Res 132-91 8/20/1991RESOLUTION NO. /1, --9"/
RESOLUTION AUTHORIZING THE MAYOR TO EXECUTE
APPROVAL OF A LEASE AGREEMENT BY AND BETWEEN
THE WICHITA COUNTY-CITY OF WICHITA FALLS,
TEXAS, HOSPITAL BOARD, D/B/A WICHITA GENERAL
HOSPITAL, WICHITA GENERAL SERVICE
CORPORATION, THE COMMISSIONERS' COURT OF
WICHITA COUNTY, TEXAS, AND THE CITY OF
WICHITA FALLS, TEXAS.
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF WICHITA
FALLS, TEXAS, THAT:
The Mayor is hereby authorized to execute approval of the
attached lease agreement by and between the Wichita County-City
of Wichita Falls, Texas, Hospital Board, d/b/a Wichita General
Hospital, Wichita General Service Corporation, the Commissioners '
Court of Wichita County, Texas, and the City of Wichita Falls,
Texas.
PASSED AND APPROVED this the 20th day of August, 1991.
1>1%1</%2 egg
M A O R
ATTEST:
City C erk
Page of Pages
Agenda Item No.
LLrtL 'rrlci t - "
MANAGEMENT CONTRACT AND LEASE AGREEMENT
THE STATE OF TEXAS 5
KNOW ALL MEN BY THESE PRESENTS:
COUNTY OF WICHITA §
This Lease Agreement is made and entered to be deemed
effective January 1, 1991 , by and between the Wichita County-City
of Wichita Falls, Texas, Hospital Board, dba Wichita General
Hospital, a body corporate and politic organized under the laws
of the State of Texas (the "Board") , and Wichita General Service
Corporation, a Texas non-profit corporation (the "Corporation") .
Additional parties hereto, to the extent required for the cove-
nants herein made, are the City of Wichita Falls, Texas and the
Commissioners' Court of Wichita County, Texas.
W I T N E S S E T H :
WHEREAS, the Board was created by the Resolutions of the
City Council of the City of Wichita Falls, Texas, and the Commis-
sioner' s Court of Wichita County, Texas, pursuant to the author-
ity granted by Article 4494i-1 , V.A.C.S. , in order to facilitate
the operation of a general medical and surgical community hospi-
tal in the City of Wichita Falls, Texas (hereinafter referred to
as the "Hospital") ;. and,
WHEREAS, Wichita General Service Corporation is a validly
created and duly existing Texas non-profit corporation created
under the provisions of the Texas Non-Profit Corporation Act,
Article 1396-1.01 et. seq. , V.A.C.S. ; and,
RLHR71991 - 1 -
WHEREAS, on March 1, 1983, the Board issued and sold its
Wichita County-City of Wichita Falls, Texas, Hospital Board
Revenue Bonds, Series 1983" (the "1983 Hospital Bonds") in the
total principal sum of $17, 600, 000. 00; and,
WHEREAS, the 1983 Hospital Bonds were secured by a certain
Trust Indenture dated as of the 1st day of March, 1983 ("Trust
Indenture") , between the Board and the InterFirst Bank of Wichita
Falls, Texas, as Trustee (the "Trustee") ; and,
WHEREAS, the 1983 bonds were refunded in 1987 pursuant to
powers granted to the issuer by Article 717k V.A.T.C.S. , and the
refunding bonds are entitled Wichita County-City of Wichita
Falls, Texas, Hospital Board Hospital Revenue Refunding Bonds
Wichita General Hospital Project Series 1987) , and were issued
in the amount of $21,295,000.00; and,
WHEREAS, the 1987 Hospital Bonds are secured by a certain
Trust Indenture dated as of March 1, 1987 ("Trust Indenture")
between the Board and Interfirst Bank Wichita Falls, N.A. as
Trustee (now NCNB Texas National Bank) ; and,
WHEREAS, the City Council of the City of Wichita Falls and
the Commissioner's Court of Wichita County have resolved to
authorize this Lease Agreement as evidenced by the resolutions
attached as Exhibit and hereto; and,
WHEREAS, by Corporate Resolution, the Directors of Wichita
General Service Corporation have empowered its undersigned
officers to enter into this Lease Agreement as evidenced by the
Corporate Resolution attached on Exhibit hereto; and,
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WHEREAS, the Board has given serious consideration to the
present and future health care needs of the residents of the
community served by the Hospital and has determined that it is in
the best interest of the community for the Board to enter into a
management contract and lease agreement with the Corporation
whereby the Corporation may become the operating entity of the
Hospital; and,
WHEREAS, the Corporation is desirous of leasing the Hospital
from the Board, such leasing being permitted and provided for by
Article 4494i-1, Revised Civil Statutes of Texas; and,
WHEREAS, The Internal Revenue Service has determined the
Corporation to be an organization described in Section 501 (C) (3)
of the Internal Revenue Code of 1954, as amended, and has further
determined that the Corporation is not a private foundation as
described in Section 509 (a) of the Internal Revenue Code, said
determinations being material conditions precedent and continuing
substantial requisites for this agreement;
NOW, THEREFORE, for and in consideration of the mutual
covenants, promises and agreements herein contained, the Board
and the Corporation, hereby covenant, promise and agree as
follows:
1. Lease of Premises. In consideration of the covenants of
the Corporation to provide community medical and hospital ser-
vices and care, the Board does hereby lease to the Corporation
and the corporation does hereby lease and take from the Board,
those certain tracts or parcels of land described in Exhibit
hereto (the "Land") , together with all buildings, equipment,
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fixtures and facilities now or hereafter erected, constructed or
situated thereon (the "Improvements") , together with all personal
property used or useful in connection with the operation of the
Hospital, including, but not limited to, equipment, machinery,
furniture, vehicles, accounts, contract rights, interests
resulting from Joint Venture Agreements, general intangibles,
inventory, consumable supplies and small tools (the "Personal
Property") , and together with all rights, powers, easements,
licenses, rights of way, and other interests in property, real,
personal or mixed, now owned and appurtenant thereto (the Land,
the Improvements, the Personal Property, and interests
appurtenant thereto are hereinafter collectively referred to as
the "Leased Premises") .
