$62,900,000 COUNTY OF CHRISTIAN, KENTUCKY Hospital Revenue Bonds, Series 2016 (Jennie Stuart Medical Center)

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1 New Issue - - Book-Entry Only Ratings: S&P: BB+ Fitch: BBBSee RATINGS herein In the opinion of Wyatt, Tarrant & Combs LLP, Louisville, Kentucky, Bond Counsel, based on existing statutes, regulations, rulings and judicial decisions, and assuming compliance with certain covenants in the documents pertaining to the Bonds and the requirements of the Internal Revenue Code of 1986, as amended (the Code ), as described herein, interest on the Bonds is not includable in the gross income of the owners of the Bonds for federal income tax purposes. In the further opinion of Bond Counsel, interest on the Bonds is not treated as an item of tax preference in calculating the federal alternative minimum taxable income of individuals and corporations. Interest on the Bonds, however, is included as an adjustment in the calculation of federal corporate alternative minimum taxable income and may therefore affect a corporation s alternative minimum tax liability. In the further opinion of Bond Counsel, the Bonds are exempt from ad valorem taxation, and the interest thereon is exempt from income taxation, by the Commonwealth of Kentucky and all of its political subdivisions and taxing authorities. See TAX MATTERS herein. $62,900,000 COUNTY OF CHRISTIAN, KENTUCKY Hospital Revenue Bonds, Series 2016 (Jennie Stuart Medical Center) The Bonds are issuable as fully-registered bonds registered in the name of a nominee of The Depository Trust Company ( DTC ), which will act as securities depository for the Bonds. Purchases of the Bonds may be made in book-entry form only, through brokers and dealers who are, or who act through, DTC Participants. Purchasers of the Bonds will not receive physical delivery of bond certificates. Payments of principal, interest and premium, if any, of the Bonds will be made to DTC by U. S. Bank National Association, as Bond Trustee. Disbursement of payments to DTC Participants is the responsibility of DTC and disbursement of payments to the beneficial owners is the responsibility of DTC Participants. See Appendix C BOOK-ENTRY ONLY SYSTEM. The Bonds will be dated the date of issuance and will bear interest from the date of issuance thereof (calculated on the basis of a year of 360 days consisting of twelve 30-day months), payable on each February 1 and August 1, commencing February 1, The Bonds will be issued in authorized denominations of $100,000 and integral multiples of $5,000 in excess thereof. In the event the Obligated Group receives an investment grade category rating from two rating agencies, the authorized denominations for the Bonds shall be $5,000 and integral multiples thereof. The Bonds constitute limited obligations of the Issuer issued pursuant to the Bond Indenture described herein, payable solely (i) from payments by the Obligated Group to the Issuer or the Bond Trustee pursuant to the Loan Agreement described herein and the Series 2016A-1 Note (as hereinafter defined) issued by the Obligated Group described herein, under and pursuant to the Master Indenture described herein, and (ii) to the extent provided in the Bond Indenture from the proceeds of the Bonds. The Bonds are being issued by the County of Christian, Kentucky (the Issuer ), which will loan the proceeds thereof to Jennie Stuart Medical Center, Inc. ( JSMC ) and Fairview Physicians Network, LLC, doing business as Jennie Stuart Medical Group ( JSMG, and together with JSMC, the Obligated Group ) pursuant to the Loan Agreement described herein. The Obligated Group will use the proceeds of such loan, together with proceeds of a taxable bank loan and other moneys available therefor as described herein, to (i) advance refund all of the Issuer s Hospital Revenue and Refunding Bonds (Jennie Stuart Medical Center, Inc) Series 2006, the proceeds of which bonds were used by JSMC to finance improvements to its Hospital described herein, (ii) finance or refinance the costs of certain capital additions and improvements for the Obligated Group, (iii) fund a deposit to the Debt Service Reserve Fund, and (iv) pay the costs of issuance of the Bonds, all as more fully described herein. Maturities, Amounts, Interest Rates, Yields and CUSIP Numbers $8,335, % Term Bond due February 1, 2026, Yield 4.710%, CUSIP CM7 $22,245, % Term Bond due February 1, 2036, Yield 5.510%, CUSIP CN5 $32,320, % Term Bond due February 1, 2044, Yield 5.650%, CUSIP CP0 The Bonds are subject to redemption prior to maturity, as described herein. THE BONDS DO NOT CONSTITUTE A DEBT OR LIABILITY OF THE ISSUER, THE COMMONWEALTH OF KENTUCKY OR OF ANY POLITICAL SUBDIVISION THEREOF WITHIN THE MEANING OF THE CONSTITUTION AND LAWS OF THE COMMONWEALTH OF KENTUCKY, BUT SHALL BE PAYABLE SOLELY FROM THE FUNDS PROVIDED THEREFOR UNDER THE LOAN AGREEMENT AND THE INDENTURE. NEITHER THE ISSUER NOR THE COMMONWEALTH OF KENTUCKY SHALL BE OBLIGATED TO PAY THE PRINCIPAL OF OR PREMIUM, IF ANY, OR INTEREST ON THE BONDS, EXCEPT FROM THE FUNDS PROVIDED THEREFOR UNDER THE LOAN AGREEMENT AND THE INDENTURE, AND NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE ISSUER, THE COMMONWEALTH OF KENTUCKY OR ANY POLITICAL SUBDIVISION THEREOF IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF OR PREMIUM, IF ANY, OR INTEREST ON THE BONDS. THE ISSUANCE OF THE BONDS HAS NOT DIRECTLY, INDIRECTLY OR CONTINGENTLY OBLIGATED THE ISSUER, THE COMMONWEALTH OF KENTUCKY OR ANY POLITICAL SUBDIVISION THEREOF TO LEVY OR PLEDGE ANY FORM OF TAXATION WHATSOEVER THEREFOR OR TO MAKE ANY APPROPRIATION FOR THEIR PAYMENT. This cover page contains certain information for general reference only. It is not a summary of this issue. Investors must read the entire Official Statement to obtain information essential to the making of an informed decision. The Bonds are offered by the Underwriter, when, as and if issued by the Issuer and accepted by the Underwriter, subject to approval of legality by Wyatt, Tarrant & Combs LLP, Louisville, Kentucky. Certain legal matters will be passed upon for the Issuer by its County Attorney, J. Michael Foster, Hopkinsville, Kentucky, for the Obligated Group by White, White & Crenshaw, Hopkinsville, Kentucky, and for the Underwriter by Ballard Spahr LLP. It is expected that the Bonds in definitive form will be available for delivery through the facilities of DTC in New York, New York, on or about December 21, Wells Fargo Securities The date of this Official Statement is December 7, 2016.

