Management Services Agreement
between
HealthCare Congiemerate Associates, LLC
and

Tulare Regional Medica! Center

2014

MANAGEMENT SERVICES AGREEMENT

This Management Services Agreement ("Agreement") is made and entered into effective as of May 29, 2014 ("Effective Date"), by and between HealthCare Conglomerate Associates, LLC, a California limited liability company ("Manager"), and Tulare Local Healthcare District, d/b/a Tulare Regional Medical Center (the "District"). This Agreement supersedes that
certain Management Services Agreement dated as of January 10, 2014 between Manager and the District.

RECITALS:

WHEREAS, the District owns and operates an acute care hospital at 869 North Cherry Street in Tulare, California (the "Hospital") together with the Clinics and Other Facilities;

WHEREAS, the parties have determined that Manager's provision of services in accordance with the terms of this Agreement will further the ability of the District (1) to provide for efficient delivery of health care services; (2) serve the best interests of the communities served by
the District; and (3) enhance the ability of the parties to effectively and efficiently provide health care for the communities served by the District;

WHEREAS, the parties intend that this arrangement will allow them to achieve a number of mutually beneficial objectives, including the following: (1) further the development of a community-based integrated health care system; (2) enhance the quality of health care services available to residents of the communities served by the District; (3) respond to the health care needs and cost concerns of community residents by allowing evaluation of existing services and addition of new services, as deemed appropriate by Manager; (4) achieve efficiencies through coordination, consolidation, or reorganization, as appropriate, of certain identified health care services; and (5) improve the capacity of the parties and their affiliates to recruit and retain physicians necessary to serve the health care needs of the community, develop linkages with other providers and payers, and expand the geographical service area of the District;

WHEREAS, Manager has heretofore expended considerable effort and resources, including, but not limited to, financial resources and independent consultants, to review and analyze information regarding the Hospital provided by the District; and

WHEREAS, the District desires to engage Manager, and Manager desires to be engaged, to manage the operations of the District upon the terms set forth in this Agreement.

NOW, THEREFORE, for and in consideration of the premises and the mutual undertakings and representations herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged. the parties hereto, intending to become legally bound, hereby agree as follows: 

 AGREEMENT
1. Definitions.

All capitalized terms not defined elsewhere in this Agreement shall have the following meanings,
unless a different meaning clearly appears from the context:

(8) "Acquisition Proposal" shall have the meaning set forth in Section 9(b)(ii). -- "Affiliate" means any other firm, partnership, association, corporation, joint
venture or public body, directly or indirectly controlling or controlled by, or under direct or indirect
common control with, the District or Manager. The term ?control,? when used with respect to a
particular Person, means the possession, directly or indirectly, of the power to direct or cause the
direction of management in the policies of such Person whether through the ownership of voting
stock, by contract or otherwise, and the terms "controlling" and ?controlled? have meanings
correlative to the foregoing.

nnual Budget? shall have the meaning set forth in Section 
indentUre" means that certain indenture of Trust dated as of November 1, 2007 between the

District and U.S. National Bank Association, as trustee.

 

 

?Bonds? shall have the meaning set forth in Section 

"Buildings" means those buildings and other structures in which the
Operations, now or hereafter are conducted, together with such other buildings and structures now
or hereafter owned, leased or otherwise operated by the District that Managerelects, in its sole
and absolute discretion, to operate hereunder, by notice to the District from time to time.

(9) ?Chief Executive Officer" shall have the meaning set forth in Section 4(ailii

?gig? shall have the meaning set forth in Section Sta 1.

?Claims? shail have the meaning set forth in Section 4(viixii4).

 

?Clinics and Other Facilities? means those facilities and businesses identi?ed
on Exhibit A to this Agreement, together with such other facilities and clinics owned, leased or
otherwise operated by the District that Manager elects, in its sole and absolute discretion, to
manage hereunder, by notice to the District from time to time.

means the Centers for Medicare and Medicaid Services. I
?Coltections? shall have the meaning set forth in Section 

(in) ?Compliance Plan? shall have the meaning set forth in Section 5(a1.
"Consultants" shall have the meaning set forth in Section 

 

(0) "Contract Document? shall have the meaning set forth in Section 

 



(p Controlling Person" means any Person, who acting alone or with others, has
the ability to directly or indirectly influence, direct, or cause the direction of the management,
expenditure ctr-money, or policies of a Person submitting an Acquisition Proposal, including any

shareholder dinning, directly or indirectly, legally or beneficially, more than 5% of the equity of such

Person submitting an Acquisition Proposal, a management company or similar service provider
(together with a Person who is a Person of such management company or other
business entity) and any other individual who, because of a relationship of any nature with the
Person submitting an Acquisition Proposal or its owners, or managers, is in a position of actual
control or authority with respect to the Person submitting an Acquisition Proposal, without regard to
whether the individual is formally named as an owner, manager, director, officer, provider,
consultant, Contractor, or employee of the Person submitting an Acquisition Proposal.

2

 shall have the meaning set forth in Section Bibi?).

Increase" shall have the meaning set forth in Section l.
"Degositogg" shall have the meaning set forth in Section 4(g 

"Degosltorg Account? shall have the meaning set forth in Section 

"District Default? shall have the meaning set forth in Section ?l-Dia).

?Emergent Exgenses" shall have the meaning set forth in Section 41min.

"Emplovee Lease Panent? shall have the meaning set forth in Section

 

4( 1; i.

means United States generally accepted accounting principles and
practices as in effect from time?to?time as applied by Manager.

"Governing Body" shall have the meaning set forth in Section Sta 1.

"GoVernmental Authority? means any federal, State or local judicial,
executive or legislative body or governmental municipality, department, commission board, agency
or authority, including government contractors for federal health programs, and including without
limitation, the State of California - Health and Human Services Agency Office of Statewide Health
Planning and Development.

(ea) "Governmental Depositorv Account? means a Depository Account
established for the sole purpose of receiving checks, Wire transfers and other forms of electronic
payments governed under the Social Security Act (42 USC. 1395 etseq.), including payments
under Medicare, Medicaid and TRICAREJCHAMPUS, and payments administered or regulated by
the Centers for Medicare and Medicaid Services of the United States Department of Health and
Human Services (collectively "Governmental Health Payers?).

(bb) means the Health insurance Portability and Accountability Act of
1996 and the regulations promulgated pursuant thereto.

(cc) "Hosgital" shall have the meaning set forth in the Recitals.
(dd) ?Hosgital Law" means California Health and Safetv Code {$32000 et seq.

(ee) neligible Person" shall have the meaning set forth in Section Sit).

"interim Operating Agreement? shall have the meaning set forth in Section

(gig) eopardy Event? shall have the meaning set forth in Section 

(hh) ?Lay? means any constitutional provision, statute, ordinance, or other law,
rule, regulation, interpretation, judgment, decree, or order of any Governmental Authority or any
settlement agreement or compliance agreement with any Governmental Authority, including
Hospital Law, as the foregoing may be revised, replaced or amended from time to time.

3

(ii)

Section 
(to 

(mm)
(rm)
(00)
Section 3(e11i1.(pp)
 (on)
(it)
and Human Services.
(58)
(it)
(UH)

which are conduoted

"Leased Emgloyees" shall have the meaning set forth in Section 4mm.

?Long Term Operating Agreement? shaii have the meaning set forth in

"Manage has the meaning set forth in the Preamble.

"Manager Default? shall have the meaning set forth in Section tote).
?Manager Parties? shall have the meaning set forth in Section Bieili 1.
?Master Account? shall have the meaning set forth in Section 4(g Mill 1.
"Medical Staff" shall have the meaning set forth in Section 3(e)(i1.

?Medical Staff Recommendations" shall have the meaning set forth in

"Net Adiusted Management Fee? shall have the meaning set forth in Section

 

means the Office of Inspector General of the Department of Health

"Ogerating Contracts? shall have the meaning set forth in Section 
"Ogerattng Perio shall have the meaning setforth in Section 2ga1.



Ogerations? means the healthcare and other operations and programs
at the Hospital and the Clinics and Other Facilities, as the same may be

modi?ed by Manager from time to time during the Operating Period.

(W)

"Person" means an association, a corporation, a limited liability company, an

individual, a partnership (general or iimited), a trust, a hospital district organized under the'Hospital
Law, or any other entity or organization, including a Governmental Authority.



(xx)

"311? shall have the meaning set forth in Section Atlantic}.

"Pro?existing Claims" shall have the meaning set forth in Section 4iv)(x)l51.
?Protect? shall have the meaning set forth in Section tilvlii}.

?State? means the State of California.

?Statement? shalt hate the meaning set forth in Section 

"Susgended" shall have the meaning set forth in Section 9gb).

?Termination Fee" shall have the meaning "set forth in Section 1003)?).

2. Operating Period

initial Operating Period. The initial term of this Agreement shall commence
on the Effective Date and end on the date fifteen years thereafter (as such initial term may be
renewed pursuant to Section 2031, the "Operating Period?).

Extension of Operating Period. Upon completion of the initial Operating
Period or of any subsequent renewal Operating Period, this Agreement shall automatically re
1er an additional 10?year period unless either party shall send a written notice of intent not to renew
the Agreement to the 
Operating Period or then current renewal Operating Period, as applicable. Each renewal Operating
Period shall be on the same terms and conditions set forth herein. Notwithstanding the foregoing,
nothing herein is intended to permit the Operating Period to exceed such time period as is
permissible under any tax-exempt bond financing requirements under applicable Law, with respect
to bonds issued by the District on or prior to the date hereof, or hereafter issued with the
concurrence of Manager. in the event the Operating Period exceeds any permissible time period,
then the Operating Period shall be conformed to the maximum time period permitted under
applicable Law.

(0) lrrevocabilitv of Agreement. The District acknowledges and agrees that
Manager is entering into this Agreement in reliance on the long term nature of this Agreement, and
further acknowledges that the rights, duties, powers and authority of each of the parties hereto, are
intended to be non-terminable throughout the Operating Period, except in accordance with the
express provisions of this Agreement. The District acknowiedges that neither party will achieve the
benefits intended to be achieved if the District has any continuing right or power to terminate this
Agreement, or the relationship hereby created, except in accordance with the express provisions of
this Agreement. Accordingly, the District, as a substantial inducement to Manager to enter into this
Agreement and pmpropnetary systems and knowlweby Irrevocably?wg?ggd
or authority at law or in edurty to terminate this Agreement,
except in strict accordance with the express provrsron?s of this? Agreement. The parties further
hewrweby permanent damage
to Manager, not compensable by money damages.

 

 

3. General Responsibilities of the Parties.

Aggointment. The District hereby engages and appoints Manager,
and Manager hereby accepts such engagement, to exclusively provide day-to-day management
services to and for the District with respect to the Hospital and the Clinics and Other Facilities.
Anything herein to the contrary notwithstanding, Manager?s authority hereunder shall be limited as
described in Section 81b), and Manager shall otherwise perform its services hereunder in
accordance with Section 5. Manager?s duties shall include but are not limited to financial and
operating system management, preparation of proposed annual budgets, purchasing, contracting
support enda?telationship management, expansion of the Hospital and the Clinics and Other
Facilities or the services offered, preparation and implementation of staffing plans, recruitment of
personnel, and supervision of the day-to?day operations of the Hospital and the Clinics and Other
Facilities. Manager shall perform its services hereunder in accordance with the District Bylaws, the
policies lawfully adopted by the Board of Directors of the Distn'ct (the "Governing Body?) and
applicable Law. it is understood and agreed that to the extent that Hospital Law is in conflict
with any of the District's Bylaws, then Hospital Law shall control or (ii) the District?s BylaWS or
policies conflict with the terms hereof, the terms hereof shall control.

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 Genera! Control of the District.

Manager expressiy acknowledges and agrees that the District
exercises, and at ail times during the Operating Period, shall eXercise the ultimate control and
directiOn of the Operations. Subject to the provisions of Section Manager shall operate within
the reasonable parameters, policies and procedures adopted by the Governing Body and
communicated to Manager by the District, (and provided that such parameters, poiicies and
procedures do not, in Manager?s reasonable judgment, jeopardize the quality of patient care
provided at the Hospital and the Clinics and Other Facilities, or require Manager or the District to
engage in any illegal or unethical acts, or breach any express provision of this Agreement or any
other agreement of the parties). Notwithstanding the ultimate control to be exercised by the
Governing Body, Manager shail compiy with its obligations under this Agreement, provided that the
District shall not interfere with its ability to do so,

(ii) Notwithstanding anything to the contrary herein. any change in the
licensure type, payment model chosen by the Hospital, classi?cation or operations of the Hospitai
other than as a Medicare participating acute care hespitai that is paid through the Medicare
Prospective Payment System (Sociai Security Act ?1886(d)), shail be subject to the prior written
approval of the Governing Body and Manager.

The District shall timpjy urnish sufficient fuhdggo

Mics.?

tim lypay theaexgensewsnifueiating to Operationgiwiggluding filming of expenses

563? non?o crating expenses. Subjedtwto the more exp??i??i? funding requirements set forth in
7?ection if funds in the Master Account are insufficient, Manager shall notify the District of
the need for funds by submitting Manager?s fund request to the District and the District shalt supply
the requested funds within three (3) days of Manager?s notice to the District of the need for same,
provided that for unanticipated Emergent Expenses. Manager shall have the right to provide a
shorter notice period. Manager shalt not be obliged to fund the District expenses hereunder or
provide funds to accommodate shortfalis in revenue, however, Manager may, in its sole and
absolute discretion, advance funds as provided in Section Manager shall not be in
default hereunder if Manager?s failure to compiy with the terms of this Agreement is due to the lack
of adequate funds provided by the District.

 

(iv) The District shall assure that its funds are used to support the
Hospital and the Clinics and Other Facilities and to provide charitable care therein and are not
diverted to other uses.

(0) Cooperation and Responsiveness.

The District and its Governing Body shall fully and timely cooperate in
good faith with Manager and shall be responsive and avaiiable to Manager during the Operating
Period in order that Manager can carry out its duties and obiigations hereunder.

(ii) in any instance in which the District (or the Governing Body) has an
obligation to provide input or decide an issue, or provide (or withhold) its approval or consent under
the terms of this Agreement, the District (or the Governing Body) shall do so in accordance with the
provisions of Section Hie}. Uniess a period of time is set forth herein for a particular act, a
reasonable period of time for the District to provide input or decide an issue, or provide (or
withhoid) its approval or consent shall generally be Within five (5) to seven caiendar days.

 in addition to its obligation to provide funds, the District will timely
provide Manager with the necessary equipment, information and other resources to enable
Manager to fully and timely perform its services hereunder.

(iv) Manager shall provide up to five (?L?hgurs of consultation to the
District on a basis regarding the Operations and the services provided hereunder. if

requested to do so, Manager will provide additional consulting services for the District. Such
services and the charge therefor will be determined by Manager and the cost thereof shall be billed
to the District pursLlant to Manager's then current terms and conditions, Wm
such amount within thirty (30) days of invoicing. 

 

Relationship.

Except as specifically authorized hereunder, the District shall not
interfere, directly or indirectly, with Manager?s decisions or the daily Operations, and shall not
lnten?ere with Manager's ability to perform its obligations hereunder. The District re resentat'v 
chanting access the Hospital and the Clinics pgiorsarrangement
 "Matt?anger, except'in the event?of' emergency. 'Eitb?pt upon request of Manager, individual
members of the District?s Governing Body. shall not issue directions to Manager, except following
and in accordance with the formal actions of the District's Governing Body. The District shall not
access data systems utilized in connection with the Operations, unless specifically authorized by
Manager in each instance.

(ii) The District representatives? communications, formal and informal,
regarding Manager and the Operations with Persons associated or affiliated with the Operations or
Manager, shall be conducted exclusively with Persons designated by Manager?s Chief Executive
Officer.

Neither the District nor its Governing Body shall (nor cause or
encourage others to) disclose m?rding, or take any action of
omit to take any actionihat is materially detrimental to the reputation of (anything which might tend
tW disrepute, hatred, contempt, scorn?gandaifor cement
tend to reflect unfavorabiy on or otherwise degrade such party), Manager or any of the other
Manager Parties, or make any statements, verbally, in writing or otherwise, that defame, disparage
or in any way criticize the personal or business reputation, practices, or conduct of Manager, or of
the other, Manager Parties, to anyone other than Manager's Chief Executive Officer.
Notwithstanding the foregoing, negative information may be discussed within official the District
Governing Body meetings and in connection with its internal operations, provided that it such
information is used in a non?confidential forum, the District shall use reasonable efforts to verify the
veracity and objectivity of such information prior to disclosing same in a non?confidential forum.
However, nothing herein shall prevent the District or any member of its Governing Body from
testifying truthfully in a legal proceeding or governmental administrative proceeding. the District
agrees that this prohibition extends to statements, written or verbal, made to
anyone, incid?ding but not limited to, the news media, bondholders, industry competitors,
strategic partners, vendors, employees (past and present), and clients.

 

(iv) The parties acknowledge that: this Section is a material provision
of this Agreement; (2) any breach of this Section shall be a material breach of this Agreement, and
(3) a breach of this Section would cause irreparable harm.

 Medical and Professional Matters.

All medical and professional matters relating to the care and
treatment of patients requiring professional medical judgment shall remain the responsibility of the
District medical 'direclor(s) and medical staff of the Hospital (the ?Medical Staff?), provided,
however, that Manager, in accordance with Cal. Admin.Code Regs, tit. 22, 70701 and 
7070303) and 42 CPR. 482.12(a) and 482.22. shall be obliged to recommend written
bylaws for adoption by the District in accordance with legal requirements and the District's
community reaponsibility regarding the appointment and reappointment of members of the Medical
Staff, which bylaws may or may not be consistent with the current bylaws in order to provide the
most efficient, highest quality care practicable given the Hospital's size, location and resources,
and (ii) provide recommendations to the District regarding Governing Body approval of Medical
Staff by~laws (collectively ?Medical Staff Recommendations?). it being the goal of the parties to
establish and implement a medical staff development plan (the ?Medical Staff Development

 

Plan?) that will lead to the establishment of a medical staff which is configured to provide high

quality care through a patient centered approach be accountable for the care delivered and the
efficiency of that care. The Medical Staff Development Plan shall be consistent with the provisions
of 42 CPR. pt. 425, without regard to whether the District is a recognized accountable care
organization. The parties recognize that changes established pursuant to the Medical Staff
Development Plan implementation may result in a smaller more accountable Medical Staff being
appointed. The District shall be deemed to have accepted Manager's Medical Staff
Recommendations unless the District?s Governing Body within thirty (30) days of written notice
of such Medical Staff Recommendation with good cause (which shall be specifically set forth in
writing) speci?cally votes to disapprove the Medical Staff Recommendation and (ii) such vote is by
a 4f5ths majority vote of the Governing Body, after Manager has been provided a reasonable

cpportuniiy to explain andior juatify the Medical Staff Recommendation before the members of the

Governing Body. The Medical Staff shall be organized and shall function in compliance with
applicable Law and other licensu're, certification, and accreditation standards as they may be
amended from time~to~time. Subject to the foregoing; final decision?making authority relating to all
matters of medical, professional, and ethical affairs, are and shall be the exclusive responsibility of
the District. Manager and its Affiliates, and their respective officers, directors, managers,
members, employees, agents, contractors and representatives (collectively, "Manager Parties")
expressly do not, by this Agreement, undertake to perform or provide any physician or medical
services to patients. Except as provided with respect to Medical Staff Recommendations, all
matters requiring or involving physician professional medical judgments or medical issues shall
remain the responsibility of the District and its Medical Staff. Manager and Manager Patties shall
not be responsible in any manner for the acts, omissions or conduct of any member of the Medical
Staff, or other credentialed health care providers or practitioners. Neither Manager nor Manager
Parties shall be liable to any patient or other Person for damages arising out of or resulting from
any medical treatment, or act or emission by, or dishonesty or misconduct of, any servant or
employee of the Hospital and the Clinics and Other Facilities, any physician or other credentialed
health careiprovider providing physician or medical services at the Hospital or the Clinics and
Other Facilities, or any agent of the Hospital and the Clinics and Other Facilities (other than for the
direct acts of agents of Manager and Manager Parties, which shall not include any physicians,
health care professionals or the District employees). However, Manager and Medical Staff shall
consult with each other regarding such matters where consultation is feasible and in the best
interest of the patients of the District.