2. Warranty of Title. The Board represents and warrants
that it owns the Leased Premises in fee simple, free and clear of
all encumbrances, except as set forth and described on Exhibit
to this Lease Agreement, the bond indenture, and statutory
restrictions imposed under Article 4494i-1. The Board further
warrants that it has the lawful authority to enter into this
Lease Agreement and covenants that it will execute or procure any
further necessary assurance of title and authority that may be
reasonably required for the protection of the Corporation.
3. Covenant of Quiet Enjoyment. Except as otherwise
expressly provided in this Lease Agreement, and so long as no
default exists hereunder, the Board covenants to do no act to
disturb the peaceful and quiet occupation and enjoyment of the
Leased Premises by the Corporation.
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4. Warranty of Fulfillment of Existing Obligations. The
Board represents and warrants that, at the time of the execution
and delivery of this Lease Agreement, it is not in default of its
obligations under the 1987 Hospital Bonds, and Trust Indenture,
or any other obligations which are secured by, or related to the
Leased Premises. The Board further represents and warrants that
the execution and delivery of this Lease Agreement will not
constitute such a default.
5. Assignment of Board' s Rights. The Board assigns to the
Corporation, for the term of this Lease, all of the Board rights
under, or in connection with, leases of real estate, equipment
leases, office leases, employment agreements, warranties and
guarantees, other executory agreements, and transferrable govern-
mental or quasi-governmental licenses and permits relating to the
operation of the Hospital. In addition, the Corporation shall
have access to, and the right to use, all customer lists of the
Hospital, all books and records relating to the medical care,
operations, financial condition, personnel and patients of the
Hospital, and all telephone exchange numbers presently in use, or
reserved for the use, by the Hospital. As further consideration
for the assumption by the Corporation of the obligations herein
described, the Board herewith assigns and delivers to the Corpo-
ration its deposits of operating capital and funds registered to
its account and in its name in financial and savings institutions
listed on the attached Exhibit if any, and if there are
none, the word none shall be inserted on such exhibit. The
Corporation acknowledges receipt of such deposits in the amounts
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I ,
set forth by separate letter executed contemporaneously with this
Lease Agreement, if there are such sums on deposit. In accordance
with Paragraph 10 of this Agreement, the Corporation agrees to
periodically and upon reasonable notice to provide the Board the
hospital' s operating information, including but not limited to,
an accounting for all sums registered upon deposit or to its
credit in such institutions. Further, the Corporation agrees to
provide the Board at all times material to this Agreement
evidence of fidelity bond coverages on all employees entrusted
with such funds.
6. Additional Security. As additional security for this
lease, Lessee grants and pledges to Lessor a security interest in
and to any and all income, rents, profits, and gross revenues of
the corporation, including, but not limited to all patient
revenues, third art payments, accounts receivable, monies inPYPYm
bank accounts, cash on hand, articles, i and items of equipment,
inventory, furniture and supplies.
7. Term of Lease. The initial term of the Lease Agreement
shall commence legally on the deemed effective date of this
lease, June 1, 1991, and shall continue through the period ending
on December 31, 1995. In the event the Corporation loses its
501 (c) (3) exemption from the Internal Revenue Service, then this
Lease Agreement shall be deemed to be voidable subject to the
curative opportunities for default as provided for in this
Agreement.