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3 This Official Statement and the information contained herein are subject to completion and amendment. Under no circumstances shall this Official Statement constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Bonds in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. This Official Statement is not to be construed as an agreement or contract between the Issuer and the purchasers or owners of any of the Bonds. No dealer, salesperson or other person has been authorized by the County of Christian, Kentucky (the Issuer ), Jennie Stuart Medical Center, Inc. (the JSMC ), Fairview Physicians Network, LLC, doing business as Jennie Stuart Medical Group ( JSMG, and together with JSMC, the Obligated Group ), or Wells Fargo Securities (the Underwriter ) to give any information or to make any representations, other than those contained herein, in connection with the offering of the Bonds and, if given or made, such information or representations must not be relied upon. The information set forth herein under the captions THE ISSUER and ABSENCE OF MATERIAL LITIGATION has been obtained from the Issuer. All other information set forth herein has been obtained from the Obligated Group and other sources which are believed to be current and reliable, but the accuracy or completeness of such information is not guaranteed by, and is not to be construed as a representation by, the Issuer or the Underwriter. The Underwriter has provided the following sentence for inclusion in this Official Statement. The Underwriter has reviewed the information in this Official Statement in accordance with, and as part of, its responsibility to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information. References to website addresses presented herein are for informational purposes only and may be in the form of a hyperlink solely for the reader s convenience. Unless specified otherwise, such websites and the information or links contained therein are not incorporated into, and are not part of, this offering document for purposes of, and as that term is defined in, SEC Rule 15c2-12. Estimates and opinions are included herein and should not be interpreted as statements of fact. Summaries of documents herein do not purport to be complete statements of their provisions. The information and expressions of opinion herein are subject to change without notice, and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the Issuer or the Obligated Group since the date hereof. This Official Statement contains certain forward-looking statements concerning the operations and financial condition of the Obligated Group. These statements are based upon a number of assumptions and estimates which are subject to significant uncertainties, many of which are beyond the control of the Obligated Group. The words may, would, could, will, expect, anticipate, believe, intend, plan, estimate and similar expressions are meant to identify these forwardlooking statements. The achievement of certain results or other expectations contained in such forwardlooking statements involves known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements described to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The Obligated Group does not plan to issue any updates or revisions to these forward-looking statements if or when changes to its expectations, or events, conditions or circumstances on which such statements are based, occur.

4 CUSIP numbers on the cover page of this Official Statement are copyright 2016 by the American Bankers Association. CUSIP data herein is provided by the CUSIP Service Bureau, managed by Standard and Poor s Financial Services LLC, a division of The McGraw Hill Companies, Inc. This data is not intended to create a database and does not serve in any way as a substitute for the CUSIP Service Bureau. CUSIP numbers have been assigned by an independent company not affiliated with the Issuer and are included solely for the convenience of the registered owners of the applicable Bonds. Neither the Issuer nor the Underwriter are responsible for the selection or uses of these CUSIP numbers, and no representation is made as to their correctness on the applicable Bonds or as included herein. The CUSIP number for a specific maturity is subject to being changed after the issuance of the Bonds as a result of various subsequent actions including, but not limited to, a refunding in whole or in part or as a result of the procurement of secondary market portfolio insurance or other similar enhancement by investors that is applicable to all or a portion of certain maturities of the Bonds. IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVERALLOT OR EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF THE BONDS AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. THE BONDS MAY BE OFFERED AND SOLD BY THE UNDERWRITER TO CERTAIN DEALERS, INSTITUTIONAL INVESTORS AND OTHERS AT PRICES LOWER THAN THE PUBLIC OFFERING PRICE INDICATED ON THE COVER HEREOF, AND SUCH PUBLIC OFFERING PRICES MAY BE CHANGED FROM TIME TO TIME BY THE UNDERWRITER.

