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									     Heads of Agreement for the
continued management, operation and
           funding of the
     Mersey Community Hospital

                   between the


         COMMONWEALTH OF AUSTRALIA

              as represented by the

       DEPARTMENT OF HEALTH AND AGEING
              (ABN 83 605 426 759)


                    and the


              STATE OF TASMANIA

               represented by the

   DEPARTMENT OF HEALTH AND HUMAN SERVICES
              (ABN 11 255 872 006)
1    Status and interpretation                                       3


2    Extent of this Agreement                                        8


3    Funding for the Project                                         8


4    Use of Funds                                                    10


5    Management of Funds and bank account                            10


6    Specified Personnel and other personnel                         11


7    Records and reporting                                           11


8    Tasmania’s responsibilities                                     12


9    Liaison                                                         13


10   Access, records and assistance                                  14


11   Hospital                                                        15


12   Hospital Assets                                                 16


13   Hospital contracts                                              18


14   Income, expenses, business liabilities and malpractice Claims   19


15   Employees                                                       20


16   Termination                                                     21


17   Repayment of funds                                              23


18   Indemnity                                                       23


19   Post Agreement Period Issues                                    24


20   Protection of personal information                              26
21   Dispute resolution                            28


22   Taxes, duties and government charges          29


23   Notices                                       30


SCHEDULE                                           31


ANNEXURE A MONTHLY INCOME AND EXPENDITURE REPORT   37


ANNEXURE B ANNUAL INCOME AND EXPENDITURE REPORT    41


ANNEXURE C PLAN OF CENTRE OF EXCELLENCE            46
This Agreement is made

BETWEEN the

COMMONWEALTH OF AUSTRALIA (Commonwealth), as represented by the Department of Health and
Ageing (DoHA) ABN 83 605 426 759

AND the

STATE OF TASMANIA (Tasmania) as represented by the Department of Health and Human Services (DHHS)
ABN 11 255 872 006

RECITALS

A.     As the owner of the Mersey Community Hospital at Latrobe in the North West region of Tasmania, the
       Commonwealth seeks to continue to ensure that the people in its catchment area have appropriate access
       within clinically appropriate times to an appropriate range of safe health care services based on clinical
       need.

B.     It is the wish of both Parties that the role of the Mersey Community Hospital as a key provider of public
       hospital services across the North West region of Tasmania continues to be strengthened and enhanced.

C.     Tasmania has been managing and operating the Mersey Community Hospital, including carrying on the
       business and operations of the Mersey Community Hospital, under a Heads of Agreement between the
       Commonwealth and Tasmania dated 27 August 2008.

D.     Tasmania has agreed to carry out and deliver the Project, and the Commonwealth has agreed to provide
       Tasmania with funding for that purpose, on the terms of this Agreement.

E.     In the course of the Project, the Parties will:

       (a)      consistent with ongoing developments in safe and contemporary clinical practice, regularly
                reassess and attempt to agree the range of additional appropriate activities to be carried out;

       (b)      continue to look to exploit the opportunity offered by the arrangements described in this
                Agreement for elective surgery;

       (c)      subject to both Parties’ budgetary constraints, move to expand the range of services over the
                Agreement Period (but affording priority to renal dialysis, rehabilitation and expanded outpatient
                services and any other agreed priority programs or treatment from time to time); and

       (d)      move towards activity based costing of the services being delivered to allow for greater
                transparency of costs and benefits,

       at the Mersey Community Hospital.

THE PARTIES AGREE as follows:

1      Status and interpretation
1.1    The Parties intend this Agreement to be legally binding. This Agreement and the Existing Lease record
       their entire agreement in respect of the Mersey Community Hospital, its management, operation and
       funding, and the clinical, administrative and other support staff employed there.

1.2    In this Agreement, unless the contrary intention appears:

       Agreement means this document including the Schedule and Annexures A, B, C and D and includes any
       variation or replacement of it.

       Agreement Period means the period from 1 July 2011 to the Expiry Date (both inclusive).

       Applicable Licensing Legislation means:

       (a)      the Hospitals Act 1918 (Tas) unless and until the Health Services Establishments Act 2006 (Tas)is
                proclaimed and takes effect; or
(b)      such other Law as may at the relevant time govern the licensing of, or the operation of, the Mersey
         Community Hospital.

Australian Accounting Standards means the standards by that name formulated by the Australian
Accounting Standards Board under sections 227(1)(b) and (c) of the Australian Securities and Investments
Commission Act 2001 (Clth).

Australian Auditing Standards means the standards set by the Auditor-General under section 24 of the
Auditor-General Act 1997 (Clth) and, to the extent they are not inconsistent with them, generally accepted
Australian auditing principles and practices consistently applied.

Australian Standards means the documents published under that name by Standards Australia.

Budget means the budget for Tasmania’s expenditure of the Funds on the Project.

Business Day means any day other than a Saturday or Sunday, or a bank holiday or a public holiday in
either Hobart or Canberra.

Claim means any allegation, debt, cause of action, liability, claim, proceeding, suit or demand of any
nature however arising and whether present or future, fixed or unascertained, actual or contingent at law, in
equity, under statute or otherwise.

Clinical and Financial Services Plan means the plan from time to time agreed between the Parties to be
the “Clinical and Financial Services Plan” for the purposes of this Agreement.

Closing Hospital Assets means the Opening Hospital Assets plus all Equipment and Consumables
acquired by Tasmania using the Funds (by purchase, lease or otherwise) for use at the Hospital, other than
those which have been stolen, lost, destroyed, used up, consumed or otherwise replaced during the
Agreement Period.

Commencement Date means 1 July 2011, or any other date that the Parties agree.

Committed, at any time and in respect of Tasmania and any Funds, means that Tasmania is then
contractually obliged to pay them to a Third Party in respect of any of the activities included in the Project,
and Commit and Commitment each has a corresponding meaning. Except in the definition of “Unspent”
and Clauses 3.2(b) and (d) and 4.1(d), the obligation to make the payment must be:

(a)      evidenced in writing; and

(b)      either unconditional, or conditional only on the Third Party’s performance of its obligations under
         the relevant contract.

Consent means prior written consent.

Consumables mean goods on hand (including pharmaceuticals) which, by their nature, will be used up or
consumed in the normal course of Hospital operations.

Core Clinical Activities is defined at Item A.

Currently Licensed Premises means any part of the Mersey Community Hospital over which,
immediately prior to the Date of this Agreement, the Commonwealth has granted rights of occupation to
Third Parties.

Date of this Agreement means the date written on the execution page of this Agreement or, if no date or
more than one date is written there, the date on which this Agreement is signed by the last Party to do so.

DHHS includes any department or agency of Tasmania which is from time to time responsible for the
administration of this Agreement.

Dispute Initiation Notice is defined in Clause 21.1.

Dispute Referral Notice is defined in Clause 21.2(b).

Dispute Resolution Process means the process for resolving disputes and differences as set out in Clause
21.
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DoHA includes any department or agency of the Commonwealth which is from time to time responsible
for the administration of this Agreement.

Ends means, in respect of this Agreement, terminates or expires, and has a corresponding meaning in the
Original Agreement.

Equipment means all items of tangible property of a portable nature used (or acquired for use) at the
Hospital, other than Consumables and buildings, improvements and fixtures.

Existing Lease means the lease from the Commonwealth to Tasmania in respect of those parts of the
Mersey Community Hospital known as the “Ambulance Depot”, the “Equipment Technology Library” and
the “Stores Room”.

Expiry Date means 30 June 2014 or any other date the Parties agree in writing.

Funding or Funds means the GST exclusive amounts payable by the Commonwealth to Tasmania
(represented for that purpose by DHHS) according to Item D, and in any provision of this Agreement, with
the exception of Clause 3.1, includes:

(a)     any Interest earned on them (including on any amount referred to in paragraph (b) or (c) of this
        definition);

(b)     any amount required to be deposited by Tasmania according to Clause 3.2(d)(i); and

(c)     any Unspent Funds carried over within the Agreement Period according to Clause 3.2(f)(i).

Hospital means, as the context requires:

(a)     the land, buildings and other improvements and fixtures owned by the Commonwealth at midnight
        on the day before the Commencement Date and which together comprise:

        (i)      the Mersey Community Hospital; and

        (ii)     off-site accommodation listed in Item G (which is used to house persons employed or
                 engaged at the Mersey Community Hospital); or

(b)     the business of a public hospital, including all surgical, clinical, other medical and health-related,
        administrative and support activities conducted from time to time at and through the Mersey
        Community Hospital and, where the context permits, includes any part of that business.

Hospital Assets means the Opening Hospital Assets, all replacements and other Equipment, and all
Consumables acquired by Tasmania for use at the Hospital and from time to time not consumed.

Hospital Management Rearrangement Date is defined in Clause 19.4.

Hospital Patient means a person:

(a)     seen, examined or treated at the Hospital;

(b)     in respect of, or to or for, whom:

        (i)      a procedure is performed at the Hospital; or

        (ii)     any medication or pharmaceutical or other product is prescribed administered or
                 dispensed at the Hospital; or

(c)     who otherwise receives medical care and attention at the Hospital,

in any case whether before, on, or after the Date of this Agreement, and includes a person born at the
Hospital.

Hospital Staff means persons who are employed or engaged at the Hospital, including medical
practitioners with visiting rights. Hospital Staffer has a corresponding meaning.

Initiating Party is defined in Clause 21.1.

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Initiating Party’s Nominee is defined in Clause 21.1(d).

Interest means interest calculated on daily rests at the 90 day bank-accepted bill rate (as notified by the
Reserve Bank of Australia from time to time) less 10 basis points.

Law means any applicable statute, regulation or subordinate legislation and includes the common law and
equitable rules and doctrines.

Liaison Officer, in respect of a Party, means the person from time to time employed by that Party in the
position specified in Item E.

Material means documents, records, software (including source code and object code), goods, images,
information and data stored by any means including all copies and extracts of them.

National Specific Purpose Payment means the funding provided under the Federal Financial Relations
Act 2009 (Clth) by the Commonwealth to the States and Territories for the purpose of expenditure on
healthcare, through National Specific Purpose Payments, and includes any replacement funding for those
States and Territories health care systems agreed between the Commonwealth and the States and
Territories from time to time.

Nominees is defined in Clause 21.3.

Opening Hospital Assets means all those things contained in Annexure D subject to any changes reflected
in the register of Hospital Assets prepared in accordance with Clause 12.4(a) of the Original Agreement
being Consumables and Equipment for consumption solely and exclusively in the Hospital’s operation, on
hand at the Commencement Date, including those things temporarily away from the Hospital but in the
ordinary course consumed solely and exclusively in the Hospital’s operation.

Original Agreement means the Heads of Agreement for the management, operation and funding of the
Mersey Community Hospital between the Parties made on 27 August 2008 as varied by the Mersey
Community Hospital - First Variation Agreement, dated 17 December 2009; and the Deed of Variation
No.2 dated 14 January 2011.

Original Agreement Period means the “Agreement Period” as defined in the Original Agreement.

Party means a party to this Agreement and Parties means both of them.

Project is defined in Item A.

Recipient is defined in Clause 21.1(c).

Recipient’s Nominee is defined in Clause 21.2(a).

Records includes patient records, documents, receipts, ledgers, invoices, books of account, accounts,
information and other data stored by any means, and all copies of them and extracts from them.

Relevant Hospital Staff is defined in Clause 19.11.

Report means a report provided, or to be provided, by Tasmania to the Commonwealth according to this
Agreement.

Specified Personnel means the personnel recruited to fill the positions in the Hospital specified in Item F.

Tasmania’s Personnel means:

(a)      the officers, employees and agents of Tasmania;

(b)      each of its contractors; and

(c)      the officers, employees and agents of each of those contractors,

which includes the General Manager of the Hospital, whether or not employed exclusively in the business
and operations of the Hospital.

Termination Rights is defined in Clause 16.2(b)(ii)(B).

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       Third Party means someone other than a Party.

       Unspent, at a particular time, means Funds that have not then been spent or Committed by Tasmania.

1.3    Terms defined in the Schedule which are also used elsewhere in this Agreement have the respective
       meanings given to them in the Schedule.

