HomeMy WebLinkAboutMINUTES - 03131984 - X.1 'THE BOARD OF SUPERVISORS OF CONTRA COSTA COUNTY, CALIFORNIA
Adopted this Order on March 13 , 1984 , by the following vote:
AYES: Supervisors Powers, Fanden, Schroder, Torlakson.
NOES: None.
ABSENT: None.
ABSTAIN: Supervisor McPeak.
SUBJECT: Agreement with National )
Medical Enterprises, Inc . )
i
It is by the Board ORDERED
1. The agreement between the County of Contra Costa and
National Medical Enterprises, Inc. , granting NME an option to
purchase the County' s rights to operate 86 licensed hospital
beds, a copy of which is attached hereto is approved. -
2 . The Chairman of the Board of Supervisors is authorized
and directed to execute said agreement on behalf of the County
of Contra Costa.
1 hereby certify that this is a true and correct copy of
an action taken and entered on the minutes of the
Board of Superv/4orrss on the date shown.
ATTESTED: XVLt1& M• /g,?*
J.R. OLSSON, COUNTY CLERK
and ex officio Clerk of the Board
By • Deputy
Orig. Dept.: County Administrator
cc: Health Services Department
Auditor-Controller
National Medical Enterprises , Inc. 0 0 0A7 7
US
AGREEMENT }'
Effective March 13, 1984, NATIONAL MEDICAL ENTERPRISES, INC., a
Nevada corporation, (hereinafter referred to as "NME") and CONTRA COSTA
COUNTY, a Political Subdivision of the State of California, (hereinafter referred
to as "County"), agree as follows:
1. FACTS.
A. County is the owner and operator of a Hospital located in
Martinez, California and known as Contra Costa County Hospital, (hereinafter
referred to as "County Hospital").
B. The County Hospital is currently licensed by the State of
California for a bed capacity of 314 beds.
C. NME desires to develop a health care facility in the San Ramon
Valley, to be known as the San Ramon Valley Intercommunity Hospital
(hereinafter referred to as "San Ramon Hospital"). -
D. A Certificate of Need has been issued by the Office of
Statewide Health Planning and Development for the State of California
(hereinafter referred to as "OSHPD") for NME to develop the San Ramon
Hospital under the condition that 86 of the San Ramon Hospital beds be obtained
through agreement with County for the delicensure of a like number of County
Hospital beds (56 being general acute care beds and 32 being psychiatric beds)
and the distribution of such beds to the San Ramon Hospital.
I-. There is currently in process litigation originally involving the
OSHPD, NME, the John Muir Memorial Hospital, Valley Memorial Hospital of
Livermore and the Alameda Contra Costa Health System Agency among others,
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contesting whether or not the Certificate of Need for San Ramon Hospital was
validly issued.
F. NME desires to arrange for compliance with the condition
granted in San Ramon Hospital's Certificate of Need by purchasing from County
and County desires to grant to NME the option to buy the rights of County to
operate 86 hospital beds, for use by NME in conjunction with its development
plans for the San Ramon Hospital.
G. As part of the Agreement, County will execute any application
or certification and otherwise use its best efforts, without being required to
participate in litigation or to make any payment or other concession, to
effectuate the delicensing and transfer of 86 of its County Hospital beds to the
San Ramon Hospital, all as requested by NME, to cause the condition in the San
Ramon lospital's Certificate of Need to be satisfied.
2. GRANT OF OPTION. County, in consideration of the sum of Two
Hundred Thousand Dollars ($200,000), which is nonrefundable to NME received
from NME simultaneously with the execution of this Agreement (the sufficiency
of whiclvis hereby acknowledged), hereby grants to NME the option to purchase,
upon the following terms and conditions, the County's right to operate 86 of
County Hospital's licensed beds, which would include the permanent delicensing
of the 86 hospital beds at County Hospital upon the request of NME and the
County's cooperation in effectuating the transfer of such beds to the San Ramon
Hospital as set forth in Paragraph I(g) above.
3. OPTION. This Option shall remain open and in full force and effect
until such time as is 30 days after NME receives or is denied all necessary final
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government approvals, whether administrative or judicial, to develop the San
Ramon Hospital using the County's 86 hospital beds provided, nevertheless that
this Option shall expire three years from the date hereof, but that NME may
extend this Option for an additional two years upon payment of the additional
sum of $200,000.00, which shall also be credited to the purchase price if Option
to purchase is exercised.