5 TABLE OF CONTENTS Page INTRODUCTORY STATEMENT... 1 General... 1 Authority for and Purpose of Issue... 1 The Obligated Group... 2 Security and Sources of Payment for the Bonds... 2 Redemption of Bonds... 2 Book-Entry Only System... 2 Continuing Disclosure... 2 Certain Information Related to this Official Statement... 3 Bondholders Risks... 3 ESTIMATED SOURCES AND USES OF FUNDS... 4 PLAN OF FINANCING... 4 THE PROJECT... 5 SECURITY AND SOURCES OF PAYMENT FOR THE BONDS... 6 General... 6 Pledge of Revenues Under the Loan Agreement... 6 Debt Service Reserve Fund for the Bonds... 7 Mortgage Securing All Obligations Issued Under the Master Indenture... 7 Limitation on Liens under Master Indenture... 8 The Master Indenture... 8 Taxable Loan Agreement... 9 Other Indebtedness of the Obligated Group... 9 Liquidity Covenant Debt Service Coverage Ratio Acceleration Certain Additional Covenants of the Obligated Group THE BONDS Description of the Bonds Redemption Provisions of the Bonds Notice of Redemption and Other Notices ESTIMATED DEBT SERVICE REQUIREMENTS ADDITIONAL NOTES UNDER MASTER INDENTURE AND OTHER ADDITIONAL DEBT THE ISSUER General Authority for Issuance of Bonds CERTAIN BONDHOLDERS RISKS General Obligated Group Security for the Bonds Limitations on Remedies under the Deed of Trust Risks Associated with Taxable Loan Agreement Bankruptcy Additional Limitations on Enforceability Acquisitions, Affiliations, Mergers and Divestitures General Economic Conditions; Bad Debt, Indigent Care and Investment Performance Affordable Care Act Federal and State Reimbursement Regulation Federal Budget Cuts Medicaid Funding i

6 Provider Tax International Classification of Diseases and Related Health Problems, 10th Revision Coding System Audits and Withholdings Health Insurance Portability and Accountability Act Health Information Technology for Economic and Clinical Health Act Security Breaches and Unauthorized Releases of Personal Information Cybersecurity Other Regulatory and Contractual Matters Voluntary Corporate Compliance Shortage of Nurses and Other Health Care Professionals Licensing, Surveys and Accreditations Competition Rankings Based on Patient Satisfaction and Other Performance Measures Utilization Physician Contracting and Relations Class Actions Managed Care Uninsured Patients Pension Fund Cost and Availability of Medical Malpractice Insurance Technological Changes Investment Income Future Results May Differ from Historical and Forecasted Results Tax Exemptions Antitrust Additional Parity Debt Secondary Market Prepayment Risks Bond Ratings Certain Other Risks LEGALITY FOR INVESTMENT IN KENTUCKY TAX MATTERS APPROVAL OF LEGAL PROCEEDINGS ABSENCE OF MATERIAL LITIGATION FINANCIAL ADVISOR UNDERWRITING CONTINUING DISCLOSURE RELATIONSHIPS VERIFICATION OF MATHEMATICAL COMPUTATIONS RATINGS FINANCIAL STATEMENTS MISCELLANEOUS APPENDIX A INFORMATION CONCERNING THE OBLIGATED GROUP APPENDIX B FINANCIAL STATEMENTS OF THE OBLIGATED GROUP APPENDIX C BOOK-ENTRY ONLY SYSTEM APPENDIX D SUMMARY OF PRINCIPAL LEGAL DOCUMENTS APPENDIX E PROPOSED FORM OF OPINION OF BOND COUNSEL APPENDIX F FORM OF CONTINUING DISCLOSURE AGREEMENT ii

7 $62,900,000 COUNTY OF CHRISTIAN, KENTUCKY Hospital Revenue Bonds, Series 2016 (Jennie Stuart Medical Center) INTRODUCTORY STATEMENT This Introductory Statement contains only a brief summary of certain of the terms of the Bonds being offered and a full review should be made of the entire Official Statement, including the cover page and the Appendices. All statements contained in this Introduction are qualified in their entirety by reference to the entire Official Statement. References to, and summaries of provisions of the laws of the Commonwealth of Kentucky or any documents referred to herein do not purport to be complete and such references are qualified in their entirety by reference to the complete provisions thereof. General This Official Statement, including the cover page and Appendices hereto (the Official Statement ), provides certain information in connection with the offering of $62,900,000 aggregate principal amount of Hospital Revenue Bonds, Series 2016 (Jennie Stuart Medical Center) (the Bonds ) of the County of Christian, Kentucky (the Issuer ). See Appendix D SUMMARY OF PRINCIPAL LEGAL DOCUMENTS Definitions for definitions of certain words and terms used herein. Authority for and Purpose of Issue The Bonds will be issued pursuant to the provisions of Sections to , inclusive, of the Kentucky Revised Statutes (the Act ), and a Trust Indenture, dated as of December 1, 2016 (the Bond Indenture ), between the Issuer and U. S. Bank National Association, as trustee (the Bond Trustee ). The proceeds of the sale of the Bonds will be loaned by the Issuer to Jennie Stuart Medical Center, Inc. a Kentucky nonprofit corporation ( JSMC ) and Fairview Physicians Network, LLC, a Kentucky limited liability company doing business as Jennie Stuart Medical Group ( JSMG, and together with JSMC, the Obligated Group ), pursuant to a Loan Agreement, dated as of December 1, 2016 (the Loan Agreement ), between the Issuer and the Obligated Group. The proceeds of such loan, together with proceeds of the Taxable Loan (hereinafter defined) and other moneys available therefor as described herein, will be used to (i) advance refund all of the Issuer s Hospital Revenue and Refunding Bonds (Jennie Stuart Medical Center, Inc) Series 2006 (the Prior Bonds ), the proceeds of which were used by JSMC to finance improvements to its Hospital described herein, (ii) finance or refinance the costs of certain capital additions and improvements for the Obligated Group, (iii) fund a deposit to the Debt Service Reserve Fund securing the Bonds, and (iv) pay the costs of issuance of the Bonds. See ESTIMATED SOURCES AND USES OF FUNDS and PLAN OF FINANCING herein.