(ii) Subject to Subsection Sleilii, Manager shall provide such oversight
and support as Manager, in its sole and absolute discretion, deems appropriate for the Medical

8

Staff?s administrative affairs, including monitoring the performance of professional services by the
Medical Staff and other licensed personnel.

Subject to the Medical Staff Recommendations, the District retains
control and authority over all appointments to the District's Medical Staff, the granting of clinical
privileges at the District to the extent required by applicable Law and applicable accreditation
standards, and any actions taken with respect to Medical Staff members, including appeals of
actions. Actions taken by the District pursuant to this Subsection shall be consistent with the
Medical Staff Development Plan. Notwithstanding the foregoing, the Chief Executive Officer or his
or her designee may grant an individual temporary clinical privileges for a period not to exceed the
greater of one hundred twenty {120) days or (ii) such period as is allowed under applicable Law,
all in accordance with accreditation agency requirements and the District?s Bylaws.

Standards of Performance. The District acknowledges that while Manager
shall expand its commercially reasonable efforts in performing its obiigations under this
Agreement, Manager does not guarantee any particular results, notwithstanding projections which
may be made by Manager. Managens projections and forward looking statements are based on
estimates and expectations, and reasonably available competitive, ?nancial, economic and other
data, and as a result are inherently uncertain. Actual results could differ materially from those
anticipated as a result of a variety of factors. Manager shall use its commercially reasonabie
judgment in providing the services required under this Agreement. The parties acknowledge that
implementation of the District?s charitable care purposes may not permit the maximization of the
District's profits. Manager shall, for and on behalf of the District, use commercially reasonable
efforts to make recommendations and take actions required hereunder to assist the District to
comply in all material respects with any material Law respecting the Hospital and the Clinics and
Other Facilities. The District covenants that it will, in good faith, consider all of Manager?s
recommendations regarding the Operations, and will support and implement, through policies
andlor other appropriate actions of the Governing Body, the recommendations it deems reasonably
appropriate. The District is a California Health Care District organized and operating under the
Hospital Law with, inter site, a charitable mission, and it has under the Hospitai Law certain
responsibilities and obligations, including, but not limited to, obligations to provide charity care and
indigent care. At all times, Manager, in managing the District, shall follow the charity and indigent
care policies and obligations of the District (provided that the Hospital and the Clinics and Other
Facilities? financial obligations in that regard shall not be materially changed unless such change is
required by applicable Law) and shaii?assist the District in meeting all of the District?s required
obligations under Hospital Law, the District will notify Manager of any changes to any
policy, procedure, or the District Bylaw which may impact Manager?s rights or obligations under this
Agreement, including but not limited to, those affecting the Hospital and the Clinics and Other
Facilities? charity care obligations.

4. Duties of Manager.
gifts) Hospital Chief Executive Officer.

Manager shall provide a Chief Executive Officer (?Chief Executive
Officer") to provide the routine, day-to?day administrative and management services for the
Hospital and the Clinics and Other Facilities, as settorlh herein. Such Chief Executive Of?cer shall
carry out the usual and customary duties of such positions within the health care industry. The
Chief Executive Officer shall be an employee of Manager, as provided in Section Alibi.
Notwithstanding anything to the contrary in this Agreement, the Chief Executive Officer?s authority
shall be at least as extensive as the authority the District delegated to the District?s former chief



executive officer (as of the end of 2013), together with such additional authority as is provided in
the District?s Bylaws. However, it is specifically agreed that the restriction on the authority of the
Chief Executive Officer set forth in Section 2(9) of the District's Bylaws (regarding submittal of
certain expenditures over $100,000 to the Governing Body) shall not be a limitation on the
authority of the Chief Executive Officer. Any duties andlor responsibilities beyond the foregoing
will be discussed and agreed upon by Manager and the Governing Body and will be provided by
Manager pursuant to the terms of a separate written agreement in exchange for fair market value
compensation, and in compliance with applicable Law.

(ii) The Chief Executive Of?cer shall: serve as the District?s authorized
representative to the public, as well as to Governmental Authorities or voluntary" organizations; (ii)
report regularly to the Governing Body on the performance of the Hospital; assist the District
with the development of strategies and action plans enabling the District to respond to the health
care needs of individuals residing in communities served by the District; and (iv) direct the District
in expanding its community relations program.

Personnel. 

As soon as reasonably practicable, as determined by Manager,
following the Effective Date, 'of

OMS, except for those employeemh'd?rnus?t poem by the 
wit-Fapplicable Law 42 C.F.R. 482.28). Manager shall provide advance notice to the
District of the date 'or dates upon which Manager shall elect to become the employer of the
personnel of the Hospital and the Clinics and Other Facilities, as provided herein. Such employee
transition may be made in one or more stages, as determined by Manager.

(ii) Upon Manager's becoming the employer of the employees
associated with the Hospital and the Clinics and other Facilities, Manager shall lease the
employees associated with the Hospital and the Clinics and Other Facilities (the "Leased
Employees") to the District during the Operating Period, on the terms set forth in this Section 4.
Prior to Manager?s becoming the employer of such employees the District shall be the employer of
the employees and shall be responsible for paying such emptoyees in accordance with its regular
payroll practices.

The Leased Employees shall be employees of Manager for purposes
of Manager?s benefit programs or plans now existing or hereafter created, including compensation
and payment and withholding of federai, state and local income, social security, unemployment,
Medicare, other payroll and employment taxes, Section 125 plans, Section 403(b) annuities,
workers' compensation and health insurance. Manager is solely responsible for the administration
of employee benefits, bene?t plans and programs for the Leased Employees. All expenses and
charges incurred in connection with the Leased Employees shall be reimbursed to Manager by the
District. 

(iv) Manager pays compensation to its employees for certain holidays
and vacations. Any paid holidays and vacation cggurring duringthe Operating Period hereof shell
to themlgistrict at the?sgmne rates asmit thegr?ployee vvg?cgking. 

Manager reserves the right of direction and control over the Leased
Employees, including a right to terminate Manager?s employment relationship with a Leased
Employee in Manager?s sole and absolute discretion. Manager shall recruit, employ, train,

'10

promote, direct and terminate the employment of Leased Employees, as needed for the
Operations, and shall provide oversight and consultation regarding performance standards,
personnel policies, and employee bene?ts.

(vi) Manager shall be responsible for the development and
implementation of policies and practices, in conformity with the terms of this Agreement, relating to
personnel management services only, including without limitation, enrolling, recruiting,
interviewing, selecting, training, evaluating, replacing, supervising, disciplining, reassigning and
terminating Leased Employees. .

(vii) While performing services for the District, the Leased Employees will
be subject to all work rules and performance standards applicable to Manager's employees and
contractors, including disciplinary standards.

Manager shall have the right to draw from the Master Account, or if
such amount is not sufficient, the District shall pay to Manager the estimated amount of the
Employee Lease Payment for each payroll cycle payment date within two (2) days of a request
from Manager for such funds. Within ten (10) days after the close of each month, Manager shall
deliver to the District a statement of the actual Employee Lease Payment(s) for the prior month (the
?Statement?). At the District's written request, Manager shall provide the District reasonable
supporting detail underlying the calculations of the Employee Lease Payment(s). if the Statement
discloses that actual Employee Lease Payments were less than the estimated Employee Lease
Payments for the applicable prior month, then Manager shall refund the excess to the District or
redeposit such amount in the Master Account, as Manager shall determine appropriate. if the
Statement discloses that actual Employee Lease Payments were more than the estimated
Employee Lease Payments for the applicable prior month, then Manager shall be paid the shortfall
by the District within one business day or shall withdraw such amount from the Master Account,
as Manager shall determine appropriate- if the District fails to timely advance funds for the
Employee Lease Payment, Manager shall have the right, in its sole and absolute discretion, but not
the obligation, to advance such funds, as provided in Section 

(ix) The payment for the applicable period, with respect to each Leased 
Employee (the "Employee Lease Payment?), shall be an amount equal to 1% of the
compensation (including, without limitation, wages, salary, compensation, employee benefits,
insurance, workers? compensation coverage, unemployment compensation coverage, taxes,
withholdings, contributione,?commissions, bonuses and travel and business expenses), retirement,
workers compensation premiums and benefit amounts payable with respect to a Leased
Employee, and taxes thereon. 

Manager shall confer with the District in determining the general
range of the number and duai'ioations of employees required for the efficient and effective
operation of ljospital and the Clinics and Other Facilities and in establishing and revising in?service
training programs, and lob descriptions, all in order to accomplish the goals and objectives of
Hospital and?the Clinics and Other Facilities. Hovvever, Manager shall have the ultimatiauthor?y
to hire, tire and set the terms of employment for all such employees. To discourage nepotism and
mrepresentatwes agree tnatthey shall not request or require
that Manager: hire or fire any speci?c employee or amend the terms of any specific employee's
employment, (ii) dictate the specific number of employees in a category of employment or 
select, reject or promote a Leased Employee or contractor (or its? personnel) based on the
individual's political affiliation or beliefs or as a reward for political services or as a form of political

 

 



patronage, directly or indirectly. Likewise, the District shall not refer potential employees or
contractors to Manager for hiring or engagement.

(xi) During the Operating Period and for a period of two (2) years
thereafter, the District and its Af?liates shall not, directly or indirectly, solicit for employment any
Leased Employee. 

(xii) Manager ma hire or retain any consultants, accountants, attorneys
or other professional perso?rElWT?E?dely, ?Consultants? which Manager, in its sole and
absolute discretion, determines is necessary or appropriate to assist Manager in carrying out its
duties and responsibilities under this Agreement. The expense of any Consultants so retained

shall be an expense of the District, but Manager shall not-retain any such Consultants without the
a revel of the Governing Body, if the cost of such Services shall exceed $100,000 in any calendar
ymmemise set io?? InTrie approved AnnUal Budget.



 

 

 

Manager, during the transition of Leased Employees from the District
hereunder, shall not implement any employee layoffs that could implicate the Worker Adjustment
and Retraining Notification Act of 1988, as amended, 29 U.S.C. 210?], et seq., and any similar
state and local applicable Law, without providing any required notices. Notwithstanding anything in
this Agreement to the contrary, Manager is not obligated to hire any specific District employee but
may interview any or all such District employees. Manager may, but shall not be obligated to,
make otters of employment to such employees of the District as are identified by Manager in its
discretion. It is understood and agreed that (A) Manager's extension of offers of employment shall
not constitute any commitment. contract or understanding (expressed or implied) of any obligation
on the part of Manager to an employment relationship of any fixed term or duration or upon any
terms or conditions other than those that Manager may establish pursuant to individual offers of
employment, and (B) em loyment offered by Manager is "at will? and me be terminated by
Manager or by an amp eyes a any time for any reason (subject to any written commitments to the
contrary made by Manager or an employee). Nothing in this Agreement shall be deemed to
prevent or restrict in any way the right of Manager to terminate, reassign, promote or demote any
of the Leased Employees or to change adversely or favorably the title, poWers, duties,
responsibilities, functions, locations, salaries, other compensation or terms or conditions of
employment of such employees.

(0) Patient Safety Quality and Performance Measurement. Manager shall assist
in the implementation of the Hospital and the Clinics and Other Facilities? patient safety, quality,
and performance measurement program. Manager shall provide oversight and facilitate the
Hospital and the Clinics and Other Facilities? patient safety, quality, regulatory readiness, infection
controll?prevention, and service excellence performance metrics. Manager activities shall include:

Coordination, data collection/analysis and recommendation}
facilitation of evidence?based practices to address the following:
at?" (1) Clinical program measures, hospital?acquired conditions, and
other priority patient populations;

(2) Patient and staff safety, including the reduction of
preventable adverse eyents;

(3) infection control and prevention services to include electronic
surveillance, tracking and transmission of required data; 

12

(4) Regulatory and accreditation readiness and compliance
tracking:

(5) Evidencabased policy and procedure development: and
Patient satisfaction and loyalty. 

(ll) Manager will also recommend strategies to enhance the Hospital?s
patient safety and quality department infrastructures, assist the Hospital and the Clinics and Other
Facilities in implementation of evidencebased order sets, and disseminate best practices. The
District shall be responsible for all expenses associated with surveys, licensure, permits, and
accreditation.

Manager shall use reasonable efforts, on a consultative basis, to
guide or direct the District in maximizing its total pedonnance score under the Federal
government's value-based purchasing programs, including but not limited to the clinical process of
core measures, the patient experience of care dimensions; and in connection with the" Consumer
Assessment of Health Care Providers and Systems surveys.

Standard Forms. Manager shall recommend standard formats for all charts,
invoices, and other forms used in the Operations. Manager shall make reasonable efforts to
ensure that such standard forms remain current as to applicable Law, as well as industry
standards.

 

Revenue Cycle Management Manager shall provide advice, direction, and
reasonable assistance to the District and assist it in overseeing its revenue cycle management for
the Heepital and the Clinics and Other Facilities. Services provided by Manager include making
recommendations regarding Hospital and the Clinics and Other Facilities?:

Charge master or similar schedule of charges;
(ii) Adjustment coding;

Patient I client billing and collections; and

(iv) Coding and billing compliance audits.

All direct, out?of?pooket fees, espenses and charges incurred in connection with actual
regenueoyole management shall be the District. expenses.

Annual Budget.

.s Manager shall be responsible for preparation, presentation,
rncnitoring, and reporting of the annual operating and capital budgets (collectively, the ?Annual
Budge Each proposed Annual Budget shall set forth an estimate of operating revenues and
expenses (including capital expenses) for the next fiscal year. together with an explanation of
anticipated changes in utilization, charges to patients and clients, payroll rates and positions, non-
vvage cost increases, and all other factors differing signi?cantly from the then-current year.
Manager shall be reaponsible for the oversight and review of the Annual Budgets, with final
recommendations presented to the Governing Body for approval. Each Annual Budget will be
created and implemented to coincide with the District?s fiscal year, which is July ?i st through June

?13

30th of the following year. Once approved, Manager shall thereafter establish a plan necessary to
implement such Annual Budget.

(ii) Subject to the limitations set forth in Section Manager shali take
commerciaiiy reasonable efforts to oversee the management of the Hospital and the Clinics and
Other Facilities so that the actual revenUes, costs, and expenses of the operation and maintenance
of the Hospital and the Clinics and Other Facilities shall be consistent with the approved Annual
Budget. inclusion of any item within the Annual Budget shall constitute ail necessary approval of
the Governing Body for Manager to take such act to effectuate the budgeted item. Notwithstanding
anything to the contrary herein, Manager shall have the right, in its sole and absolute discretion, to
make any expenditures necessary on an emergent basis to avoid or mitigate damage to the
Hospital and the Clinics and Other Facilities, obtain equipment repairs or to avoid or mitigate injury
or potential injury to Persons or property or that are necessary on an emergent basis to comply
with any Law or to cure or prevent any violation of any Law, whether or not provided'for'or within
the amounts provided for in the approved Annual Budget for the applicable year (collectively, the
"Emergent Expenses"). Manager shaii use its reasonable efforts to give the District advance
notice of any such Emergent Expenses, and in any event, shall give notice as soon as reasonably
practicable after such expenditures, but in no event later than fifteen (15) days.

(9) Bank Accounts.

The District shall maintain the Gross Revenue Fund (as defined in
the Section 5.01 of the Bond indenture) bank accounts (the "Depository Accounts?) at one or
more ?nancial institutions (the "Depositorfi pursuant to the requirements of the Bonds. The
District shall cause ali amounts received by or on behalf of the District in connection with the
operation, maintenance, or ownership of the Hospital and the Clinics and Other Facilities (the
?Coilections?) to be deposited in the Depository Accounts, including a Governmental Depositpry
Account. Amounts received from Governmental Heaith Payers shalt, unless otherwise required by
the Bonds, be deposited into a separate Governmental Depository Account. Funds in the
Governmental Depository Account shall be transferred, on a daily basis to a Depository Account
(other than the Governmental Depository Account), in a manner consistent with the Bond
Indenture. in the event that payments on the Bonds are delinquent or the Bonds are in default, or
the Bond trustee shail have otherwise taken controi of the Depository Accounts or amounts to be
deposited therein, the District shall use its best efforts to cause the trustee to disburse amounts in
the Gross Revenue Fund for the payment of current or past due expenses of the District and
hereby authorizes Manager to make such requests directly to the Bond trustee on behalf of the
District.

. (1) Except to the extent inconsistent with the Bond lndenture,
the District shaii enter into an agreement with each Depository to cause the Depository to receive
such payments and deposit them into Governmentai Depository Account in the name of the
District, and sweep the proceeds of such account on a daily basis, into the Depository or Master
Account as designated by Manager, in conformity with the terms of the Bond lndenture.

(2) The foregoing instructions of the District with respect to the
Government Depository Account shall be revocable, at the sole instruction of the District, to the
extent required by applicable Law; provided, however, that if the District revokes such instructions,
it shall be in material defauit of this Agreement and Manager shall, in addition to ail other rights
hereunder, be entitled to seek an order or judgment from a court. of properjurisdiction for speci?c
performance to sweep?the Governmental Depository Account pursuant to this Agreement.

14

(ii) Manager, acting in the District?s name and as agent of the District, as
provided in Section 4(h} shall make or direct to be made timely deposits, in the Depository
Accounts or the Master Account, as hereafter de?ned, of all Collections which Manager receives, .
subject to the Bond lndenture requirements.

The District shall provide disposition instructions to the Depository to
transfer, at the end of each business day during the Operating Period, subject to the terms of the
Bond Indenture. all amounts in the Depository Account (other than amounts required for payment
of the Bonds) into a bank account controlled by Manager (the "Master Account?). Except for the
transfers to the Master Account and Bond payments, the District shall not remove, disburse,
transfer, use, pledge, hypothecate. grant a lien on or security interest in, or otherwise encumber
any funds in the Depository Accounts or Master Ascount.

(iv) The District shall execute such documents as any Depository or
Manager may reasonably require, including without limitation, a limited power of attorney, to permit
the Depository to receive the Collections, endorse any checks, drafts, notes, money orders, cash,
insurance payments, and other instruments relating to such Collections,'deposit the Collections
. into the Depository Account, and to transfer the Collections (less amounts precluded from transfer
under the Bond indenture) each day from the Depository Account into the Master Account. The
District shall be responsible for all fees, costs and expenses incurred in connection with
maintaining the Depository Account, including all fees, costs and expenses of a lockbox which may
be deemed desirable and appropriate by Manager; provided, however if and to the extent
permitted by applicable Law and the Bonds, at the request of Manager, the Collections or any part
thereof, shall be deposited directly into the Master Account. .