8. Provisions of Health Care.
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a) The Corporation will operate the Hospital and all
affiliated entities in such a manner to ensure high quality and
comprehensive hospital care, reflective of local characteristics
and responsive to the current and anticipated demands from and
within the communities served by the Hospital, and to assure an
effective, efficient and economic program manifesting financial
viability. For purposes of this Agreement, except where other-
wise specifically modified, "affiliated entities" shall mean all
of the land, hospitals, buildings, structures, equipment, ser-
vices, and other facilities of every nature whatsoever constitut-
ing Wichita General Hospital in Wichita Falls, Texas, together
with all future improvements, enlargements, and additions
thereto, and replacements thereof, acquired or constructed from
any sources, including the issuance of revenue bonds, and by the
following or any subsidiary thereof: (1) the Wichita General
Hospital of Wichita Falls, Texas, (2) the System as defined in
Section 1.01 of the Trust Indenture, and (3) the Corporation and
any other corporation or entity which includes any of these
entities including clinics and any other method of delivering
hospital care as defined herein. Such term does not include
independent non-owned joint venturers or partners and does not
include the resulting joint ventures or partnerships as long as
the entry into such joint ventures or partnerships does not
diminish the existing hospital care available to medically
indigent residents of Wichita County. The Corporation covenants
and agrees that it will at all times use its best efforts to
maintain and operate the Leased Premises and affiliated entities
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in compliance with all laws, ordinances, orders, rules, regula-
tions, and requirements of duly constituted public authorities
which may be applicable to the Leased Premises or to the repair
and alteration thereof, or to the use or manner of use of the
Leased Premises, and to meet standards and requirements and
provide hospital care of such quality and in such manner as shall
enable the Hospital to participate in, and provide services in
connection with, recognized health and hospital insurance pro-
grams, and agrees that, so long as it shall remain a participat-
ing hospital under the Medicare, Medicaid, Blue Cross, Blue
Shield, or other programs, it will use its best efforts to comply
with the standards and requirements for remaining a participating
hospital thereunder. The Corporation further covenants that in
the operation and maintenance of the Leased Premises and affili-
ated entities it will comply with applicable federal and state
laws prohibiting discrimination based on race, religion, creed,
color, sex or national origin. The Corporation further covenants
and agrees that during the term of this Lease it will use its
best efforts to continuously operate the Leased Premises in a
manner that will maintain its certifications for reimbursements
and licensure and its accreditation, if compliance with accredi-
tation standards is. required to maintain the operations of the
Leased Premises and if failure to comply would adversely affect
revenues from the Leased Premises. The Corporation agrees that
it and all its affiliated entities shall admit and/or provide
treatment to any person at any facility under their control where
hospital care is provided without regard to his or her ability to
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pay for the hospital care rendered. It is agreed that the term
Hospital Care" shall include the various types of services
offered by the Wichita General Hospital at the commencement date
of this agreement, including the future development and improve-
ment of those services, as well as such additional services as
may be generally recognized and delivered by medical and surgical
hospitals of similar size and nature in communities of similar
size in the State of Texas, and which additional services the
Corporation is able to deliver at the time the need for same
arises. The term "Hospital Care" shall not include physicians
fees except those required of the Hospital by State or Federal
Law or by contract.
b) In consideration of the authorization of this Lease
Agreement by the City Council of the City of Wichita Falls, Texas
and the Commissioner' s Court of Wichita County, Texas, and the
covenants made herein by the Commissioner's Court with respect to
payments and reimbursements to the hospital for indigent care,
the Corporation agrees that it shall provide hospital care to
medically indigent residents of Wichita County as required of the
Hospital by State or Federal law or by this contract.
Notwithstanding anything to the contrary, Wichita General
Hospital shall not be responsible for hospital care which is
provided or has been provided by any other non-affiliated entity,
or care which exceeds the capacity and/or ability of the hospital
to deliver at the time the need for such care arises.
c) The Corporation further covenants that it will neither
refer nor permit the referral of County Jail inmates, juveniles
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in County detention, nor medically indigent residents of Wichita
County to other institutions, unless it is documented as part of
the patient record that the facilities of the Corporation or the
expertise of the medical staff are inadequate or inappropriate to
provide the patient care required for that patient.
d) Fees and charges. The rates, fees, charges, and rents
established or caused to be established by the LESSEE for the use
of the Hospital shall be substantially commensurate with facili- •
ties of similar size and nature in communities of similar size
within the State of Texas. Such rates, fees, charges and rent
shall be sufficient to provide money adequate to meet its obliga-
tions hereunder, as well as to pay all operating costs and debt
service, and provide reserves therefor, all as provided by State
law and the existing Trust Indenture.
9. Provision for Indigent Health Care.
Wichita County pursuant to Section 61.001 et seq, of the
Health and Safety Code (the "Code") will meet its statutory
obligations for funding of health care services to the County's
eligible residents under this Code.Accordingly, and
simultaneously with the execution of the lease agreement, Wichita
County will select the Corporation as one of the County mandated
providers of health care service pursuant to Section 61.030 of
the Code. As a mandated provider, the Corporation will provide
to eligible County residents hospital services set forth under
the Code that are within its capacity as designated in paragraph
8 of this Agreement, and will be entitled to receive
reimbursement from the County for such hospital services upon
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proper documentation of such services rendered, at a rate of
reimbursement as then currently set by the Texas Department of
Health. The County is obligated by State Law to reimburse
provider a total sum for accounts and services in sums up to ten
percent (10%) of the then current Gross Revenue Tax Levy and of
that amount, the Corporation agrees to the limitation of up to
sixty-five percent (65%) of the then percent (10%) of Gross
Revenue Tax Levy as the maximum amount the Corporation can expect
from the County until such time as the County has expended the
ten percent (10%) of the Gross Revenue Tax Levy. This covenant
by the County is accepted by the Corporation as consideration for
this agreement to induce it to provide indigent care within the
limits herein set forth; provided, however, that the County
hereby additionally covenants to expend reimbursements to other
mandated providers to the extent necessary to provide indigent
care services incurred outside the hospital up to the County's
remaining statutory responsibility of thirty-five percent (35%)
of ten percent (10%) of its Gross Revenue Tax Levy. Once the
County has expended the amount of ten percent (10%) of Gross
Revenue Tax Levy and thus qualifies for state pool reimbursement
of eighty percent (80%) of all qualified additional indigent
health carer expenditures, the Corporation shall receive
reimbursement per the Texas Department of Health formula from the
County of all eligible expenditures without limitation. Should
the Corporation cease to be a mandated provider for any reason of
indigent health care for the County during the term of this lease
agreement, then in that event this lease agreement shall
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terminate as of the date the Corporation ceases to be a mandated
provider.