8 The Obligated Group JSMC operates a general medical and surgical hospital (the Hospital ) located at 320 West 18th Street, Hopkinsville, Kentucky with 194 licensed beds of which 139 are currently in operation. The Hospital is the only nonmilitary acute care hospital in the County of Christian, Kentucky. In 2011, JSMC formed, and is currently the sole member of, JSMG. JSMG currently employs a total of 19 physicians (five primary and 14 specialty care) and eight mid-level practitioners. JSMC and JSMG have entered into the Master Trust Indenture dated as of December 1, 2016 (the Master Indenture ) with U.S. Bank National Association, as Master Trustee (the Master Trustee ). The Master Indenture created the Obligated Group described herein (the Obligated Group ). JSMC and JSMG are currently, and as of the date of the issuance of the Bonds will be, the only members of the Obligated Group (each an Obligated Group Member ). See Appendix A for more information about the Obligated Group. The Internal Revenue Service has determined that JSMC is a tax-exempt organization described in Section 501(c)(3) of the Code and is exempt from federal income taxation under Section 501(a) of the Code. Because JSMG is a limited liability company and JSMC is the sole member of JSMG, for federal income tax purposes JSMG is disregarded as a separate entity and is treated as a division of JSMC. Security and Sources of Payment for the Bonds The Bonds will be secured as described herein under SECURITY AND SOURCES OF PAYMENT FOR THE BONDS. Redemption of Bonds The Bonds are subject to redemption (including mandatory sinking fund redemption) prior to maturity as described herein. See THE BONDS Redemption Provisions of the Bonds. Book-Entry Only System When delivered, the Bonds will be registered in the name of a nominee of The Depository Trust Company, New York, New York ( DTC ), which will act as securities depository for the Bonds. Purchases of the Bonds and tenders of Bonds for purchase may be made in book-entry form only, through brokers and dealers who are, or who act through, DTC Participants (as defined in Appendix C). Beneficial Owners (as defined in Appendix C) of the Bonds will not receive physical delivery of certificated securities. Principal of, premium, if any, and interest on the Bonds are payable by the Trustee to DTC, which will in turn remit such payments to the DTC Participants, which will in turn remit such payments to the Beneficial Owners of the Bonds. See Appendix C BOOK-ENTRY ONLY SYSTEM. Continuing Disclosure See CONTINUING DISCLOSURE for a discussion of the extent of information in this Official Statement relating to the Obligated Group, and the obligations of the Obligated Group as to continuing disclosure as contemplated by Rule 15c2-12 (Rule 15c2-12 ) promulgated by the 2

9 Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended (the Exchange Act ). Certain Information Related to this Official Statement The descriptions herein of the Master Indenture, the Bond Indenture, the Loan Agreement, the Mortgage, the Continuing Disclosure Agreement and other agreements relating to the Bonds are qualified in their entirety by reference to the complete text of such documents, and the description herein of the Bonds is qualified in its entirety by the forms thereof and the provisions of the Indenture. See Appendix D SUMMARY OF PRINCIPAL LEGAL DOCUMENTS for a brief summary of certain provisions of the Master Indenture, the Bond Indenture and the Loan Agreement. The information and expressions of opinion herein speak only as of their date and are subject to change without notice. Neither delivery of this Official Statement nor any sale made hereunder nor any future use of this Official Statement shall, under any circumstances, create any implication that there has been no change in the affairs of the Issuer or the Obligated Group. Bondholders Risks The Bonds involve special risks. Certain risk factors which should be considered by prospective investors in their decision to purchase any of the Bonds are set forth under CERTAIN BONDHOLDERS RISKS herein. [Remainder of page intentionally left blank.] 3

10 ESTIMATED SOURCES AND USES OF FUNDS The estimated costs of the Project and the amount required to refund the Prior Bonds and the sources of funds available therefor are as follows: Taxable Loan Equity Contribution Bonds Total Estimated Sources of Funds Principal Amount $62,900,000 $6,228,925 $69,128,925 Original Issue Premium/(Discount) (847,707) (847,707) Funds held in trust under prior 4,999,437 4,999,437 indenture Total $62,052,293 $11,228,361 $5,376,007 $78,656,662 Estimated Use of Funds Costs of the Project $10,000,000 $10,000,000 Amount needed to refund Prior Bonds 45,910,620 $11,159,286 $5,376,007 62,445,913 Costs of Issuance 1 1,146,961 69,075 1,216,036 Deposit to Debt Service Reserve 4,994,713 4,994,713 Fund 2 Total $62,052,293 $11,228,361 $5,376,007 $78,656,662 1 Includes Underwriter s discount, fees and expenses of the Issuer, the Trustee, Bond Counsel, Obligated Group counsel, Underwriter's counsel and the rating agencies, printing costs, and other costs incurred in connection with the issuance of the Bonds. 2 The Debt Service Reserve Fund Requirement required to be deposited in the Debt Service Reserve Fund upon the issuance of the Bonds. See SECURITY AND SOURCES OF PAYMENT FOR THE BONDS Debt Service Reserve Fund herein. PLAN OF FINANCING The proceeds of the Bonds will be used to: (i) advance refund a portion of the Issuer s Hospital Revenue and Refunding Bonds (Jennie Stuart Medical Center, Inc.) Series 2006 (the Prior Bonds ), the proceeds of which were used by JSMC to finance improvements to the Hospital, (ii) finance or refinance the costs of certain capital additions and improvements for the Obligated Group (the Project ), (iii) fund a deposit to the Debt Service Reserve Fund securing the Bonds, and (iv) pay the costs of issuance of the Bonds. The balance of the Prior Bonds not being refunded with proceeds of the Bonds will be advance refunded with proceeds of a taxable term loan from Planters Bank, Inc. (the Taxable Lender ) to the Obligated Group in the principal amount of approximately $6,228,925 (the Taxable Loan ) pursuant to the terms of a Loan Agreement (the Taxable Loan Agreement ) between the Obligated Group and the Taxable Lender. The Taxable Term Loan will bear interest at a fixed rate and will fully amortize over 15 years, maturing on December 1, Pursuant to the Loan Agreement, the Issuer will lend the proceeds of the Bonds to the Obligated Group by depositing such proceeds as provided in the Bond Indenture. Simultaneously with the issuance of the Bonds, pursuant to the Master Indenture, the Obligated Group will issue Master Indenture Note, Series (the Series Note ) to the Issuer, which in turn has pledged and assigned the Series Note to the Bond Trustee to provide 4