Manager is hereby authorized to make payment from the Master
Account or other accounts of the District, including the Depository Account, to itself and its
Affiliates of any amounts due to it or any of them by the District under this Agreement or otherwise,
including, without limitation, the Management Fee, and the reimbursement of expenses and
advances, and the District acknowledges that any amounts due to Manager or any of its Affiliates
under this Agreement, including without limitation, any Management Fee. shall be of at least as
senior a priority as, and shall not be subordinate to the payment of, any amount due to any other
creditor of Company, unlessotherwise agreed to in writing by Manager and paid as provided in

Section dif). 

(vi) Whawas?m?spamiu?tmpew lossmresoiting
from the insolvency, malfeasance or non~feasance of any Depository with respect to the District
bank accounts.

(vii) Manager shall have the right to make disbursements from the Master
Account, the Depository Account and other the District bank accounts, on behalf of the District in
such amountsland at such times as the'same are required to operate the Hospital and the Clinics
and Other Facilities, as provided in Section 4m and to pay the expenses and debts incurred in
connection therewith. if the District fails to timely advance funds for to pay expenses, Manager
shall have the right, in its sole and absolute discretion, but not the obligation, to advance such

funds, as provided in Section 1.

Charges and Collections of Accounts.

Manager shall assist the District in billing and collecting for all fees
payable with respect to all services, equipment, devices and supplies provided to patients and

15

clients at the Hospital and the Clinics and Other Facilities, inciuding the enforcement of the rights
of the Hospital and the Clinics and Other Facilities and/or the District as creditor under any contract
or in connection with the rendering of any service in accordance with the District?s charity care
policies. All out-ot?pocltet costs and expenses relating to the billing and collection services.
including without limitation, any fees or expenses payable to collection agencies, shall be for the
account of the District. 

(ii) The District shall direct all third party payers to provide Manager with
copies of ail remittance advices in electronic format or in suoh other format as shall be agreeable to
Manager.

The District hereby irrevocably appoints Manager during the
Operating Period as its true and [awful attorney-intact to take the following actions for and on
behalf of and in the name of the District and agrees to execute the Limited Power of Attorney,
attached hereto as Exhibit and any other instrument reasonabiy requested by Manager to
evidence such appointment to:

- (1) Bill patients and third party payers (including reimbursement
or indemnification from insurance companies and plans, and other third party payers or fiscal
intermediaries) in the name and provider numberis) oi the District;

(2) Collect in the name of the District from patients, insurance
companies and all other third party payers (other than from Governmental Health Payers), alt
charges resulting from the provision of items and services rendered to patients of the Hospital and
the Clinics and Other and to collect capitated payments and all other charges, fees or
salaries resulting from or related to the Operations, including but not limited to any and all incentive
funds and funds from shared risk. and bonus pools under any risk sharing arrangements wherein
the District is the provider of medical services, in whole or in part;

(3) Take possession of and endorse in the name of the District
all cash, notes, checks, money orders, insurance payments, and any other instruments received as
payment of accounts receivable for deposit into the Depository Account or Master Account or other
account, as applicable; -

(4) Deposit all such Collections directly into the Depository
Account or the Master Account, other than with respect to Governmental Health Payer receivables;

(5) Deposit Governmental Health Payer receivables into the
Governmental Depository Account;

(8) Make withdrawals from the Depository Account and other the
District accounts for such purposes as are consistent with the provisions of this Agreement and the
Bond indenture;

(7) Place accounts for collection. settle and compromise claims,
and institute legal action for the recovery of accounts; and

(8) Execute all instruments or documents necessary or
appropriate in connection with the above.

16

(iv) With respect to Government Health Payer patients and clients,
Manager shall bill the Governments! Health Payers for same in the name of and on behaif of the
District. . 

- At the District?s expense Manager shalt be entitled to obtain the.
assistance of one or more biliing and/or collection agencies to bili and/or coiiect sums due to the
District, in accordance with the District's charity care policies and applicable Law, inciuding, without
limitation, Section 9007 of the Patient Protection and Affordabie Care Act.

(vi) Manager, on behalf of the District, may, in its name or in the name of
the District, but in any event at the expense of the District, appeal or contest any action taken by
any Governmentai Authority against the District and/or the Operations, including, without limitation
any overpayment claims, or contest by iegal proceedings the validity of any Law adverse to the
District and/or the Operations; provided, however, that if Manager pursues any such appeal or
contest, or asserts any such legal proceeding, the District shail adequately secure and protect
Manager from all less, cost, damage or expense by bond or other means satisfactory to Manager if
any action taken by any Governmental Authority against the District and/or the Operations related
to such action could result in a toss, cost, damage, or expense to Manager.

Payment of Expenses.

 

Manager shall provide oversight of the District?s funds in connection
with the timely payment of the District?s iiabilities and other obligations. Manager shail review the
payables of the District and shall cause payment thereof to be made from the Depository Account,
the Master Account and or from funds otherwise provided by the District. if the District fails to
timely advance funds for such expenses, Manager shall have the right, in its sole discretion, but
not the obiigation, to advance such funds, as provided in Section 

(ii) The District hereby grants to Manager, to the extent permitted by
appiicabie Law, throughout the Operating Period, an exciusive special power of attorney and
appoints Manager, to the extent permitted by applicable Law, the District's exclusive true and
lawful agent and attorney-in?fact, and Manager hereby accepts such special power of attorney and
appointment, to: sign checks, drafts, bank notes or other instruments on behaif of the District, (ii)
make withdrawals from the Depository Account, the Master Account or other the District accounts
for payments specified in this Agreement and designate, remove, and change such signatories
on such accounts as Manager deems necessary or appropriate from time to time.

Upon request of Manager, the District shaii execute and deliver to
any applicable ?nancial institution such additionat documents or instruments as Manager may
reasonably request to evidence or effect the speciai power of attorney granted to Manager by the
District pursuant to this Section. The special power of attorney granted herein is coupled with an
interest and shall be irrevocable except?with Manager?s written consent.

(iv) it is specifically agreed and understood, however, that Manager?s
obligations under this Section 4 are subject to availability of the District funds to make such
payments. Nothing contained herein shall obligate Manager to make any such payments from its
own funds or resources or to advance any monies whatsoever to the District. if the District fails to
timely advance funds, Manager shalt have the right, in its sofa and absolute discretion, but not the
obligation, to advance such funds, as provided in Section tittiliil?li. Notwithstanding the foregoing,
no advance of funds hereunder shall cure the District?s default resulting from a failure to timer
provide funds as required hereunder. Manager shall not be iiable either primarily or as guarantor

17

for debts of the Hospital or the Clinics and Other Facilities, or the District under the terms of this
Agreement. The District shall be responsible for payment of all legal fees and collection fees
incurred by Manager if the District fails to pay its invoices timely.

Pledge of Credit.

Manager snail not engage in any financiai tending, financing or
banking actions that result in liens, mortgages, lines of credit, security interest or financial
obligations in the name of the District, without the prior written consent of the Governing Body.
Prior to requesting consent for approvai, Manager shall provide a detailed proposal to the
Governing Body describing the amount of required funding, the purpose of the financing, the
strategic plan to generate sufficient revenue to repay such financing and all other alternatives
evaluated to obtain suf?cient funding.

(1) Notwithstanding anything in this Agreement to the contrary,
in the event the District fails to timely advance funds, as required hereunder and/or meet any of its
payment obligations under this Agreement, Manager shalt have the right, but not the obligation, in
its sofa and absolute discretion, to advance funds or agree to undertake to advance funds to any
Person, as a loan to the District to meet the shortfall caused by the District's faiiure. Such advance
of funds by Manager, however, shall not cure any default of the District as a result of its failure to
timely provide funds. All sums advanced by Manager pursuant to such agreements or
undertakings shall be for the District?s account. The District shall pay Manager interest on 
advanced funds at the rate set forth in Section 6(a) and the principai upon demand by Manager.
Any advance made shail be evidenced by a promissory note issued by the District in an amount
equal to the amount advanced.

(2) To the extent Manager advances funds, this Agreement
constitutes a security agreement pursuant to which the District provides Manager with a lien on all
of the District?s assets, to the extent alicwed by Law, and Manager shall have the right to ?le a
Uniform Commercial Code financing statement with respect to such obligation without the
signature of the District. 

(3) Manager shali have the right to execute the above described
promissory note on behalf of the District, to the extent permitted by Law. The District hereby
irrevocably appoints Manager as its attorney-intact coupled with an interest with fuil power to
prepare and execute any documents, instruments and agreements, inciuding, but not iimited to,
any note evidencing the advance or loan and any Uniform Commerciai lCode financing statements,
continuation statements and other security instruments as may be appropriate to perfect and
continue its security interest in favor of Manager.

(ii) Except as provided in Section 4(jl(i), Manager shall not, under any
circumstance, in the name of, or on behalf of, the District borrow any money or execute any
promissory note, bill of exchange or other obligation, or dispose of any asset of the District not in
the ordinary course of business, without the consent of the Governing Body; and only to the extent
aiiowed by all applicabie Law.

(it) information Technology. Manager shall provide oversight of the information
technology activities associated with the Hospital and the Clinics and Other Manager
shall be responsible for oversight of the selection, negotiation, instaiiation, and implementation of
the information technology systems and structures at the Hospitai and the Clinics and Other
Facilities consistent with the Annual Budget. Manager shaii seek approval from the Governing

18

Body of any new systems and/or termination of any existing agreements. which approval shall not
be unreasonably withheld. The District shail?be responsible for the direct expense of all hardware
and software for the information technology activities of the Hospital and the Clinics and Other
Facilities. The District shall be responsible for the cost of maintenance and support of all such
hardware and software, as well as the training of Manager and the District employees, physicians
and other applicable personnel on systems and software provided, however, that Manager shalt
not incur any expense in excess of $100,000 unless set forth in the approved Annual Budget or
otherwise approved by the Governing Body. For avoidance of doubt, Manager shall not perform
the information technology maintenance for the District under the terms of this Agreement. Rather,
any such additional services it provided, will be provided by Manager pursuant to the terms of a
separate written agreement in exchange for fair market value compensation, and in compliance
with applicable Law.

internal Audit. Manager shall provide oversight of the District?s routine audits
of internal procedures and systems, including auditing of billing, information systems, payroll, and
other areas as identified and shall perform such internal audits as Manager, in its reasonable
discretion, deems necessary for the purposes of providing its services hereunder. External audits,
it requested by and performed for the District, shall be the responsibility of the District. All direct,
out-of?pocltet tees, expenses and charges incurred in connection with such external and internal
audits shall be a the District expense. Ail internal and/or external audit expenses in excess of
$100,000 shall be approved by the Governing Body, Unless such expenses are set forth in the
approved Annual Budget.

Managed Care Contracting. Manager shall provide recommendations
regarding managed care contracts and rates, and assist the District in the negotiation and
consummation of such contracts, and monitoring of contract effectiveness and compliance.

Operating Contracts,

Manager shall assist the District in negotiating and securing all third
party Operating Contracts necessary or desirable for the proper and ef?cient management and
operation of the Hospital and the Clinics and Other Facilities.

(ti) Notwithstanding Section 4m, Manager may enter into, or modify,
supplement, amend, discharge, or terminate, or grant waivers or releases of obligations under
such contracts, leases, licenses, instruments, and other agreements ("ggemting Contracts") to
the name of and at the expense of the District, as may be deemed necessary or advisable by
Manager for the furnishing of all professional, consulting, and staffing services, concessions,
drugs, supplies, utilities, equipment, property maintenance, insurance and other products, goods,
and services as may be necessary or appropriate from time to time for the maintenance and
operation of the Hospital and the Clinics and Other Facilities, or as may otherwise be necessary or
appropriate to_carry out Manager?s obligations under this Agreement. Subject to the terms hereof,
Manager is hereby expressly authorized, as the District?s agent, to execute and deliver any of such
Operating Cdritracts in the name of and on behalf of the District, and presentation of a copy of this
Agreement shall constitute conclusive evidence of such agency; provided, however, that, Manager
is also authorized to enter into and maintain in its own name any national and regional contracts in
which the District may participate, as well as such other contracts for the District which, in the
judgment of Manager, are advisable to be entered into in Manager?s name. Upon Manager?s
request, the District shall execute such agreements, contracts, leases- Instruments, documents
and other Agreements as Manager shall determine are desirable to facilitate the operation and
management of the Hospital and the Clinics and Other Facilities. With respect to all cost and

it?







expenses associated with Operating Contracts in Manager's name, the District shall reimburse
Manager tor all such costs and expenses and or pay such costs and expenses directly, at
Manager?s discretion. Manager is expressly authoriZed to contract, in the name and on behalf of
the District, for the provision by Manager or its Affiliates of any services to be provided with reapect
to the Operations. 

in the event of a termination of this Agreement which resuits in no
further reiationship between the District and Manager, Manager shall cause any contracts,
including Operating Contracts, it has entered into in its own name to manage and operate the
Hospital and the Clinics and Other Facilities pursuant to this Agreement for the bene?t of the
District to be assigned to the District and the District shaii assume the obligations under at! such
agreements and shall indemnify Managertrom and against any liability thereunder.

(iv) All such Operating Contracts in excess of $1,000,000 shall be
approved by the Governing Body, such consent not to be unreasonabiy delayed or denied, unless
the items or services that are the subject of the contract have been approved previousiy in the
Annual Budget. -

The expense of such third party contracts shall be a direct expense
of the District. Manager shall not be obliged to pay for any the District purchases from its own
funds nor shalt Manager be obliged to guarantee, directly or indirectly, any debts of the Hospital or
the District under the terms of any purchasing arrangement. if the District iaiis to timely pay
amounts due under such arrangements, Manager shall have the right, in its sole discretion, but not
the obitgation, to advance the funds necessary to satisfy such obligations, as provided in Section



insurance. Manager shali consult with the District as to the type of insurance
or self?insurance, amount of coverage thereunder, deductibles andr?cr self?insured retentions
therefor, premiums therefor, and issuers thereof to be carried with respect to the Hospital and the
Ciinics and Other Facilities and the Operations. Approval of any change to the types or iirnits of
insurance coverage for the District shalt be made by the Governing Body. Manager shall use its
commercially reasonable efforts to cause such insurance to be placed and kept in'ettect at 
times; provided, however. the District shalt, solely at its own excense, obtain antiglaintainjniuii
rewrote aemsurcughom "?ee ?mg 

?u

insurance coverage:
?M?m-n-?mx

Comprehensive genera! insurance, including personal injury
and property damage liability insurance naming the District and Manager as insureds.

(ii) Property and casualty insurance, inciuding coverage for ail Buildings
and their contents, including boiler insurance naming the District and Manager as insureds.

 if deemed necessary by the District or Manager, comprehensive
automobiie liability insurance naming the District and Manager as insureds.

(iv) Worker?s compensation and employer?s liability insurance and other
similar insurance naming the District and Manager as insureds for the District?s and Manager?s
employees.

Professional liability insurance covering all Operations and, to the
extent availabie, directors and officers insurance, naming the District and Manager (and Manager's

20

executive employees) as named insureds. The professionai liability insurance shall afford
minimum protection (which may be effectuated through primary and/or excess coverage) of not
less than $1,000,000.00 combined single iimit for damage in any one occurrence and not less than
$3,000,000.00 aggregate for all occurrences. The insurer must be licensed by the California
Department of insurance and have a general policyholders rating of not less than or better by
Best?s Key Rating Guide and with a claims paying ability rating from of at least AA or an
equivalent rating from another rating agency acceptable to Manager. Manager may require that
the District obtain from the insurer a statement as to good standing with the California Department
of insurance.

(vi) Commercial umbrella or excess liability coverage and, to the extent
available, regulatory insurance coverage, covering ail Operations, naming the District and. Manager
as named insureds. The commercial Umbrella and Excessive Liability insurance shall afford
minimum protection (which may be etfectuated through primary and/or excess coverage) of not
less than $1,000,000.00 combined single limit for damage in any one occurrence and not less than
$8,000,000.00 aggregate for all occurrences, insuring Manager and the District and their
respective employees and representatives in connection with Operations. The insurer must be
licensed by the California Department of and have a general policyhoiders rating of not
less than or better by Best?s Key Rating Guide and with a claims paying ability rating from 
of at least AA or an equivalent rating from another rating agency acceptable to Manager. Manager
may require that the District obtain from the insurer a statement as to good standing with the
California Department of insurance.

insurance Specifications. The foregoing insurance shall meet the foiiowing
speci?cations:

All such policies of insurance shalt be in such amounts as are
deemed necessary by the District and Manager (but in no event less than the amounts set forth
above) and shall contain a waiver of rights of subrogaticn ciause against Manager and the District, -
to the maximum extent permitted under applicable Laws. The parties and their respective Affiliates
shall not assert against the others, and each does hereby waive with respect to the others, any
claims for any losses, damages, liabilities or expenses (including attorneys? fees) incurred or
sustained by any of them on account of damage or injury to Persons or property arising out of the
ownership, operation and/or maintenance of the Hospital and the Clinics and Other Facilities, to
the extent that the same would be covered and paid by the insurance required to be carried
hereunder. The District shail present such policies of insurance to Manager for review, upon
request by Manager.

(ii) The District shall cause Manager, and any Person affiliated with
Manger, that Manager so directs, to be named as additional insureds on the liability insurance
coverage described above and on any fidelity bend (it any). It is the intention of the parties that the
insurance and bonds {if any) maintained by the District with respect to the Operations shall protect

both the District and Manager and will be primary insurance for both parties for any and ail losses



covered thereby.

Certi?cates of insurance for the above coverages and a copy of the
bond (if any) and accompanying endorsement naming Manager andior Manager's employees
(specifying hisiher position), as appiicabie, shall be provided to Manager within thirty (30) days of
the Effective Date and thereafter within thirty (30) days of policy or bond (if any) renews! or
replacement and (ii) of a request by Manager. At! such policies shall provide that the subject policy
may not be canceled, modified or reduced (including, without limitation, any amendment that would

21

reduce the scope or limit coverage or remove any endorsement to such policy or cause the same
to no longer be in full force and effect) except upon not less than thirty (30) days prior written notice
to Manager. Originals of each renewal policy or certificates therefore from the insurers evidencing
the existence thereof shall be provided to Manager at least thirty (80) days prior to, but not later
than, the expiration or termination dates of the applicabie policy. in addition, the District shall notify
Manager in writing of any reduction or canceilation, increase of deductible or material modification
of any term or condition of any of insurance coverage required herein within twenty?four (24) hours
of receipt.

(iv) Manager reserves the right to procure, at the District's cost, any or sit
of the foregoing required insurance coverage, if the District fails or refuses to do so, or if Manager
in its sole discretion determines that Manager's procuring of such insurance is most efficient andior
in the financial benefit of Manager andior the District. Manager is not required to act under this
Section 4(9) and shall not be liable for its failure to effect or maintain recommended insurance
upon the District's failure to do so.

