Resolution for Creation of 501(c)3 Corporation, Lease and Funding Agreement

RESOLUTION AUTHORIZING THE CREATION OF A 501(C)(3) CORPORATION, AND THE PREPARATION OF A LEASE AGREEMENT AND A FUNDING AGREEMENT

WHEREAS, The Fulton-DeKalb Hospital Authority (the “Authority”) was created on August 6, 1941, and owns and operates the Grady Health System (the “System”) a comprehensive healthcare system which includes Grady Memorial Hospital (“Grady Hospital”), Hughes Spalding Hospital (“Hughes Spalding”), Crestview Nursing and Rehabilitation Facility (“Crestview”), neighborhood health centers, and certain other real and personal property;

WHEREAS, as the primary provider of healthcare for the indigent and uninsured populations of Fulton County, DeKalb County, and surrounding areas, the Authority has sought over the past decades to fulfill its historic mission and preserve its unique role and character in the face of increasing indigent and charity populations and decreasing public funds;

WHEREAS, as a result of decreasing public funds, adverse reimbursement policies and other factors beyond the control of the Authority, the Authority has suffered severe financial hardships and deficits in recent years that have threatened the System’s ability to continue to provide high-quality medical services to the indigent and other residents of Fulton and DeKalb Counties;

WHEREAS, in seeking to address its current financial situation in the face of rising healthcare costs and diminished resources, the Authority (i) engaged a national consulting firm to evaluate its financial and operating conditions, (ii) sought additional input from business and other organizations and received the report of the Greater Grady Task Force of the Metro Atlanta Chamber of Commerce, and (iii) engaged the law firm of Troutman Sanders LLP to conduct due diligence activities relating to a proposed restructuring of the System;

WHEREAS, in response to said due diligence activities, as well as input and recommendations from Authority stakeholders and other parties, the Authority on September 24, 2007, authorized the Chairperson to appoint a special committee of Trustees (the “Exploratory Committee”) to work jointly with an Ad Hoc Advisory Group of representatives from civic, religious, governmental, business, philanthropic, and other community interests to explore strategic alternatives for the future operations of the System;

WHEREAS, the Exploratory Committee convened several meetings and considered various options to address the financial challenges facing the Authority, including but not limited to state government funding of Grady Hospital operations; the creation of a regional hospital authority to jointly fund Grady Hospital operations; the initiation or increase of sales and/or ad valorem taxes to directly fund Grady Hospital operations; and the formation of a 501(c)(3) nonprofit corporation which would lease Grady Hospital and other operating units of the System from the Authority, would assume many debts and liabilities of the Authority, and would assume responsibility for the day-to-day operations of the System, including Grady Hospital;