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[413]

Part of Minutes of the University of Kentucky Board of Trustees

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consecutive calendar months out of the most recent period of eighteen (18) full consecutive calendar months preceding the date of incurrence of such Short-Term Indebtedness for which the Financial Statements have been reported upon by the Auditor or by an independent certified public accountant or firm of certified public accountants chosen by the Board provided, however, that the Board shall be free from all such Short-Term Indebtedness, except for a principal amount equal to 3% of said Total Operating Revenues, for a period of twenty (20) consecutive calendar days in each Fiscal Year of the Board; provided, further, that such amount may be increased from 3% to 5% of said Total Operating Revenues if at least 40% of such additional Short-Term Indebtedness has been incurred to off-set an anticipated temporary delay in the receipt of funds due from third-party payors; provided, however, that in no event shall the principal amount of Short-Term Indebtedness incurred pursuant to this paragraph and amounts withdrawn from the Depreciation Reserve Fund pursuant to the Master Resolution outstanding at any time exceed 15% of Total Operating Revenues for the period described above. Section 6.02. Restrictions on Guaranties; Calculation of Principal and Interest Requirements on Guaranties. The Board agrees that it will not enter into, or become liable in respect of, any Guaranty unless (i) such Guaranty shall provide that no acceleration of the Indebtedness guaranteed is permitted as long as principal and interest are paid on a current basis as provided for by such Indebtedness, (ii) there shall be delivered to the Trustee and the State Treasurer an Officer's Certificate showing the income available for debt service of the person whose Indebtedness is being guaranteed (determined in a manner as nearly as practicable like Income Available for Debt Service hereunder) for the most recent period of twelve (12) full consecutive calendar months out of the most recent period of eighteen (18) full consecutive calendar months preceding the date of issuance of such Guaranty, and (iii) compliance is shown for the incurrence of Additional Indebtedness in accordance with the requirements of Section 6.01 hereof. When calculating the principal and interest requirements on Guaranties, if the percentage derived from dividing the amount mentioned in the preceding paragraph by the total of the debt service requirement (determined in a manner as nearly as practicable like principal and interest requirements hereunder) of the Person whose indebtedness is being guaranteed and all other Indebtedness of such person then outstanding is (A) less than 1.00; (B) between 1.00 and 1.25; (C) between 1.26 and 1.34 or (D) in excess of 1.34, then for the purpose of making any Principal and Interest Requirements calculation in the case of (A) 100%, (B) 75%, (C) 50% and (D) 25% of the annual debt service on the indebtedness being guaranteed shall be added to the computation of Principal and Interest Requirements. Notwithstanding the foregoing provisions of this paragraph, at the time of execution of any Guaranty, for the purpose of determining compliance with any test for the incurrence of Indebtedness, 100% of the annual debt service on the Indebtedness proposed to be guaranteed shall be added to the computation of Principal and Interest Requirements. -i9-