Manager may obtain similar coverages for its bene?t by taking out
policies with such insurance companies as may be selected by Manager. Notwithstanding
anything herein to the contrary, any insurance obtained by Manager hereunder may, at Manager?s -
election, cover only Manager's interest. Ail direct, out~0f?pocket tees, expense?g?ges
incurred in conthaining such insurance shall be the it the
insurance protects oninManag'eMF'E?interests. 

 

 

 

 

 

 

(vi) If, during the Operating Period, the District is covered by general
liability, professionai liability, or other iiability insurance on a "ciaims made? basis, then at ieast ten
(10) days before the termination of this Agreement, the District shail procLIre and maintain, at the
District?s sole cost and expense, an extended reporting endorsement or ?tat!? insurance coverage
for a period of at least four (4) years after the termination date of this Agreement, with coverage
limits and deductible amounts equivalent to those required hereunder on the date immediately
preceding the termination of this Agreement for such coverage for general, professional and other
liability claims reported after the termination of this Agreement but concerning services provided
during the Operating Period or the term of the ciaims- made policy. The District shall provide
Manager with a certificate evidencing such coverage no later than ten (10) days before the
termination of this Agreement. The District shall be named as the primary insured party on each
policy of tail insurance and Manager shall be named as an additional insured. This Section will
survive the termination or expiration of the Agreement.

(vii) To the extent any insurance is placed through a selt~insurance
program or captive insurance program, the District shall assure that such insurance shall comply
with all applicable Law, it such self?insurance or captive program is domiciled outside the United
States, and the District shall assure that such coverage shall be, as appropriate, reinsured by
reinsurers acceptable to Manager, in Manager's sole and absolute discretion.

Purchasing.
Manager shall be responsible for the oversight and management of
the District?s purchasing systems and procedures for the Operations at the supervisory 
management level, including but not limited to oversight of:

(1) Capital purchasing;

22

(2) Researching and negotiating equipment based on Hospital
and the Clinics and Other Facilities? needs, specifications, and the Annual Budget;

(3) Reviewing oversight of inventory par levels audits);
andlor

(4) Department purchasing structures and systems.

(ii) W?onsible for the direct expense of all

grchases and for all purchasing, expenses, including but not limited to utilities, concessions,
I W- mm m"Mn-? c? n. - 1 I
drugs, equr ment, supp res, furniture or furnishin 3M UEory?i ?terns,_linens, mac tnery, mediornes.

guesses.

In furtherance of the foregoing, all capital and other expenditures
made shall be subiect to the purchasing and procurement policies and procedures of the District,
its Bylaws, and applicable Law.

Marketing and Communications.

 

Manager shall provide consultation, advice and oversight related to
marketing, advertising, and promotional issues, as well as marketing strategies and policies, as it
deems necessary in its sole and absolute discretion.

(it) Manager shall:

(1) Provide direction and advice regarding the marketing
program for the Hospital and the Clinics and Other Facilities which shall be reasonably designed to
inform and educate health care professionals and the general public served by the District of the
existence of one or more of the services offered by the District.

(2) Cause, to the extent required by applicable Law, including
Internal Revenue Code a community needs health assessment to be prepared identifying
the health and welfare needs of the residents who reside in the communities served by the District,
and. propose an implementation strategy to meet the outstanding community health needs
identified in the assessment.

(3) Cause to be prepared and distributed such descriptive
booklets, brochures or pamphlets as Manager determines are necessary, in its sole and absolute
discretion, to inform health care professionals and members of the public of the nature and
requirements of State and Federal reimbursement programs for patients and how the same relate
to the services offered at the District.

?ll dii?ecLout?of-pociget teesmexpenses and: _chargeswi?n?ggrur?gmirl
gaggegtion with marketing, advertising, and promotional and

expense of the 
?WV-unrulqu1 . v,

is) Medical Records.

Manager shall be responsible for the oversight of the District?s
medical records activities at director and executive levels, including development of department
strategies and systems and planning.

23

- (ii) During and following the expiration of the Operating Period, all
records of the District shall remain the property of the District.

Ail patient medical records shall be treated as confidential so as to
comply with all applicable Laws regarding the confidentiality of patient records, including, without
limitation, the privacy standards promulgated under HIPAA.

(iv) Manager shall be a ?Business Associate? of the District, as that term
is defined in the regulations implementing and Manager?s use of ?Protected Health
Information," as that term is defined in the reguiaticns implementing HIPAA Manager shall
execute and comply with the Business Associate Agreement previously executed by the parties.

Manager shall notify the District of any data breach that may occur at
the Hospital and the Clinics and Other Facilities, after Manager becomes aware of same.

it) Additions! Reports. Manager agrees to prepare, cause to be prepared or
otherwise make available reports regarding the Operations as follows:

Within forty-five (45) days after the- end of each fiscal quarter,
Manager shall matte availabie to the District the following information:

Relevant utilization statistics for the District for the prior
quarter, including but not limited to patient volume and payer mix; and

(2) Financial statements and budget analysis for the District for
the prior quarter, as provided in Section 

(ii) Manager shall provide to the Governing Body, on at least thirty (80)
calendar days' notice, or sooner if necessary, to implement such required action, a description of
any needed or discontinued services, refinancing proposals, expansion pians or material changes
in operating procedures. The proposal shall eXpiain the reasons for the proposed activity.

Agency. Subject to approval of the Governing Body for acts outside of the
ordinary course of the Hospitai and the Clinics and Other Facilities? businesses, and (ii) the terms
hereof, Manager shall have the right to act as the agent of the District and/or the Hospital and the
Clinics and Other Facilities in the procuring of linenses, permits and other approvals, the payment
and collection at accounts and in all other activities necessary or appropriate or useful to Manager
in the carrying out of its duties as specified herein.

Construction Protect Advice.

Wine District with advice and recommendations
rega?rgingathe', current Hospital construction 133$:ng the comwer
commonly referred to as the Tower No. 1 Expansion Project (the rcject")) and wilt assist the
WWTHEPWEETAW Consultants engaged by Manager in this regard shail
be compensated as provided in Section Manager shall not be a contractor on the Project
and shall not have control over, charge of or responsibility for, the means, methods, techniques,
sequences, procedures, or for the safety precautions and programs related to such Project.
Manager shall not have control over or be responsible for the District?s architects or contractors or
their agents, nor shall Manager be deemed to be responsible for the construction of the Project,
directly or indirectly or the funding of such Project.

24

(ii) Manager shall provide consultation and advice, and shall assist the
District in the District?s efforts to discharge all of the field operations requirements and
responsibilities of the District as the owner of the Project as required under the construction
contracts between the District and its contractors (the "Contract Documents?) and to cauae the
District?s contractors to perform the work required to construct the Project in accordance with the
Contract Documents. in this regard, Manager shall provide recommendations to the District to
assist in its evaluation of the status of the on?going construction associated with the Project.
Manager shall provide on~site administration of the Contract Documents in cooperation with the
Project architect. Manager shail provide assistance, including administrative, management and
related services, to coordinate scheduled activities and responsibilities of the contractors, and
Manager shall schedule and conduct meetings to discuss such matters as procedures, progress,
coordination, and scheduling of the Project work.

Manager shall endeavor to obtain satisfactory performance from the
District?s contractors, but shall have no for any fatiure of performance by any of 
contractors. Manager shall have no liability for any design defect or other matter which is the
responsibility of the Project architect. Manager shalt recommend courses of action to the District
when requirements of the Contract Documents are not being fulfilled. Manager shall report to the
District any defects or deficiencies in the work of any contractor or their agents or employees, or
any other Person performing construction on or providing materials or equipment to the Project of
which Manager obtains actual knowledge. Notwithstanding the foregoing. Manager shall have no
obligation to investigate or take active steps to determine the existence of any such defects or
deficiencies. nor shall Manager be liable, for any faiiure to timely communicate any such defect or
deficiency to the District. Manager may recommend the rejection of any de?cient or defective work
to the District, if such work does not Conform to the Contract Documents; however, the failure of
Manager to recommend rejection of any such work shall not constitute Managesz approvai or
acceptance of the work.

(iv) Manager shall review requests for changes in the construction
contracts, assist in negotiating contractors? proposals, and provide recommendations to the Project
architect and the District in connection therewith.

- Manager shaii monitor and evaluate actual costs for the construction
work, and estimates for uncompleted work, and shalt advise the District as to variances between
actual and. budgeted or estimated costs. Manager shall notify the District if there are any apparent
inconsistencies or inaccuracies in the information presented by the District?s contractors. Manager
shall also report the contractors? cost control information to the District.

(vi) Manager sh-ali assist the District in developing and implementing
procedures for the review and processing of applications for payment from the contractors for
progress and final payments.

(vii) Manager shall record the progress of the Project. On a 
basis or otheirwise as requested by the DistrictTManager shall submit written or oral progress
reports to the District and attend Governing Body meetings requested by the District.

Manager shalt not have control over, charge of, or responsibility for

the construction means, methods, techniques, sequences or procedures, or for safety precautions
or programs in connection with the Work of any contractors.

25

(ix) Manager shall make recommendations if it determines that
Consultants are reasonably required for the Project, and shall assist the District in selecting and
engaging such Consultants. Manager shall supervise and coordinate Project Consultants.

Limitations.

(1) Manager has no authority to execute any Contract
Documents or otherwise bind the District to any transactions with respect to the Project
construction. Manager shall not provide any legal services or architectural services with respect to
the Project. The District agrees that although Manager will make recommendations, Manager shall
not take any action in connection with the implementation of such recommendations without the
District?s prior approval.

(2) The District will at all times maintain a meaningful and
substantial involvement in all phases of the Project, and hereby accepts responsibility for the
results of the Project. Managefs recommendations concerning terms of the Construction
Contracts shall be subject to review and approval of the District and the District?s attorneys or other
advisers.

(3) The District acknowledges that Manager does not guarantee
any particular results, notwithstanding projections which may be made by Manager. Manager's
projections and forward looking statements are based on estimates and expectations, and
reasonably available data from contractors, architects and others, and as a result are inherently
uncertain. Actual results could differ materially from those anticipated as a result of a variety of
factors.

(4) Neither Manager nor Manager Parties shall be liable to the
District for any claims, demands, costs, expenses, liabilities or obligations of any nature relating to
the Project, except to the extent resulting from the willful misconduct of Manager or
Manager Parties. Manager and Manager Parties may be liable to the District for general and direct
damages, but in no event shall Manager or any Manager Parties be liable to the District for any
consequential damages, including loss of use, special, indirect or incidental damages. Manager
and Manager Parties may be liable for punitive or exemplary damages to the extent resulting from
their willful misconduct.

(5) The District shall defend, indemnify and hold Manager and
Manager Parties free and harmless from and against all Claims (including reasonable attomey?s
fees), except to the extent resulting from the willful misconduct of Manager or Manager Parties. It
is understood and agreed that, Manager and Manager Parties shall have no liability whatsoever for
any actions or tailure to act which arose prior to January 10, 2014, including Claims which relate in
any way to construction activities which occurred prior to that date (?Pro-existing Claims?). In the
event that any Claims are made against Manager or any Manager Party which may include Pre-
existing Clairg-?s. then the indemnification and defense obligations of the District shall apply, even if
they also involve Claims which are not Pro-existing Claims. However, in the event of a
determination by a court or arbitrator that any Claims for which indemnification was provided by the
District were not in fact Pris?Existing Claims and were not Claims for which indemnification is
otherwise required hereunder, then Manager shall be liable to reimburse the District for any
reasonable costs or expenses incurred by the District in connection with the defense or
indemnification. 

26

(6) in circumstances where any limitation on damages or
indemnification provision hereunder is unenforceable or unavailable for any reason, the District
shall contribute to any Claims, relating to the Services provided hereunder by Manager, in such
proportion proportional to the relative fault of the parties bears to all other conduct giving rise to
such Claim. -

(7) Neither Manager nor any Manager Patties, or any of their .
respective Affiliates, shall have any liability hereunder to the District, and the District agrees it will
not bring any action against any such Persons, except to the extent caused by the wiliful
misconduct of such Persons. Without limiting the foregoing, such Affiliates are intended third?party
beneficiaries of these terms and may in their own right enforce such terms.

(8) The provisions of Section 4(viixii4i-(71 shall survive the
expiration or termination of this Agreement.

5. Legal Compliance.

Compliance Plan. Manager has received a copy of the District's Compliance
Policies and Procedures. including the Code of Conduct and the Physician Referral, Stark Law,
and Anti-Kickback policies and procedures together with a copy of the District?s Corporate integrity
Agreement with the HHS Of?ce of inspector General dated July 20, 2009 (the  Manager
shall abide by these policies and procedures and applicable Law. Any recommendations and/or
revisions of such policies made by Manager must be approved by the Governing Body. Manager
will be given prompt written notice of any changes made to the foregoing. Manager may develop
and recommend changes to the District?s existing Compliance Plan (the "Comgliance Plan?) for
implementation during the Operating Period. Any such recommendations andfor revisions to the
Compliance Plan must be approved by the Governing Body. Manager shall use its commercially
reasonable efforts to support'the Compliance Plan. All costs of developing, implementing and
maintaining the Compliance Plan shall be borne by the District.

Government Regulations. On behalf of the District, Manager shall, subject to
the limitations set forth herein, use its reasonable commercial efforts to help assure that: the
District continuously complies with all material applicable Laws, including without limitation,
Hospital Law, State and Federal False Claims Act, Civil Monetary Penalty Law, State and Federal
Anti?Kickback statutes, State and Federal self?referral prohibitions and applicable Medicare
conditions of coverage andior participation and (2) the District retains and maintains in good
standing all necessary aocreditations, iicenses, permits, approvals and authorizations required for
the ongoing operation of the Hospital and the Clinics and Other Facilities.

A Accreditation Compliance. Manager shall, subject to the limitations set forth

herein, take all steps necessary to assist the District to continue meeting the applicable
accreditation agency?s accreditation standards, as they exist or may be changed from time-to?time,
and as applicable to the Hospital and the Clinics and Other Facilities? than current
accreditationi's'). Manager shall have the right to select and/or change the applicabie accreditation
agency for the Hospital, and if applicable, the Clinics and Other Facilities, in its sole and absolute
discretion.

Licensure. Manager shall not act in a manner which adversely affects the
licensure of the District by the State as a Medicare participating acute care hoSpitai (or any other
Medicare reimbursement designation as may be agreed to by the parties). Within thirty (30) days
of receipt by the District or Manager of any final report or written assessment concerning the

2?

licensure oi the District by the State as an acute care hospital or the accreditation of the District,
Manager shall furnish a copy of such report to the District.

Compliance. Manager shall comply with the applicable provisions of
the Administrative Simplification and Privacy Ruies of the Health insurance Portability and
Accountability Act of 1996, as amended, and regulations promulgated pursuant thereto, and any
related or applicable privacy Law regarding medical information and protected health information.

Ineligible Persons Disclosure Obligation. Manager shall use reasonable
commercial efforts to monitor that none of Manager's or the District?s employee?s employed at the
Hospital and the Clinics and Other Facilities have been sanctioned, debarred or suspended or
otherwise deemed ineligible to participate in Medicare, Medicaid or other Federal health care
programs, and procurement, or non?procurement programs (collectively, an neligible Person?).
Manager represents to the District that Manager is not an Ineligible Person nor has any pending
proceedings or received notice of any action or proceeding to exclude, debar, suspend, or
otherwise declare Manager ineligible under any federally funded health program. Manager shall
notify the District within three (3) business days after becoming aware of any fact or circumstance
that would make Manager an ineligible Person.

Access to Records. Manager shall, in accordance with Section 
of Title 42 United States Code until the expiration of four (4) years, or longer as may be required by
applicable Law, after the termination of this Agreement, make available upon written request to the
Secretary of the United States Department of Health and Human Services, or, upon request, to the
Comptroller General of the United States Accounting Office, or any of their duly authorized
representatives, a copy of this Agreement and such books. documents and records as are
necessary to verify the nature and extent of the costs of the services provided by Manager under
this Agreement. Manager further agrees that in the event Manager carries out any duties under
this Agreement through a subcontract with a .value or cost of Ten Thousand Dollars ($10,000) or
more over a twelve-month period with a related organization, such agreement shall contain a
clause to the effect that until expiration of four (4) years, or longer as may be required by Law, after
the furnishing of such services pursuant to such subcontract, the reiated organization shall make
available upon written request to the Secretary of the United States Department of Health and
Human Services, or, upon request. to the Comptroller General of the United States Accounting
Of?ce, or any of their duly authorized representatives, a copy of such contract and such books,
documents and records of such organizations as are necessary to verify the nature and extent of
such costs. This Section is included pursuant to and is governed by the requirements of federal
Law. No attorney-client, accountant-client, or other iegal privilege will be deemed to have been
waived by the parties or any of the parties' representatives by virtue of this Agreement.

- No Obligation to Refer Patients. Nothing contained in this Agreement shall
require (directly or indirectly, explicitly or implicitly) either Manager or its Af?liates or the District or
its Affiliates, to refer any patients to one another or to use the Hospital or the Clinics or Other
Facilities as aggrecondition to receiving the bene?ts set forth herein.

6. Management Fee.

Management Fee. the performanceigiathe
W?ioes under this Agreement, Manager shall receive adyangg _o_n the
'ittstasv?iaa.ch.aenthi a intrastate:nicotine 



28

 CPI Adiustment.

"931? means the index of the US. City Average Consumer
Price Index for Urban Wage Earners and Clerical Workers Medical Care Services (1982?84
equals 100) published by the United States Department of Labor, Bureau of Labor Statistics or any
successor agency that shall issue such index. in the event that the CPI is discontinued for any
reason, the parties shall use such other index, or comparable statistics, on the cost of medical care
services in the United States, as shall be computed and published by any agency of the United
States or, if no such index is published by any agency of the United States, by a responsible
financial periodical of recognized authority.

(it) Beginning on January 1, 2015, and every year thereafter, the
Management Fee shall each be adjusted for inflation as follows:

The than existing Management Fee shall be multiplied by the
greater of the CPI percentage increase using the latest published data since the last adjustment

3% or {ii} five percent Increase?);

(2) The than existing Management Fee shall then be added to
the CPI increase (?Net Adjusted Management Fee?); and

 

(3) The Net Adjusted Management Fee will then be multiplied by
Z. ?1 to determine the Management Fee for the next ensuing calendar year.

(4) For example, the latest published CPI in January 2015 (eg.
November 2014) will be compared to the CPI for November 2013 (assuming that was the latest
available published data) and the 2014 Management Fee will be multiplied by the percentage
difference. Assuming a three percent increase, the Management Fee of $225,000 would be
increased by $6,750 for a new montth Net Adjusted Management Fee of $231,750. That amount
would then be multiplied by 1.311 resulting in a new Management Fee of $234,067.50.

(0) Expenses. in addition to the Management Fee, Manager shall be
reimbursed by the District for expenses expressly made reimbursable hereunder
together with (ii) other usual, customary, and commercially reasonable out-of?pocket expenses
incurred on behalf of the District, in accordance with the approved Annual Budget, or with approval
from the Governing Body, if such fees are in excess of the amount in the approved Annual Budget.
Manager shall not be reimbursed for any indirect or overhead expenses of Manager or its Affiliates.