10. Special Provisions for Operating Deficits.
a) If the schedule of rates, fees and charges for the
system, as defined in Section 1 . 01 of the Trust Indenture, does
not produce in any fiscal year an amount of net revenues suffi-
cient for the purposes stated in Section 5.01 (a) (1) of the Trust
Indenture, the lease agreement shall be reviewed in accordance
with this Paragraph. Net revenues, for purposes of this
agreement, shall be defined as the excess of revenues over
expenses including depreciation, such depreciation computed on a
basis consistent with generally accepted accountin g principles.rinci les
b) The special provision for operating deficits shall be
applicable only if all the Net Revenues of all affiliated enti-
ties of the Corporation are included in the calculation for the
System. For purposes of this Paragraph, affiliated entities
shall mean all of the hospitals, buildings, structures,
equipment, services, and other facilities of every nature whatso-
ever constituting Wichita General Hospital in Wichita Falls,
Texas and the Corporation, together with all future improvements,
enlargements, and additions thereto, and replacements thereof,
acquired or constructed from any sources, including the issuance
of revenue bonds, and by the following or any subsidiary thereof:
1) the Wichita General Hospital, in Wichita Falls, Texas, (2)
the System as defined in Section 1.01 of the Trust Indenture, (3)
the Corporation and/or (4) any related holding company or other
corporation or entity which includes any of these entities,
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including but not limited to Joint Venture interests,
professional office buildings, clinics, ambulatory care units,
data processing, parking garages, nursing homes, sales of
inpatient or outpatient drugs or supplies, alcoholism/-
detoxification programs, real estate companies and service
corporations. However, this definition of the "System" shall not
be deemed to include the Wichita General Hospital Foundation or
any other philanthropic entity or organization principally funded
by charitable contributions.
c) For the Corporation to invoke the special provisions of
paragraph 10 (a) it must notify the Board, the Commissioner's
Court of Wichita County, Texas and the City Council of Wichita
Falls, Texas in writing, of, the circumstances requiring the
invocation. After providing such notice, the Corporation, the
Board, the City Council of Wichita Falls, Texas and
Commissioner's Court of Wichita County, Texas, shall enter into
negotiations for reviewing the lease agreement.
d) If, within ninety (90) days after receiving such
written notice of the deficit and requested review of this lease
agreement, the Board, the City Council of Wichita Falls, Texas,
the Commissioner's Court of Wichita County, Texas and the Corpo-
ration have not agreed upon a means to make up the deficit that
resulted in the invoking of the special provision, then the
Corporation shall have the right to terminate this lease
agreement upon ninety (90) days written notice.
e) In no event shall any provisions of this lease
agreement result in obligating Wichita County, Texas or the City
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of Wichita Falls, Texas to provide for payments for indigent
health services in excess of the obligation of the County or City
under state and federal law.
f) The Commissioner' s Court of Wichita County, Texas, and
the City of Wichita Falls, Texas, reserves the right to provide
Hospital care in any manner authorized by law, including but not
limited to providing such care thro ug h the Corporation or its
affiliated entities, or such other provider or entity as the
Commissioner's Court of Wichita County and City of Wichita Falls
may determine. The exercise of this right shall not enlarge the
responsibilities of the Corporation as set forth herein.
g) The Corporation agrees to indemnify and hold the Board,
the County and the City harmless against any and all claims,
demands, charges, cost and expenses including attorney's fees for
defense of such claim and demands arising from the Corporation's
operations and use of the Leased Premises.
11. Mutual Agreement to Terminate. Notwithstanding any
provision herein to the contrary, this management contract and
lease agreement may be concluded or terminated by mutual
agreement of the parties in writing at any time during the
initial term or any renewal hereof. In that event, all
properties- leased, pledged, encumbered, or otherwise assigned
hereunder shall revert to and become the property of the Wichita
County - City of Wichita Falls, Texas, Hospital Board, a
political subdivision of the State of Texas, as shall all other
assets and liabilities of the Corporation be distributed to or
assumed by said Board, and the Corporation shall then be
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dissolved in accordance with the laws of the State of Texas and
applicable regulations of the Internal Revenue Code applicable to
501 (c) (3) organizations generally.
12. Condition of Premises. The Corporation shall maintain
the Leased Premises in good repair and operating condition. Cor-
poration shall permit no liens to be affixed to the realty and
improvements. Any such encumbrances so created shall be void and
of no validity, force or effect, as an attempt to affix a lien
against realty owned by a Texas political subdivision. Corpora-
tion agrees to indemnify and hold the Board harmless from all
costs and expenses in removing such liens.