11 payment for the Bonds, and to secure the performance of the Obligated Group s obligations under the Loan Agreement. The Obligated Group will grant to the Master Trustee, pursuant to the Mortgage, as security for the Obligated Group s obligations under the Series Note, a security interest in its Gross Receipts, as defined herein. The security interest granted to the Master Trustee secures the Bond Trustee, as holder of the Series Note, equally and ratably on a pari passu basis with the holders of all other master notes issued as parity obligations under the Master Indenture (the Notes ), including the Note to be issued to the Taxable Lender as security for the Obligated Group s obligations under the Taxable Loan Agreement. The liens created by the Mortgage are subject to certain permitted encumbrances (the Permitted Encumbrances ) and to the right of the Obligated Group, under certain conditions, to dispose of assets. See SECURITY AND SOURCES OF PAYMENT FOR THE BONDS. To effect the refunding of the Prior Bonds, a portion of the proceeds of the Bonds, the proceeds of the Taxable Loan and an equity contribution of the Obligated Group will be applied to the purchase of United States government securities or ownership interests therein (collectively, Federal Securities ), which will be deposited with U.S. Bank National Association, as Bond Trustee under the Bond Indenture and refunding escrow agent for the Prior Bonds (the Escrow Agent ) under a Refunding Escrow Agreement (the Escrow Agreement ) between the Issuer and the Escrow Agent. The Federal Securities deposited under the Escrow Agreement will be payable as to principal and interest at such times and in such amounts as will be sufficient, together with an initial cash deposit, to pay when due the interest on the Prior Bonds becoming due before February 1, 2018 and to pay on February 1, 2018 the Redemption Price of the Prior Bonds and the interest accrued thereon. See VERIFICATION OF MATHEMATICAL COMPUTATIONS herein. The Federal Securities and cash deposited under the Escrow Agreement will be pledged only to the payment of the Prior Bonds and will not be available for the payment of the Bonds. After the deposit of the Federal Securities and cash as described above, the Obligated Group will be discharged from all of their obligations with respect to the Prior Bonds. THE PROJECT The Project will consist of various capital additions and improvements to medical facilities owned by the Obligated Group, including some or all of the following: (i) rehabilitation of the existing patient tower, renovations of the coffee shop/grille, construction to accommodate emergency department observation beds and the addition of geriatric psychiatric services, and other health care facilities and equipment to be located at the Hospital s main campus, (ii) expansion or improvement of medical and radiation oncology services and cardiology services, and other health care facilities and equipment to be located on the Hospital s main campus, and/or on a second campus totaling 50 acres approximately 3.5 miles south of the Hospital (the Ambulatory Campus ), and/or on a new, undeveloped campus of approximately acres located approximately five miles southeast of the Hospital (the Blue Creek Campus ), (iii) construction of a convenient care clinic at the Blue Creek Campus, and (iv) construction of a new medical office building and installation of various improvements and equipment at the Ambulatory Campus. For a description of the Obligated Group s facilities, see BACKGROUND & HISTORY General Overview and HEALTH CARE FACILITIES AND KEY SERVICES in Appendix A. 5

12 SECURITY AND SOURCES OF PAYMENT FOR THE BONDS General The Bonds are payable solely from the payments received by the Issuer from the Obligated Group pursuant to the Loan Agreement and the other amounts available to the Bond Trustee therefor under the Bond Indenture. THE BONDS DO NOT CONSTITUTE A DEBT OR LIABILITY OF THE ISSUER, THE COMMONWEALTH OF KENTUCKY OR OF ANY POLITICAL SUBDIVISION THEREOF WITHIN THE MEANING OF THE CONSTITUTION AND LAWS OF THE COMMONWEALTH OF KENTUCKY, BUT SHALL BE PAYABLE SOLELY FROM THE FUNDS PROVIDED THEREFOR UNDER THE LOAN AGREEMENT AND THE INDENTURE. NEITHER THE ISSUER NOR THE COMMONWEALTH OF KENTUCKY SHALL BE OBLIGATED TO PAY THE PRINCIPAL OF OR PREMIUM, IF ANY, OR INTEREST ON THE BONDS, EXCEPT FROM THE FUNDS PROVIDED THEREFOR UNDER THE LOAN AGREEMENT AND THE INDENTURE, AND NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE ISSUER, THE COMMONWEALTH OF KENTUCKY OR ANY POLITICAL SUBDIVISION THEREOF IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF OR PREMIUM, IF ANY, OR INTEREST ON THE BONDS. THE ISSUANCE OF THE BONDS HAS NOT DIRECTLY, INDIRECTLY OR CONTINGENTLY OBLIGATED THE ISSUER, THE COMMONWEALTH OF KENTUCKY OR ANY POLITICAL SUBDIVISION THEREOF TO LEVY OR PLEDGE ANY FORM OF TAXATION WHATSOEVER THEREFOR OR TO MAKE ANY APPROPRIATION FOR THEIR PAYMENT. Pledge of Revenues Under the Loan Agreement The Bonds are authorized pursuant to and are secured by the Bond Indenture. To evidence the loan of the proceeds of Bonds by the Issuer to the Obligated Group under the Loan Agreement, the Obligated Group has issued and delivered the Series Note to the Issuer. The Issuer has pledged and assigned the Series Note to the Bond Trustee as security for the Bonds. The terms of the Series Note require that payments be made by the Obligated Group (and any other Obligated Group members) which together with other moneys available therefor, will be sufficient to provide for the payment of the principal of, premium, if any, and interest on the Bonds. The Bonds will be special limited obligations of the Issuer payable solely from (i) payments to be made by the Obligated Group on the Series Note pledged under the Bond Indenture, (ii) other payments under the Loan Agreement, and (iii) other amounts held by the Bond Trustee pursuant to the Bond Indenture. Under the Bond Indenture, the Issuer will assign and pledge to the Bond Trustee in trust upon the terms of the Bond Indenture (i) the amount required by the Bond Indenture and the Loan Agreement to be deposited in the Bond Fund and the Debt Service Reserve Fund for the Bonds created by the Bond Indenture and all other funds and amounts held in funds held by the 6