Operating Expenses. Except as otherwise provided in this Agreement, all of
the costs and expenses of maintaining and operating the Hospital and the Clinics and Other
Facilities shall be the sole cost and expense of the District, and shall not be expenses of Manager.
Expenses shall include, without limitation:

-- any operating or non-operating expense incurred in the provision of
services to the District (unless specifically excluded hereunder); and

(ii) The cost of any employee or Consultant that provides services at or
in connection with the Hospital or the Clinics or Other Facilities for improved clinic performance,
each as management, billing and collections, business of?ce consultation, accounting and legal
services, including salaries, benefits, other compensation, traVel costs, and other expenses, but
only when such services are coordinated by Manager.

29

Mama?s?nmm?fwk
.

 Late Payments. if payment of amounts due hereunder, including
Management Fees, Employee Lease Payments and reimbUrsement of other amounts, are not
made on the due date, then interest shall accrue on any unpaid amounts for each day beyond the
due date at a rate equal to the iesser of: one percent per month or the maximum
non?usurious interest rate allowable by Law.

Senior Indebtedness Status. The obligations of the District under this
Agreement rank and shall rank at least senior in priority of payment to all other unsecured debt of
the District. Fund transfers and other payments received by the District shall be directed,
regardless of the payment purpose indicated in the payment document, according to the folicwirig
priority ranking: (1) payment of the Bonds; payment of the Management Fee and 
deder and 
Setcff. Notwithstanding any provision of this Agreement to the
Manager shall have the right from time to time to setoff any amounts owed by the. District
to Manager against any amounts owed by Manager to the District and/or from any funds of the
District over which Manager has a power of attorney or right of disbursement, whether pursuant to
this Agreement or otherwise.

7. Books and Records.
Maintenance of Books and Records. Manager shaii supervise the
maintenance of the books of account covering the operation of the District. Such books of account
shall be maintained on an accrual basis in accordance with GAAP.

Accounting. Manager shalt be responsibie for the oversight of Hospital and
the Ciinics and Other Facilities? accounting functions.

(0) Reports and Financial Statements. Manager shall from time to time deliver
to the Governing Body, from the District?s data, the reports and ?nancial statements reasonably
requested by the Governing Body, as well as any other reports or financial statements required by
the terms of this Agreement. Oversight shall include consultation with respect to Hospitai and the
Clinics and Other 

General ledger} financial accounting;
(ii) Accounts payabie;
Payrcii;

(iv) Facilitation of Hospital and the Clinics and Other Facilities annuai
audit; fees paid to independent accountants, hoWever, shall be the responsibility of the District;

11"" reporting. Year-end information required for preparation of
Medicare and MWe.m  ,?ndjuheDjshic?emdire_cticn,
gleaccou?iants, prior to one hundred twenty (120) days into the year foiiowing the year for which
they are prepared; and

(vi) Mo nthiy bank 

3O

 Financial Statements.

financial statementS, Including income statements, balance
sheets, statement of cash flows. Such statements shall generally be available to the District by the
20th day of the month following the applicable period.

(ii) Quarterly financial statements including unaudited financial
statements reflecting the operations of the District for such quarter. Such statements shall
generally be available to the District by the 45th day following the .end of each applicable quarter.
Quarterly statements shall also include Manager?s usual and customary statistical and performance
measures.

Annual financial statements, including an unaudited balance sheet of
the District dated as of the end of the fiscal year and a related statement of income or loss for the
District for such fiscal year. Year-end income statements, shall be available to the District, and at
the District?s direction, to its accountants, prior to ninety (90) days into the year following the year
for which they are prepared.

Audit.

If the District so elects, such financial statements will be certi?ed in
the customary manner by an independent certified public accountant approved by the District. the
am of any such independent accountants shall be borne by 

 

(ii) Manager shall respond, in writing, to any and all recommendations
made by the District?s independent auditors, which response shall either acknowledge that an audit
proposal or recommendation has been implemented or, if not, the reasons why not.

Financial Reporting Expenses. Fees paid to independent firms and
professionals in connection with the foregoing together with the direct, out~ofnpocket fees, expenses
and charges incurred in connection with the preparation of such shall be 

inspection of Records. Authorized agents of the District shall have the right
at all reasonable times during usual business hours, attlge to audit, examine and
make copies of or extracts from the books of account of the District maintained by Manager. Such
right may be exercised through any agent, independent public accountant or employee of the

District designated by the District.

 

Confidentiality. The parties agree that: neither party will disclose any
secrets or confidential technology, proprietary information, or trade secrets of the other party without
the prior Written consent of the transmitting party, except to the receiving party?s agents, advisers,
auditors and representatives; or (it) as may be necessary by reason of legal, accounting or
regulatory rquirements beyond the reasonable control of the recipient party; and (is) should this
Agreement expire or terminate, neither party will take or retain any papers, records, tiles, computer
programs and software, other documents or copies thereof, or other confidential information of any
kind belonging to the other party, except for copies of same as may be reasonably necessary to
defend any anticipated litigation or respond to claims or pursuant to ordinary data backup or storage
processes.

3'1

8. Indemnification and Liabilities.

District indemnity Obligation. Manager does not hereby assume any of the
obligations, liabilities or debts of the District or the Hospital or the Clinics and Other Facilities,
except as otherwise expressly provided herein, and shall not. by virtue of its performance
hereunder, assume or become liable for any of such obligations, debts or liabilities. The District
hereby agrees to indemnify, defend and hold Manager harmless from and against any and all
claims, actions, liabilities, losses, costs and expenses of any nature whatsoever, including
reasonable attorneys? tees and other costs of investigating and defending any such claim or action,
asserted against Manager on account of any of the obligations, liabilities or debts of the District or
the Hospital or the Clinics and Other Facilities, except for demands arising from Manager?s willful
misconduct. The District further hereby agrees to defend, hold harmless and indemnify Manager
and Manager Parties from and against any and all claims, actions, liabilities. losses, costs and
expenses of any kind imposed on account of or arising out of actions taken by Manager or
Manager Parties in what Manager or any such Person reasonably believed to be within the scope
of their responsibilities under this Agreement, exceptfor acts of willful misconduct. However, in no
event shall Manager or any Manager Parties be liable to the District for any. loss of use, goodwill,
revenues or profits, or any consequential, special, indirect or incidental loss, damage or expenseI
or for punitive or exemplary damages. except for punitive or exemplary damages to the extent
resulting from the willful?mlsconduct of Manager or Manager Parties. This Section shall sup/lye the
expiration or termination of this Agreement. The foregoing indemnification is an addition to and not
in limitation of the indemnification provisions as they relate to agents of the District (it being agreed
that Manager is an agent of the District for that purpose), as set forth in the District?s Bylaws, and
any other indemnification provisions set forth in this Agreement.

(1395, Manager Not Liable for District Liabilities. The District is and shall be lully
liable and legally accountable at all times to all patients and Governmental Authorities for all patient
care and funds and all other aspects of the operation and maintenance of the Hospital and the
Clinics and Other Facilities. Manager shall have absolutely no obligation or duty to act for or on
behalf of the District with respect to any matter which is not directly related to Manager?s obligation
to provide the administrative and management services described herein to the Hospital and the
Clinics and Other Facilities, as and to the extent provided herein. Manager shall not be or become
liable for any of the existing or future obligations, liabilities, or debts of the District, or for any of the
obligations of the Heepital and the Clinics and Other Facilities. This Section shall survive the
expiration or termination of this Agreement.

(0) 3%?Manaoer Not Liable for Condition of Buildings or Equipment.
Notwithstanding anything contained herein to the contrary, in no event shall Manager be liable for
any damages arising from, incident to, or in connection with, the physical condition (including the
environmental condition) of the Buildings or other structures owned or leased by the District, or the
land upon which such Buildings or other structures are sitUated, or any of the equipment located
thereon, and any such damages as may arise shall be the sole responsibility of the District, as a
the District expense, except to the extent that Manager engages in willful misconduct in carrying
out its responsibilities hereunder, in which event Manager?s liability shall be limited to amounts not
covered by applicable insurance policies. in connection with the foregoing, the District shell, with
the assistance of Manager, comply with any and all applicable ?re and safety codes. This Section
shall surviva the eXplration or termination of this Agreement. -

Manager Not Liable for Acts or Omissions oi the District?s Agents. Manager
shall not be responsible for the acts or omissions of any of the District?s managers, officers,
directors, Governing Body, agents, employees, contractors, subcontractors or any other Persons

32

performing any work or rendering any services in connection with the operation, management.
ownership or other use of the Hospital and the Clinics and Other Facilities, or any Consultants or
other Persons engaged with respect thereto. This Section shall survive the expiration or
termination of this Agreement.

biz-Manager Not Liable for Consultants' Fees and Other Financial Obligations.
The District, and not Manager, shall be responsible for all fees and other compensation charged by
Consultants and other Persons engaged by the District (or by Manager on behalf of the District in
accordance with the terms hereof) to provide services related to the Hospital and the Clinics and
Other Facilities. Manager shall be responsible for reviewing such fees, and the District shalt timely
provide Manager with copies of all bills, invoices, and other information relating to such fees.

Retease. Because of the unique services to be provided by Manager
hereunder, neither Manager nor any Manager Parties shall be liable to the District for any damages
or loss of any kind including, without limitation: direct damages; (ii) consequential damages; 
loss of profits; (iv) business interruption; damage, to property or death or injury to-Persons from
any cause whatsoever including, without limitation, professional liability or malpractice, acts of
vandalism, loss of trade secrets or other con?dential-information; or (vi) damage, loss, or injury
caused by a defect in the structure of the Hospital and the Clinics and Other Facilities, power
failure, fire, strikes, shortage of supplies, or any cause whatsoever in or about the Hospital and the
Clinics and Other Facilities or any part thereof, unless such claims, losses, costs, damages or
expenses are the result of the willful misconduct of Manager or Manager Parties. This Section
shall survive the expiration'or termination of this Agreement.

Manager indemnity Obligation. Manager shall indemnify, defend and hold
the District harmless from and against any and all claims, actions, liabilities, losses, costs and
expenses of any nature whatsoever, including reasonable attorneys? fees and other costs of
investigating and defending any such claim or action, imposed on the District including its of?cers.
directors, partners, employees and agents on account of or arising out of any breach of the terms
hereof by Manager, and resulting from the wlilful misconduct of Manager or any Manager Parties.
ANY PROVISION OF THIS AGREEMENT (INCLUDING ANY
INDEMNIFICATION OBLIGATIONS), lN NO EVENT SHALL MANAGER BE LIABLE (WHETHER
IN AN ACTION lN NEGLIGENCE, CONTRACT OR TORT OR BASED ON A WARRANTY OR
OTHERWISE) FOR (1) FAILURE TO REALIZE SAVINGS OR LOSS OF PROFITS, REVENUE, OR
ANY OTHER INDIRECT, INCIDENTAL, PUNITIVE, SPECIAL OR CONSEQUENTIAL DAMAGES,
AND (Ii) DIRECT AND OTHER DAMAGES iN EXCESS OF THE AMOUNT OF MANAGEMENT
FEES EARNED BY MANAGER UNDER THIS AGREEMENT DURING THE THREE (3) MONTHS
TO THE DATE OF THE APPLICABLE CLAIM FOR DAMAGES, lN EACH CASE, EVEN lF
MANAGER HAS BEEN ADVISED OF POSSIBILITY OF SUCH DAMAGES.

9. Joint Venture.

Covenant to Enter into Joint Operating Agreement.

Attached hereto as Exhibit is the Interim Joint Operating
Agreement (the "Interim Operating Agreement?) that the parties have executed and shall become
effective, upon written notice from Manager, following: Manager?s or the District's receipt of
consent thereto from the District's Bond trustee under the general obligation bonds and revenue
bonds issued by the District prior to the date hereof, or hereafter issued with the concurrence of
Manager (collectively, the ?Bonds"); (it) any required notices to the Attorney General regarding the
transaction, if any, have been provided, including any that may be required pursuant to Cal. Code

33

 

Regs, tit. 11, 999.40; and any required approvais from the Attorney General with respect to
the charitable care assumption by Manager thereunder have been received, if any. The District
shali fully cooperate with Manager?s efforts to obtain the consent of such Bond trustee and the
Attorney Generai, and the District shall make such requests and take such actions as
Manager shalt request to obtain the Bond trustee?s and Attorney Generate consent(s). Efforts to
procure such consent shall be commenced after the Effective Date.

(ii) Attached hereto as Exhibit is the form of Joint Operating
Agreement (the "Long Term Operating Agreement?) that the parties have executed and shaii
become effective, upon written notice from Manager to the District after: all Bonds which require
compiiance with Rev. Proc. 97?13 (or any successor regulatory requirement thereto containing
similar limitations), have been repaid or otherwise defeased or the Internal Revenue Code
limitations and conditions to the proposed transaction set forth in the Long Term Operating
Agreement have been waived; (ii) any required notices to the Attorney General regarding the
transaction, if any, have been provided, including any that may be required pursuant to Cal. Code
Regs, tit. 11, 999.40; and any required approvals from the Attorney General with respect to
the charitable care assumption by Manager thereunder have been received, if any. The parties
may enter into the Long Term Operating Agreement, whether the conditions described herein
occur prior to or following entry into the interim Operating Agreement. The District shall use its
reasonabie commercial efforts to repay or defease the Bonds as soon as reasonably practicable
following the Effective Date. The District shall fuliy cooperate with Manager?s efforts to obtain the
consent of the Attorney Generai, and the District shall promptiy make such requests and take such
actions as Manager shaii request to obtain the Attorney Generai's consent.

The District agrees that Manager shall have the right to determine
and direct the strategy and process by which the District and Manager effectuate the interim
Operating Agreement and the Long Term Operating Agreement (coiiectiveiy, the ?Operating
Agreements?). Manager shail have the right to take the lead in ail meetings and communications
with the Bond trustee(s) and or any other party whose consent is required to effectuate the
Operating Agreements, including by determining the appropriate timing of any such meeting or
communications (inotuding the timing of the submission of any filing with, or the response to any
request by, any consent party or any action to be taken pursuant to this Section).

(iv) The District shall: give notices which either party
deems necessary, preper or advisable to the Bond trustee(s) and other applicable third parties
which may be necessary or deemed desirable by Manager in connection with effectuating the
Operating Agreements and the consummation of the transactions contemplated thereby; use its
best efforts to obtain all Bond trustee and other approvals, consents, permits, authorizations, and
orders necessary, proper or deemed desirabie by Manager in connection with effectuating the
Operating Agreements and the consummation of the transactions contempiated thereby; (0) Permit
Manager to review in advance, and consuit with Manager on, any proposed tiling, submission or
communication (whether Verbal or written) by the District or its Affiliates, and give Manager the
opportunity toigattend and participate at any meeting with the Bond trustee(s) or any other party's
representative?s that are necessary, proper or advisable to effectuate the Operating Agreements.
The District and its accountants, and attorneys shall cooperate fully with Manager in the
preparation of any statements or applications made by Manager to the Bond trustee(s) and other
appiicabie parties whose consent is required to effectuate the Operating Agreements and the
transactions contemplated thereby and to furnish Manager with all information concerning the
District necessary or deemed desirable by Manager for inclusion in such statements and
applications, including, Without limitation, ali requisite financial statements and schedules.

34

 Between the date hereof and the effective dates of the Operating
Agreements, the District shall notify Manager of any notice or other communication
from any Person alleging that the consent of such Person is or may be required in connection with
the Operating Agreements becoming effective, (it) any notice or communication from the Bond
trustee(s) or any other party form-whom consent is required, and any action or proceeding
commenced or, to the knowledge of the District, threatened against Manager andior the District
which relates to the consummation of the transactions proposed under the Operating Agreements.

Stand?by Management Services.

Upon the Effective Date of an Operating Agreement (as defined in
the Operating Agreements), Manager?s and the District?s obiigations hereunder shall be treated as
suspended (?Suspended?) with neither party effectiver having any obiigation beyond those they
would have had it the Agreement had been terminated or expired, When the District and Manager
enter into either the Interim Operating Agreement and/or the Long Term Operating Agreement, the
parties shall wind?up of their obligations hereunder as if this Agreement had been terminated.
Following the Effective Date of an Operating Agreement (as defined in the Operating Agreements),
during the remainder of the Operating Period hereunder, the District shat] pay Manager an amount
equai to One Hundred Doliars ($100) per year, for each year in which this Agreement is
Suspended, on each annual anniversary of the Effective Date under the appitcabie Operating
Agreement. in consideration of Managers agreement to serve as a stand?by manager for the
District forthe Operating Period hereunder.

I (ii) As stand-by manager, Manager shaii provide the management
services described herein upon the terms set forth herein in the event that: the term of the
applicable Operating Agreement terminated or declared by a court of competent jurisdiction to be
invalid or unenforceable and such termination of the Operating Agreement was not due to: 
Manager's default under the applicabie Operating Agreement; (it) any event which resulted in the
payment of a Termination Fee, as defined in the appiicable Operating Agreement; or the Long
Term Operating Agreement becoming effective. Manager shaii commence providing the
management services under the terms of this Agreement immediater foliowing the termination of
the applicable Operating Agreement and shat! hays rights hereunder, including the right to
renew the Operating Period.

if Manager provides stand-by services hereunder, the Management
Fee shalt be adjusted pursuant to Section 603) as if the Agreement had not been Suspended and
CPI Adjustments had continued to be made following the Effective Date of the applicable
Operating Agreement.

?10. Default.

District Defauit. The foiiowlng occurrences shalt each be deemed an event
of default by  District (?District Default"), unless waived in writing by Manager:

Material breach of any representation, warranty, or covenant of the
District contained within this Agreement, after giving written notice to the District, and the District ?5
subsequent failure to cure the breach (if such breach is capable of being cured) within sixty (60)
days (or ten (10) days in the event of a monetary breach or thirty (30) days in the event of a breach
of any provision requiring the District to: provide the Manager with a consent or approve! or (ii)
execute an agreement or document hereunder); provided, however, that if the cure cannot
reasonably be effectuated within the applicable cure period, a longer period shall be aiiowed not to

35

exceed ninety (90) days, if the District has commenced to cure such breach in good faith or has
otherwise provided adequate protection or security to protect Manager?s interest hereunder (which
security shall be sufficient in Manager?s sole and absolute discretion) within the applicable cure
period, and the District is proceeding with due diligence to effect a cure.