1.4    In this Agreement, unless the contrary intention appears:

       (a)      words in the singular include the plural and words in the plural include the singular;

       (b)      words importing a gender include every gender;

       (c)      words importing persons include a body politic, a partnership and a body whether corporate or
                otherwise;

       (d)      Clause and Item headings, and the recitals, do not affect interpretation;

       (e)      where any word or phrase is given a defined meaning, any other form of that word or phrase has a
                corresponding meaning;

       (f)      an uncertainty or ambiguity in the meaning of a provision of this Agreement will not be
                interpreted against a Party just because that party prepared or proposed the provision;

       (g)      references to any statute or other legislation (whether primary or subordinate) is to that statute or
                other legislation as amended from time to time; and

       (h)      references to a Clause are to a clause in this Agreement, references to an Item are to an item in
                the Schedule, references to the Schedule are to the schedule to this Agreement, and references to
                an Annexure are to an annexure to this Agreement.

1.5    If there is any inconsistency between:

       (a)      a Clause and any Item, the Clause will prevail to the extent of the inconsistency;

       (b)      a Clause and anything in an Annexure, the Clause will prevail to the extent of the inconsistency;

       (c)      any Item and anything in an Annexure, then the Item will prevail to the extent of the
                inconsistency; and

       (d)      any provision of any Clinical and Financial Services Plan, and any Clause, Item or Annexure, the
                Clinical and Financial Services Plan will prevail over that Clause, Item or Annexure, to the extent
                of the inconsistency, unless (and except to the extent that), the Clinical and Financial Services
                Plan expressly provides otherwise.

1.6    This Agreement is to be governed by the Laws in force in the State of Tasmania.

1.7    Subject to Clauses 1.5(d), 3, and 16, this Agreement may only be varied by an instrument in writing signed
       by both Parties.

1.8    A waiver of any provision of this Agreement is ineffective unless it is in writing and signed by the Party
       granting it.

1.9    No waiver of any provision (or of a breach of any provision) of this Agreement waives another breach of
       the same or of any other provision of this Agreement.

1.10   If a Party does not exercise, or delays in exercising, any of its rights under this Agreement or at Law, that
       failure or delay does not operate as a waiver of those, or any other, rights. A single or partial exercise by a
       Party of any of its rights under this Agreement or at Law does not prevent the further exercise of those, or
       any other, rights.

1.11   Each Party must perform promptly those of its obligations under this Agreement in respect of which there
       is no time fixed for their performance.



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1.12   Any reference in this Agreement to Commonwealth contractors or any contractor of or to the
       Commonwealth does not include Tasmania, its officers, agents, employees and contractors.

1.13   Except as this Agreement otherwise expressly provides, Tasmania is not, by virtue of this Agreement, the
       Commonwealth’s agent or invested with any power or authority to bind or represent the Commonwealth.

1.14   The words “include”, “includes”, “including”, “for example”, “in particular” and “such as” are not to be
       construed as words of limitation in this deed.

1.15   The words at the Hospital, when used in this Agreement, mean:

       (a)      at the Hospital premises; or

       (b)      otherwise in the course of, or in connection with, the business and operations of the Hospital; and

       (c)      in the course of, or in connection with, the performance or purported performance of any other
                activities from time to time agreed by the Parties in writing to be included in the Project.

1.16   Where:

       (a)      a provision of the Original Agreement is expressed to survive its Ending (original provision); and

       (b)      there is in this Agreement a term or condition to the same, or in all material respects the same,
                legal effect (new provision),

       then despite the terms of the original provision, it ceases to be of any force or effect, and the new provision
       applies in substitution for it as if the new provision had been in full force and effect since the Original
       Agreement commenced.

1.17   This Agreement commences and takes effect according to clause 2.1. However, any provision of this
       Agreement which purports to vary the Original Agreement in relation to acts done, or things to occur at the
       end of the Original Agreement, takes immediate effect.

2      Extent of this Agreement

2.1    This Agreement:
       (a)      commences, subject to clause 1.17, on the Date of this Agreement;

       (b)      from its commencement, and except to the extent that clause 1.16 otherwise expressly provides,
                replaces the Original Agreement without affecting the accrued rights and obligations of each Party
                under that Original Agreement; and

       (c)      unless terminated earlier, expires at midnight on the Expiry Date.

2.2    Tasmania must not dispose of its rights under this Agreement, or allow an interest in them to arise or exist
       in any Third Party, without the Commonwealth’s Consent.

2.3    Tasmania agrees not to consult with any person for the purposes of entering into an arrangement for the
       novation of this Agreement without first consulting the Commonwealth

3      Funding for the Project
3.1    Subject to Parliamentary appropriation, the Commonwealth agrees to pay the Funds to Tasmania in the
       instalments set out in Item D and otherwise on the terms of this Agreement.

3.1A   If no Parliamentary appropriation is made to support this Agreement, Tasmania’s obligations under this
       Agreement will cease on the expiry of the last appropriation.

3.1B   If the Parliamentary appropriation for any year during the term of this Agreement is less than the Funding
       to be paid in that year, the Parties must immediately commence discussions on the basis upon which the
       Hospital is to be managed, administered and operated.

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3.1C   Subject to any contrary provision in any Clinical and Financial Services Plan, the amount to be paid by the
       Commonwealth to Tasmania for the Project will not exceed the aggregate of the amounts specified in Item
       D1.

3.2    If, at any time during the Agreement Period:

       (a)     there are Unspent Funds which the Commonwealth reasonably considers should have been spent
               on the Project; or

       (b)     Tasmania spends or Commits any Funds in breach of this Agreement,

       then, subject to Clauses 3.2(e) and (f), the Commonwealth may at its discretion:

       (c)     in the circumstances described in Clause 3.2(a), either:

               (i)      require Tasmania to repay to the Commonwealth an amount equal to those Unspent
                        Funds; or

               (ii)     defer, withhold or reduce the balance of the Funding yet to be provided by the same
                        amount; or

       (d)     in the circumstance described in Clause 3.2(b), either:

               (i)      require Tasmania to make good the relevant Funds from its own resources by depositing
                        the same amount into the bank account referred to in Clause 5 and then expending that
                        amount only for the purposes of the Hospital (and until Tasmania has done so, its rights to
                        receive, and the Commonwealth’s obligations to provide, Funding under this Agreement
                        are suspended); or

               (ii)     require Tasmania to pay to the Commonwealth the amount of those Funds and Interest on
                        them. Interest under this Clause 3.2(d)(ii) accrues daily, is payable on demand and is
                        calculated from the date on which the Commonwealth requires repayment until the
                        amount of those Funds and all Interest on that amount is paid in full,

               in each case without any reduction in or suspension of Tasmania’s obligations under this
               Agreement.

       However:

       (e)     before exercising any of its rights under Clause 3.2(c) or (d), the Commonwealth must give
               Tasmania at least 10 Business Days notice of its intention to do so and will consider in good faith
               any submission made by Tasmania during that period in connection with the Commonwealth’s
               exercise of those rights; and

       (f)     nothing in this Agreement:

               (i)      precludes Tasmania from carrying over Unspent Funds, with the Commonwealth’s
                        Consent, from one financial year to, and for expenditure in full in, the next financial year
                        during the Agreement Period; or

               (ii)     obliges the Commonwealth to give any such Consent.

3.3    Without limiting Clause 4.1, it is not necessary for the acquittal of Tasmania’s obligations under that
       Clause that the moneys expended or used constitute the proceeds from the Funding, provided that the
       amount expended or used (that amount) is not less than the amount of the Funding that Tasmania
       receives. The expenditure or use of that amount is an expenditure, application or use of, or payment out of,
       the Funds for all the purposes of this Agreement, and references to the expenditure, application or use of,
       or payment out of, the Funds, or to the Funds being spent, applied, paid or used, are to be interpreted
       accordingly.
3.4    Nothing in this Agreement requires Tasmania to spend on the Hospital any monies from sources other than
       the Funds.

3.5    The Commonwealth must:

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      (a)     instruct the Commonwealth Grants Commission to prepare its assessment of per capita relativities
              for the distribution of the GST revenue pool without reference to the Funding (that is, the Funding
              will be quarantined);

      (b)     not reduce the funding provided to Tasmania under the National Specific Purpose Payment or any
              other health funding arrangement as a result of the Funding; and

      (c)     not reduce funding provided to Tasmania under any other current or future funding agreements,
              such as Specific Purpose Payments, as a result of the Funding. In agreeing future financial
              arrangements between the Commonwealth and Tasmania for any purpose, no regard shall be had
              to the Funding.

4     Use of Funds
4.1   Tasmania must:

      (a)     perform the Project throughout the Agreement Period according to the terms of this Agreement.
              However, from the time that the Parties agree a Clinical and Financial Services Plan, this
              Agreement is to be read subject to it;

      (b)     use its best endeavours to ensure that any Clinical and Financial Services Plan is implemented, and
              subject to any such plan, this Agreement and every application of the Funding is designed to
              promote the availability of appropriate access, within clinically appropriate times, to a range of
              safe and cost-effective health care services based on clinical need.

      (c)     use the Funds only for the performance of the Project. To avoid doubt, this includes any minor
              capital works with a value of up to $250,000 to the Hospital or its facilities, the replacement of
              worn or damaged items and general repairs and maintenance (but not works made necessary by
              the negligent act or omission or breach of this Agreement by Tasmania, which (without limiting
              Clause 18.1) must be paid for by Tasmania from sources other than the Funds). It also includes
              the costs of employing the Specified Personnel, but only to the extent that they are engaged at the
              Hospital; and

      (d)     consult with the Commonwealth and obtain the Commonwealth’s Consent, with regard to
              Commitments for expenditure which will or is reasonably likely to be incurred to any extent after
              this Agreement Ends.

4.2   The Parties will from time to time meet and consider whether, and the extent to which, they ought to
      supplement or amend this Agreement to reflect changes in the circumstances in which the Project is being
      delivered. The agreed supplementation or amendment will be included in, and for that purpose the Parties
      will negotiate and use their best endeavours to agree, the (or a new) Clinical and Financial Services Plan,
      and that Clinical and Financial Services Plan, and this Agreement, will continue in effect subject to Clause
      1.5(d).

5     Management of Funds and bank account
5.1   All Funds received from the Commonwealth must be immediately deposited into an account with an
      Australian bank in the name of, and controlled solely by, Tasmania.

5.2   Tasmania must:

      (a)     give details of that bank account to the Commonwealth at least 10 Business Days before the first
              payment of Funds is scheduled to be made; and

      (b)     if the bank account for the Funding changes, notify the Commonwealth in writing within 2
              Business Days of the change occurring and provide the Commonwealth with details of the new
              bank account.

5.3   Interest earned on the Funds forms part of the Funds and must be dealt with accordingly.




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6     Specified Personnel and other personnel
6.1   Tasmania must retain a General Manager for the Hospital, and the other Specified Personnel, to work on
      the Project and in doing so, carry out and perform the duties:

      (a)     normally with the scope of the duties to be discharged by persons in comparable positions in
              public hospitals in Australia; and

      (b)     which may otherwise be agreed in writing between the Parties from time to time.

6.2   Where there is a delay in the recruitment of any Specified Personnel or in the commencement of their
      employment, or any of the Specified Personnel is unable or unwilling to perform the duties of their position
      or their employment ceases, Tasmania agrees to notify the Commonwealth immediately.

7     Records and reporting
7.1   Tasmania agrees to provide the Commonwealth with the information and Reports referred to in this Clause
      7 and Item C.

7.2   Tasmania must:

      (a)     maintain complete, detailed, accurate and up to date records of the conduct of the Hospital and the
              performance of its obligations under this Agreement, including the receipt and application of
              Funds and, in respect of each Hospital Patient, detailed records of the care provided, including
              diagnoses made, treatments and medications prescribed and administered, procedures
              recommended and performed and monitoring of their progress and recovery, and outcomes. All
              those records must be maintained in a manner that will enable them to be conveniently and
              properly audited;

      (b)     keep such other records and accounts as the Commonwealth reasonably requires, or according to
              responsible public hospital practice, from time to time;

      (c)     comply with any standards prescribed or instructions given by the Commonwealth from time to
              time for the creation, use, care, access, storage, preservation and return or legal destruction of its
              accounts and records and any Commonwealth material;

      (d)     provide any assistance reasonably requested by the Commonwealth for any administrative or
              statutory review, audit or inquiry, any request for information directed to the Commonwealth and
              any inquiry conducted by the Parliament (or any Committee of the Parliament) of the
              Commonwealth of Australia concerning this Agreement or its subject matter; and

      (e)     subject to Clause 10.12, retain copies of all accounts and records for 7 years after:

              (i)      this Agreement Ends; or

              (ii)     completion of any legal action arising out of or in connection with this Agreement,

              whichever occurs last. For the purposes of this Clause 7.2(e), legal action is complete when all
              appeal rights are exhausted or time-barred.