13. Operating Information. The Corporation shall furnish
the Board with copies of the annual operating and financial
statements of the Hospital and periodic reports when requested by
the Board or the Trustee, prepared in the ordinary course of
business, so that the Board may know the general financial condi-
tion of the Hospital as operated by the Corporation. The Board
will be permitted, upon giving reasonable advance written notice
to the Corporation, to inspect the Leased Premises and review
records related to the operations thereon so that the Board may
be satisfied as to the keeping of the covenants and conditions
contained in this Lease Agreement. The Corporation shall also be
required to furnish to the Board upon request, evidence of com-
pliance with licensing, accreditation and indigent care require-
ments. The City and County, shall be furnished the same informa-
tion upon reasonable written notice.
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14. Compliance with Hospital Survey and Construction Act.
To the extent that Wichita General Hospital has any obligation
under any application for federal financial assistance under the
Hospital Survey and Construction Act (42 U.S.C. Sec. 291 , et.
seq. ) , the Corporation agrees that it will obtain the appropriate
state and federal approval for the transfer of the Hospital. The
Corporation represents that it is an entity that would have been
eligible for the original grant under the Act, and it will assume
the Hospital's responsibility for providing the assurances origi-
nally given by the Hospital. The Board of Directors of the Cor-
poration will adopt a resolution formally assuming such obliga-
tions. To the extent that the Corporation is unsuccessful in
obtaining such approval, so as to relieve the County and the
Hospital of such obligations, the Corporation agrees to be solely
responsible for liabilities relating to the County and the Hospi-
tal under the Hospital Survey and Construction Act.
15. Assignment and Sublease Prohibited. Except as provided
in Paragraph 23 hereafter, neither this Lease nor any part of
this lease or the Leased Premises shall be assignable or sublet
without the express written approval of the Board.
16. Payment of Obligations; Additional Indebtedness. The
Corporation shall keep all obligations created by or arising from
the lease of they Leased Premises paid and discharged before they
become delinquent,and if the Board should in the future at the
Corporations' request incur other or further debts or obligations
related to the Leased Premises (the "Additional Indebtedness") ,
the Corporation will likewise keep, perform and discharge the
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p
Additional Indebtedness at the Corporation' s sole cost and
expense so that the Board is fully protected.
17. Insurance Coverage for the Board. The Corporation shall
provide, either under its own blanket insurance policies or under
a separate insurance policy, directors and officers liability
insurance, which insurance shall jointly and severally insure the
Board and the Individual members of the Board (the "Board Mem-
bers") . Such insurance shall provide for coverage for each Board
Member in an amount of not less than One Million Dollars
1,000,000.00) ; provided, however, that the Corporation shall
only provide insurance for the BoardPrd and the Board Members for
claims arising during or related to the operations of the Hospi-
tal during the Term or Extension thereof of the Lease Agreement,
and further provided that the Corporation shall not be required
to provide insurance for the Board or the Board Members against
any claims arising out of any willful or wrongful misconduct of
the Board or any of the Board Members or other standard
exclusions from such policies.
18. Insurance Coverage for the Leased Premises.
a) At a minimum, the Corporation will provide and maintain
continuously during the Initial Term and any Extended Term, an
insurance policy or policies covering the Leased Premises against
loss or losses which are required to be provided by the Board by
Section 7. 11 of the Trust Indenture. If requested by the Board,
and if such insurance is available at reasonable rates, the Cor-
poration shall carry, at its own expense, public liability insur-
ance in reasonable amounts to protect the Board; and
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b) (i) In case of the destruction of or damage to the
Leased Premises, or any part thereof, for which destruction or
loss insurance is maintained, the Corporation may collect the
insurance proceeds for such loss, for and on behalf of the Board,
but (1) shall use the proceeds for the repair or replacement of
the Leased Premises so that the Leased Premises are restored as
nearly as possible to their condition prior to the casualty, and
2) subject to the provisions for control over and use of
insurance proceeds contained in the Trust Indenture. Should such
insurance proceeds be insufficient to properly repair or restore
the Leased Premises (and needed additional funds not be readily
obtainable from other acceptable sources of financing) , or such
repair or restoration be otherwise not feasible, the Lease
Agreement may be terminated by either party.
ii) Any insurance adjustment which may be made shall be
made by the Corporation with the consent of the Board, which
consent shall not be unreasonably withheld.
