in the Hospital being in default under the Agreement.
SECTION 9.2. Provisions With Res ect to Parit Obli ations. In
the event any Parity 0 gations are issued and outstanding, the
Trustee shall exercise any remedy herein accorded it for the equal and
ratable benefit of the holders of the Bonds and such Parity
Obligations, and such Parity Obligations shall be deemed Notes within
the meaning of the provisions of this Affiliate Guaranty for all
purposes whatsoever.
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SECTION 9.3. Affiliate Guaranty for Benefit of Parties Hereto.
Nothing in this Affiliate Guaranty, expressed or implied, is intended
or shall be construed to confer upon, or to give to any person other
than the parties hereto and Obligatione
Obligations, any right, remedyoroclaim under orlder of the tby reason rofythis
Affiliate Guaranty or any covenant, condition or stipulation hereof;
and the covenants, stipulations and agreements in this Affiliate
Guaranty contained are and shall be for the sole and exclusive benefit
of the parties hereto, their successors and assigns, and the holder of
the Notes and Parity Obligations..
SECTION 9.4. Severability. In case any one or more of -the
provisions contained in t is A filiate Guaranty shall be invalid,
illegal.or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and therein
shall not in any way be affected or impaired thereby.
SECTION 9.5. Notices. All notices, certificates or other
communications hereun er shall be sufficiently given and shall be
deemed given when mailed by first class mail, postage prepaid, with
proper address as indicated below. The Affiliate, the Hospital and the
Trustee may, by written notice given by each to the others, designate
any address or addresses to which notices, certificates or other
communications to them shall be sent when required as contemplated by
this Affiliate Guaranty. Until otherwise provided by the respective
parties, all notices, certificates and communications to the Hospital
and the Trustee shall be addressed as provided in Section 10.4 of the
Agreement and all notices, certificates and communications to the
Affiliate shall be addressed as follows:
To the Affiliate:
Attention:
SECTION 9.6. Successors and Assi ns.- whenever in this Affiliate
Guaranty any of the parties ereto are named or referred to, the
successors and assigns of such party shall be deemed to be included and
all the covenants, promises and agreements in this Affiliate Guaranty
contained by or on behalf of the Hospital or the Affiliate shall bind
and inure to the benefit of their respective successors and assigns,
whether so expressed or not.
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SECTION 9.7. Counter arts. This Affiliate Guaranty is being
executed in any num er o counterparts, each of which is an original
and all of which are identical. Each counterpart of this Affiliate
Guaranty is to be deemed an original hereof and all counterparts
collectively are to be deemed but one instrument.
SECTION 9.8. Governing Law. It is the intention of the parties
hereto that this Affiliate Guaranty and the rights and obligations of
the parties hereunder, shall be governed by and construed and enforced
in accordance with the laws of the State of Iowa.
SECTION 9.9.
rin .,..� n,i iace. no recourse shall be had
for the payment o the principal o or premium or interest on any of
the Notes or for any claim based thereon or upon any representation,
obligation, covenant or agreement in this Affiliate Guaranty contained
against any past, present or future officer, member, employee, director
or agent of the Hospital or the Affiliate, or respectively, of any
successor corporation thereto, as such, either directly or through the
Hospital or the Affiliate, or respectively, any successor corporation
thereto under any rule of, law or equity, statute or constitution or by
the enforcement of any assessment or penalty or otherwise, and all such
liability of any such officers, members, employees, directors or agents
as such is hereby expressly waived and released as a condition of and
consideration for the execution of this Affiliate Guaranty.
IN WITNESS WHEREOF, the Hospital, the Affiliate and the Trustee
have caused this Affiliate Guaranty to be executed in their respective
corporate names and have caused their respective corporate seals to be
hereunto affixed and attested by their duly authorized officers, all as
of the date first above written.