7.3   Without limiting Clause 7.2, Tasmania must maintain complete, detailed, accurate and up to date separate
      financial records for the Hospital sufficient:

      (a)     to identify the use of the Funding and the timing of that use;

      (b)     to identify all Hospital income and expenditure;

      (c)     to prepare financial statements for the Hospital according to the Australian Accounting Standards
              as if the Hospital were a separate economic entity;

      (d)     to enable those records and financial statements to be conveniently audited according to the
              Australian Auditing Standards and Clause 10; and
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       (e)     for Tasmania to substantiate to the Commonwealth’s reasonable satisfaction that the Funding has
               been expended or Committed according to this Agreement,

       and provide those records and that substantiation to the Commonwealth on reasonable request. This
       obligation extends to and includes the period since August 2008 and survives the Ending of this
       Agreement.

7.4    Tasmania’s obligation to provide the Commonwealth with any information or Report under this Clause 7 or
       Item C is not discharged unless the information or Report is satisfactory to the Commonwealth, acting
       reasonably. The Commonwealth's assessment as to whether a report is satisfactory is subject to
       independent assessment at Tasmania’s request by an appropriately credentialed independent auditor. For
       the avoidance of doubt, the dispute resolution process set out in clause 21 applies to disputes arising under
       this clause.

7.5    All the information and Reports required by this Clause 7 or Item C (other than that referred to in Item C4)
       must be provided promptly after the end of the period to which they relate:

       (a)     via DoHA’s “Secure Web Transfer”; and

       (b)     in the format notified by the Commonwealth to Tasmania from time to time.

7.6    The acquittal and reporting obligations in Clauses 7.1 to 7.5 (both inclusive) and Item C continue in full
       force and effect after this Agreement Ends and (for the avoidance of doubt) notwithstanding the invocation
       of any Dispute Resolution Process.

7.7    Tasmania must implement and maintain electronic data processing and transmission systems in respect of
       the Hospital such that it can:

       (a)     use electronic claiming channels through Medicare Australia, including Medicare Online,
               Medicare Easyclaim and Medicare Australia’s Electronic Claim Lodgement and Information
               Processing Service Environment (ECLIPSE); and

       (b)     integrate with and utilise private health insurers’ electronic claims systems, as appropriate.

7.8    Tasmania must liaise with and assist the Commonwealth in any review or other evaluation of this
       Agreement, the Project or the Hospital.

7.9    The Parties may agree to change the information to be supplied by Tasmania from time to time under this
       Clause 7 or Item C, taking into account changes in the information other Australian public hospitals
       generally are, from time to time, required to provide by Law, under any intergovernmental agreement
       between the States and Territories and the Commonwealth or by responsible public hospital administrative
       practice.

7.10   Tasmania must promptly notify and fully disclose to the Commonwealth in writing any act, omission, event
       or circumstance actual or threatened (including matters relating to the medical or other technical capacity
       of Tasmania’s Personnel who are, or are to be, engaged at the Hospital during the Agreement Period) of
       which it is, or ought reasonably be, aware which has or might have an adverse effect on the proper
       management of the Funds or the Hospital.

8      Tasmania’s responsibilities
8.1    Tasmania agrees to undertake and deliver the Project according to this Agreement, and its responsibility for
       doing so will not be affected by any subcontract or other arrangement it makes in connection with the
       Project.

8.2    Without limiting Clause 8.1, Tasmania must:

       (a)     use the Hospital only for Core Clinical Activities and associated medical and other purposes,
               including consulting suites, clinical training, health research and education, health administration
               and other uses of a medical nature;

       (b)     carry on the Hospital diligently, honestly and, in a professional and competent manner;


                                                                                                                  12
      (c)     use its best endeavours to employ or engage sufficient experienced and relevantly trained
              personnel within the limit of the Funds provided by the Commonwealth;

      (d)     in carrying on the Hospital, establish, maintain and liaise with a representative to, a community
              regional advisory body which is to provide key stakeholder engagement with, and guidance to, the
              direction and development of health and community services in the North West region of
              Tasmania;

      (e)     comply with all Laws and responsible public hospital practice in respect of the Hospital and in
              relation to any medical, clinical, surgical or other service from time to time provided or proposed
              to be provided at the Hospital;

      (f)     not do or omit to do anything where that act or omission might cause the Commonwealth to be in
              breach of the occupancy arrangements for any Currently Licensed Premises; and

      (g)     comply with all Laws, Australian Standards, Commonwealth and industry standards and
              guidelines in relation to any works carried out in respect of the Hospital.

8.3   Tasmania will maintain a clinical network of physicians and other health practitioners (clinical services
      advisory group), to consider the matters referred to it from time to time by Tasmania, including:
      (a)     the nature and extent of the clinical services to be provided in the region; and

      (b)     where best the relevant service providers ought be located.

      Tasmania will keep the Commonwealth fully informed of the recommendations it receives from time to
      time from the clinical services advisory group, but nothing in this Clause 8.3 requires the Commonwealth
      to accept or implement those recommendations or precludes the Commonwealth from obtaining (and acting
      on) its own advice on any matter.

8.4   Tasmania:

      (a)     is, and remains, liable and responsible for all of its acts and omissions and those of Tasmania’s
              Personnel arising out of the conduct of, or in connection with, the Hospital (including any act,
              omission, conduct or other thing done or proposed to be done by Tasmania with the Funding); and

      (b)     agrees that nothing in, or done by the Commonwealth under or in connection with, this Agreement
              (including the provision of any Funding), constitutes any form of acknowledgment, approval or
              other endorsement by the Commonwealth of anything done, proposed to be done, or omitted to be
              done by Tasmania or any of Tasmania’s Personnel in connection with the Hospital.

8.5   To the full extent permitted by Law, Tasmania releases the Commonwealth from, and agrees that the
      Commonwealth is not in any way responsible for, any liability or loss arising out of, or any costs, charges
      or expenses incurred in connection with, any Claim in any way connected with the Hospital, the Funding or
      any act or omission (whether negligent or otherwise) of Tasmania or any of Tasmania’s Personnel in
      connection with the Project, whether before or after the Commencement Date.

8.6   Tasmania must notify the Commonwealth at least 2 weeks before any proposed public announcements are
      to be made or public events are to occur regarding the Project. Tasmania must obtain the Commonwealth’s
      written consent before making any public announcement or attending any public event regarding the
      Project.

9     Liaison
9.1   Each Party must appoint a Liaison Offer for the purposes of this Agreement.

9.2   The Liaison Officers are to be responsible for the operational co-ordination and management between the
      Parties of their respective obligations under this Agreement. Each Party may deal through their own
      Liaison Officer with the other Party’s Liaison Officer on all matters relating to this Agreement in the same
      manner and to the same extent as they may deal with that other Party.



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9.3    The Commonwealth will appoint and may remove and replace from time to time a representative to the
       community regional advisory body referred to in Clause 8.2(d).

10     Access, records and assistance

10.1   Subject to Clause 20, Tasmania must give the Commonwealth and its officers (including the Auditor-
       General, the Privacy Commissioner, the Ombudsman and persons authorised in writing by the
       Commonwealth, all of whom are referred to in this Clause 10 collectively as those permitted), access to
       any premises at which Records or Materials associated with this Agreement or the Original Agreement are
       stored or work on the Project is undertaken, for the purpose of inspecting and copying those Records or
       Materials, in Tasmania’s possession or control, for any purpose in connection with this Agreement or any
       review of Tasmania’s performance under this Agreement (agreed purpose).

10.2   Tasmania must also give those permitted access to any Hospital Assets, wherever they are located, and
       reasonable access to its officers, employees, agents and contractors, for the agreed purpose.
10.3   The rights conferred by Clauses 10.1 and 10.2 are subject to:

       (a)     the provision of notice which is reasonable in the circumstances by the Commonwealth;

       (b)     access being sought during times which are reasonable in the circumstances; and

       (c)     Tasmania’s reasonable security and infection control procedures and other proper administrative
               and health care practices.

10.4   Subject to the Personal Information Protection Act 2004 (Tas) Tasmania must give those permitted such
       access during normal business hours to the medical records of Hospital Patients irrespective of the period
       to which those records relate as the Commonwealth reasonably requires for or in connection with any
       Claim or the discharge of any ministerial or parliamentary reporting requirements.

       For the avoidance of doubt, access includes the provision of copies of documents at no cost to Tasmania.

10.5   Tasmania agrees:

       (a)     to provide such reasonable assistance as any of those permitted reasonably requests in respect of
               any inquiry into or concerning the Project, the Hospital, this Agreement or the Original
               Agreement;

       (b)     to comply with its obligations under this Clause 10, irrespective of:

               (i)        how and where the Records and Materials are stored or located; and

               (ii)       in whose custody, possession or control they are;

       (c)     in the case of Records and Materials stored on a medium other than in writing, to make available
               to those permitted on request reasonable facilities necessary to enable a legible reproduction to be
               created promptly;

       (d)     to do everything necessary to comply with the requirements of those permitted in the exercise of
               their functions as contemplated by this Clause 10;

       (e)     that nothing in this Agreement reduces, limits or restricts any function or right of those permitted.
               Their rights referred to in this Agreement are in addition to their other functions and rights; and

       (f)     the requirements of this Clause 10 do not in any way reduce Tasmania’s responsibility to perform
               its other obligations according to this Agreement.

10.6   Each Party must bear its own costs of any inspection and audit.

10.7   In the exercise of their rights under this Clause 10, the Commonwealth must ensure that those permitted
       must do all that they reasonably can to avoid unreasonable interference in any material respect with
       Tasmania’s performance of its obligations under this Agreement.
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10.8    Tasmania must ensure that any contract it enters into for the purposes of this Agreement contains an
        equivalent provision allowing those permitted to have the rights of access and inspection specified in this
        Clause 10.

10.9    Tasmania must not transfer, or permit the transfer of, custody or the ownership of or otherwise dispose of,
        any Commonwealth record (as defined in the Archives Act 1983 (Clth)) without the consent of the
        Commonwealth and the National Archives of Australia.

10.10   If the Commonwealth authorises the transfer of custody of Commonwealth records to Tasmania, Tasmania
        must comply with the requirements of the Archives Act 1983 (Clth) in respect of those records.
10.11   Tasmania must comply with any reasonable direction given by the Commonwealth for the purpose of:

        (a)     transferring Commonwealth records to the custody of the National Archives of Australia; or

        (b)     providing the National Archives of Australia with full and free access to Commonwealth records.

10.12   Subject to Clauses 10.9 to 10.11 (inclusive), Tasmania will maintain Hospital Patient medical records and
        medical malpractice claim records according to all applicable Laws and in any event:

        (a)     for at least 7 years after the last date on which the relevant Hospital Patient was a patient at the
                Hospital; or

        (b)     in obstetric cases, 25 years from the relevant date of birth,

        (each, an on risk period). If legal proceedings are brought by or in the name of or for the benefit of any
        Hospital Patient in connection with the Hospital or any treatment or procedure prescribed or undertaken
        there or any medication prescribed or administered there (whether or not also dispensed there), those
        records must be maintained until any relevant appeal period expires or for 7 years after judgment is
        entered, whichever is the longer period.

10.13   Subject to Clause 10.12, this Clause 10 continues in full force and effect for 7 years after this Agreement
        Ends, but the Ending of this Agreement does not affect or restrict any on-risk period.

10.14   In this Clause 10.14 the terms “document” and “Commonwealth contract” have the same meaning as in the
        Freedom of Information Act 1982 (Clth), and this Clause 10.14 only applies if this Agreement is a
        Commonwealth contract.

        (a)     Where the Commonwealth has received a request for access to a document created by or in the
                possession of, Tasmania or any subcontractor that relates to the performance of this Agreement
                (and not to the entry into this Agreement), the Commonwealth may at any time by written notice
                require Tasmania to provide the document to the Commonwealth and Tasmania must, at no
                additional cost to the Commonwealth, promptly comply with the notice.