4. EXERCISE OF OPTION. This Option may be exercised at any time
during the aforesaid period by written notice to County delivered or mailed by
certified mail, return receipt requested, to County's address set forth
hereinbelow.
"5. PRICE. The purchase price for the exclusive right to obtain the
County's release of its right to operate the 86 beds (including the delicensure and
transfer?of such beds) is One Million Eight Hundred Thousand Dollars ($1,800,000)
payable by NME to County as follows:
a. Two Hundred Thousand Dollars ($200,000), the sum paid for this
Option, shall be credited against the purchase price.
b. Two Hundred Thousand Dollars ($200,000.00), if this Option is
extended,shall be credited (if paid) against the purchase price.
C. The balance of the purchase price (namely One Million Six
Hundred Thousand Dollars ($1,600,000), or One Million Four
Hundred Thousand Dollars ($1,400,000) (which is appropriate),
shall be deposited into an interest bearing escrow account with
the Escrow Agent (hereinafter designated) in Contra Costa
County in cash or its equivalent within ten (10) days after the
Option is exercised.
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6. FAILURE TO EXERCISE OPTION. If NME is unable to exercise the
Option or does not exercise the Option, within the time prescribed above, the
consideration paid for the Option, namely Two Hundred Thousand Dollars
($200,000) for the first three years and Two Hundred Thousand Dollars ($200,000)
for the next two years if the Option is extended will be retained by County and
neither party shall have any further rights or claims against the other.
7. CLOSING DATE. The transaction forming the subject of this
Agreement shall be closed by NME and County within forty-five (45) days after
NME's exercise of the Option or at such later date as is mutually agreed between
the parties. At Closing, the funds escrowed pursuant to the exercise of the
Option by NME and all interest thereon from the time of deposit in escrow shall
be paid to County provided all of the conditions to Closing,have been complied
with by County. Prior to making any payment to County the Escrow Agent shall
give NME and County fifteen (15) days written notice of its intent to disburse
interest, income or principal to County stating the amount and date of the
proposed disbursement. If NME should deem that County is in breach of this
Agreement, NME shall have the right to seek an injunction to prevent the Escrow
Agent from making payment to County. The Escrow Agent shall be
I3ank ofAmerica , and the costs of escrow shall be evenly
divided between the parties.
8. COUNTY'S REPRESENTATIONS AND WARRANTIES. At all times,
during the Option Period, County shall:
a. Fully cooperate with NME in NME's efforts to obtain the
Certificate of Need contemplated herein for the San Ramon
Hospital and make all . reasonable effort• to support the
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unencumbered granting of NME's application for governmental
approvals required for the San Ramon Facility, provided, that
the County shall be under no obligation to institute or
participate in litigation or to make any payment or satisfy
other conditions to that end.
b. Hold the 86 beds referred to above pending the OSHPD's or
Licensing Agency's (whichever is appropriate) agreement to
transfer them to NME and County will refrain from contracting
with or in anyway assisting, directly or indirectly, any person,
firm, corporation or other entity for the transfer of such beds
until after the Option has been exercised or the Option Period
has expired.
C. Until 86 of the County's Hospital beds are closed and
transferred to NME pursuant to the terms of the Certificate of
Need or other appropriate order or judgement contemplated by
this Agreement, County shall continue to operate its County
Hospital in accordance with all pertinent laws and regulations,
or otherwise maintain all required licenses and certification by
all accrediting agencies, whether governmental or otherwise,
necessary to effectuate the delicensure and transfer of the
beds.
d. County shall not be liable to NME (other than as set forth below
in this paragraph), for any damages which occur if the County is
prevented from carrying out its undertakings hereunder,
provided, (i) County shall have taken all reasonable actions to
prevent the circumstances beyond its control from preventing it
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from carrying out its undertakings hereunder and (ii) that
County shall have timely notified NME of the circumstances
beyond its control to allow NME to protect its rights under this
Agreement.
If for any reason due to circumstances beyond its control,
County is prevented from carrying out its undertakings
hereunder, as liquidated damages, County shall return all
monies deposited with County by NME under this Agreement.