(ii) The occurrence of any of the following: the filing by the District of
a voluntary petition in bankruptcy or for reorganization under the Bankruptcy Code, or the filing
of a petition for the appointment of a receiver for all or any of the property of the District, or the
taking of any voluntary or involuntary steps to dissolve or suspend the powers of the District .
(unless such steps to dissolve or suspend are removed) within thirty (30) days, or the consent
by the District to an order for relief under the Bankruptcy Code or the failure to vacate such an
order for relief within sixty (60) days from and after the date of entry thereof, or the entry of any
order, judgment or decree, by any court of competent jurisdiction, on the application of any creditor
of the District or any other Person, adjudicating the District as a bankrupt, or to be insolvent, or
approving a petition seeking reorganization or the appointment of a receiver, trustee or liquidator of
all or a substantial part of the District's assets, if such order, judgment or decree shall continue
unstayed and in effecter any period of sixty (60) days. in the event that the District becomes a
debtor under the Bankruptcy Code, the District agrees, to the extent permitted under applicable
Law: not to reject this Agreement; to designate Manager as a vendor supplier that is critical
to the District?s business and obtain a critical vendor Order that waives or releases any 
preference liability; and provides administrative priority or other preferred status, acceptable to
Manager, with respect to Manager's preppetition claims.

if Manager, at any time and in good faith, shall deem itself insecure
and for the purposes of this Agreement, Manager shall be entitled to deem itself insecure when -
some event occurs, fails to occur or is threatened or some obiective condition exists or is
threatened which significantly impairs the prospects that any of the obligations of the District
hereunder will be paid when due, or which signi?cantly affects the financial or business condition of
the District. if Manager deems itself insecure, it shall have no obligation to continue performing
hereunder more than thirty (30) days from and after it notifies the District that it has deemed itself
insecure, unless the District provides Manager with an unconditional, irrevocable letter of credit
(the ?Letter of Credit") from a US banking institution acceptable to Manager, insured by a federal
insurance agency (?issuer?). The Letter of Credit shall meet the requirements of the "Uniform
Customs and Practice for Documentary Credits,? No. 500 (1993 Edition), (ii) name Manager as
bene?ciary, (ill) be in an amount equal to the lesser of (A) the Termination Fee or (B) such lesser
amount as may be specified by Manager, in its sole and absolute discretion, (iv) be payable in full
or partial draws against Manager?s sight draft, include an "evergreen" provision which provides
that the Letter of Credit shall be renewed automatically on an annual basis following its issuance,
unless the issuer delivers thirty (30) days prior written notice of cancellation to Manager, (vi) have
an initial expiration date no earlier than one year from the date of issue, and (vii) cthervviso be in
form and substance satisfactory to Manager. in the event the Letter of Credit is ever not renewed
when required hereunder, Manager shall have the right, immediately upon receipt of the notice of
cancellation described above, to draw upon the Letter of Credit and hold the proceeds thereof as a
cash security?deposit. Provided'that the District is' not then in default of any of its obligations
hereunder and no act, omission, fact, circumstance, condition or event that with the giving of notice
or the passage of time or both would constitute a default hereunder exists, Manager shall return
the Letter of Credit to the District within forty-five (45) days after the expiration or termination of this
Agreement. If the Letter of Credit is not timely provided, then Manager shall have the right to
immediately terminate this Agreement (with no right on the part of the District to cure same) and
receive the Termination Fee.

36

 Liguldated Damages.

jig it) Each of the parties acknowledges that it would be extremely difficult
and impracticable, if not Impossible, for Manager to ascertain with any degree of certainty the
amount of damages that would be suffered by Manager in the event of the occurrence of a the
District Default. in the event this Agreement is terminated as a result of any the District Default, or
for any other reason other than a termination by Manager under Section or a Manager
Default, the District shall pay a fee (the ?Termination Fee?), which fee is not a penalty, but rather is
liquidated damages in accordance with California Civil Code Section 1671, which the parties have
negotiated in good faith and have agreed is a reasonable fee under the circumstances. The
Termination Fee shall be paid within five (5) days after the effective date of the termination of this
Agreement.

pi (ii) The Termination Fee shalt be an amount equal to Seventy Thousand
Dollars ($70,000) per month first increased by CPI, as provided below. and then multiplied by the
remaining number of months in the Term (not to exceed 120 months) at the time of the termination,
discounted to its present value Using the discount rate of the Federal Reserve Bank of San
Francisco at the time of termination plus one percent 

means the index of the U.S. City Average
Consumer Price index for Urban Wage Earners and Clerical Workers Medical Care Services
(1982-84 equals 100) published by the United States Department of Labor, Bureau of Labor
Statistics or any successor agency that shall issue such index. in the event that the is
discontinued for any reason, the parties shall Use such other index, or comparabie statistics, on the
cost of medical care services in the United States, as shall be computed and published by any
agency of the United States or, if no such index is published by any agency of the United States,
by a responsible financial periodical of recognized authority.

(2) inflation Adjustment. The Termination Fee shall be adjusted
for inflation by multiplying the above stated Termination Fee by the CPI percentage increase
between January 2015 and the date the Termination Fee is payable, using the latest published
data since the last adjustment.

Notwithstanding the foregoing, nothing herein is intended to permit
the Termination Fee to exceed such amount as is permissible under any tax?exempt financing
requirements under applicable Law, with respect to the Bonds. in the event the Termination Fee
exceeds any permissible limit upon such fees, then the Termination Fee shall be reduCed to the
maximum termination or similar fee permitted under such Law, hoWever denominated, and the
District shall enter into any agreements necessary to minimize any reduction to the Termination
Fee.

I (iv) if the District fails to pay the Termination Fee when due, then the
Termination fies, or any unpaid portion thereof, shall bear interest from the date such payment was 
required to be?rnade until the date of payment at the interest rate set forth in Section 

?lmif upon termination of this Agreement, the District contends that the
Termination Fee is not dos and owing and Manager contends that same is doe and owing, the
District shall be obliged to deposit, within three (3) days, the amount of the Termination Fee into
an Escrow scoount with a national bank with not less than in assets. The funds
shall be released to the applicable party upon the sooner to occur of: mutual instructions of
Manager and the District; final non~appealable order of a court directing the release of the funds



to a party; or to the District if Manager has not contested, in ajudiciai proceeding, that the funds
are owed to it within twenty four (24) months of the termination.

(vi) This Section shall survive the expiration or termination of this
Agreement.

Manager Default. The following occurrences shall each be deemed an event
of default by Manager ("Manager Default"), unless waived in writing by the District:

Material breach of any material covenant of Manager contained
within this Agreement, after giving written notice to Manager, and Manager?s subsequent failure to
cure the breach within sixty (60) days; provided, hoviever, that it the cure cannot reasonably be
effectuated within such sixty (60) day period, a longer period shall be allowed, if Manager has
commenced to cure such breach or has otherwise provided adequate protection or security to
protect the District '8 interest hereunder, and Manager is proceeding to effect a cure. in
determining whether a breach has occurred, the District shall exercise its reasonable discretion In
goo-d faith and shat! use its best efforts to assist Manager in effectuating a cure.

(ii) The occurrence of any of the following: the filing by Manager of a
voluntary petition in bankruptcy or for reorganization under the Bankruptcy Code, or the filing of
a petition for the appointment of a receiver for all or any substantial portion of the. property of
Manager, or the taking of any voluntary or involuntary steps to dissolve or suspend the powers
of Manager (unless such steps to dissolve or suspend are removed) "within sixty (60) days, or 
the consent by Manager to an order for relief under the Bankruptcy Code or the failure to vacate
such an order for relief within sixty (60) days from and after the date of entry thereof, or the
entry of any order, judgment or decree, by any court of ocmpetentjurisdiction, on the application of
any creditor of Manager or any other Person, adjudicating Manager as a bankrupt, or to be
insolvent, or approving a petition seeking reorganization or the appointment of a receiver, trustee
or liquidator of all or a substantial part of Manager?s assets, if such order, judgment or decree shall
continue unstayed and in effect for any period of sixty (60) days.

Early Termination Events.

Notwithstanding anything herein to the contrary, during the initial
thirty?six (38) months of the Operating Period, Manager shall have the option to terminate this
Agreement before its expiration, upon at least six (6) months' written notice to the District.

(ii) In the event either party should be determined by a Governmental
Authority to be in violation of any Law, by virtue of this arrangement or this arrangement is
otherwise deemed illegal by a Court of competent jurisdiction in a final non~appealabte
determination (?Jeopardy Events?), the parties shall use best efforts to negotiate an amendment
to this Agreement to remove or negate? the Jeopardy Event. if they are unable to do so within six
(6) months, either party may terminate this Agreement by written notice to the other, provided that
upon such tet'rnination the District shatl be obliged?to pay the Termination Fee as provided in
Section 10lbi. Until any such written notice of termination is received, Manager may elect to
exercise its rights under Section 9, without regard to whether the preconditions regarding the Bond
indebtedness has been satisfied.

38

 Procedure.

in the event either party to this Agreement deems the other party to
be in default of its obligations hereunder, then said party shall be required to provide notice of the
alleged default to the other party, which notice shalt contain a detailed description of the alleged
default.

(ii) if the claim of default is disputed by the party receiving such notice.
within ten (10) business days thereafter the party receiving the notice shell give notice to the
charging party that the party receiving such notice disputes that the factual matters alleged
constitute a default under this Agreement. if the parties cannot resolve such dispute within ten 
business days thereafter (commencing on the date that the charging party receives notice of the
dispute) the parties shalt submit such matter to binding arbitration in Los Angeles County,
California. in accordance with the American Health Lawyers Association Alternative Dispute
Resolution Service Rules and Procedure for Arbitration, and applying the Law of the State. Any
determination by the arbitrator shall be ?nal and binding upon the parties, and judgment thereon
may be entered in any court having jurisdiction thereof. The costs of arbitration shall be borne
equally by the parties. During the pendency of any such arbitration and'?h?t'ili?ajudgment thereon
has been entered, this Agreement shall not be terminated as a result of the alleged default which is
in dispute.

Termination.

In the event of a party?s failure to cure a default within the time
allowed herein for curing such default, the nonvdefaulting party may immediately terminate this
Agreement by notice to the defaulting party and none of the parties shall have any further
obligations under this Agreement, except these obligations that by their terms or nature extend
beyond the date of expiration or termination, provided, that the non~defaulting party shail have all
rights and remedies available hereunder and at Law as a resuit of the default. it is understood that
in the event of any monetary default by the District which is not cured within the speci?ed ten (10)
day period (including the failure to deposit sufficient funds to enable Manager to pay the Hospital
and the Clinics and Other Facilities? expenses) Manager may immediately terminate this
Agreement by written notice to the District and may cease rendering any services hereunder to the
District, all without any further liability to the District (without regard to whether Manager has
advanced any funds pursuant to Section 4(i 1 1.

(ii) The parties may mutually agree at any time to terminate this
Agreement.

This Agreement shall automatically terminate if:

(1) An Operating Agreement, after its Effective Data, has been
terminated and the Manager is not obliged to provide the stand?by management services
described in Section -

(2) The Operating Period hereunder has expired; or

(3) A substantial portion of the Hospital and the Clinics and

Other Facilities are destroyed or subject to condemnation such that the Operations are. in the sole
and absolute discretion of Manager, materially impaired.

39

(iv) in the event of termination of this Agreement, Manager shall remove
itself as a signatory on the District?s accounts and turn over to the District within ten (10) business
days following the expiration or termination of this Agreement all business records of the District
pertaining to the District. All medical records shall be maintained by the District and shall remain
the property of the District. -

11. Miscellaneous.

Complete Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the management of the Hospital and the Clinics and Other
Facilities, and supersedes any and all prior agreements, either oral or written, between the parties
with reapect thereto, including the Management Services Agreement described in the first
paragraph of this Agreement.

Recordation. At the request of either party and at the expense of the
requesting party, the parties shall execute a memorandum of this Agreement which
identifies this Agreement, the parties, the Operating Period, the legal description of the real
property upon which the Hospital and the Clinics and Other Facilities are located. and such other
matters as the parties may agree. Such memorandum shall he recorded in the Offico of the
County Recorder of Tulare County, California, at the expense of the requesting party.

(0) Binding Agreement. This Agreement and the rights and obligations of the
parties hereunder are binding upon and shall lnure to the benefit of the parties hereto and their
respective successors and permitted assigns. Except as provided in this Section, neither party
shall have the right to assign its rights or delegate its duties hereunder unless it first obtains the
written consent of the other party hereto. Manager may, in its sole and absolute discretion, assign
this Agreement, without the District's consent, to any Affiliate of Manager, or to any other Person
which is owned and controlled by Manager or the Controlling Persons of Manager, or in connection
with a Manager consolidation or sale by Manager to any Person of all or substantially all of
Manager's assets or ownership interests. Nothing herein prevents Manager from subcontracting
with third parties to perform any of the services required of Manager hereunder. Any assignment
in violation of this Section shall be null and void.

Governing Law. This Agreement shall be deemed to be made in, and in all
respects shall be interpreted, construed, and governed by and in accordance with, the Law of the
State. The parties agree that the exclusive jurisdiction and venue of all actions claims, or other
legal proceedings arising in any manner pursuant to this Agreement, shall be vested in the
Superior Court of. the County of Los Angeles in the State and in no other. Notwithstanding any
other provisions contained in any other docdment executed simultaneously herewith, each party,
for itself, and all successor, assigns, heirs, executors, or future parties at interest agree and accept
the jurisdiction of these courts and waive any defense of personal jurisdiction, forum non
conveniens, venue or similar defenses and irrevocably agree to be bound by any judgment
rendered in the. aforementioned Court; exclusive of any and all other Federal or State courts.

Headings. The section and subsection headings contained in this
Agreement are for reference purposes only and shall not affect in any way the meaning or
interpretation of the Agreement. -

Notices. Except as otherwise expressly permitted herein, all notices
required or permitted to be given hereunder shall be in writing (whether or not written notice is
specified herein) and shall be personally delivered, or mailed by United States mail, postage

4O

prepaid, registered or certified, return receipt requested, or sent by a nationally recognized
overnight delivery service, or sent by electronic transmission system. Uniess such information is
changed by written notice given by the affected party, any such notices shall be sent to the
following addresses:

if to Manager:
HeaithCare Conglomerate Associates

Attention: Benny Benzeevi, MD.
810 North Cherry Street

Tulare, CA 93274

Emaii: 

With a copy to:

Bruce R. Greene, Esq.

Baker Hostetler LLP

11601 Wilshire Blvd, Suite 1400
Los Angeies, CA 90025

Email: brgreene@bakerlaw.com

a if to the District:
Tuiare Regional Medical Center
Attention: Chair of the Board
869 North Cherry Street
Tulare, CA 93274
Emaii: sbeil@tulareregional.org

With a copy to:

Dooley, Herr, Pedersen Berglund Bailey
Attention: Kris Pedersen

100 Willow Piazza, Suite 300

Visalia, CA 93291

Email: kpedersen@dhlaw.net

Ali notices sent by personal delivery shall be effective and deemed served upon receipt thereof.
All notices sent by mail shalt be effective and deemed served three (3) calendar days after being
deposited in the United States mail. All notices sent by overnight delivery service shall beefiective
and deemed served when delivered by such overnight delivery service. All notices sent by
electronic transmission system shall be effective and deemed served on the day of transmission, it
on a business day and during business hours (9am untii 5pm, PT) or otherwise on the next
business day thereafter.

Survival of Representations. of the representations. and warranties, and
those covenants and agreements contained in this Agreement which are stated to survive
termination or expiration of this Agreement, shalt survive the expiration or the termination, for any
reason, of this Agreement. No performance or execution of this Agreement, in whole or in part, by
any party hereto, no course of'dealing between the parties hereto or any deiay or failure on the
party of any party in exercising any rights hereunder or at Law or in equity, and no investigation by
any party hereto, shail operate as a waiver of rights of such party1 except to the extent expressly
waived in writing by such party.

41

 Counterparts. This Agreement may be executed in two or more

counterpans, each of which shall be deemed to be an original, but all of which together shall 

constitute one and the same instrument. Signatures transmitted by facsimile or e?rnail or other
digital means shall be accepted as original signatures.

Severability.

Each and every provision of this Agreement is severabie, and the
invalidity of one or more of such provisions shall not, in any way, affect the validity of this
Agreement or any other provisions hereof. if any clause or provision of this Agreement is illegal,
invalid or unenforceable, then and in that event, it is the intention of the parties hereto that the
remainder, of this Agreement shall not be affected thereby, and it is also the intention of the parties
to this Agreement that in lieu of each clause or provision that is illegal, invalid or unenforceable,
there be added as a part of this Agreement a clause or provision as simiiar in terms to such illegal,
invalid or unenforceable clause or provision as may be possible and be legal, valid and
enforceable.

(ii) The parties hereby have made all reasonable efforts to ensure this
Agreement represents and memorializes the complete and ?oat agreement between the parties
hereto, and that it complies with ail applicable Law. in the event there is a change in Law, or the
interpretations thereof, whether by statute, regulation, agency or judicial decision, or otherwise,
that has any material effect on any term of this Agreement, or in the event that a party?s reputable
counsel (being legal-counsel with at least ten years? experience in Hospital Law) determines
that any term of this Agreement poses a material risk of violating any Law, then the applicable
term(s) of this Agreement shall be subject to renegotiation and either party may request
renegotiation of the affected term or terms of this Agreement, upon written notice to the other party,
to remedy such condition. in the interim, the parties shall perform their obligations hereunder in full
compliance with applicable Law. The parties expressly recognize that upon request for
renegotiation, each party has a duty and obligation to the other only to renegotiate the affected
term(s) in good faith and, further, the parties expressly agree that their consent to proposals
submitted by the other party during renegotiation efforts shall not be unreasonably withheld or
delayed. The parties further expressly recognize that in any such renegotiation, the relative
economics to each of the parties shall be preserved. Should the parties be unable to renegotiate
the term or terms so affected so as to bring it/them into compliance with Law or the interpretation
thereof within sixty (60) days of the date on which written notice of a desired renegotiation is given,
then either party shall be entitled, after the expiration of said sixty (60) day period, to terminate this
Agreement upon sixty (60) days? written notice to the other party, provided that such party has
received an opinion of reputabie legal counsel, which legal counsel and opinion are reasonably
acceptabie to the other party. that it is more likely than not that this Agreement violate-s applicable
Law. if this Agreement is terminated pursuant to Section Manager shall be entitled to
receive payment of the Termination Fee.

Cumuiative Rights and Remedies. Any right, power or remedy provided
under this Agt'eement or any party hereto shall be cumulative and in addition to any other right,
power or remedy provided under this Agreement or existing in Law or in equity, including, without
limitation, the remedies of injunctive relief and specific performance.

Modification and Waiver.

 

This Agreement may only be amended by a writing signed by both
parties.

'42

(ii) No failure by any party to insist upon strict compliance with any term
of this Agreement, to exercise any option, enforce any right, or seek any remedy upon any default
of any other party shall affect, or constitute a waiver of, the ?rst party's right to insist upon such
strict compliance, exercise that option, enforce that right, or seek that remedy with respect to that
default or any prior, contemporaneous, or subsequent default; nor shall any custom or practice'of
the parties at variance with any provision of this Agreement affect or constitute a waiver of, any
party's right to demand strict compliance with all provisions of this Agreement.

(1) Attorneys? Fees. if any action at law or in equity (or any arbitration
proceeding required hereunder) is brought to enforce any of the terms of this Agreement, the
prevailing party shall be entitled to recover reasonable attorneys? fees and costs in addition to any
other relief, as determined by the applicable court or arbitrator. The foregoing includes reasonable
attorney?s fees in connection with any bankruptcy proceeding (including relief from stay litigation),
and in connection with any appeals.

independent Contractor Status. Notwithstanding any provision contained
herein to the contrary, Manager and the District each understand and agree that the parties hereto
intend to act and perform as independent contractors. Therefore, the District is not an employee or
partnercf Manager. Nothing in this Agreement shail be construed as placing the District in a
relationship of employer-employee or partners with Manager. The parties shall not have the right
to make any promises, warranties or representations, or to assume or create any obligations, on
behaif of the other party except as otherwise expressly provided herein or as otherwise agreed.
The District and Manager agree to be solely and entirely responsible for their respective acts and
for the acts of any of their respective employees and agents, except as othenivise expressly
provided herein.