        (b)     Tasmania must include in any subcontract relating to the performance of this Agreement
                provisions that will enable Tasmania to comply with its obligations under this Clause 10.14.

11      Hospital
11.1    The Commonwealth grants (and Tasmania accepts) at Tasmania’s sole risk and expense a non-exclusive
        personal licence of the Hospital:

        (a)     other than those parts of the Hospital which are:

                (i)      from time to time during the Agreement Period otherwise leased or licensed to Tasmania;

                (ii)     occupied or to be occupied by the University of Tasmania under licence for the operation
                         and management of a Centre of Excellence for Clinical Education. That part of the
                         Hospital licensed or to be licensed to the University of Tasmania is shaded on the plan at
                         Annexure C (Centre of Excellence); or

                (iii)    Currently Licensed Premises;
                                                                                                                       15
        (b)     in their current condition and state of repair;

        (c)     subject to all faults and defects (latent and patent);

        (d)     for the Agreement Period;

        (e)     at a licence fee of $1.00 per annum (payable if and when demanded),

        but nothing in this Agreement confers on Tasmania any interest of a proprietary nature in the Hospital.
        Tasmania will pay all statutory outgoings and the cost of all services supplied to the Hospital (such as
        electricity, gas, water and telephone) and all other costs and outgoings payable by the Commonwealth as
        owner of the Hospital.

11.2    Subject to Clauses 11.3 and 11.4, in respect of the Currently Licensed Premises and the Centre of
        Excellence, the Commonwealth appoints Tasmania its agent for the duration of the Agreement Period to
        manage administer and exercise all the Commonwealth’s rights, and to discharge all the Commonwealth’s
        obligations, under the occupancy arrangements with the lessees or licensees and other relevant Third
        Parties, other than rights to receive, and obligations to pay, money. However, if any amount is received by
        Tasmania from a Third Party in connection with Currently Licensed Premises, it will be paid promptly to
        the Commonwealth.

11.2A   Any amount received as described in clause 11.2 which is held by Tasmania at the start of the Agreement
        Period and which was received by it under the Original Agreement is to be dealt with and accounted for by
        Tasmania as if it had been received pursuant to clause 11.2 during the Agreement Period.

11.3    Tasmania’s appointment as the Commonwealth’s agent under Clause 11.2 ends when this Agreement Ends.

11.4    Tasmania must not make or allow to be made any structural alterations or additions to the Hospital without
        the Commonwealth’s Consent. For this purpose, an alteration or addition is “structural” if it affects the
        load-bearing elements essential to the strength and stability of any building, and the load-bearing part of
        any roof, included in the Hospital.

11.5    Subject to Clause 11.4, Tasmania must:

        (a)     having regard to the state and condition of the Hospital on the Commencement Date, keep, and at
                the End of this Agreement deliver up, the Hospital in good repair in a clean and tidy condition and
                in all other respects in a safe condition appropriate for the conduct of the business of a public
                hospital. For the avoidance of doubt, but subject to Clause 11.5(b), nothing in this Clause 11.5(a)
                requires Tasmania to improve the state and condition of the Hospital to a state and condition
                superior to that subsisting on the Commencement Date;

        (b)     despite Clause 11.5(a), Tasmania must effect those repairs and replacements the need for which
                was caused or contributed to by the negligent act or omission or wilful default of Tasmania or any
                of Tasmania’s Personnel.

11.6    Alterations, additions, repairs and replacements to the Hospital become the Commonwealth’s property
        when made, but Tasmania remains, as between it and the Commonwealth, solely responsible for their
        quality and compliance with applicable Laws, and the consequences of any deficiency in quality or non-
        compliance with applicable Laws.

11.7    The Commonwealth and any person authorised by it may enter and inspect the Hospital at all reasonable
        times after giving reasonable notice, but in doing so must observe all clinical hygiene and safety Laws,
        protocols and procedures in force at the Hospital from time to time.

12      Hospital Assets
12.1    Notwithstanding clause 12.7 of the Original Agreement, Tasmania may (subject to this Agreement) retain
        title and possession of the closing hospital assets (as that term is defined in the Original Agreement) and
        those assets will constitute the Opening Hospital Assets for the purposes of this Agreement.



                                                                                                                   16
12.2    The Commonwealth confirms that the transfer referred to in clause 12.2 of the Original Agreement remains
        in full effect notwithstanding anything to the contrary.

12.3    The Commonwealth transfers to Tasmania on the Commencement Date all of its right, title and interest in
        those of the Opening Hospital Assets.

12.3A   Should the Commonwealth so require, Tasmania will co-operate with the Commonwealth in undertaking a
        stocktake of inventory and audit of assets in order to identify the Opening Hospital Assets for the purposes
        of this Agreement.

12.4    The Commonwealth will deliver the Opening Hospital Assets to Tasmania by leaving them at the Hospital,
        or at the place where they are otherwise then located, on the Commencement Date. Title will then pass to
        those of the Opening Hospital Assets the title of which is transferable by delivery. Any other of the
        Opening Hospital Assets the title to which is not effectively vested in Tasmania on the Commencement
        Date will be held by the Commonwealth on trust for Tasmania.

12.5    Tasmania accepts the Opening Hospital Assets:

        (a)      in their current condition and state of repair (and in the case of medications and Consumables
                 (including blood products), whether within or beyond their respective expiry dates), and subject to
                 all faults and defects (latent and patent); and

        (b)      without any warranty or other obligation or liability about or in connection with title, description,
                 quality, condition or fitness for purpose.

12.6    Tasmania must:

        (a)      maintain a register of all Hospital Assets recording the date of acquisition or lease, the purchase
                 price (or in the case of any Hospital Asset which is leased, the term of the lease and the rent and
                 residual value), their description (including serial number and location), the amount of the Funds
                 used to acquire them, the extent remaining of their economic life and (where relevant) details of
                 their disposal (including the sale price); and

        (b)      as and when requested during the Agreement Period, and without request promptly after this
                 Agreement Ends, give the Commonwealth a copy of the register of Hospital Assets (certified by a
                 responsible officer as correct and up to date if the Commonwealth requires).

12.7    Tasmania must use the Hospital Assets only for the Hospital’s purposes, and keep them safe, secure and in
        all respects in a condition suitable for use for their intended purpose.

12.8    Tasmania must promptly:

        (a)      repair worn or damaged Hospital Assets; and

        (b)      replace Hospital Assets that are stolen, lost, destroyed or otherwise disposed of, or the repair of
                 which is unsafe, impractical or uneconomic.

        Repairs must be fully warranted by the repairer. Replacements acquired by Tasmania after the
        Commencement Date must be of a quality appropriate for use in a public hospital and acquired on terms
        (including warranties as to title, description, fitness for purpose and quality) which, in their scope, extent
        and duration, are no less than those generally available to persons acquiring assets of that nature and value
        from the relevant supplier.

12.9    If, when this Agreement Ends, the Parties have not made any written agreement to the contrary, then on
        and by virtue of the Ending of this Agreement, Tasmania transfers to the Commonwealth (and the
        Commonwealth accepts) all of Tasmania’s right, title and interest in the Closing Hospital Assets and must
        deliver them to the Commonwealth by leaving them at the Hospital. The Closing Hospital Assets must be
        in a state of repair that is in accordance with Tasmania’s obligations under this Agreement, including
        Clauses 12.7 and 12.8. For avoidance of doubt the Closing Hospital Assets must be delivered up to the
        Commonwealth in at least as good a condition as they were at the time of Tasmania first obtaining title in
        them subject to dilapidations caused by ordinary use or the ordinary operation of natural forces.



                                                                                                                       17
        Any Closing Hospital Asset the title to which cannot be transferred according to this Clause 12.9 and
        which is not the subject of a contract the benefit of which is assigned to the Commonwealth under Clause
        13.6, is to be held by Tasmania on trust for the Commonwealth.

12.10   This Clause 12 continues in full force and effect after this Agreement Ends.

13      Hospital contracts
13.1    Notwithstanding clause 13.5 of the Original Agreement, Tasmania is not required to assign to the
        Commonwealth its rights in respect of any contract which relates to the Hospital and each such contract
        will continue to be performed by Tasmania subject to this Agreement.

13.2    If, on the Commencement Date, there remains any contract which was an unassigned contract under the
        Original Agreement, and which has maintained that status (unassigned contract) then:

        (a)     the Commonwealth will continue to account to Tasmania for any benefit it receives in relation to
                that unassigned contract which is referable to the Hospital and will (at Tasmania’s cost) do
                everything reasonably required by Tasmania to ensure Tasmania receives that benefit;

        (b)     the Commonwealth will continue to pay Tasmania any amount it receives under that unassigned
                contract;

        (c)     Tasmania will pay to the Commonwealth any amount which the Commonwealth expends under
                that unassigned contract on or after the commencement of the Original Agreement; and

        (d)     the Commonwealth will have no liability to Tasmania for any breach of that unassigned contract
                by the Commonwealth or any other party to it.

13.3    To facilitate the arrangements described in Clause 13.2:

        (a)     the Commonwealth reappoints Tasmania as its exclusive agent to perform all of its obligations and
                enforce all of its rights under each unassigned contract; and

        (b)     in respect of each unassigned contract, Tasmania agrees to continue to:

                (i)      perform all of the Commonwealth’s obligations and exercise all of the Commonwealth’s
                         rights; and

                (ii)     administer each of them (including issuing tax invoices) on behalf of the Commonwealth,

        until they are assigned or substituted with a new contract between Tasmania and the relevant Third Party.

        In particular, Tasmania may, at its own risk and expense, but only at the Commonwealth’s request, assume
        and conduct any Claim, or the defence of any Claim, in connection with an unassigned contract, for and on
        behalf of the Commonwealth, and will (subject to any direction from the Commonwealth to the contrary)
        continue with the conduct of any Claim assumed by it during the period of the Original Agreement.

        All of Tasmania’s costs, charges and expenses of exercising the rights conferred, and discharging the
        obligations it agrees to discharge, under this Clause 13.3 are to be paid by Tasmania out of (and the
        Commonwealth’s obligation to pay or reimburse Tasmania for those costs, charges and expenses is limited
        to) the Funds.

13.4    Tasmania must continue to maintain and keep current a register of all those contracts in connection with
        the Hospital to which it is a party or of which it has the benefit. Tasmania must provide the
        Commonwealth with a copy of that register from time to time during the Agreement Period on request and
        promptly (without request) after this Agreement Ends (certified by a responsible officer as correct and up
        to date, if the Commonwealth requires).

13.5    Subject to (and without prejudicing the Commonwealth’s rights under) clauses 13.6 and 13.7, each party
        releases the other from its obligations under clauses 13.5 and 13.6 of the Original Agreement.

13.6    On and by virtue of the Ending of this Agreement, Tasmania assigns to the Commonwealth (and the
        Commonwealth accepts) all of Tasmania’s rights in respect of each contract (which term includes all
        agreements arrangements and understandings, including those which were current on the Commencement
                                                                                                                    18
       Date and which would have been reassigned to the Commonwealth on the Ending of the Original
       Agreement) which relates (but to the extent only that it relates) to the Hospital (other than a contract with
       Tasmania or with a Third Party in respect of Currently Licensed Premises):

       (a)      in whatever form and of whatever nature or kind; and

       (b)      to which, on the date this Agreement Ends, it is a party or in respect of which the Commonwealth
                then holds its rights on trust or as nominee for, or otherwise on behalf of, Tasmania.

13.7   If a contract of the kind described in Clause 13.6:

       (a)      is not effectively assigned to the Commonwealth on the date this Agreement Ends; or

       (b)      cannot be effectively assigned without the consent of a Third Party and they do not consent to the
                assignment (or their consent is not obtained) and the contract is not novated to the
                Commonwealth,

       (remaining contract) then:

       (c)      Tasmania will account to the Commonwealth for any benefit it receives in relation to that
                remaining contract which is referable to the Hospital and will (at the Commonwealth’s cost) do
                everything reasonably required by the Commonwealth to ensure the Commonwealth receives that
                benefit;

       (d)      Tasmania will pay the Commonwealth each amount it receives under that remaining contract after
                this Agreement Ends;

       (e)      the Commonwealth will pay to Tasmania each amount which Tasmania expends under that
                remaining contract after this Agreement Ends; and

       (f)      Tasmania will have no liability to the Commonwealth for any breach of that remaining contract by
                Tasmania or any other party to it.