9. CONDITIONS TO CLOSING. The obligations of NME to exercise the
Option Agreement are subject to the satisfaction at or prior to the Closing Date
of each of the following conditions:
a. County's Representations and Warranties contained in this
r. Agreement shall continue to the Closing.
b. San Ramon Hospital's Certificate of Need together with all
other necessary government approvals shall have been issued in
final, unappealable form, or in final form from which no appeal
is taken and the time for appeal has run.
C. County shall have requested the State Division of Licensing and
Certification to delicense 86 beds from its then current
licensed bed capacity at County's Hospital in Martinez,
California and NME's San Ramon Hospital shall have received
from OSHPD notification that the condition, regarding the
delicensure of beds by County shall have been satisfied.
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d. County Hospital's request for delicensure will correspond with
the categories of beds that are required to match the license
compliment contained in the San Ramon Hospital Certificate of
Need's Conditions.
10. MISCELLANEOUS.
A. Except to the extent that this Option and the right to use
County Hospital's license to operate such 86 hospital beds constitute property,
County shall retain title to all of its property, both real and personnal, and shall
retain its right to all revenue derived from its operations as well as the duty to
bear the expenses thereof. Subject to the provisions of this Agreement, County
shall retain its right to sell, assign, or lease the Hospital or otherwise contract in
relation thereto, provided, any such Purchaser agrees in writing to be bound by
the terms and conditions of this Agreement. Either party may file a Notice of
Memorandum of the contents of this Agreement with the Contra Costa County
Clerk or any other appropriate governmental agency.
B. It is agreed and understood that any and all of the actions
contemplated herein for the performance by NME may be performed instead by
an entity which is controlled by it and such related entities obligations shall be
guaranteed in all respects by NME.
C. This Agreement contains the entire agreement between the
parties, and supersedes any and all other agreements and communications, either
oral or in writing, between the parties hereto with respect to the subject matter
of this Agreement. This Agreement may be modified or amended only by a
writing signed by the party to be charged.
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D. CHOICE OF LAW AND JURISDICTION.
1. This Contract is made in Contra Costa County and shall
be governed and construed in accordance with the laws of the State of
California.
2. Any action relating to this Contract shall be instituted
and prosecuted in the courts of Contra Costa County, State of California.
E. ASSIGNMENT, ETC. This Contract binds the heirs, successors,
assigns and representatives of NME. Except as provided in Part 1013, above,
NME shall not assign this Contract, in whole or in part, without the prior written
consent of the County.
F. POSSESSORY INTEREST. If this Contract results in NME
having possession of, claim to or right to the possession of land or improvements,
but does not vest ownership of the land or improvements in the same person, or
if this Contract results in the placement of taxable improvements on tax exempt
land (Revenue and Taxation Code §107), such interest or improvements may
represent a possessory interest subject to property tax, and NME may be subject
to the payment of property taxes levied on such interest. NME agrees that this
provision complies with the notice requirements of Revenue and Taxation Code
107.6, and waives all rights to further notice, or to damages as defined in said
S 107.6 under that or any comparable statute.
11. NOTICES. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been given if delivered
or mailed certified mail, return receipt requested, to the parties at the following
addresses.
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OOO.155
NME: National Medical Enterprises, Inc.
11620 Wilshire Boulevard
Los Angeles, California 90025
Attention: Office of the General Counsel
County: Contra Costa County
County Administration Building
651 Pine Street
Martinez, California 94553
Attention: County Administrator
IN WITNESS WHEREOF, the parties have duly executed this Agreement on
the date first above written.
NATIONAL MEDICAL ENTERPRISES, INC.
ATTEST:
By:
CONTRA COSTA COUNTY
ATTEST:
By:
CONTRA COSTA COUNTY HOSPITAL
ATTEST:
By:
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NME: National Medical Enterprises, Inc.
11620 Wilshire Boulevard
Los Angeles, California 90025
Attention: Office of the General Counsel
County: Contra Costa County
County Administration Building
651 Pine Street
Martinez, California 94553
Attention: County Administrator
IN WITNESS WHEREOF, the parties have duly executed this Agreement on
the date first above written.
NATIONAL MEDICAL ENTERPRISES, INC.
ATTEST:
By: -
Ass:s bn��.�w.y n�s�d•+�+
CONTRA COSTA COUNTY
ATTEST: ate, /ROLSSON
By:
CONTRA COSTA COUNTY HOSPITAL
ATTEST:
By:
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