Ambiquities and Uncertainties. This Agreement and any ambiguities or
uncertainties herein, or the documents referenced herein, shall be equally and fairly interpreted
and construed without reference to the identity of the party or parties preparing this Agreement or
any of the documents referred to herein, on the express understanding and agreement that the
parties participated equally in the negotiation of the Agreement and the documents referred to
herein. or have had equal opportunity to do so. Accordingly, the parties hereby waive the benefit
of California Civil Code Section 1654 and any successor or amended statute providing that in
cases of uncertainty, language or a contract should be interpreted most strongly against the party
who caused the uncertainty to exist.

(0) Consents, Approvals and Discretion. Except as herein expressly provided to
the contrary, whenever this Agreement requires any consent or approval to be given by any party
or any party must or may exercise discretion, the parties agree that such consent or approvai shaii
not be unreasonably withheld, conditioned or delayed and such discretion shall be reasonably
exercised, except as otherwise provided herein. if no response to a con-sent or request from
Manager to the District for approval is provided to Manager within ten (to) days from the receipt by
the District otfathe request, then the consent or approval of the District shall be deemed to have
been given.  

Expiration of Time Periods. in the event that any date speci?ed herein is, or
that any period specified herein expires on, a Saturday, a Sunday, or a State or federai hoiiday,
then such date or the expiration date of such period, as the case may be, will be extended to the
next succeeding business day. A business day is a day on which banks are required to be open
for business in Los Angeies, California. All references in this Agreement to "days" are to calendar
days, unless business days areso indicated.

43

 Force Maieure. Except with respect to payment obligations, neither party
shall be liable nor deemed to be in default for any delay or failure in performance under this
Agreement or other interruption of service deemed resulting, directly or indirectly, from acts of God,
civil or military authority, acts of public enemy, war, accidents, tires, explosions, earthquakes,
floods, failure of transportation, machinery or supplies, vandalism, strikes or other Work
interruptions beyond the reasonable control of either party. However, both parties shall make good
faith efforts to perform under this Agreement in the event of any such circumstances.

bio Third-Party Beneficiaries. The rights, privileges, benefits, and obligations
arising under or created by this Agreement are intended to apply to and shall only apply to the
parties and to no other Persons, except as otherwise set forth herein.

Consequential Damages. Except as expressly provided herein to the
contrary, neither party shall be liable under this Agreement for consequential damages, incidental
damages, indirect damages, or special damages or for loss of profit, loss of business opportunity
or loss of income. Notwithstanding anything to the contrary contained in this Agreement, the
parties hereto acknowledge andagree that the terms and provisions of this Section tits} shall not
limit, alter, modify, impair, or otherwise affect any of the remedies of Manager set forth in this
Agreement, including the right to be paid the Termination Fee.

Limitation of Liability. Notwithstanding any provision in this Agreement to the
contrary. under no circumstances shall Manager or any Manager Party have any personal liability
for any failure to perform any obligations arising out of or in connection with this Agreement or for
any breach of the terms or conditions of this Agreement (whether written or implied), No personal
Judgment shall tie against Manager or any Manager Party and any judgments so rendered shalt not
give rise to any right of execution or levy against any of their assets. Any judgments rendered
against Manager shall be satisfied solely out of the assets of Manager. The foregoing provisions
are not intended to relieve Manager from the performance of any of Manager's obligations under
this Agreement, but only to limit the personat liability of Manager and Manager Parties in case of
recovery of a judgment against any of them.

Additional Assurances. The provisions of this Agreement shall be self-
operatlve and shall not require further agreement by the parties except as may be herein
specifically provided to the contrary; provided, however, at the request of a party, the other party or
parties shall execute such additional instruments and take such additional actions as the
requesting party may deem necessary to effectuate this Agreement.

Exgenses. District shall bear any costs and expenses incurred by it in
connection with the negotiation of the transactions contemplated herein and shall reimburse
Manager for its actUal out?of~pocket expenses incurred in connection with formulating, identifying,
and developing transaction structures and strategies, ?nancial and operational due diligence.
preparation oi definitive transaction agreements and ancillary documents, oversight of the legal
process, andgcoordination and oversight of transaction implementation strategy related to the
transactionsic?ontemplated herein, provided that such amount shall not exceed One Hundred
Eighty Thousand Dollars Manager shall bear any other costs and expenses incurred
by it in connection with the negotiation of the transactions contemplated herein.

[Signatures on next page]

IN WITNESS WHEREOF, the
?rst above written.

parties hereto have executed this Agreement as of the day and year

HEALTHCARE ONGLOM ERATE ASSOCIATES,
LLC

 

By .L
Name: Yereii?Be??y) Benzeevi?, MD.
Title: Manager

TULARE LOCAL HEALTHCARE DISTRICT, dIb/a
TULARE REGIONAL MEDQCAL CENTER



Neme?herrie Bel!
Title: Chairman of the card/President

  
    

 


51y. -P MD 
amen ermo umar, if} brief.??

Title: irmen/ Vice President



Ne Richard wry-e:sz

Tit] Member Tree surer

 
Avitia I
Title: Member! Secretary

moi/?e Mag/t,

Name: Laura Gedke
Title: Member

 

45

 EXHIBIT A

LIST OF FACILITIES

Evolutions Fitness 8: Wellness
1425 E. Prosperity Avenue
Tulare CA

Family X?Ray Center
880 E. Merritt Ave
Tulare, CA 93274

Hillman Healthcare Center 1062 South Street Tulare, CA. 93274
Kingsburg Healthcare Center 1200 Smith Street Kingsburg, CA. 93631
Lindsay Healthcare Center - 845 Sequoia Ave Lindsay, CA. 93247
Viiest Street Healthcare Center a 325 West Street Tuiare, CA. 93274
chdvilie Healthcare Center - 16796 Ave 188 CA. 93257

Allied Services Center
Tuiare Regional Medical Center Clinical Laboratory
Allied Services Building
869 N. Cherry
Tuiare, CA 93274

Tulare Regional Laboratory Aiternate Collection Site
799 Cherry Street
Tuiare, CA 93274

Mineral King Toxicology-Laboratory
880 E. Merritt, Suite 107
Tulare, CA 93274

Retail Pharmacy
{*F-uiare District Hospital Pharmacy
869 Cherry St
Tulare, CA 93274

Together with such other facilities and clinics as are owned, leased or otherwise
operated by District that Manager elects to operate hereunder, by notice to
District from time to time.

Exhibit A 1
5035455317 

 
INTEREM JOINT OPERATING AGREEMENT

[Attached]

Exhibit 
603545531? 

interim Joint Operating Agreamem
b?tween
HeaithCare Cangiomemt? Assaciates, LLC
and

Tuiam Regimai Medica? Center

m?z 21,2014

EXHIBIT A
HOSPITAL

869 Cherry St, Tulare, CA 93274

  

   

 

 

  

OF OF 7.205.. 52941:? cm!?  
905?000
I :33? 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

m?l?m? -  
if",   
. .u . . 
ugu??IL? ?5 .. ..  H. ?Hemp . 
"2.33: a aft-Liif] laud-Iii-J w-rIf: by; In;? 
LOCAI HEALFHCARL 1 i-?1.1.1.3..- 
    1 .. as.? i 
1 TUMRE reLmrwaL 3'31.311mu". I 
.
- I 
I :23. .. A.  1 Luau My? I I
I Hum: wright/m"; i I ?um!
TLRHACE LN.  ?5 r2 ?95- "ah" i "1
I?ll?irt?L's' 5""5 I ?03 5 I i war-'5 ma?a . 

5 1 OF MAE-E. cnwomm, p.54.

fru??l ?mm Know: 39:? iff-l-
nae-w :s bl?. mm? [mm :Ja-u

   

 

 

Exhibit A I

 p05. 5552.. or 556.2, I205, 9.24151. H. .0. a. a: M. mm? .7013?

Luanda-sunk?: m3 ?uh

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 .-  005-000 
we.) - I 095-01..I ?uf AVE. ?mu?m e] -- .. .
if. 111.rI?if?25via-p k? f5 Iii?up41:1153%; FEJ 2* b.  {as:53('73 {?.51: -
:13' ?34; rim 3 - run"um-
(a 3.53? - 9.3L :v-ur?tm{9544:: 1 ch 1 .1. .. ?ram?, i TERRACE. LN.  .
1 m. macaw our mar. 3-.9  .. ?.5755?
magma: emu. any5:1! were 5
lama my "05? PM 13.? CITY OF TULARE
gm: 35?. MAM 5K. H107
A I 5' 1  . ?Iu
$533325; ?ffw?'?zr   coumv 0F TULARE, 
355059 07" SUFVEV 39?5 I-?yapumum
rune-'1 hat-Lam b-J?w ru? mun 

 

The parties acknowledge that the foregoing descriptian and maps do not
represent ail of ihe real parapet-w associated wiih the Hospital which is owned by
the District The Distrist hereby grants HCGA the right to amend a-ndfor
gupplement ?this exhibit to properiy describe ?the reai estate assnciaied with the
Hospital, from time to time.

Exhibit A

EXHIBIT l3
CLINICS AND OTHER 

Evolutions Fitness 8i Wellness
1425 E. Prosperity Avenue
Tulare CA

Family X?Ray Center
880 E. Merritt Ave
Tulare, CA 93274

Hillrnan Healthcare Center 1062 South Street Tulare, CA. 93274
Kingsburg Healthoare Center 1200 Smith Street Kingsburg. CA. 93631
Lindsay Healthcare Center - 845 Sequoia Ave Lindsay, CA. 93247
West Street Healthoare Center 325 West Street Tulare, CA. 93274
Woodville Healthcare Center - 16798 Ave 168 Woodviile, CA. 93257

Allied Services Center
Tulare Regional Medical Center Clinical Laboratory
Allied Services Building
869 N. Cherry
Tulare, CA 93274

Tulare Regional Laboratory Alternate Collection Site
799 Cherry Street
Tulare, CA 93274

Mineral King Toxicology Laboratory
880 E. Merritt, Suite 107
Tulare, CA 93274

Retail Pharmacy
'T?FUlare District Hospital Pharmacy
869 Cherry St
Tulare, CA 93274

Together with such other facilities and clinics as are owned, leased or otherwise 
operated by District that elects to operate hereunder, by notice to District
from time to time. 

Exhibit 

EXHIBIT 
CONTRACTS

Contracts shall include all Contracts that relate to the Operations as of the Effective Date.
HCCA ehatl supplement this Exhibit within thirty (30) days following the Effective Date.

Exhibit 

EXHIBIT 
ASSUMED CONTRACTS

HCCA shall provide the information fur this Exhibit within thirty (30) days foliowing the Effective
Date.

Exhibit 

EXHEBIT 
CHARITABLE POLICIES OF THE HOSPITAL

The District?s Charity policy as in effect on May 2014. The Charity Policy shall include the
foregoing Charity Policy together with any changes thereto as mutually agreed to by the parties
priorto the Effective Date pursuant to the terms of the MSA.

Exhibit 

TU LARE LGSAL HEALTH CARE 
dba REGEQNAL CENTER

PQLEGY l' GUIDELENE
TO: All Departments
FROM: Administration 

SUBJECT: Financial Assistance (Charity Care) Program

PURPGSE:

The mission of Tulare Regional Medical Center California is to provide safe, efficient,
technologically advanced healthcare with the respect for the diVersity of our region.
Assembly Bill 774 774) became effective January 1 2007. The law mandates that as
a condition of obtaining or holding an acute care hospital license, Hospitals must limit bills
to the uninsured with family incomes at or below 350% of the Federal Poverty Level (FPL)
and individuals with high cost medical bills compared to their family income. Bills are
limited to the higher of the government reimbursement rates for comparable health
services. This policy complies with the requirements of AB 774.

PROCEDURE:
Who is financially eligible?

Non?insured Patients:

No third party insurance

No Medicare/Medi?Cal

No Workers Compensation

No Auto insurance (medical portion for third party liability)
Family income at or below 350% of Federal Poverty Level (FPL)



insured Patients with Patient Responsibility:

1-. Family income at or below 350% FPL

2. Financial assistance is available for patients whose out of pocket expenses exceed
10% of family income in the prior 12 month period.

3. Special consideration may be made for patients with out of pocket expenses less
than fi?O?i/E: of family income in the prior 12 month period.

 

Effective Date: 07126/12 (11) Fiscal at Business
Patient Accounting:

APPROVED: Financial Assistance (Charity Care)
Program

Board Of Directors: 07725112 11?3028

TULARE LOCAL HEALTH CARE DESTREDT
dba TULARE REGHQNAL CENTER

PQUCWGUIDELENE MANUAL

1. Eligibility for financial assistance will be considered for all patients who meet the above
criteria. The granting of financial assistance shall be based on an individualized
determination of financial need and shall not take into account age, gender, race, socio?
economic or immigrant status, sexual orientation, or religious affiliation.

2. Tulare Regional Medical Center recognizes that there may be unusual or
extenuating financial circumstances which may exceed the specific criteria as
established in this policy and warrant special consideration. in such cases, a

description of the unusual circumstances should be forwarded by Hospital staff to
the Director of Patient Access or designee for review and then forward to the Chief
Financial Officer who will make the final determination as to the amount, if any, of
financial assistance allowance to be granted.

3. Tulare Regional Medical Center recognizes that the financial status of patients may
change over time. Hospital personnel will actively assist families in securing
for any program with the cooperation of patients and their families.
Services for dates of service prior to discharge date of January 1, 2007 are not
considered underthis policy.

4. The Director of Patient Access for design as will review all applications to determine
eligibility for ?nancial assistance. Reasonable efforts wilt be made to verify financial
data. financial information provided wit! be considered confidential and staff will
respect each circumstance with dignity. -

5. The Director of Patient Access or designee will use the following table to .
determine the amount of financial assistance. This schedule will be maintained and
updated annually by the Patient Access Director or designee.

 

Federal Poverty Level Charity Care Allowance [write off]
inpatient Outpatient
a. Less than 200% - 100% 100%
b. 201?250% 90% 95%
o. 251~300% 80% 90%
d.

301 350% 75% 87%

e. Any other type of discount not adhering to the above schedule is not
considered a Financial Assistance Discount and will follow the terms and
conditions set forth in the Discount Policy.




f. In all cases Tulare Regional Medical Center will not collect more than the
average reimbursement of its government payers which includes but is not
limited to Medicare, Medi?Cai, and Healthy Family Programs.

6. Patient guarantors must complete a financial assistance application, be in process
with an eligibility application for a government sponsored insurance program or set

Effective Date: 07/26/12 Page 2 of 5 i #1 $3028

 .

TULARE LCCAL HEALTH CARE 
dice TULARE REGEQNAL MEDECAL CENTER

MANUAL

up a payment plan within 150 days of service or the account will be assigned to a
third party billing agency at full billed charges upon 150 days after initial biliing.

Written notification of determination of eligibility or non-eligibility for financial
assistance will be forwarded to the applicant by the Director of Patient Access I or
designee, within 30 days of receipt of the Financial Profile.

Patients or guarantors have the right to appeal a non-eligible decision within 30 days
of the denial letter. Appeals will be forwarded to the Director of Patient Access or
designee who will decide to uphoid or overturn the original decision within 15 days.

An emergency physician as defined in AB 774, Section 127450, who provides-
emergency medical services in a hospital that provides emergency care is also
required by to provide discounts to uninsured patients or patients with high medical
costs who are at or below 350% of the federal poverty level.

iO.Tu are Regional Medical will compiy with OSHPD reporting requirements including

the foliovving information:

a. Submission of charity care and discount policies

b. Submission of eligibility procedures for charity care and discount payment
c. Submission of review procedures for charity care and discount payment
d. Submission of the application used for charity care and discount payment

Charity Care Quaiifioations 84 Calculations

.

Financial obligations not eligible for consideration are those whose injury is a
compensable injury for the purposes of workers? compensation or auto insurance.
Further, not all services are eligible for charity care. Elective services are not
eligible. Special consideration may be made by the Director of Patient Access for
designee, Chief Financial Officer, or Chief Executive Officer.

2. A patient may qualify for financial assistance prior to admission, after admission, or

Effective Date: 07/26/12

after discharge. Written price estimates are available prior to serviCe for inpatient
and outpatient services with the exception of emergency services. Every attempt will
be made to identify all available funding sources prior to or at time of visit. if a 
funding source cannot be identified after full compliance by the patient or guarantor,
financial assistance will be considered. The hospital contact information for financial
assistance is listed on the Financial Assistance application.

A financial assistance application, provided by TRMC Heepital staff, must be
compieted with the assistance of a Financial Counseior or by compieting, signing
and returning it to Tulare Regional Medical Center Admitting Department. This
document must be completed within 30 60 calendar days from date of discharge.
The application shall remain valid for services rendered within a 180 day period or
upon a new admission to the hospitai. The financial assessment will include a

Page 3 of 5 i #1 1-3028

 LQCAL HEALTH CARE DISTRICT
dba TULARE REGEQNAL MEDECAL CENTER

MANUAL

review of the family?s gross income, number of family members, outstanding
balances of the medical bills, and assets when appropriate. Copies of prior year tax
return (preferred documentation) or current pay stubs will be needed to verify
income information. Other documents proving status of assets may be required.
The information contained in the financial application will not be used in collection
efforts.

4. For purposes of determining family size, the following guidelines will be used.

a. For patients 18 years ofage and older, patient?s family includes spouse,
domestic partner and dependent children under 21 years of age Whether
living at home or not.

b. For patients under 18 years of age, patient?s family includes parents,
caretaker relatives and other children under 21 years of age of the parent or
caretaker relative. 

5. Financial assistance information is available from Tuiare Regional Medical Center
through various means, including the publication of notices in patient bills and by
posting notices in high volume areas such as the Emergency Department, Clinics,
Admitting, and other places as Tulare Regional Medical Center may elect. Such
information shall be provided in English and?panish, and will be translated for
patients/guarantors who speak other languages.

6. Any patient account recommended for partial or total financial assistance, after
meeting the guidelines set forth in this policy, requires the Director of Patient Access
for designee to prepare all the patient documentation. The following approval
process applies:

a. Patient Access Director
b. Over $25,001? Chief Financial Officer

7. Tulare Regional Medical Center will assign any financial obligation to a debt
collector after 150 calendar days from date of discharge of non?payment of an
established payment plan or 30 calendar days of nonpayment on an account where
the patient guarantor is not in process with an eligibility application for a government
sponsored insurance program or is attempting in good faith to settle an outstanding
bill. .- 

8. interest or finance charges will not be added to any account that has been approved
for Financial Assistance.

9. The financial assistance policy shall also include an extended payment plan to allow
payment of the discounted price over time. The hospital and patient will negotiate
terms of the payment plan. lithe patient fails to make payments for a period of 90
days, the payment plan will be considered inoperative and TRMC will inform the
patient via phone call and written correspondence that the payment plan has
terminated and the account may be forwarded to collections.

i

Effective Date: 07/26/12. Page 4 of 5 #116028

TULARE LQCAL HEALTH CARE 
dba TULARE MEDECAL CENTER.