13.8   The Parties will co-operate in respect of any contract referred to in this Clause 13 so that (unless they both
       agree) nothing is done or omitted that is, or is likely to:

       (a)      adversely affect the operation or economic effect of that contract;

       (b)      be a breach of that contract; or

       (c)      give rise to circumstances which would entitle a Third Party to terminate that contract.

13.9   This Clause 13 continues in full force and effect after this Agreement Ends.

14     Income, expenses, business liabilities and malpractice Claims
14.1   The Commonwealth is entitled to all the revenue received in respect of the Hospital before 1 September
       2008, including prepayments, and Tasmania is entitled to all the revenue received in respect of the Hospital
       on and after 1 September 2008, and up to and including the End of this Agreement, in each case
       irrespective of the period or timing of the event circumstance service or transaction to which the revenue is
       attributable.

14.2   Without limiting Clause 14.1, Tasmania may invoice all amounts due from a patient, health fund provider
       or other person in connection with patient care or treatment at the Hospital before 1 September 2008 but
       must promptly account to the Commonwealth for payments received. The Commonwealth must pay to
       Tasmania any amount received by it from a patient, health fund provider or other person in connection with
       patient care or treatment at the Hospital on or after 1 September 2008. Where a payment is received in
       respect of an invoice which overlays both periods, or a payment is received from a patient, health fund
       provider or other person in respect of both periods, and the payment is insufficient to cover the full amount
       owing, it is to be applied first in satisfying the amount owing in respect of the period before 1 September
       2008.

14.3   The Commonwealth is liable for, and must pay, each amount owing to an unpaid supplier of goods or
       services to the Hospital where:
                                                                                                                       19
       (a)      the goods or services have been ordered and delivered or performed, in whole or part; and

       (b)      an invoice for the payment of their cost is received by the Commonwealth,

       before 1 September 2008.

       Tasmania is liable for, and must pay, any amount owing to an unpaid supplier where the goods or services
       are first delivered or performed, or an invoice for their cost is first received, on or after 1 September 2008.

14.4   Except as Clauses 14.6 and 14.7 otherwise provide, Tasmania is liable for, and must discharge, all other
       liabilities in connection with the Hospital (other hospital business liabilities).

14.5   From (and including) the 1 September 2008, Tasmania will continue to be responsible for the management
       and conduct of the defence of, and be responsible for the payment of, each other hospital business liability
       (other than a liability referred to in Clause 14.6 or 14.7) at its cost and expense.

14.6   The Commonwealth will continue to be responsible for (and for the management of) all medical
       malpractice, public liability and workers compensation Claims arising out of or in connection with any
       event or circumstance first occurring or first existing in connection with the Hospital (including in the
       course of or in connection with the prescription of any medication for, or the diagnosis treatment or care of,
       any Hospital Patient) during the period from (and including) 11 am AEST on 23 November 2007 up to (but
       excluding) 1 September 2008. However, the Commonwealth’s continuing liability does not affect its
       rights, or Tasmania’s obligations, under any indemnity given by Tasmania in favour of the Commonwealth
       in respect of those (or any of those) medical malpractice, public liability or workers compensation Claims,
       which continues in full force and effect, anything to the contrary (including the Ending of the Original
       Agreement) notwithstanding.

14.7   Tasmania will continue to be responsible for (and for the management of) all medical malpractice, public
       liability and workers compensation Claims arising out of or in connection with any event or circumstance
       first occurring or first existing in connection with the Hospital (including in the course of or in connection
       with the prescription or administration of any medication for, or the diagnosis treatment or care of, any
       Hospital Patient) at any time either up to (and including) 11 am AEST on 23 November 2007 or during that
       part of the Original Agreement Period on and after 1 September 2008. However, Tasmania’s continuing
       liability does not affect its rights, or the Commonwealth’s obligations, under any indemnity given by the
       Commonwealth in favour of Tasmania in respect of those (or any of those) medical malpractice, public
       liability or workers compensation Claims, which continues in full force and effect.

14.8   The Commonwealth and Tasmania must co-operate with one another in the management and defence of
       Claims of the kind referred to in Clause 14.6 or 14.7.

14.9   Nothing in this Clause 14 is intended to:

       (a)      affect the rights of any insurer;

       (b)      relieve either Party of the obligation to obtain the consent of an insurer to a settlement where that
                consent is otherwise required; or

       (c)      bring about a waiver of legal professional privilege applying to any information or Materials.
                Where privileged information is to be provided by either Party to the other, the privileged
                information is provided on a confidential basis and for the limited purpose of the Parties
                exercising their rights under this agreement, with the intention that the privilege and
                confidentiality are preserved.

15     Employees

15.1   Tasmania must continue to employ all Hospital Staff who are employed or engaged at the Hospital
       immediately before the Commencement Date, on the same terms and conditions.
15.2   On and from the Commencement Date, Tasmania will continue to be solely responsible for all wages,
       salary, bonuses, annual leave, sick leave, long service leave and all other forms of leave entitlement of
       Hospital Staff (irrespective of the period to which the entitlement is referrable), including rostered days off
       and time off in lieu, and any other payment, benefit or amount (including both accrued superannuation
       commitments, and unfunded superannuation entitlements).
                                                                                                                     20
15.3   Tasmania will continue to ensure that:

       (a)      all clinicians who work at the Hospital and who (by operation of Law or otherwise) require it, are
                given the appropriate clinical oversight; and

       (b)      all other people who work at the Hospital are (and remain) appropriately trained and supervised.

16     Termination
16.1   Each of the following is a “default” by Tasmania for the purposes of this Clause 16:

       (a)      the Commonwealth is satisfied on reasonable grounds that Tasmania has not complied with any of
                its obligations under this Agreement;

       (b)      the Commonwealth is satisfied on reasonable grounds that Tasmania is unable or unwilling to
                fully perform and discharge any of its obligations under this Agreement;

       (c)      the Commonwealth requests Tasmania to take action to meet a timeframe or perform an activity
                (such as delivering a Report) according to this Agreement and Tasmania fails to do so within 10
                Business Days after the date of the Commonwealth’s request;

       (d)      the Commonwealth is not satisfied that Tasmania is applying the Funds solely and exclusively to
                the Project; or

       (e)      the Commonwealth is satisfied on reasonable grounds that any information or Report given by
                Tasmania is incomplete or inaccurate in a material respect.

16.2   If a default occurs, the Commonwealth may give Tasmania a notice which:
       (a)      identifies the default; and

       (b)      states whether, in the opinion of the Commonwealth, the default is capable of being remedied,
                and:

                (i)      if the default is in the Commonwealth’s opinion capable of being remedied, sets out the
                         steps which the Commonwealth considers to be necessary to remedy that default; or

                (ii)     if the default is in the Commonwealth’s opinion not capable of being remedied, either:

                         (A)      sets out the steps that the Commonwealth requires Tasmania to take to mitigate
                                  the effects of the default on the Commonwealth and the Hospital; or

                         (B)      if the Commonwealth is satisfied that the effects of the default on the
                                  Commonwealth or the Hospital cannot be mitigated, or cannot be mitigated to an
                                  extent satisfactory to the Commonwealth, includes a statement to that effect and,
                                  in addition, states whether or not the Commonwealth intends to exercise its
                                  rights under Clauses 16.4 to 16.6 (inclusive) (Termination Rights).

       (c)      For the removal of doubt a notice issued under this Clause 16.2 will be subject to Tasmania
                exercising its rights under Clause 16.5 of this Agreement.

16.3   If Tasmania intends to, or is attempting to:
       (a)      remedy a default which in the Commonwealth’s opinion is capable of remedy, Tasmania must
                promptly notify the Commonwealth of the measures taken or intended to be taken to do so, and the
                time at or by which the default will be remedied; or

       (b)      mitigate the effects of a default which is not in the Commonwealth’s opinion capable of being
                remedied, Tasmania must promptly notify the Commonwealth of, and keep the Commonwealth
                informed about, progress in doing what the Commonwealth has required be done to mitigate the
                effects of the default.

                                                                                                                   21
16.4   Subject to Clause 16.5, if a default is subsisting, the Commonwealth may not terminate, or accept the
       repudiation of, this Agreement unless:
       (a)     the Commonwealth has given Tasmania a notice under Clause 16.2;

       (b)     not less than 10 Business Days have expired since Tasmania received, or is taken by Clause 24 to
               have received, that notice; and

       (c)     either:

               (i)       if the default is in the Commonwealth’s opinion capable of being remedied, Tasmania has
                         not remedied the default to the reasonable satisfaction of the Commonwealth; or

               (ii)      if the default is in the Commonwealth’s opinion not capable of being remedied, either:

                         (A)      the notice has been given under Clause 16.2 which requires Tasmania to mitigate
                                  the effects of the default on the Commonwealth and the Hospital, and Tasmania
                                  has not done so or has not otherwise satisfied the Commonwealth that it will do
                                  so within a time satisfactory to the Commonwealth; or

                         (B)      the notice states that the Commonwealth intends to exercise its Termination
                                  Rights.

16.5   At any time during (but not after) the period referred to in Clause 16.4(b) (in which regard time is of the
       essence), Tasmania may dispute the validity of a notice given by the Commonwealth under Clause 16.2 by
       giving the Commonwealth a Dispute Initiation Notice under Clause 21.1.

16.6   If a default is subsisting and Tasmania:
       (a)     does not exercise its rights under Clause 16.5, the Commonwealth may, by not less than 6 months
               notice to Tasmania, terminate this Agreement. In that event, Clauses 19.5 and 19.6, and 19.8 to
               19.16 (inclusive) apply as if the last day of the period of 6 months referred to this Clause 16.6(a)
               was the Hospital Management Rearrangement Date and the “Agreement Period” was the period
               expiring on that date; or

       (b)     exercises its rights under Clause 16.5, but the dispute or difference is not resolved within 3 months
               after the Dispute Initiation Notice is received by the Commonwealth:

               (i)       Clause 21.10 applies; and

               (ii)      Clauses 19.5 and 19.6, and 19.8 to 19.16 (inclusive) apply as if the last day of the period
                         of 3 months referred to in this Clause 16.6(b) was the Hospital Management
                         Rearrangement Date and the “Agreement Period” was the period expiring on that date,

16.7   On termination of this Agreement and without limiting Clause 4:

       (a)     Tasmania must deliver up possession of the Hospital as a going concern to the Commonwealth;

       (b)     Tasmania must cease to apply and Commit Funds and promptly repay to the Commonwealth an
               amount equal to the balance of the Funds unexpended; and

       (c)     the Commonwealth must either resume responsibility for the operation and management of the
               Hospital, or make such other arrangements for the operation and management of the Hospital as:

               (i)       comply with any applicable Law; and

               (ii)      it otherwise thinks fit.

16.8   Without limiting Clause 16.7, the Commonwealth is not obliged to provide any Funding to Tasmania after
       this Agreement Ends.

                                                                                                                   22
16.9   Clauses 16.7 and 16.8 continue in full force and effect after this Agreement ends.

17     Repayment of funds
17.1   If, when this Agreement Ends, any Funds:

       (a)     remain Unspent; or

       (b)     cannot, by reconciliation between the Records maintained by Tasmania and the Budget or
               otherwise, be shown to the Commonwealth’s satisfaction to have been spent or Committed
               according to this Agreement,

       the Commonwealth may by written notice to Tasmania require Tasmania to repay an amount up to the
       amount of those Funds, and Tasmania must repay to the Commonwealth the amount set out in the notice,
       within 20 Business Days of the date of the notice.

17.2   If Tasmania fails to repay any amount according to a notice issued under Clause 17.1:

       (a)     Tasmania must pay the Commonwealth Interest on the unpaid amount from the date it was due, for
               the period it remains unpaid; and

       (b)     the unpaid amount, and Interest on it, will be recoverable by the Commonwealth as a debt due to
               the Commonwealth by Tasmania.