19. Condemnation.
a) If, during the term of this Lease Agreement or any
extension or renewal thereof, all or a substantial part (substan-
tial part being defined as any portion of the Leased Premises,
the condemnation of which would unduly interfere with or burden
the intended use of the Leased Premises) of the Leased Premises
should be taken for any public or quasi-public use under any
governmental law, ordinance or regulation or by right of eminent
domain, or should be sold to the condemning authority under
threat of condemnation, the Corporation shall collect the condem-
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nation award or the amount of the settlement in lieu thereof, for
and on behalf of the Board, but (1) shall use such amount for the
purchase of property acceptable to the Corporation and the Board
and on- such property shall construct a replacement facility for
the Hospital, and (2) subject to any provisions for control over
and use of such amount contained in the Trust Indenture. Should
the amount received upon condemnation or settlement be insuffi-
cient (and needed additional funds not be readily obtainable from
other acceptable sources of financing) , or the Corporation and
the Board be unable to agree upon a proper site for the replace-
ment facility or the construction of a replacement facility be
otherwise not feasible, this Lease Agreement may be terminated by
either party.
b) If this Lease Agreement terminates under this Paragraph
19, the Board and the Corporation shall each be entitled to
receive and retain such separate awards and portions of lump sum
awards as may be allocated to their respective interests in any
condemnation proceedings. The termination of this Lease Agree-
ment shall not affect the rights, if any, of the respective
parties to such awards.
20. Licenses. The Corporation shall take such actions as
may be necessary to keep any governmental and quasi-governmental
licenses and permits in force which are required to operate the
Hospital or occupy the Leased Premises and shall comply with any
lawful requirements relating to the operations of the Hospital or
occupation of the Leased Premises. The Board agrees to join and
cooperate fully with the Corporation in such actions when reason-
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ably necessary for the Corporation to meet its obligations under
this Lease Agreement. Loss of licensing shall constitute a
material breach of this Agreement.
21 . Additional Facilities. Written approval of the Board
shall be required prior to enlargements, additions, replacements
or substitutions to the Leased Premises (the "Additional Facili-
ties") ; (1) that exceed the provisions of Section 7.05 of the
Trust Indenture; (2) or if the amount to be expended for any •
enlargement, addition, replacement, or substitution to the Leased
Premises is in excess of the budgeted depreciation expense for
the period expended and would cause action to be initiated under
Paragraph 10 herein. Additionally, Corporation agrees to submit
all proposed capital expenditures valued in excess of $1,000,000.
for the review and comment of the Board prior to such expenditure
by the Corporation. The Board and the Corporation further agree
to cooperate in all matters in connection with any proposed
tax-exempt financing for the construction of such Additional
Facilities and issuance of bonds to finance such construction
when determined to be in the best interest of the Hospital and
the community. The Additional Facilities, when constructed,
shall become a part of the Leased Premises. Approval shall not
be granted, if in the opinion of Bond Counsel, such approval
would constitute violation of the provisions of any existing bond
trust indenture.
22. Payment of Impositions; Compliance with Laws.
a) Before interest or penalties are due thereon, the
Corporation shall pay and dischargeSail taxes of every kind and
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nature (including, for example, federal income tax withholding on
wages) , all charges for any easement or agreement maintained for
the benefit of any of the Leased Premises, all general and
special assessments, levies, permits, inspection and license
fees, all water and sewer rents and charges, ad valorem taxes, if
any, and all other public charges whether of like or different
nature, imposed upon or assessed against the Board, the
Corporation or the Leased Premises, or arising in respect of the
occupancy, use of possession thereof (collectively, the "Imposi-
tions") .
In any event that any Impositions may be paid in install-
ments, the Corporation shall have the option to pay such assess-
ment in installments, and in such event, the Corporation shall be
liable for only those installments which become due during the
term of the Lease Agreement. The Corporation shall prepare and
file all tax reports required by governmental authorities which
relate to the Impositions. The Corporation shall deliver to the
Board, within twenty (20) days of receipt thereof, copies of all
settlements and notices pertaining to the Impositions which may
be issued by any governmental authority.
b) The, Corporation shall comply with and conform to all
present and•:` future laws, codes, ordinances, orders, judgments,
decrees, injunctions, rules, regulations and requirements of
every duly constituted governmental authority and all covenants,
restrictions and conditions of record which may be applicable to
the Corporation or the Leased Premises, or to the use, manner of
use, occupancy, possession, operation or maintenance of the
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Leased Premises (collectively, the "Legal Requirements") .
c) The Corporation and the system' s properties, real and
personal, whether owned or leased by the City-County Hospital
Board or the Corporation will remain exempt from ad valorem taxes
so long as the Corporation complies with the terms and conditions
of the Lease Agreement and is not in default.
23. Permitted Contest. The Corporation shall be required to
i) pay any Imposition, or (ii) comply with any Legal Requirement
so long as the Corporation shall contest, in good faith and at
its expense, the existence, the amount, or the validity thereof,
or the extent of its or the Board' s liability therefor, by
appropriate proceedings which shall operate during the pendency
thereof to prevent (i) the collection of, or other realization
upon, the Imposition, (ii) the sale, forfeiture or loss of any of
the Leased Premises to satisfy the payment of any Imposition or
payment of any damages caused by the violation of any such Legal
Requirement, (iii) any interference with the use of occupancy by
the Corporation of any of the Leased Premises, and (iv) the
cancellation of any fire or other insurance policy. The
Corporation further agrees that each such contest shall be
promptly and diligently prosecuted to a final conclusion, except
that the Corporation shall, so long as the conditions of the
first sentence of this Paragraph are at all times complied with,
have the right to attempt to settle or compromise such contest
through negotiations. The Corporation shall pay, and save the
Board, County or City harmless against, any and all losses,
judgments, decrees and costs (including reasonable attorney's
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fees and expenses) in connection with any such contest and shall,
promptly after the final determination of such contest, fully pay
and discharge the amounts which may be levied, assessed, charged
or imposed or be determined to be payable therein or in
connection therewith, together with all penalties, fines,
interest, cost and expenses thereof or in connection therewith,
and perform all acts the performance of which shall be ordered or
decreed as a result thereof. No such contest shall subject the
Board to the risk of any civil or criminal liability or
contravene any provision of the Wichita County-City of Wichita
Falls, Texas, Hospital Board Hospital Revenue Refunding Bonds
Wichita General Hospital Project Series 1987) or the Trust
Indenture.