PDLECWGUEDELENE MANUAL

?10. In the course of debt collection involving low?income uninsured patients who are at
or below 350% of the Federal Poverty Level, Tulare Regional Medical Center will
follow all guidelines established by AB 774. This provision will not preclude Tulare
Regional Medical Center from pursuing reimbursement from third? party liability
settlements.

11. A patient deemed homeless will qualify for presumptive eligibility. To be deemed
homeless, the individual must not have a regular, and adequate nighttime
residence or has a primary nighttime residence that is a supervisor publicly or
privately operated shelter.

12. All documentation will be maintained by Patient Access Services in accordance with
regulatory guidelines.

13.Tulare Regional Medical Center Home Care and Retail Pharmacy will use best
efforts to follow the hospital's approved charity care policy. Separate or additional
applications to be completed by the patient/family will not be required. Referral will
be made to use the Hospital?s financial infonnation.

14.This policy does not apply to professional services provided to Hospital patients by
physicians or other medical providers including but not limited to Radiology,
Anesthesiology, Pathology other than Emergency Room services as required by
A8774, Section 127450.

Questions concerning any aspect of this policyfguideline should be referred to Patient Access
or Administration.

This policy/guideline replaces and supersedes all previous policies/guidelines concerning
this matter and is effective immediately.

 Effective Date: 07/28/12 Page 5 0i 5 #113023

Descriptive Name:
Descriptive Type:
Document Number:
Attachments:

Author:

Typist:
Creation Date:

Prev. Dist. Date:

Financial Assietance (Charity Care) Program
New Policy

11-3028

None

Karen Levering. Director, Patient Access (First Source) in
conjunction with the Chief Financial Officer, TRMC

Karen Levering
04M 5/12

None

 

Committee Review and Approval:

Approval Date: Comments:

 

 

Board of Directors

 

 

07/25/12

 

Effective Date:

Forward To:

Disposition:

Comments:

07/28/12

Policy Binders (PBX end-Administration) and Post to
intranet Site

Copy and Distribution Administration

Policy replaces 114002 Charity Care Program

 

EXHIBIT 
LONG TERM OPERATING AGREEMENT

See attached

Exhibit 

EXHIBIT 

JOINT OPERATING AGREEMENT

[Attached]

Exhibit 
8013545537.?

Enterim Joint Operating Agreemem
b?tween
HealthCare Congiomerat? Assaciatesj LLC
and

Tulare Regiana? Medica! Center

2014

EXHIBIT A
HOSPITAL

869 Cherry St, Tulare, GA 93274

cur/:2 or sum/4 OF 5113.2. was? 8.24?? u.u.a.w. CUM 170?32
:39me

     

Evf'  
-  ..  
I .
H11 akin Inn-m:
. I 
jg; 2 tie..-..-  


.mtg?n ?:3th 

a.


 

. I at

mumman-mm: 
m?mcm 05mm 

@213Inh'
I {(11.12eig- 351:} ae a. II
. H. nusIf? 
rzPOP. iS-M?f 5. 
3- 
3" 5 i MAPS mum . 
i cauwr or mum. um.

flare. (gnu-(1 f'lrun- (?n-57v: :11?
b-w-dv'h Alma-a {mm run?.3 

 

4} Pure. ?f?f?fit: 5153mm Ls. 

 

 

 

Exhibit A

?gr-n

i" "meme.-  pm 5554. or Hwy, 555.2, ?205, 245Ibu- m! um


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  a 005-000 a
103?93332 .. I  Mme?Ei 51:; his?! 3? :fg?in(all.263} :9 33aEngrug);  Q: ?a l3". Jae'35{.0533 3- {(?33'1?3 .
we; .. .
L. Hum11?Hg?2 
1 ?lm-?jg 1 [bid LE  n.  3"  
I I 
1 ma: Warm tux eater, 3-  Warn
1 ammo? meow. .95 (33) If" 
N. N-nt 1 a
1 egg: ?30 arr or fumes I
gm: fig? gig. 33535550123 MAPS BR. (70. 
mean MAF 321.5 Wax-3.: 
.esc?e?u or 5413155? swig, ,rr. COUNTY DF TULARE. CANE
me. Heroes 55' went? as. 

mu -awlw: Ma: Ma Jul-m
unlic? I'Av??l mug? P.1th n? (ma:

 

The parties acknowledge the% the foregoing description and maps do net
represent all the real preper?y associated with the Hes-pita] which is owned by
the District The Distrie? hereby grants HCCA the right to amend andler
suppiemenf this exhibit ?to preperiy the reei estate associated with the
Hospital, from time 110 time.

Exhibit A

EXHIBIT 
AND OTHER FACILITIES

Evolutions Fitness Wellness
1425 E. Prosperity Avenue
Tulare CA

Family X-Ray Center
880 E. Merritt Ave
Tulare, CA 9327ar

Hillman Healthoare Center - 1062 South Street Tulare, CA. 93274
Kingsburg Healthoare Center - 1200 Smith Street Kingsburg, 93631
Lindsay Healthcare Center - 845 Sequoia Ave Lindsay, CA. 93247
West Street Healthcare Center 325 West Street Tulare, CA. 93274
Woodville Healthoare Center - 16796 Ave 168 Woodviile, CA. 9325?

Allied Services Center
Tulare Regionai Medical Center Clinical Laboratory
Allied Services Building
869 N. Cherry
Tulare, CA 93274

Tulare Regional Laboratory Alternate Collection Site
799 Cherry Street
Tulare, CA 93274

Mineral King Toxicology Laboratory
880 E. Merritt, Suite 107
Tulare, CA 93274

Retail Pharmacy
*Tiilare District Hospital Pharmacy
869 Cherry St
Tulare, CA 93274

Together with such other facilities and Clinics as are owned, leased or otherwise
operated by District that HCCA elects to operate hereunder, by notice to District
from time to time.

Exhibit 

 
CONTRACTS

Contracts shall include all Contracts that relate to the Operations as oftha Effective Date.
HCCA shall supplement this Exhibit within thirty (30) days foliowing the Effective Date.

Exhibit 

EXHIBIT 
ASSUMED CONTRACTS

HCCA shall provide the information for this Exhibit Within thirty (30) days follow?ng the Effective
Date.

Exhibit 

EXHIBIT 
CHARITABLE POLICIES OF THE HOSPITAL

The District?s Charity policy as in effect on May 1, 2014. The Charity Policy shall include the
foregoing Charity Policy together with any changes thereto as mutually agreed to by the parties
prior to the Effective Date pursuant to the terms of the MSA.

Exhibit 

TULARE LQCM. CARE 
dba TULARE REGEQNAL CENTER

PGLECY 
TO: All Departments
FROM: Administration 

SUBJECT: Financial Assistance (Charity Care) Program

PURPOSE:

The mission of Tulare Regional Medical Center California is to provide safe, efficient,
technologically advanced healthcare with the respect for the diversity of our region.
Assembly Bill 774 (AB 774) became effective January 2007. The law mandates that as
a condition of obtaining or holding an acute care hospital license, Hospitals must limit bills
to the uninsured with family incomes at or below 350% of the Federal Poverty Level (FPL)
and individuals with high'cost medical bills compared to their family income. Bills are
limited to the higher of the government reimbursement rates for comparable health
services. This policy complies with the requirements of AB 774.

PRQCEDURE:
Who is financially eligible?

Non?Insured Patients:

No third party insurance

No MedicareIMedi~Cal

No Workers Compensation

No Auto Insurance (medical portion for third party liability)
Family income at or below 350% of Federal Poverty Level (FPL)

91.43953??

insured Patients with Patient Responsibility:

1. Family income at or below 350% FPL

2. Financial assistance is available for patients Whose out of pocket expenses exceed
10% of family income in the prior ?12 month period.

3. Special consideration may be made for patients with out of pocket expenses less
than of family income in the prior 12 month period.

 

Effective Date: 07/26/12 (ii) Fiscal ti Business
Patient Accounting:

APPROVED: Financial Assistance (Charity Care)
Program

Board Of Directors: 07725112 11?3028

TULARE LDCAL HEALTH CARE 
dba TULARE REGEQNAL MEQECAL CENTER

MANUAL

1. Eligibility for financial assistance will be considered for all patients who meet the above -
criteria. The granting of ?nancial assistance shall be based on an individualized
determination of financial need and shall not take into account age, gender, race, socio?
economic or immigrant status, sexual orientation, or religious affiliation.

2. Tulare Regional Medical Center recognizes that there may be unusual or
extenuating financial circumstances which may exceed the specific criteria as
established in this policy and warrant special consideration. In such cases, a
description of the unusual circumstances should be forwarded by Hospital staff to
the Director of Patient Access I or designee for review and then'for'vvard to the Chief
Financial Officer who will make the final determination as to the amount, if any, of
financial assistance allowance to be granted.

3. Tulare Regional Medical Center recognizes that the financial status of patients may
change over time. Hospital personnei will actively assist families in securing
eligibility for any program with the cooperation of patients and their families.
Services for dates of service prior to discharge date of January 1, 2007 are not
considered under this policy.

4. The Director of Patient Access for designee will review all applications to determine
eligibility for financial assistance. Reasonable efforts will be made to verify financial
data- All financial information provided Will be considered confidential and staff will
respect each circumstance with dignity. -

5. The Director of Patient Access or designee will use the following table to 
determine the amount of financial assistance. This schedule will be maintained and
updated annually by the Patient Access Director or designee.

 

Federal Poverty Level Charity Care Allowance [write off]
inpatient Outpatient
a. Less than 200% - 100% 100%
b. 201-250% 90% 95%
c. 251-300% 80% 90%
d. 30i "350% 75% 87%

e. Any other type of discount not adhering to the above schedule is not
 considered a Financial Assistance Discount and will follow the terms and
conditions set forth in the Discount Policy.

In all cases Tulare Regional Medical Center will not collect more than the
average reimbursement of its government payers which includes but is not
limited to Medicare, Medi-Cal, and Healthy Family Programs.

6. Patient guarantors must complete a financial assistance application, be in process
with an eligibility application for a government sponsored insurance program or set

I.
I

Effective Date: 07/26/12 Page 2 of 5 a #1 1?3028

TULARE LQCAL HEALTH CARE 
ribs TULARE REGEQNAL itiiEiCAL CENTER

PQLEGWGUEDEMNE MANUAL

 

up a payment plan within 150 days of service or the account will be assigned to a
third party billing agency at full billed charges upon 150 days after Initial billing.

Written notification of determination of eligibility or non?eligibility for financial
assistance will be forwarded to the applicant by the Director of Patient Access 2 or 
designee, within 30 days of receipt of the Financial Profile.

8. Patients or guarantors have the right to appeal a non-eligible decision within 30 days
of the denial letter. Appeals will be forwarded to the Director of Patient Access or
designee who will decide to uphold or overturn the original decision within 15 days.

9. An emergency physician as defined in AB 7?4, Section 127450, who provides-
emergency medical services in a hospital that provides emergency care is also
required by to provide discounts to uninsured patients or patients with high medical
costs who are at or below 350% of the federal poverty level.

tO.Tulare Regional Medical will comply with OSHPD reporting requirements including
the following information:

Submission of charity care and discount policies

Submission of eligibility procedures for charity care and discount payment
Submission of review procedures for charity care and discount payment
Submission of the application used for charity care and discount payment



Charity Care Qualifications a Caicuiations

1. Financial obligations not eligible for consideration are those whose injury is a
compensable injury for the purposes of workers? compensation or auto insurance.
Further, not all services are eligible for charity care. Elective services are not
eligible. Special consideration may be made by the Director of Patient Access for
designee, Chief Financial Officer, or Chief Executiva Of?cer.

2. A patient may qualify for financial assistance prior to admission, after admission, or
after discharge. Written price estimates are available prior to service for inpatient
and outpatient services with the exception of emergency services. Eyery attempt will
be made to identify all available funding sources prior to or at time of visit. if a 
funding source cannot be identified after full compliance by the patient or guarantor,
financial assistance will be considered. The hospital contact information for financial
assistance is listed on the Financial Assistance application.

3. Afinancial assistance application, provided by TRMC Hospital staff, must be
completed with the assistance of a Financial Counselor or by compieting, signing
and returning it to Tulare Regional Medical Center Admitting Department. This
document mUst be completed within 30 - 60 calendar days from date of discharge.
The application shall remain valid for services rendered within a 180 day period or
upon a new admission to the hospital. The financial assessment will include a

Effective Date: 071.26%] 2 Page 3 of 5 i #11?3028

TULARE LQCAL HEALTH CARE 
dba TULARE REGEQNAL MEDECAL CENTER

PGUQWGUEDELENE MANUAL

review of the family?s gross income, number of family members, outstanding-
baiances of the medical bills, and assets when appropriate. Copies of prior year tax
return (preferred documentation) or current pay stubs will be needed to verify
income information. Other documents proving status of assets may be required.
The information contained in the financial application will not be used in collection
efforts.

4. For purposes of determining family size, the following guidelines will be used.

a. For patients 18 years ofage and older, patient?s family includes spouse,
domestic partner and dependent children under 2'1 years of age Whether
living at home or not.

b. For patients under 18 years of age, patient?s family includes parents,
caretaker relatives and other children under 21 years of age of the parent or
caretaker relative. 

5. Financial assistance information is available from Tulare Regional Medical Center
through various means, including the publication of notices in patient bills and by
posting notices in high volume areas such as the Emergency Department, Clinics,
Admitting, and other places as Tulare Regional Medical Center may elect. Such
information shall be provided in English and?panish, and will be translated for
patients/guarantors who speak other languages.

6. Any patient account recommended for partial or total financial assistance, after
meeting the guidelines set forth in this policy, requires the Director of Patient Access
for designee to prepare all the patient documentation. The following approval
process applies:

a. Patient Access Director
b. Over $25,00'l? Chief Financial Officer

7. Tulare Regional Medical Center will assign any financial obligation to a debt
collector after 150 calendar days from date of discharge of non-payment of an
established payment plan or 30 calendar days of nonpayment on an account where
the patient guarantor is not in process with an eligibility application for a government
sponsored insurance program or is attempting in good faith to settle an outstanding
bill. .- 

8. interest or finance charges will not be added to any account that has been approved
for Financial Assistance.

9. The financial assistance policy shall also include an extended payment plan to allow
payment of the discounted price over time. The hospital and patient will negotiate
terms of the payment plan. If the patient fails to make payments for a period of 90
days, the payment plan will be considered inoperative and TRMC will inform the
patient via phone call and written correspondence that the payment plan has
terminated and the account may be forwarded to collections.

Effective Date: 07/28/12 Page 4 of 5 3 #11?3028

TULARE LQCAL HEALTH CARE 
dba TULARE REGEQNAL MEDHCAL CENTER

MANUAL

10. in the course of debt coilection involving low~income uninsured patients who are at
or below 350% of the Federal Poverty Level, Tulare Regional Medical Center will
follow all guidelines established by AB 774. This provision will not preclude Tulare
Regional Medical Centerfrom pursuing reimbursement from third party liability
settlements.

ii. A patient deemed homeless will qualify for presumptive eligibility. To be deemed
homeless, the individuai must not have a fitted, regular, and adequate nighttime
residence or has a primary nighttime residence that is a supervisor publicly or
privately operated shelter.

12. All documentation will be maintained by Patient Access Services in accordance with
regulatory guidelines.

13.Tulare Regional Medical Center Home Care and Retail Pharmacy will use best
efforts to follow the hospital's approved charity care policy. Separate or additional
applications to be completed by the patient/family will not be required. Referral wilt
be made to use the Hospital?s financial information.

14.This policy does not apply to professional services provided to Hospital patients by
physicians or other medical providers including but not iimited to Radiology,
Anesthesiology, Pathology other than Emergency Room services as required by
A8774, Section 127450.

Questions concerning any aspect of this policy/guideline should be referred to PatientAccess
or Administration.

This policy/guideline replaces and supersedes all previous policiesfguidelines concerning
this matter and is effective immediately.

Effective Date: 07/28/12 Page 5 of 5 1 #11?3028

Descriptive Name:
Descriptive Type:
Document Number:
Attachments:

Author:

Typist:
Creation Date:

Prev. Dist. Date:

Financial Assistanoe (Charity Care) Program
New Polioy

11?3028

None

Karen Levering, Director, Patient Access (First Source) in
conjunction with the Chief Financial Officer, TRMC

Karen Levering
04/15/12

None

 

Approval Date: Comments:

 

Committee Review and Approval:

Board of Directors

 

 

07/25/12

 

 

Effective Date:

Forward To:

Disposition:

Comments:

07f26f?l 2

Policy Binders (PBX and Administration) and Post to
intranet Site

Copy and Distribution - Administration

Policy repieoes 114002 Charity Care Program

 

EXHIBIT 
LONG TERM OPERATING AGREEMENT

See attached

Exhibit 



(a I  


Limited Power of Attorney

KNOW ALL MEN BY THESE PRESENTS, that in accordance with the terms of that certain
Management Services Agreement, dated of even date herewith, (the "Agreement"), by and
among HeatthCare Conglomerate Associates, LLC (?Manager?) and Tuiare Locai
Heatthcare District dba Tulare Regions! Medical Center (the "District?), the District hereby
makes, constitutes and appoints Manager as the District?s true and lawful attorney-in?fact (the
"Attorney~ln~Fao and in the District?s name, place and stead to act in connection with any
and all matters relating to any of the ioliowing and with all requisite authority and power and as
legally permissible:

1. To bill, collect, or cause to be collected, all amounts related to the operation of the
Hospital and the Clinics and the Other Facilities, including, but not limited to, the accounts
receivable, in the District?s name, and, when deemed appropriate by the AttorneynimFact, settle
and compromise claims, and assign such other items to a collection agency, bring a legal action
or take such other appropriate action against an obliges;

2. To receive, take possession of, endorse in the name of the District, and deposit into the
Depository Account, the Master Account or other account, as deemed appropriate by Manager,
in accordance with the terms of the Agreement, any notes, checks, money orders, payments,
insurance payments, and any other instruments received in payment of services provided at the
Hospital and the Clinics and Other Facilities.

3. To deposit ail amounts collected into the Depository Account, Master Account or other
account, as deemed appropriate by Manager, in accordance with the terms of the Agreement.

4. To sign checks, drafts, bank notes or other instruments on behalf of the District, and to
make withdrawals from the Depository Account, Master Account or other applicable account for
payments speci?ed in this Agreement.

5. To execute any instruments or documents or take such other or further action necessary
or appropriate in connection with any of the above.

This Power of Attorney is coupled with an interest, and shalt give the Attorney~ln~Fact the power 
and authority to act in the District?s name as fully as the District could do if present. The District
hereby ratifies and confirms and agrees to ratify and confirm whatsoever the Attorney?ln?Fact
shall do or purport to do by reason of these presents.

Capitalized terms not defined herein shall have the meaning ascribed to them by the
Agreement. {Any provision hereof which may prove unenforceable under any Law shail not
affect the vaiidity of any other provisions hereof.

Any photocopy of this Power of Attorney shall have the same force and effect as the original.

Exhibit I
80354553727 i

IN WITNESS WHEREOF, I have hereunto set my hand and sea! effective as of the day of

 

 

 

 

WITNESS:
Tulare Lesa] Healthcare District, dIbla Tulare
Regional Medical Center
Signature:
Print Name: By:
Sherrie Ben, Chairman of the BoardIPr-esidenr
Signature:
Print Name:

 

Exhibit 
60354553717 I