17.3   Clause 17.2 does not affect Tasmania’s obligation to repay the relevant Funding according to clause 17.1.

17.4   This Clause 17 continues in full force and effect after this Agreement Ends.

18     Indemnity
18.1   Tasmania indemnifies the Commonwealth (and all of its officers, employees, agents and contractors)
       (those indemnified) against any and all:

       (a)     loss or liability suffered or incurred by all or any of those indemnified;

       (b)     loss of or damage to any property of all or any of those indemnified; and

       (c)     loss or costs, charges or expenses suffered or incurred by all or any of those indemnified in dealing
               with or in relation to any Claim, including legal costs and expenses on a solicitor/own client basis
               and the cost of time spent, resources used, or disbursements paid by all or any of those
               indemnified,

       arising from:

       (d)     any act or omission (whether negligent or not) by Tasmania, or any of Tasmania’s Personnel, in
               connection with this Agreement or the Project;

       (e)     any breach by Tasmania of any of its obligations under this Agreement;

       (f)     Tasmania’s conduct, or purported conduct, of the Hospital;

       (g)     any activity in connection with the Hospital from time to time agreed by the Parties to be included
               in the Project according to the first paragraph (c) of Item A;

       (h)     any breach by the Commonwealth of any contract referred to in Clause 13.1 as a result of any act
               or omission of Tasmania or any of Tasmania’s Personnel;

       (i)     the defence and conduct by Tasmania of any Claim in respect of any contract of the kind referred
               to in Clause 13.1;

       (j)     any diagnosis made, any treatment (including medication) prescribed given or administered, any
               procedure performed or any care given (or omitted) at the Hospital or by Hospital Staff or
               otherwise in the course, or purportedly in the course, of the Hospital’s business;



                                                                                                                 23
       (k)     any product liability claim including in connection with the provision or use of blood and blood-
               related products;

       (l)     the operation, care and maintenance of the Hospital and the Hospital Assets; or

       (m)     a breach of any of Tasmania’s obligations under Clause 20 or by a subcontractor under any of the
               provisions of a subcontract referred to in Clause 20.5.

18.2   Tasmania’s liability under Clause 18.1 will be reduced proportionally to the extent that any unlawful or
       negligent act or omission of the Commonwealth or any of its officers, employees, agents or contractors
       contributed to the liability, loss, cost, charge or expense.

18.3   The right of the Commonwealth to be indemnified under this Clause 18 is in addition to, and not exclusive
       of, any other right, power or remedy provided by Law.

18.4   Tasmania agrees that, for the purposes only of Clause 18.1 and in respect of the rights of those indemnified
       other than the Commonwealth, the Commonwealth will be taken to be acting as agent or trustee for or on
       behalf of its officers, employees, agents and contractors from time to time.

18.5   This Clause 18 continues in full force and effect after this Agreement Ends.

19     Post Agreement Period Issues

19.1   No later than 12 months before the expiry of the Agreement Period , the Parties must commence
       consideration of the basis on which the Hospital is to be managed, administered and operated after the
       Agreement Period expires, including Funding and staffing arrangements.

19.2   If this Agreement is not extended or renewed or there is no change in the ownership of the Hospital,
       Tasmania warrants that the Hospital will be in a condition to be able to continue to provide at least the
       Core Clinical Activities.

19.3   At any time during the term of this Agreement and notwithstanding Clause 19.1, if an amount of
       appropriated funds leads to clause 3.1B being invoked nothing in this Agreement will require Tasmania to
       continue to operate the Hospital for any period where, pursuant to the formula below, no funds are
       available. The formula is as follows:
                The amount of appropriated funds that is known as a result of Clause 3.1B will be assessed against
                the Funds for that year to calculate the proportion it represents against the Funds for that year.
                Once the proportion has been calculated that proportion will be converted into an amount of days
                that represents the same proportion against the total days in that year.

       At the end of the period calculated using the formula above, this Agreement will be at an end with the last
       day of that period being the revised Expiry Date.

19.4   If, the date which is at least 3 months before the expiry of the Agreement Period, either:
       (a)     the Parties have not agreed:

                (i)     to extend the Agreement Period for a further period ; or

                (ii)    a new arrangement for the management, administration and operation of the Hospital by
                        Tasmania for the further period; or

                (each such further period being a renewal period); or

       (b)     the Commonwealth has not engaged a private operator to manage, administer and operate the
               Hospital after the Agreement Period expires,

       the Commonwealth must, if legally obliged to do so, promptly apply for any licence for the Hospital as may
       be required by any Applicable Licensing Legislation, to take effect from midnight on the last day the
       Agreement Period (Hospital Management Rearrangement Date).

                                                                                                                   24
19.5   Tasmania will consider the Commonwealth’s licence application promptly and in sufficient time to enable
       the Commonwealth to:
       (a)      respond appropriately to the licensing decision having regard to:

                (i)      the balance then remaining of the Agreement Period;

                (ii)     the status of the Hospital as an existing establishment which will be admitting and
                         treating patients, and in the ordinary course performing regular surgical and other
                         procedures throughout the remainder of the Agreement Period; and

                (iii)    the likelihood of there being a number of patients at the Hospital at the expiry of the
                         Agreement Period requiring the performance of surgical and other procedures and
                         ongoing treatment and care; and

       (b)      make the offers of employment referred to in Clause 19.8.

19.6   Nothing in Clause 19.5 is to be construed as requiring Tasmania to do other than respond to and treat any
       application by the Commonwealth for a licence for the Hospital according to the requirements of any
       Applicable Licensing Legislation.

19.7   Clauses 19.4 to 19.6 (inclusive) apply, with the necessary changes, in respect of any renewal period.

19.8   Provided it has been issued with, or is satisfied that it will be issued with, the appropriate licence under any
       Applicable Licensing Legislation the Commonwealth will, no later than 20 Business Days before the
       Hospital Management Rearrangement Date, offer employment to all Hospital Staff employed or engaged at
       the Hospital immediately before the Hospital Management Rearrangement Date (including those people
       who accepted, or who subsequently accept, an offer of employment at the Hospital made by Tasmania
       before the Hospital Management Rearrangement Date) on terms and conditions which:
       (a)      in respect of each permanent Hospital Staffer (which expression excludes casuals, locums and
                persons employed for a fixed term), are no less advantageous to them than those on which they are
                employed or engaged by Tasmania at the Hospital immediately before the Hospital Management
                Rearrangement Date; and

       (b)      in respect of each Hospital Staffer who is a casual or locum or who is employed for a fixed term,
                the same terms and conditions as those on which they are employed and engaged by Tasmania
                immediately before the Hospital Management Rearrangement Date,

       subject in each case only to the substitution of the Commonwealth as their employer.

19.9   Tasmania must pay to, or for the benefit of, all Hospital Staff:
       (a)      in respect of each pay period ending before the Hospital Management Rearrangement Date:

                (i)      the amount of their wage or salary entitlement; and

                (ii)     any elected salary sacrifice amounts; and

       (b)      in respect of any pay period commencing before, but ending on or after, the Hospital Management
                Rearrangement Date:

                (i)      the amount of their wage or salary entitlement; and

                (ii)     any elected salary sacrifice amounts,

                attributable to that part of the period ending on (and including) the day before the Hospital
                Management Rearrangement Date.

       Each amount referred to in Clause 19.9(a) must be paid by Tasmania on the pay date for the relevant pay
       period. Each amount referred to in Clause 19.9(b) must be paid by Tasmania on the date which would


                                                                                                                     25
        have otherwise been the pay date for the relevant pay period had the relevant Hospital Staffer continued to
        be employed by Tasmania at the Hospital.

19.10   Tasmania must consult with the Commonwealth, and keep the Commonwealth informed, of any significant
        events affecting any Hospital Staff on or after the Date of this Agreement and before the Hospital
        Management Rearrangement Date, including changes to the financial terms and conditions of their
        employment.
19.11   No later than 30 Business Days before the Hospital Management Rearrangement Date, Tasmania must
        provide the Commonwealth with a current list of all Hospital Staff containing the following details in
        respect of each of them:

        (a)     their full name;

        (b)     the location in the Hospital in which they are employed or engaged;

        (c)     their employment classification or position;

        (d)     their employment status (permanent, part-time, temporary, causal etc); and

        (e)     their wage or salary (and any salary sacrifice arrangements) or other remuneration.

        The Commonwealth must notify Tasmania at least 5 Business Days before the Hospital Management
        Rearrangement Date of those Hospital Staff who have accepted the Commonwealth’s offer of employment
        (Relevant Hospital Staff).

19.12   On and from the Hospital Management Rearrangement Date, the Commonwealth will be solely responsible
        for all wages, salary, bonuses, annual leave, sick leave, long service leave and all other forms of leave
        entitlement of Relevant Hospital Staff (irrespective of the period to which the entitlement is referrable),
        including rostered days off and time off in lieu, and any other payment, benefit or amount (including both
        accrued superannuation commitments, and unfunded superannuation entitlements but excluding payments
        Tasmania is obliged to make under Clause 19.9 and Claims in respect of that obligation.

19.13   Tasmania will, with effect on and from the Hospital Management Rearrangement Date, release each
        Relevant Hospital Staffer, from their employment with Tasmania to enable them to accept the
        Commonwealth’s offer and commence employment with the Commonwealth at the Hospital on the
        Hospital Management Rearrangement Date.

19.14   For the purpose of calculating any benefit or entitlement arising under any Law, award, agreement or
        contract of employment between the Commonwealth and each Relevant Hospital Staffer:

        (a)     prior service is to be taken as service with the Commonwealth; and

        (b)     continuity of the Relevant Hospital Staffer’s employment is not broken because they cease to be
                an employee of Tasmania and become an employee of the Commonwealth and their continuous
                service with Tasmania will be regarded as continuous service with the Commonwealth.

19.15   The Parties acknowledge that any transition of the operations of the Hospital from Tasmania will require
        that appropriate arrangements are made to secure the availability to the operator from time to time of
        sufficient, and appropriately trained and skilled, Hospital Staff.

19.16   Tasmania will use its best endeavours to induce Hospital Staff to accept any offer of employment made to
        them by the Commonwealth according to this Clause 19.

20      Protection of personal information
20.1    In this Clause 20:

        Personal Information means:

        (a)     “personal information” as defined in section 3 of the Personal Information Protection Act 2004
                (Tas); and

        (b)     any other information which:
                                                                                                                   26
               (i)      is not “personal information” as defined in section 3 of the Personal Information
                        Protection Act 2004 (Tas); but

               (ii)     is “personal information” as defined in section 6(1) of the Privacy Act 1988 (Clth).

20.2   Nothing in Clause 20.1 constitutes as Personal Information any information which would not otherwise be
       “personal information” for the purposes of the Personal Information Protection Act 2004 (Tas), except for
       the purposes of this Agreement, and only as between the Commonwealth and Tasmania.

20.3   In conducting the Hospital under this Agreement, Tasmania agrees:

       (a)     to comply with the personal information protection principles in Schedule 1 to the Personal
               Information Protection Act 2004 (Tas); and

       (b)     not to do anything, or engage in any practice which, if done or engaged in by DoHA, would
               constitute a breach of any of the information privacy principles in section 14 of the Privacy Act
               1988 (Clth).

20.4   To avoid doubt, the parties agree that nothing in this Agreement authorises or permits Tasmania to do
       anything or to engage in any practice which, if done or engaged in by DoHA, would constitute a breach by
       DoHA of any of the information privacy principles in section 14 of the Privacy Act 1988 (Clth).

20.5   Each subcontract (as defined in section 95B(4) of the Privacy Act 1988 (Clth)) made by or on behalf of
       Tasmania for or in connection with its management and conduct of the Hospital under this agreement, must
       contain provisions:

       (a)     which are not limited or restricted in their application or effect by any other provision of that
               subcontract or any provision of any other contract;

       (b)     which oblige each other party not to do anything, or engage in any practice which, if done or
               engaged in by DoHA, would constitute a breach of any of the information privacy principles in
               section 14 of the Privacy Act 1988 (Clth); and

       (c)     to the effect that nothing in the subcontract authorises or permits Tasmania or its subcontractors to
               do anything or to engage in any practice which, if done or engaged in by DoHA, would constitute
               a breach by DoHA of any of the information privacy principles in section 14 of the Privacy Act
               1988 (Clth).

