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1454
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LAWS OF MARYLAND
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Ch. 472
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SECTION 4. AND BE IT FURTHER ENACTED, That the proceeds of
the sale of said bonds shall be used and applied exclusively and
solely for construction of additions and improvements to
Frederick Memorial Hospital for which the bonds were sold and
shall be loaned or otherwise paid by the Treasurer of the County
to or for the benefit of Frederick Memorial Hospital as and when
and under such terms, conditions and documentation and secured by
such collateral as the County directs in accordance with the
terms and conditions of its agreement or agreements with
Frederick Memorial Hospital, Inc., of the resolutions of the
County, and of this Act. If the proceeds of the sale of any
series or issue of said bonds exceeds exceed the amount needed to
finance the hospital improvements construction of additions and
improvements to Frederick Memorial Hospital, the excess funds so
borrowed and not expended shall be applied to the payment of the
next principal maturity of the bonds or to the redemption of any
part of the bonds which have been made redeemable or to the
purchase and cancellation of bonds, as the County may determine
to be in its best interest.
The authority granted under this Act shall not be exercised,
nor shall any of the proceeds of the sale of bonds be used or
applied, in any manner which would cause any bonds, refunding
bonds or temporary bonds issued hereunder to be deemed "arbitrage
bonds" within the meaning of Section 103 of the Internal Revenue
Code of 1954, as amended.
It is the intent of this Act that the County be vested with
full discretion and authority to determine what portion, if any,
of the cost of any construction of additions and improvements to
Frederick Memorial Hospital be paid from the proceeds of general
obligation bonds authorized pursuant to this Act and that the
County may provide or require such conditions for the loan of the
proceeds of such bonds to Frederick Memorial Hospital, Inc., as
the County deems necessary or appropriate, including (without
limitation) provision for the repayment of such loan from rates
charged patients at the hospital. The County is further
expressly authorized to agree that construction of additions and
improvements to Frederick Memorial Hospital may be financed in
whole or in part from the proceeds of: (i) general obligation
bonds issued pursuant to this Act or any other Act authorizing
the issuance of general obligation bonds of the County for such
purpose, or (ii) revenue bonds issued pursuant to any authority
authorizing the issuance of revenue bonds to finance the hospital
improvements, or (iii) any combination of (i) and (ii); in
connection with such agreement (without in any way creating any
limitation on the discretion of the County) the County may
further agree, in its discretion, that any interest (actual or
implied) of the County in the hospital or in any receipts or
assets of the hospital may be subordinated to the interests of
the holders of any revenue bonds issued to finance the hospital
improvements, all as may be determined in the absolute discretion
of the County.
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