13 Bond Trustee for the benefit of the holders of the Bonds pursuant to the Bond Indenture, together with any investments and reinvestments made with such amounts and moneys and the proceeds thereof; (ii) all of the Issuer s right, title and interest in and to the Series Note; (iii) all of the Issuer s right, title and interest in and to the Loan Agreement except as described in the following sentence, together with all powers, privileges, options and other benefits of the Issuer contained in the Loan Agreement which are not specifically described in (i) above; and (iv) any and all property of any kind which may, after the date of the Bond Indenture, be pledged as additional security by the Issuer or which pursuant to the provisions of the Bond Indenture, the Loan Agreement or the Series Note may come into the possession or control of the Bond Trustee or of a receiver appointed pursuant to the Bond Indenture as additional security. The assignment and pledge by the Issuer does not include the rights of the Issuer pursuant to the Loan Agreement to receive payments for indemnification and administrative expenses. See Appendix D SUMMARY OF PRINCIPAL LEGAL DOCUMENTS The Bond Indenture; the Loan Agreement attached hereto for a summary of certain terms of the Bond Indenture and the Loan Agreement. Debt Service Reserve Fund for the Bonds A Debt Service Reserve Fund for the Bonds will be established under the Bond Indenture and held by the Bond Trustee in an amount equal to the Debt Service Reserve Fund Requirement. The Bond Indenture establishes the Debt Service Reserve Fund Requirement as the greatest amount required in the then current or any future Bond Year to pay the sum of the interest (excluding accrued interest, if any received upon the issuance of the Bonds and payable in such Bond Year) and principal (including Sinking Fund Requirements) of the Bonds, or such lesser amount as may be permitted pursuant to the Bond Indenture. In no event shall such amount exceed the lesser of (i) maximum annual debt service on the Bonds in the current or any future Bond Year, (ii) one hundred twenty five percent (125%) of the average annual debt service on the Bonds, and (iii) ten percent (10%) of the original principal amount of the Bonds. For purposes of this definition, principal becoming due by reason of acceleration or redemption of the Bonds shall be treated as coming due on the original scheduled date until the same has been paid. The Debt Service Reserve Fund may be drawn upon to pay principal of and interest on the Bonds, to the extent there are insufficient funds available therefor in the Bond Fund. See Appendix D SUMMARY OF PRINCIPAL LEGAL DOCUMENTS The Bond Indenture Debt Service Reserve Fund. The Debt Service Reserve Fund does not secure the Taxable Loan. Mortgage Securing All Obligations Issued Under the Master Indenture A first mortgage lien on and security interest in certain land, buildings, fixtures and other improvements of the Obligated Group (respectively, the Mortgage and the Mortgaged Property ) will equally and ratably secure all Notes issued from time to time under the Master Indenture including (i) the Series Note issued to the Issuer and assigned to the Bond Trustee to secure the Bonds, (ii) the Note issued to the Taxable Lender to secure the Taxable Loan, and (iii) any other Notes hereafter issued under the Master Indenture in accordance with its terms. See Appendix D SUMMARY OF PRINCIPAL LEGAL DOCUMENTS The Master Trust Indenture Conditions to Issue of Notes; Restrictions on Debts and Guaranties. Such security may be subject to alteration and release pursuant to the provisions of the Mortgage. No 7