20.6   Tasmania also agrees, in managing and operating the Hospital under this Agreement and any associated
       activities:

       (a)     to notify individuals whose Personal Information Tasmania holds, that complaints about its acts or
               practices may be investigated by the Privacy Commissioner (in respect of a complaint made under
               the Privacy Act 1988 (Clth) and that the Privacy Commissioner has power to award compensation
               against the Commonwealth in appropriate circumstances) or the Ombudsman (as defined in, and
               in respect of a complaint made under, the Personal Information Protection Act 2004 (Tas));

       (b)     to disclose in writing to any person who asks, the content of the provisions of this agreement (if
               any) that are inconsistent with:

               (i)      an approved privacy code binding on the Commonwealth or Tasmania; or

               (ii)     a National Privacy Principle (as defined in section 6 of the Privacy Act 1988 (Clth));

       (c)     to immediately notify the Commonwealth if Tasmania becomes aware of a breach or possible
               breach of any of the obligations contained in, or referred to in, this Clause 20, whether by
               Tasmania or any person with whom it has contracted in respect of the Hospital or any associated
               activities;

       (d)     to ensure that any of Tasmania’s Personnel who are required to deal with personal information for
               the purposes of this Agreement are made aware of Tasmania’s obligations under this Clause 20.

20.7   Notwithstanding any other provision in this Clause 20, where Tasmania provides a health service to an
       individual it will:

                                                                                                                    27
       (a)     comply with the National Privacy Principles in relation to the use and disclosure of health
               information about the individual; and

       (b)     transfer health information to another health service provider when directed to do so by the
               Commonwealth.

20.8   This Clause 20 continues in full force and effect after this Agreement Ends.

21     Dispute resolution

21.1   If there is a dispute or difference between the Parties in connection with the interpretation, implementation,
       enforcement or termination of this Agreement, (but not in connection with a settlement agreement referred
       to in Clause 21.8) then, subject to Clause 21.12, either Party (Initiating Party) may give the other a notice
       (Dispute Initiation Notice) which:
       (a)     states that it is a Dispute Initiation Notice given under this Clause 21.1;

       (b)     describes, and gives reasonable particulars of, the dispute or difference;

       (c)     requires the other Party (Recipient) to refer the dispute for resolution according to Clauses 21.2 to
               21.12 (inclusive); and

       (d)     nominates a senior officer of the Initiating Party to represent the Initiating Party for the purposes
               of Clause 21.3 (Initiating Party’s Nominee).

21.2   The Recipient must, within 10 Business Days of receiving a Dispute Initiation Notice which complies with
       the requirements of Clause 21.1:
       (a)     by notice to the Initiating Party nominate a senior officer of the Recipient to represent the
               Recipient for the purposes of Clause 21.3 (Recipient’s Nominee); and

       (b)     by notice addressed to the Initiating Party’s Nominee and the Recipient’s Nominee (Dispute
               Referral Notice), refer the dispute for resolution according to Clause 21.3.

21.3   The Parties must cause the Initiating Party’s Nominee and the Recipient’s Nominee (Nominees) to meet as
       soon as practicable and use their best endeavours to resolve the dispute or difference.

21.4   If the Nominees are unable to resolve the dispute or difference within 10 Business Days of the Recipient
       receiving, or being taken by Clause 24.2 to have received, the relevant Dispute Initiation Notice, the
       dispute or difference is to be referred for resolution to the Minister of Health and Ageing (on behalf of the
       Commonwealth) and the Minister for Health and Human Services (on behalf of Tasmania) or their
       respective nominees.

21.5   The Nominees and Ministers may determine the procedures they will follow for the purposes of this Clause
       21.

21.6   The Parties will, and the Parties will cause the Nominees and the Ministers to:
       (a)     maintain the confidentiality of all confidential information disclosed to them during the Dispute
               Resolution Process (confidential information);

       (b)     not disclose confidential information to any other person unless:

                (i)     compelled by Law to do so; or

                (ii)    with the consent of the Party who (or whose Nominee or Minister) disclosed the
                        confidential information; and

       (c)     not use the confidential information for any purpose other than the Dispute Resolution Process.


                                                                                                                       28
21.7    The following communications made in the course of the Dispute Resolution Process will be made on a
        confidential and “without prejudice” basis:
        (a)     any settlement proposal, whether made by a Party, a Nominee or a Minister during the Dispute
                Resolution Process;

        (b)     the willingness of a Party to consider any such proposal during the Dispute Resolution Process;

        (c)     any admission or concession made by a Party, a Nominee or a Minister during the Dispute
                Resolution Process; and

        (d)     any statement made or document produced by a Nominee or a Minister for the purposes of the
                Dispute Resolution Process.

21.8    Despite their “without prejudice” status, a Party may adduce evidence of any of the communications
        described in Clause 21.7 for the purposes of enforcing any settlement agreement reached as a result of the
        Dispute Resolution Process.

21.9    No statements or comments, whether written or oral, made or used by the Parties, a Nominee or a Minister
        during the Dispute Resolution Process may be relied upon to found or maintain any action for defamation
        or any related complaint. This agreement may be pleaded in bar to any such action. Each Party will hold
        the benefit of this Clause 21.9 on trust for itself, it’s Nominee and its Minister.

21.10   If a dispute or difference is not resolved by the Dispute Resolution Process within 3 months after it is
        referred under Clause 21.1, the Commonwealth may:
        (a)     by notice to Tasmania, immediately terminate the Dispute Resolution Process; and

        (b)     by not less than 3 months notice to Tasmania, terminate this Agreement.

21.11   Where a dispute only concerns no payment being made by the Commonwealth under Item D2 to Tasmania
        and only where such payment has not been made in each of three consecutive months, if such dispute is not
        resolved by the Dispute Resolution Process within 3 months after it is referred under Clause 21.1,
        Tasmania may:
        (a)     by notice to the Commonwealth, immediately terminate the Dispute Resolution Process; and

        (b)     by not less than 3 months notice to the Commonwealth, terminate this Agreement.

21.12   Each Party must, in connection with this Clause 21 (including in holding or maintaining a position which
        gives rise to or continues a dispute or difference and in participating in the Dispute Resolution Process) act
        only in the utmost good faith in the exercise of their rights and the performance of their obligations.

22      Taxes, duties and government charges
22.1    All taxes, duties and government charges (Taxes) imposed or levied in connection with this Agreement or
        the Hospital must be paid by Tasmania.

22.2    Without limiting Clause 22.1, Tasmania must pay Goods and Services Tax (GST) on the goods, services
        and other supplies made under this Agreement to the extent that they are “taxable supplies” within the
        meaning of the A New Tax System (Goods and Services Tax) Act 1999 (Clth) (GST Act).

22.3    In relation to any GST payable under Clause 22.2, Tasmania must issue the Commonwealth with a tax
        invoice in accordance with the GST Act.

22.4    Tasmania warrants it is registered in accordance with the GST Act and agrees to remain registered
        throughout the Agreement Period.




                                                                                                                    29
23     North West Area Health Service

23.1   The Commonwealth acknowledges that, in continuing to manage the Hospital under this Agreement,
       Tasmania will continue to involve the Hospital and its facilities in Tasmania’s strategy for health service
       delivery in the State’s North West region.

23.2   If Tasmania wishes to use the Funds to provide services other than the Core Clinical Activities in the
       State’s North West region, the parties agree to discuss in good faith how such services could be provided
       and implemented.

24     Notices
24.1   A Party giving a notice under this Agreement must do so in writing, including by facsimile, that is:

       (a)     directed to the Party’s address specified in Item E marked for the attention of the Liaison Officer;
               and

       (b)     hand delivered or sent by pre-paid post or facsimile to that address.

24.2   A notice given in accordance with Clause 24.1 is received (or for all the purposes of this Agreement is
       taken to have been received):

       (a)     if hand delivered, on delivery;

       (b)     if sent by pre-paid post, on the third Business Day after the date of posting;

       (c)     if sent by facsimile, at the time the sender receives notification that the notice has been transmitted
               satisfactorily.




                                                                                                                     30
                                                     SCHEDULE
Item A (Project)

The Project comprises:

(a)     the management and operation (including the repair and maintenance) of the Hospital; and

(b)     carrying on the business and operations of the Hospital (which includes managing, administering,
        delivery and performing, at a minimum, the Core Clinical Activities),

for which Tasmania is to be solely and exclusively responsible; and

(c)     such other activities in connection with the Hospital as the Parties may from time to time agree in writing,

all on and subject to the terms of this Agreement.

The Core Clinical Activities are those clinical activities which the Parties agree are essential elements of the
business and operations of the Hospital to be carried on by Tasmania throughout the Agreement Period. They are:

(a)     a high dependency unit;
(b)     a 24 hour/7 day emergency department;
(c)     general and specialist medical services (including paediatric care);
(d)     oncology services;
(e)     low risk obstetrics and gynaecological care;
(f)     surgery and surgical specialties (other than planned complex surgery) that can be safely
        performed at the Hospital, including overnight planned and unplanned surgery and related post
        surgical care;
(g)     clinical support services such as pathology, radiology and pharmacy;
(h)     outpatient services;
(i)     palliative care;
(j)     geriatric support;
(k)     community and outreach services; and
(l)     such other services as the Commonwealth and Tasmania agree, having regard (amongst other things)
        to the professional support that progressively becomes available to the Hospital through the clinical
        networks developed under Tasmania’s Clinical Services Plan.

Tasmania must ensure that the Hospital operates as part of the Tasmanian Health and Hospital Network,
and Tasmania must comply with any governance framework that applies to the Tasmanian Health and
Hospital Network.
Item B (Budget)
Funding Period                 Funding Received (GST exclusive)

2011-12                        $63.60 million

2012-13                        $65.83 million

2013-14                        $68.13 million

TOTAL                          $197.56 million



Item C (Reports)

C1        Quarterly operational and clinical information and reports

          Tasmania will report to the Commonwealth promptly after each 31 March, 30 June, 30 September and 31
          December during the Agreement Period (in respect of the calendar quarters ending on those dates), and at
          the End of the Agreement (in respect of the period since the last calendar quarter end date) on:

          (a)     unit record (as specified in the Admitted Patient Care NMDS) AR-DRG admitted data
                  by medical, surgical and other, by funding source;

          (b)     the number of outpatient by type of service;

          (c)     all activity and counts of allied health services by type;

          (d)     the number of presentations at the emergency department and waiting time;

          (e)     elective surgery activity and waiting time;

          (f)     bed occupancy rates per month; and

          (g)     serious incidents by volume and service type.

C2        Annual operational and clinical information and reports

          At the end of each financial year during the Agreement Period in either case (and in respect of the
          financial year then ended) and at the End of the Agreement (and in respect of the period since the end of
          the previous financial year), Tasmania will promptly report to the Commonwealth on:

          (a)     unit record data on hospital utilisation, including all items in the Admitted Patient Care NMDS,
                  Elective Surgery Waiting Times Admissions and Removals NMDS, Elective Surgery Waiting
                  Times Census NMDS, and Non-admitted Patient Emergency Department Care NMDS;

          (b)     all items in the Public Hospital Establishments NMDS;

          (c)     Non-Admitted NMDS, which includes emergency department and outpatient department
                  services data;

          (d)     integrated information relevant to Elective Surgery Waiting Times Admissions and Removals
                  NMDS and Elective Surgery Waiting Times Census NMDS, in a format which can be linked to
                  the unit record data provided in accordance with the Admitted Patient Care NMDS; and

          (e)     training:

                  (i)         the number of clinical placements commenced by specialty type; and

                  (ii)        the number of clinical placements completed by specialty type.
C3     Monthly financial reporting and acquittal of Funding

       Promptly after the end of each month, during the Agreement, and promptly at the End of the Agreement
       Period, Tasmania will provide the Commonwealth with a financial report in the form of Annexure A of
       the revenue and expenditure of the Hospital from the relevant month. Where the monthly expenditure of
       the Hospital varies by more than 10% from the average of the monthly expenditure for the previous 3
       months, or on the Commonwealth’s request, Tasmania will also provide the Commonwealth with a
       detailed explanation for any variation in expenditure.

C4     Annual financial reporting and acquittal of Funding

       Tasmania will promptly after:

       (a)     each financial year ending during the Agreement Period; and

       (b)     the Agreement Ends in respect of the period since the last preceding financial year end date,

       provide the Commonwealth with a financial report (including a certified acquittal) in the form of
       Annexure B, showing:

       (c)     the performance and financial position of the Hospital over the course of, and as at the end of,
               the relevant financial year or other period, prepared in accordance with the Australian
               Accounting Standards and audited by an auditor agreed by the Commonwealth (acting
               reasonably) according to the Australian Auditing Standards;

       (d)     in reasonable detail, the expenditure of the Funds during the financial year or other period to
               which the report relates, identifying any expenditure:

               (i)      for which a Commitment exists (and the nature of that Commitment and the amount
                        Committed);

               (ii)     on the delivery of clinical services;

               (iii)    on the Hospital management team (including details of the team’s configuration);

               (iv)     on Tasmania’s corporate overheads;

               (v)      on maintenance of the Hospital and the Hospital Assets, and depreciation; and

               (vi)     on Hospital operating costs; and

       (e)     all sources of revenue received in or in respect of the Hospital other than the Funding.

