ABOUT MSHFA:

The Michigan State Hospital Finance Authority was created in 1969 by the Michigan legislature by Act No. 38, Public Acts of Michigan, 1969, as amended (the "Authority Act"), to provide a method to enable nonprofit nonpublic hospitals (as defined in the Authority Act) to provide facilities and services for health care and, to accomplish this purpose, the Authority is authorized to issue bonds and notes. The Authority membership includes a Chairperson and four members who are appointed by the Governor for four-year terms and the State Treasurer and the Director of the Michigan Department of Community Health (as successor to the Director of the Department of Public Health pursuant to the Governor's Executive Order No. 1996-1), who serve by virtue of their respective offices. The Authority Finance Division as part of the Bureau of Bond Finance in the Michigan Department of Treasury provides financial and administrative support services to the Authority (pursuant to Executive Order 2002-12).

As of August 25, 2005, the Authority had delivered bond issues in the approximate aggregate principal amount of $11.8 billion. None of the Authority's bond issues are a general obligation of the Authority, and each is payable solely from loan repayments made by the hospital(s) to which the proceeds of the bonds were loaned and from any security pledged by such hospital(s). The Authority has no taxing power.

POWERS:

DEFINITIONS

HOSPITAL - A private nonprofit institution within the state engaged in some phase of hospital, nursing home, homes for the aged, hospice and certain retirement housing activity or in providing services to Hospitals.

HOSPITAL FACILITIES - Buildings, outpatient clinics, laboratories, laundries, nurses, doctors or interns residences, research, administration or office buildings, maintenance, storage or utility facilities, parking lots, equipment, furnishings and land used by a Hospital. Bonds issued for private physicians office space are not eligible for federal tax exception.

PROJECT COSTS - Plans, studies, surveys, architectural, engineering, legal, financing, acquisition, demolition, site development and remodeling costs plus interest during construction. Expenditures for project costs may be reimbursed within one year, if the Hospital had officially declared its intent to finance the Hospital Facilities with tax-exempt bonds within 60 days of the expenditure.