14 appraisal of the Mortgaged Property has been conducted to determine the value of the Mortgaged Property. The Mortgaged Property consists of substantially all of the main Hospital campus, subject to Permitted Encumbrances, including that certain medical office building known as the Wallace Medical Arts Building, and excluding that certain medical office building known as the Doctor s Pavilion. Limitation on Liens under Master Indenture Under the Master Indenture and the Loan Agreement, the Obligated Group Members covenant that they will not create or suffer to be created or exist any mortgage or pledge or grant a security interest or other similar right or interest (i) in Property, other than Permitted Liens, or (ii) in the Gross Receipts of the Obligated Group, unless there is provision made in each instance to secure all Notes issued from time to time under the Master Indenture equally and ratably with the Debt to be secured by such mortgage or lien. See Appendix D SUMMARY OF PRINCIPAL LEGAL DOCUMENTS Master Trust Indenture Restrictions as to Creation of Liens; Permitted Liens. The Master Indenture The Series Note will be issued under and secured by the Master Indenture and will entitle the Bond Trustee, as the holder thereof, to the protection of the covenants, restrictions and other obligations imposed upon the Obligated Group and any other Obligated Group members by the Master Indenture. The Series Note is the full and unlimited obligation of the Obligated Group and any future Obligated Group members secured by a pledge of the Gross Receipts of the Obligated Group and any future Obligated Group members. See Appendix D SUMMARY OF PRINCIPAL LEGAL DOCUMENTS The Mortgage. The Master Indenture permits the addition and withdrawal of Obligated Group members, other than JSMC, upon the satisfaction of certain conditions. JSMC and JSMG will become members of the Obligated Group as of the date of issuance of the Bonds. The Obligated Group does not now have any plans to add additional Obligated Group members but may do so in the future. The Master Indenture permits the withdrawal of Obligated Group members, other than JSMC, subject to the satisfaction of certain conditions set forth in the Master Indenture. JSMG does not have any present intent to withdraw from the Obligated Group. See Appendix D SUMMARY OF PRINCIPAL LEGAL DOCUMENTS Master Trust Indenture Persons Becoming Obligated Group Members; Withdrawal from the Obligated Group. Under the Master Indenture, the Obligated Group and any future Obligated Group members are required to maintain rates and charges at certain levels and to satisfy certain tests before incurring additional indebtedness. See Appendix A INFORMATION CONCERNING THE OBLIGATED GROUP for a discussion of the financial condition of the Obligated Group, and Appendix B for the most recent audited consolidated financial statements of Jennie Stuart Medical Center, Inc. for the years ended December 31, 2015 and For a description of certain provisions of the Master Indenture, see Appendix D SUMMARY OF PRINCIPAL LEGAL DOCUMENTS Master Trust Indenture. 8

15 Under the Master Indenture, each holder of a Note shall be required to surrender such Note to the Master Trustee and receive a substitute Note in the event that the Obligated Group Representative requests such surrender and states that the Obligated Group Representative has become a member of an obligated group under a master indenture (other than the Master Indenture) (or an entity which, directly or indirectly, controls the Obligated Group Representative has become a member of such an obligated group and the Obligated Group Representative is obligated, by its articles of incorporation, bylaws or by contract or otherwise, to make payments to such controlling entity in amounts sufficient to enable the entity to make payments with respect to obligations issued under such master indenture) and that an obligation is being issued to the Bond Trustee under such replacement master indenture. Any such substitution of Notes shall be conditioned upon, among other things, (a) prior receipt by the Bond Trustee of written confirmation from each rating agency then rating the Bonds that the replacement of the Notes will not, by itself, result in a reduction in the then-current ratings on the Bonds (b) prior receipt by the Bond Trustee of a favorable Opinion of Bond Counsel with respect to the replacement of the Notes, and (c) no such replacement master indenture or replacement Notes shall (i) relieve the Obligated Group from its requirement to continue to provide any mortgages granted to, any negative pledges in favor of, or any Gross Receipts pledged to, the Master Trustee; or (ii) result in the elimination of any Debt Service Reserve Fund previously created with respect to a Note, unless, at the time such replacement master indenture and replacement Notes become effective (or at any time thereafter), such Notes shall be rated (based on the credit of the Obligated Group under the replacement master indenture and the replacement Notes) at least BBB+ (by S&P or Fitch), or Baa1 by Moody s. See Appendix D SUMMARY OF PRINCIPAL LEGAL DOCUMENTS Master Trust Indenture Replacement Master Trust Indenture. Taxable Loan Agreement In connection with the Taxable Loan, the Obligated Group and the Taxable Lender will enter into the Taxable Loan Agreement, including covenants of the Obligated Group which may be in addition to or more restrictive than the covenants contained in the Master Indenture or the Loan Agreement. The primary financial covenants (the Debt Service Coverage Ratio Covenant and the Liquidity Covenant) of the Taxable Loan Agreement as originally executed will be the same as those contained in the Master Indenture and the Loan Agreement. Other Indebtedness of the Obligated Group The Master Indenture permits the Obligated Group members to issue additional Notes from time to time under certain circumstances and subject to the terms of the Master Indenture, which Notes are equally and ratably secured under the Master Indenture and the Mortgage by a lien on Gross Receipts on a parity with or subordinate to all Notes outstanding under the Master Indenture. In addition, the Master Indenture permits the members of the Obligated Group to incur certain other types of indebtedness under the circumstances, and to the extent permitted by, the Master Indenture. See Appendix D SUMMARY OF PRINCIPAL LEGAL DOCUMENTS Master Trust Indenture Restriction on Debts and Guaranties. Simultaneously with the issuance of the Bonds, the Obligated Group will issue a Note under the Master Indenture to secure its obligations under the Taxable Loan Agreement. 9