24. Default.
a) If the Board, County, and/or City should claim that the
Corporation defaulted in the performance of one or more of its
obligations hereunder, including without limitation, the
obligations set forth in Paragraphs 7 and 13 of this Lease
Agreement, the Board shall give the Corporation written notice
specifying the claimed default. If the corporation does not
contest the claimed default it shall have thirty (30) days from
the receipt of such notice to (1) pay any delinquent amounts due
hereunder, or (2) perform any of the other covenants, conditions
or provisions of this Lease Agreement, provided, however, that if
such performance requires work to be done, actions to be taken,
or conditions to be remedies, which by their nature cannot
reasonably be done, taken or remedy, as the case may be, within
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such thirty (30) day period, no default shall be deemed to have
occurred or to exist if, and so long as, the Corporation shall
commence such performance within the thirty (30) day period and
shall diligently and continuously prosecute the same to
completion. If the actions required by this Paragraph are not
undertaken by the Corporation, then the Board may terminate the
Lease Agreement. In no event shall the Corporation be granted
more than ninety (90) days to cure declared default.
b) Upon the occurrence of such events of default, the
Board shall have the right to terminate this lease, in which
event the Corporation shall immediately surrender the Premises to
the Board, City or County. Should the Board at any time
terminate this lease for any. breach, in addition to any other
remedies it may have, it may recover from the Corporation all
damages it may incur by reason of such breach, including the cost
of recovering the Premises, and all of such amounts shall be
immediately due and payable from the Corporation to the Board,
City or County. Pursuit of any of the remedies of the
Corporation shall not preclude pursuit of any of the other
remedies herein provided or any other remedies provided by law,
nor shall pursuit of any remedy herein provided constitute a
forfeiture_ or waiver of any damages accruing to the Board by
reason of the violation of any of the terms, provisions, and
covenants herein contained.
c) If the Corporation fails to meet, comply with, or
perform any covenant, agreement, or obligation on its part
required within the time limits and in the manner required in
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this contract, the Corporation shall be deemed to be in default.
Such obligations specifically include but are not limited to the
obligations set forth in Paragraphs 8 , 9 and 13 of this Lease
Agreement. If the Corporationororation is in default,t, the Board or the
County may enforce specific performance of this contract against
the Corporation.
d) If any affiliated entity fails to meet, comply with, or
perform any covenant, agreement, or obligation on its part
required within the time limits and in the manner required in
this contract, the affiliated entity shall be deemed to be in
default. If any affiliated entity defaults and fails to perform
any obligations of the Corporation under this contract, the Board
of the County may enforce specific performance of this contract
against the affiliated entity.
25. Assignment to Affiliated Entity of the Corporation. The
Corporation may assign any or part of its rights under this Lease
Agreement to an affiliated entity of the Corporation, upon the
conditions that said assignee accept such assignment and assume
and agree to perform all obligations of the Corporation here-
under. The Corporation shall immediately advise the Board of
such assignment hereunder.
26. Board's Right to Re-enter the Leased Premises. In the
event of default herein, which default remains uncontested or
uncured by the Corporation as provided in Paragraph 24 of this
Lease Agreement, the Board shall have the right, after giving the
notice provided for in Paragraph 24, in addition to such other
remedies as may be available to it at law, to re-enter the
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premises and to resume possession of the Leased Premises and to
take possession of all Personal Property leased to the Corpora-
tion and covered by this Lease Agreement, and to resume control
over all Hospital operations upon the Leased Premises . To the
extent of any contract, sublease, lease, agreement or other
arrangement has been entered into by the Corporation or any of
its affiliated entities pursuant to the terms of Paragraphs 15
and 25, the Board may assume management and control over all
services, to the extent of the ownership interest of the Corpora-
tion or affiliated entity, provided pursuant to Paragraph 15 and
25, including without limitation possession of all Personal
Property, Real Property or mixed property utilized in the perfor-
mance of said services.
27. Termination of the Lease. The Corporation shall leave
as a part of the Leased Premises all fixtures which have been
installed, and all personal property acquired for the Hospital
with Corporation funds, during the term of the Lease Agreement.
28. Medical Staff. The Corporation agrees to maintain the
medical staff by-laws and rules and regulations in force at the
time of commencement of this Agreement, allowing for future
changes as authorized by due procedures. The Corporation agrees
to accept_ and approve the members of the medical staff on the
staff at that time, and to grant to such members of the staff
privileges respectively afforded to the individual members under
their existing status, allowing for future changes as authorized
by due procedures.
