(b) The Depreciation Reserve Fund Requirement for each Fiscal Year
will be determined from a schedule of depreciation and principal requirements
caused to be prepared by the Board within 30 days prior to the beginning of
such Fiscal Year.

           Each such schedule of depreciation and principal requirements shall
contain the following:

                (1)  The depreciation on all Property, Plant and Equipment of
           the  Operations   of  the  Hospital,  assuming   no  further  capital
           expenditures from the time of calculation, for each Fiscal Year
           commencing with the Fiscal Year next succeeding that in which the
           schedule is prepared, as calculated in accordance with generally
           accepted accounting principles and based upon the most recent
           Financial Statements, together with the depreciation on depreciable
           assets acquired during the period from the last Financial Statements
           to the date of calculation.

                (2)  The principal requirements on Long-Term Indebtedness for
           each Fiscal Year described in clause (1) above assuming no further
           issuance of Long-Term Indebtedness and no further reduction in any
           mandatory redemption requirements for Outstanding Long-Term Indebted-
           ness from the date of calculation (the "Principal Requirements").

                (3)  A comparison of depreciation, as shown in (1) above, and
           the Principal Requirements, as shown in (2) above, showing (A) the
           Fiscal Years in which depreciation exceeds the Principal Require-
           ments ("Excess Depreciation Years") and for each Excess Depreciation
           Year the amount by which depreciation exceeds the Principal Require-
           ments ("Excess Depreciation") and (B) the Fiscal Years in which the
           Principal Requirements exceed depreciation ("Depreciation Shortfall
           Years") and for each Depreciation Shortfall Year the amount by which
           the Principal Requirements exceed depreciation ("Depreciation Short-
           fall").

                (4)  In any Fiscal Year that is an Excess Depreciation Year,
           one-half ( ) of the excess of depreciation over the Principal
           Requirements (the "Depreciation Reserve Fund Requirement").

           (c)  Money  held for the credit of the Depreciation Reserve Fund
shall be applied as follows:

                (1)  During a Depreciation Shortfall Year the State Treasurer
           shall transfer from the Depreciation Reserve Fund to the Revenue
           Fund, an amount equal to the pro rata portion of the Depreciation
           Shortfall attributable to the Bonds for such Depreciation Shortfall
           Year and, upon delivery to the State Treasurer of an Officer's
           Certificate of the Board stating the principal amount due on other
           Long-Term Indebtedness for such Depreciation Shortfall Year, the
           date such principal amount is due and that such principal amount has
           not been paid from any other source, to the Revenue Fund an amount



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