(SEAL)
Attest:
Its Secretary
MERCY HOSPITAL, Iowa City, Iowa
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EXHIBIT A
APPRAISALS WITH DESCRIPTION OF TRANSFERRED
PROPERTY REQUIRED BY AGREEMENT SECTION 2.31
t t t
EXHIBIT B
OPINION OF COUNSEL REQUIRED BY AGREEMENT SECTION 2.31
EXHIBIT C l
OPINION OF BOND COUNSEL REQUIRED BY AGREEMENT SECTION 2.31
EXHIBIT D
FINANCIAL STATEMENTS OF AFFILIATE
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REL-NED JUN 04 1982
n,,.y 25, 1982
a
City Council
Iona City Civic Center
Iowa City, IA 52240 n
Dear Council: a
I am a long time resident of lo•;;a C*Ll;y and currently
a Purdue Univcr•sly student. It has come to my attention
that Iovla City is planning; to adopt a noise ordinance. This
has caused me great concern. i
I have had experience with a recently enartcd ordi-
nance.in West Lafayette, Indiana. This ordinance, which
bears much resemblance to the one Iona Cil.•y is curl. en Sly i
considering, has caused nothing but trouble. It has created
a point of conrlict between the student population and
the townspeople. This has led to unre-st and u •lidening; I
gap between the university and the city. I
Almost uuqunsti.onably, any noise ordinance will
h c it^ greatest effect on the students, regard7e., of
I t ; inter,t.
A university torn must learn to accept the no,.-:{.ivr }
a-Fpects of a major universil.y along ;itti the posiLivc.
No one complains about the cultural events that a u*tvc r,ity
' brings in, nor the student business. They don't corrlaln
hen Ioaa wins the game that sends them to th Ros 1.0'11
: (an event that was clearly in offense of the proposed
noise ordinance) or the excitment of national xrestlin„
championships and NCAA basketball apearanocs. These thing-s `
are onl.,y a pari: of tl,e great excitment and ctrcnCth a
university hrin;r:: to a to-?n. Yet, armed -ni th a ncise
ordinance, there are those who will. instantly come do-.nn
on the students, the eseence of the university, merely
for trying to release some of the tremendous pressures
of school. This statement maty sound harsh, but it has
boon my recent experidnce that a few can overrul.e the
good intentions of many.
The probl.em with a noise ordinance, is that there
is no limit. Is the loudspeaker at a higih school track
meet or football game nn infringement on a student's
right to study? Is rush hour trnffi.c nnfringing.on It
person's enjoyment of a book? If so, then a1.1 involved
II should be cited. .I realize that special exemptions can i
he obtained, but is that fair to everyone? There should
be no lases that can be turned on and off. I
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Leave the poanr of detcrmir.ing mr:o i TUi?EIP:G
THE rEACE to the police, for their Judgement is an imror
tant part of their ,job.
Ploise ordinances sound good on paper, but are quite
a different thing to live with.
A concerned citizen,
��LG[rl��v j�• �i�CC-�-�i2''�"�
Steven R. Hanson
2026 Ridgeway Dr.
Iowa City, IA 522.110
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RESOLUTION NO. 82-141
WHEREAS, the United States has supplied military aid to EI Salvador,
and
WHEREAS, the economy of the United States requires that rising
expenditures of the Federal Government be reduced, and
WHEREAS, the needs of the people and cities of the United States
require that no further reductions be made in the programs which
serve these needs,
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of
Iowa City, urge the Congress of the United States to review policy
on military aid to E1 Salvador, and,
BE IT FURTHER RESOLVED that the City Council of Iowa City urge the
people of Iowa City to study the history and needs of El Salvador
during the U.S. Out of E1 Salvador Week, from June 14 through June 20,
1982.
It was moved by Perret and seconded by Erdahl
theResolution a adopted, and upon MY—
ca there were:
AYES: NAYS: ABSENT:
x Balmer
x Dickson
X_Erdahl.
y_ Lynch
s ain McDonald
x Neuhauser
..x- Perret
Passed and approved this 8th day of June , 1982.
ATTEST: &L
ITY CLERK
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