HomeMy WebLinkAbout1996-084 Agrmt - ACHS DEFINITIVE AGREEMENT
by and between
THE CITY OF ASHLAND
and
ASHLAND COMMUNITY HEALTHCARE SERVICES
TABLE OF CONTENTS
Page
ARTICLE
1.1
1.2
1.3
1.4
1.5
ARTICLE 2
2.1
2.2
2.3
ARTICLE 3
3.1
RECITALS ............................................ 1
City Organization and Location .............................. 1
City's Present Healthcare Operation ........................... 1
City's Study and Determination of the Need for Restructuring ......... 1
Creation of ACHS Corporation ............................... 1
Lease of Real Property and Transfer of Operating Assets and Liabilities . . . 2
TRANSFER OF ASSETS AND LIABILITIES .................... 2
Transfer .............................................. 2
2.1.1 Cash, Bank Accounts and Investments ..................... 2
2.1.2 Patient Accounts Receivable ............................ 2
2.1.3 Inventories ....................................... 2
2.1.4 Prepaid Expenses and Miscellaneous Assets ................. 2
2.1.5 Books and Records .................................. 3
2.1.6 Leases, Contracts and Agreements ........................ 3
2.1.7 Moveable Equipment and Furnishings ..................... 3
2.1.8 Liabilities and Obligations ............................. 3
Exclusions from Transfer ................................... 4
2.2.1 Real Property and Improvements ........................ 4
2.2.2 Excluded Liabilities ................................. 4
Use of Assets ........................................... 4
LEASE OF REAL PROPERTY AND IMPROVEMENTS ............ 4
Facilities Lease ......................................... 4
3.1.1 Use and Occupancy ................................. 4
3.1.2 Lease Payments .................................... 4
3.1.3 Maintenance and Repair .............................. 5
3.1.4 Insurance ........................................ 5
3.1.5 Term ........................................... 5
3.1.6 Termination and Recovery of Assets ...................... 5
3.1.6.1
3.1.6.2
3.1.6.3
3.1.6.4
3.1.6.5
Material Breach .......................... 5
Insolvency .............................. 5
Capital Depletion ......................... 5
Debt Service Coverage ..................... 5
License ................................ 6
ARTICLE
4.1
4.2
4.3
4.4
4.5
4.6
ARTICLE
5.1
5.2
5.3
4
ARTICLE 6
6.1
6.2
6.3
6.4
6.5
6.6
6.7
6.8
6.9
3.1.7
3.1.8
3.1.6.6 Accreditation ............................ 6
Provision of Financial Information ....................... 6
Dissolution of ACHS ................................ 6
6.10
6.11
6.12
6.13
6.15
6.16
6.17
EMPLOYEES OF FORMER ACH ............................ 6
Identification of Employees and Personal Service Contractors
of Former ACH ......................................... 6
Present Benefits ......................................... 6
Collective Bargaining Agreements ............................. 6
Offer of Employment by ACHS and Related Processes .............. 7
Termination by City of Employees of Former ACH ................. 7
Employees on Leave or Special Status .......................... 8
RELATED ORGANIZATIONS .............................. 8
Foundation ............................................ 8
Auxiliary .............................................. 8
Medical Staff ........................................... 8
OTHER PROVISIONS .................................... 8
Execution of Signature Cards ................................ 8
Notification Regarding Assignment of Accounts Receivable ........... 9
Notification of Third Parties Regarding Assignment of
Contracts and Leases ...................................... 9
Licenses and Provider Numbers .............................. 9
Extended Reporting (i.e., "Tail") Insurance ....................... 9
Indemnification of the Parties ............................... 10
6.6.1 Indemnification of City .............................. 10
6.6.2 Indemnification of ACHS ............................ 10
6.6.3 Related Notices ................................... 10
Disclaimer of Warranties .................................. 11
Costs of the Transaction .................................. 11
Notices .............................................. 11
6.9.1 If to City ........................................ 11
6.9.2 If to ACHS ...................................... 11
Governing Law ........................................ 12
Captions ............................................. 12
Waiver .............................................. 12
Parties in Interest ....................................... 12
Further Assurances ...................................... 12
Warranties of Authority ................................... 12
Entire Agreement ....................................... 12
55_
DEFINITIVE AGREEMENT
by and between
THE CITY OF ASHLAND
and
ASHLAND COMMUNITY HEALTHCARE SERVICES
THIS DEFINITIVE AGREEMENT (the "Agreement") is entered into on the /J~'~day of
~,~7"~.t'~ ~.~ , 1996 by and between the City of Ashland ("City") and Ashland Community
Healthcare Services ("ACHS") to be effective on t*~,_/~,, / , 1996 (the "Effective
Date"). City and ACHS are at times referred to herein as th6 'Parties".