Item D (Funding)

D1     Amount of Funding

       Subject to section D2, the Commonwealth will pay to Tasmania:

        a)     $63.60 million (GST exclusive) for the financial year 2011-2012;

        b)     $65.83 million (GST exclusive) for the financial year 2012-2013; and

        c)     $68.13 million (GST exclusive) for the financial year 2013-2014.

       The Funds must be separately accounted for, and recorded in, Tasmania’s Records.
D2      Manner and timing of payments

        The Commonwealth will pay the Funds to Tasmania:

        (a)      monthly in advance on or about the first Business Day of each month during each Funding
                 Period;

        (b)      in cleared funds;

        (c)      in an amount calculated by the formula:

                 A÷B
                 where

                 A is the aggregate amount of the Funds for the relevant Funding Period

                 B is the number of Funding Dates in that Funding Period to which the payments relate; and

        (d)      into the account from time to time notified in writing by Tasmania to the Commonwealth.

        In this Item D2, Funding Period means a period set out beneath the heading “Funding Period” in Item B.

Item E (Liaison Officers)

Commonwealth’s Liaison Officer

The Commonwealth’s Liaison Officer is the person holding, occupying or performing the duties of Assistant
Secretary, National Partnership Agreement Branch in the Department of Health and Ageing. This position is
currently occupied by Ms Ann Smith available at the following address:

Sirius Building Level 4
23 Furzer Street
Phillip ACT 2606
Fax no. 02 6289 3186

and available on the following telephone number and email address:

02 6289 7058
ann.smith@health.gov.au

Tasmania’s Liaison Officer

Tasmania’s Liaison Officer is the person holding, occupying or performing the duties of Director, Policy and
Intergovernmental Relations in the Department of Health and Human Services. The position is currently occupied
by Mr David Nicholson available at the following address:

5/24 Davey Street
Hobart Tas 7000

and available on the following telephone number and email address:

03 6233 2483
david.nicholson@dhhs.tas.gov.au
Item F (Specified Personnel)

(a)     A General Manager, to be employed at the Hospital;

(b)     A Clinical Director, to be employed at the Hospital;

(c)     A Finance Director, to be employed at the Hospital; and

(d)     A Human Resources Manager, to be employed at the Hospital.

Item G (Off-site Accommodation)

The Off-site Accommodation comprises the following properties:

(a)    CT 25827/3;

(b)    CT 116868/2;

(c)    CT 138454/1;

(d)    CT 138454/2; and

(e)    CT 138454/3.
Execution Page

This Heads of Agreement for the continued management, operation and funding of the Mersey Community
Hospital
                                          ANNEXURE A


MERSEY COMMUNITY HOSPITAL - MONTHLY INCOME AND EXPENDITURE

Month Ending ________________________

Income                                                 $

Inpatient Fees
Inpatient Fees DVA
Inpatient Fees Nursing Home
Outpatient Fees
Outpatient Fees DVA
Pharmacy
Pathology Services
Sale of Prostheses
Private Patient Scheme
Ambulance Fees DVA
Residential Rental
Commercial Rental
Other Client Revenue
Other revenue
Salary & Wages Recoveries
Workers' Compensation Recoveries
Food Items Recoveries
Other Recoveries
Total Direct Revenue/Income

Industry Funding
Industry Funds
Total Industry Funds

Department of Health and Ageing Funding
DOHA Direct Funding
Total DoHA funding


Total Income

Expenditure

Employees
Allied Health Professional Salaries
Allied Health Professional Overtime
Allied Health Professional Callback
Allied Health Professional Other
Allied Health Professional Paid via 3rd
Admin & Clerical/Comp Systems Salaries
Admin & Clerical/Comp Systems Overtime
Admin & Clerical/Comp Systems Callback
Admin & Clerical/Comp Systems Other
Admin & Clerical/Comp Systems 3rd Party
Operational/Apprentice Salaries
Operational/Apprentice Overtime
Operational/Apprentice Callback
Operational/Apprentice Other
Operational/Apprentice Paid via 3rd Party
Nurses Salaries
Nurses Salaries Overtime
Nurses Salaries Callback
Nurses Salaries Other
Nurses 3rd Party
Medical Practitioners
Medical Practitioners Overtime
Medical Practitioners Callback
Medical Practitioners Other
Medical Practitioners Paid via 3rd Party
Visiting Medical Officers State
Visiting Medical Officers Callback
Visiting Medical Officers Other
Employer Superannuation Contributions
Payroll Tax
Workers' Compensation Premiums
Fringe Benefits Tax
Recruitment
Training
Staff Allowances (Payroll Tax Payable)
Staff Allowances (Payroll Tax Exempt)
Other Employment Related Payments
Uniforms
Total Employees

Contractors & Consultants
Contract Salaries
Contract Salaries Other
Consultants
Total Contractors and consultants

Property
Property related outgoings
Cleaning
Fuel Light and Power
Municipal Rates & Charges
Rent on Property Paid to Private Sector
Security
Other Property Costs
Accommodation - 3rd Party Staff
Programmed General Maintenance
Maintenance Contracts
Landscape Maintenance
Plant & Equipment
Furniture & Fittings
Other Repairs & Maintenance
Total Property

Information Technology
IT Acquisitions <$10k
IT Hardware Leases
IT Hardware Support / Maintenance
IT Software License Acquisition
IT Software License Acquisition
IT Systems Management
Network Charges
Printers & Computer Peripherals
Other IT Expenses
Total Information Technology

Client Expenses
Client Travel
Client Travel
Client Security
Bedding & Linen
Cleaning & Toilet Requisites
Outside Cleaning Services
Removal of Trade Refuse
Laundry Materials
Food Production
Food Supplies (Outside Catering)
Food Supplies (Outside Catering)
Kitchen & Tableware
Medical & Surgical Supplies
General Medical Consumables
Purchase of Special Services (Medical)
Prosthesis
Medical Gases
Intraocular Lenses
Pharmacy Requisites
Pathology Services
Other Client Expenses
Other Client Expenses
Plant & Equipment (Medical Equipment)
Total Client Expenses

Travel
Staff Travel
Travel Expense - 3rd Party Staff
Total Travel

Administrative Expenses
Administration
Advertising
Communications
Postage
Freight & Charges
Office Requisites
Service Fees
Library Expenses
Other Expenses
Other Expenses - 3rd Party Staff
Total Administrative expenses

Finance & Lease Expenses
Leases & Licenses
Leasing Medical Equipment
Motor Vehicle Expenses
Motor Vehicle Expenses
Revenue Collection Costs
Risk Management Fund Premiums
Total Finance and Lease Expenses

Legal
Legal Fees (excl Med Indemnity)
Total Legal Expenses

One-Off Set Up Costs
One Off Set Up Costs
Total One-Off Set Up Costs

Depreciation
Replacement plant and equipment

Total Expenditure


OPERATING RESULT
                                       ANNEXURE B




MERSEY COMMUNITY HOSPITAL

     MANAGEMENT AND FUNDING AGREEMENT

Statement of acquittal and certification of expenditure pursuant
                     to Clause ……………


I certify that:

1)          $________________ was received by Tasmania under the terms of the
            Management and Funding Agreement for the financial year end
            ________/________ as funding for the management and operation of the Mersey
            Community Hospital.


2)          $________________ was expended on the provision of public hospital services in
            accordance with the provisions of the Management and Funding Agreement, as per
            the attached Acquittal.


3)          $_________________ remains unexpended by Tasmania as at
            30 June ______ and is intended to be carried forward.




     Signature                     Delegation                 Date
MERSEY COMMUNITY HOSPITAL - ANNUAL INCOME AND
EXPENDITURE

Financial Year Ending ________________________

Income                                           $

Inpatient Fees
Inpatient Fees DVA
Inpatient Fees Nursing Home
Outpatient Fees
Outpatient Fees DVA
Pharmacy
Pathology Services
Sale of Prostheses
Private Patient Scheme
Ambulance Fees DVA
Residential Rental
Commercial Rental
Other Client Revenue
Other revenue
Salary & Wages Recoveries
Workers' Compensation Recoveries
Food Items Recoveries
Other Recoveries
Total Direct Revenue/Income

Industry Funding
Industry Funds
Total Industry Funds

Department of Health and Ageing Funding
DOHA Direct Funding
Total DoHA funding


Total Income

Expenditure

Employees
Allied Health Professional Salaries
Allied Health Professional Overtime
Allied Health Professional Callback
Allied Health Professional Other
Allied Health Professional Paid via 3rd
Admin & Clerical/Comp Systems Salaries
Admin & Clerical/Comp Systems Overtime
Admin & Clerical/Comp Systems Callback
Admin & Clerical/Comp Systems Other
Admin & Clerical/Comp Systems 3rd Party
Operational/Apprentice Salaries
Operational/Apprentice Overtime
Operational/Apprentice Callback
Operational/Apprentice Other
Operational/Apprentice Paid via 3rd Party
Nurses Salaries
Nurses Salaries Overtime
Nurses Salaries Callback
Nurses Salaries Other
Nurses 3rd Party
Medical Practitioners
Medical Practitioners Overtime
Medical Practitioners Callback
Medical Practitioners Other
Medical Practitioners Paid via 3rd Party
Visiting Medical Officers State
Visiting Medical Officers Callback
Visiting Medical Officers Other
Employer Superannuation Contributions
Payroll Tax
Workers' Compensation Premiums
Fringe Benefits Tax
Recruitment
Training
Staff Allowances (Payroll Tax Payable)
Staff Allowances (Payroll Tax Exempt)
Other Employment Related Payments
Uniforms
Total Employees

Contractors & Consultants
Contract Salaries
Contract Salaries Other
Consultants
Total Contractors and consultants

Property
Property related outgoings
Cleaning
Fuel Light and Power
Municipal Rates & Charges
Rent on Property Paid to Private Sector
Security
Other Property Costs
Accommodation - 3rd Party Staff
Programmed General Maintenance
Maintenance Contracts
Landscape Maintenance
Plant & Equipment
Furniture & Fittings
Other Repairs & Maintenance
Total Property

Information Technology
IT Acquisitions <$10k
IT Hardware Leases
IT Hardware Support / Maintenance
IT Software License Acquisition
IT Software License Acquisition
IT Systems Management
Network Charges
Printers & Computer Peripherals
Other IT Expenses
Total Information Technology

Client Expenses
Client Travel
Client Travel
Client Security
Bedding & Linen
Cleaning & Toilet Requisites
Outside Cleaning Services
Removal of Trade Refuse
Laundry Materials
Food Production
Food Supplies (Outside Catering)
Food Supplies (Outside Catering)
Kitchen & Tableware
Medical & Surgical Supplies
General Medical Consumables
Purchase of Special Services (Medical)
Prosthesis
Medical Gases
Intraocular Lenses
Pharmacy Requisites
Pathology Services
Other Client Expenses
Other Client Expenses
Plant & Equipment (Medical Equipment)
Total Client Expenses

Travel
Staff Travel
Travel Expense - 3rd Party Staff
Total Travel

Administrative Expenses
Administration
Advertising
Communications
Postage
Freight & Charges
Office Requisites
Service Fees
Library Expenses
Other Expenses
Other Expenses - 3rd Party Staff
Total Administrative expenses

Finance & Lease Expenses
Leases & Licenses
Leasing Medical Equipment
Motor Vehicle Expenses
Motor Vehicle Expenses
Revenue Collection Costs
Risk Management Fund Premiums
Total Finance and Lease Expenses
Legal
Legal Fees (excl Med Indemnity)
Total Legal Expenses

One-Off Set Up Costs
One Off Set Up Costs
Total One-Off Set Up Costs

Depreciation
Replacement plant and equipment

Total Expenditure


OPERATING RESULT
    ANNEXURE C

Plan of Centre of Excellence
  ANNEXURE D

Opening Hospital Assets

								
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