29. Hospital Auxiliary. The Corporation agrees to accept
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and continue the Board' s present affiliation with the Wichita
General Hospital Auxiliary.
30. Hospital By-Laws. The Corporation agrees to maintain in
force hospital by-laws of the Board, and to continue same where
appropriate, reserving however, subsequent autonomy to review,
amend, and adopt such by-laws as becomes necessary for the
operation of the Leased Premises.
31. Composition and Appointment of Board.
a) The Board of Directors of the Wichita General Service
Corporation shall consist of eleven (11) members.
b) The Board of the Corporation shall be autonomous and
self-perpetuating and shall elect and appoint its own successor
members.
c) The original and all successor members of the Board of
Directors of the Wichita General Service Corporation must be
residents of Wichita County at the time of appointment and shall
remain such at all times during their tenure on the Board.
32. Invalidity of Provisions. If any provision of this
Lease Agreement shall be invalid, illegal, unenforceable, or in
contravention of the Trust Indenture, the validity, legality and
enforceability of the remaining provisions and applications shall
not in any way be affected or impaired thereby.
If a particular provision's invalidity would render the
Lease Agreement invalid, then the Board and Corporation agree to
modify the Lease Agreement, if such modification is legally
possible, to preserve the original intent of the Board and
Corporation.
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33. Notices. All notices required, permitted, or desireable
hereunder shall be sufficiently given if sent by United States
Mail, postage prepaid, addressed as follows:
Wichita County, City of President and C.E.O.
Wichita Falls, Texas, Wichita General Service
Hospital Board Corporation
c/o County Judge 1600 Eighth Street
Wichita County Courthouse Wichita Falls, TX 76301
Room 202, 600 Lamar
Wichita Falls, Tx 76301
34. Governing Law. This Lease Agreement is being executed
and delivered, and is intended to be performed, in the State of
Texas, and the laws of such State shall govern the validity,
construction, enforcement, and interpretation of this Contract,
unless otherwise specified herein.
35. Entirety and Amendments. This Lease Agreement embodies
the entire agreement between the parties and supersedes all prior
agreements and understandings, if any, relating to the Leased
Premises, and may be amended or supplemented only by an instru-
ment in writing executed by the party against whom enforcement is
sought.
36. Multiple Counterparts. This Lease Agreement may be
executed in a number of identical counterparts. If so executed,
each of such counterparts is to be deemed an original for all
purposes, and all such counterparts shall, collectively, consti-
tute one agreement, but in making proof of this Lease Agreement,
it shall not be necessary to produce or account for more than one
such counterpart.
37. Parties Bound.. This Lease Agreement shall be binding
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upon and inure to the benefit of the Board and the Corporation
and their respective heirs, personal representatives, successors,
and permitted assigns.
38. Amendment. This agreement may be amended or modified
at any time by mutual agreement of all the parties but only in
writing duly executed by all parties.
39. Further Acts. In addition to the acts and deed recited
herein and contemplated to be performed, executed and/or de-
livered by the Board and the Corporation, the Board and the
Corporation agree to perform, execute and/or deliver or cause to
be performed, executed and/or delivered any and all such further
acts, deeds, and assurances as may be necessary to consummate the
transactions contemplated hereby. The Corporation agrees further
that it shall not enter into any agreement or contract with a
health care provider which is not an affiliated entity which
would materially and adversely affect the hospital services
provided by the Hospital without obtaining the prior consent of
the Board.
41. Time of the Essence. It is expressly agreed by the
parties hereto that time is of the essence with respect to this
Lease Agreement.
IN TESTIMONY WHEREOF, the parties to this Lease Agreement
have executed it as of the day and year first above written, each
representative of each party hereby certifying that individual
has been duly authorized to execute the same in the capacity
shown.
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BOARD: CORPORATION:
Wichita County-City of Wichita Wichita General Service
Falls, Texas, Hospital Board Corporation
By: By:
Chairman Chairman
FUNDING BODIES:
City of Wichita Falls, Texas Attest:
By:
Mayor City Secretary
Commissioners' Court of
Wichita County .
By:
County Judge
STATE OF TEXAS
COUNTY OF WICHITA S
This instrument was acknowledged before me on the
day of 1991, by Chairman of
the Wichita County-City of Wichita Falls, Texas, Hospital Board,
in such capacity and on behalf of said Board.
Notary Public, State of Texas
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A , V
STATE OF TEXAS S
COUNTY OF WICHITA §
This instrument was acknowledged before me on the
day of 1991 , by Chairman of
Wichita General Service Corporation, a Texas Corporation, in such
capacity and on behalf of said Corporation.
Notary Public, State of Texas
STATE OF TEXAS
COUNTY OF WICHITA §
This instrument was acknowledged before me on the
day of 1991, by Michael Lam, Mayor of the City ofWichitaFalls, Texas, in such capacity and on behalf of said
City.
Notary Public, State of Texas
STATE OF TEXAS
COUNTY OF WICHITA §
This instrument was acknowledged before me on the
day of 1991, by Nick Gipson, County Judge, fo—rtie
Commissioners' Court of Wichita County, in his capacity as County
Judge and on behalf of said Commissioner's Court.
Notary Public, State of Texas
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