16 In April 2010, JSMC executed a promissory note to the Taxable Lender evidencing a mortgage loan in the original principal amount of approximately $4,100,000 (the Mortgage Loan ), which Mortgage Loan bears interest at a fixed rate of 4.25%, fully amortizes over a 10- year period maturing on April 27, 2022, and is secured by a mortgage on the Ambulatory Campus. JSMC s payment obligations with respect to the Mortgage Loan are on a parity with its obligations under the Loan Agreement and the Notes (including the Series Note), and the Mortgage Loan constitutes Long-Term Debt for purposes of calculating Maximum Annual Debt Service and the Debt Service Coverage Ratio. Liquidity Covenant Under the Master Indenture, the Obligated Group covenants to maintain at least seventyfive (75) Days Cash on Hand as of the end of each Fiscal Year, beginning with the Fiscal Year ending December 31, If this requirement is not met, the Obligated Group jointly and severally covenant to retain an Independent Consultant within thirty (30) days of receiving JSMC s audited financial statements following the end of such Fiscal Year to make recommendations to increase such Days Cash on Hand in the following Fiscal Year to at least 75 or, if applicable laws and governmental regulations will not permit the Obligated Group to maintain such Days Cash on Hand, to the highest level permitted by such laws and regulations. The Obligated Group will, to the extent feasible and lawful, follow the recommendations of the Independent Consultant. So long as the Obligated Group retains an Independent Consultant and follows such Independent Consultant s recommendations to the extent feasible and lawful, the foregoing covenant shall be deemed to have been complied with even if the Days Cash on Hand for any subsequent Fiscal Year is below 75 but at least fifty (50), which event will not constitute an Event of Default under the Master Indenture. Notwithstanding anything in the Master Indenture to the contrary, the Days Cash on Hand of the Obligated Group for each Fiscal Year shall be at least 50. Failure to maintain such minimum Days Cash on Hand shall be an Event of Default under the Master Indenture. See Appendix D SUMMARY OF PRINCIPAL LEGAL DOCUMENTS Master Trust Indenture Liquidity Covenant; Events of Default. Debt Service Coverage Ratio Under the Master Indenture, the Obligated Group covenants to set rates and charges for use of its facilities such that the Debt Service Coverage Ratio calculated at the end of each Fiscal Year, commencing with the Fiscal Year ending December 31, 2016, is not less than If such ratio, as calculated at the end of any Fiscal Year, is below 1.10 but not less than 1.0, the Obligated Group Members jointly and severally covenant to retain an Independent Consultant within thirty (30) days of receiving JSMC s audited financial statements following the end of such Fiscal Year to make recommendations to increase such ratio in the following Fiscal Year to at least 1.10 or, if applicable laws and governmental regulations will not permit the Obligated Group to maintain such Debt Service Coverage Ratio, to the highest level permitted by such laws and regulations. The Obligated Group will, to the extent feasible and lawful, follow the recommendations of the Independent Consultant. So long as the Obligated Group retains an Independent Consultant and follows such Independent Consultant s recommendations to the extent feasible and lawful, the foregoing covenant shall be deemed to have been complied with even if such ratio for any subsequent Fiscal Year is below 1.10 but at least 1.00, which event will not constitute an Event of Default under the Master Indenture. Notwithstanding anything in the 10

17 Master Indenture to the contrary, the Debt Service Coverage Ratio of the Obligated Group for each Fiscal Year shall be at least Failure to maintain such minimum Debt Service Coverage Ratio shall be an Event of Default under the Master Indenture. See Appendix D SUMMARY OF PRINCIPAL LEGAL DOCUMENTS Master Trust Indenture Debt Service Coverage Ratio; Events of Default. Acceleration Upon a failure of the Obligated Group (i) to pay when due any payment required to be made under the Loan Agreement or under the Series Note, or (ii) an event of default triggering acceleration shall occur under a Related Bond Indenture or Related Bond (as such terms are defined in the Master Indenture) or under the Taxable Loan Agreement, all amounts due under the Series Note shall be declared to be due and payable immediately by the Bond Trustee, as assignee or successor of the Issuer, upon compliance with all applicable law, on the terms and conditions described under Appendix D SUMMARY OF PRINCIPAL LEGAL DOCUMENTS The Bond Indenture Events of Default; Remedies. Certain Additional Covenants of the Obligated Group The Master Indenture and Loan Agreement contain additional provisions, covenants and restrictions related to disposition of assets, mergers and other matters. See Appendix D SUMMARY OF PRINCIPAL LEGAL DOCUMENTS. In addition to the covenants discussed above and set forth in Appendix D, the Obligated Group has entered into, and may in the future enter into, additional covenants for the benefit of certain creditors. The enforceability of any such covenants will be at the sole discretion of such creditors. A violation of such covenants may constitute an Event of Default under the Master Indenture, which could result in a decline in the market value of the Bonds and acceleration of the maturity of the Bonds. See Appendix D SUMMARY OF PRINCIPAL LEGAL DOCUMENTS. Description of the Bonds THE BONDS The Bonds will be dated the date of delivery, and will mature as described on the cover page to this Official Statement. The principal of, and premium, if any, on the Bonds will be payable at the corporate trust office of the Bond Trustee located in Louisville, Kentucky. If the Book-Entry Only System described in Appendix C is no longer in effect, semi-annual interest on the Bonds (payable on each February 1 and August 1, commencing on February 1, 2017) will be payable by check drawn on the Bond Trustee and mailed on each interest payment date to the registered owners thereof registered as such on the relevant record date. The record date for each payment of interest is the fifteenth day of the calendar month preceding the calendar month in which an interest payment date occurs. The Bonds are issuable as fully registered bonds in denominations of $100,000 or any integral multiple of $5,000 in excess thereof without coupons and, when issued, will be registered in the name of Cede & Co., as Bondholder and nominee for The Depository Trust Company ( DTC ), New York, New York. In the event the Bonds receive a rating of BBB- or Baa3 or higher, as applicable, by at least two of the rating agencies then 11

18 rating the Bonds, the authorized denominations of the Bonds shall be $5,000 and integral multiples thereof and the holder of any Bond may exchange such Bond for a Bond or Bonds of other authorized denominations. Redemption Provisions of the Bonds Mandatory Sinking Fund Redemptions. The Bonds maturing on February 1, 2026 shall be redeemed in part on February 1, 2018, and on February 1 of each year thereafter, as set forth below, and paid, at final maturity, by operation of the Sinking Fund Account at a redemption price equal to the principal amount thereof and interest accrued to the date fixed for redemption or maturity, on the dates and in the amounts (the Sinking Fund Requirements ) set forth on the table below: Sinking Fund Requirements *Maturity YEAR PRINCIPAL AMOUNT 2018 $510, , , , , ,195, ,255, ,320, * 1,385,000 [Remainder of page intentionally left blank.] 12