ARTICLE
RECITALS
1.1 City Organization and Location. City is an Oregon municipality located in Jackson
County, Oregon.
1.2 Cit¥'s Present Healthcare Operation. The City owns an acute care general hospital and
related healthcare services and facilities, which it operates through an unincorporated operating
division known as Ashland Community Hospital ("Former ACH") as authorized pursuant to
Article XVII of the City of Ashland Charter. Former ACH is governed by a City-appointed
Board of Trustees and is operated for the benefit of City residents.
1.3 Citv's Study and Determination of the Need for Restructuring. Following an extended
process of study, focusing on the increasing challenges and requirements of operating as a
healthcare provider, the City concluded that it will better serve the long-term interests of its
residents by having its healthcare services and facilities operated for their benefit by a separate
not-for-profit public benefit corporation of which the City is the sole member and in which
governance responsibility and authority is vested in a board of directors.
1.4 Creation of ACHS Corporation. Thereafter, the City created, in accordance with Oregon
law, a not-for-profit public benefit membership corporation known as Ashland Community
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June 5, 1996
Healthcare Services, including approving its articles of incorporation and establishing itself as
sole member. As the member of ACHS, the City appointed, in accordance with the criteria set
forth in the articles of incorporation, a Board of Directors comprised of area residents and
submitted to the Internal Revenue Service a request for exemption from federal income taxation
under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the "Code").
1.5 Lease of Real Property and Transfer of Operating Assets and Liabilities. The City now
desires to transfer to ACHS certain assets, liabilities and obligations of Former ACH and, in
addition, to lease to ACHS the land, land improvements, buildings and fixed equipment
previously used in the operations of Former ACH, and thereby arrange for ACHS to assume full
ownership and operating responsibility for the healthcare services, programs and facilities
previously operated by the City in accordance with the terms and conditions of this Agreement.
ACHS is willing to accept such transfer, lease such facilities, and assume such ownership and
operating responsibility in accordance with the terms and conditions set forth below herein.
THEREFORE, in consideration of the above recited facts and the mutual covenants and
agreements set forth below, the Parties hereto agree as follows:
ARTICLE 2
TRANSFER OF ASSETS AND LIABILITIES
2.1 Transfer. Subject to all the provisions of this Agreement, on the Effective Date the City
shall assign, transfer, convey and deliver to ACHS, and ACHS shall accept, all of City's right,
title and interest in and to the assets and liabilities of Former ACH described below in this
Section 2.1.
2.1.1 Cash, Bank Accounts and Investments. All cash and cash-equivalents, deposit and
checking accounts, deposits, short-term and long-term investments, reserves (including workers'
compensation, insurance, debt service or premium rebate reserves or refunds), and contents of
safety deposit boxes.
2.1.2 Patient Accounts Receivable. All sums billed but uncollected for services prior
to the Effective Date and all right of payment for services delivered prior to the Effective Date
but not yet billed.
2.1.3 Inventories. All inventories of medical, clinical, pharmaceutical, food, office and
other disposable and consumable supplies.
2.1.4 Prepaid Expenses and Miscellaneous Assets. Any prepaid expenses, rental and
other contract deposits and prepayments, and any and all other assets except Excluded Assets as
defined in Section 2.2.1.
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June 5, 1996
2.1.5 Books and Records. All patient lists; medical records, files and charts; financial
records; computer files and diskettes containing any information regarding any of the assets
and/or business affairs; permits, licenses, provider numbers, certificates and authorizations from
any governmental authority; any trade names, telephone listings and rights to use of telephone
numbers; and other intangible assets.
2.1.6 Leases, Contracts and Agreements. Any contracts in effect as of the Effective Date
between Former ACH and other persons or entities (collectively, "Third Parties"), written or oral,
except for Excluded Liabilities as defined in Section 2.2.2, including but not limited to: leases
of equipment, furnishings and other personal property; contracts with providers of goods and
services; maintenance contracts; contracts with insurers, suppliers, personnel, managed care
programs; software license agreements; employee benefit plans; accounts receivable; and accounts
payable. If any Third Party refuses to consent to assignment of its contract with Former ACH
to ACHS, or attempts to impose some condition which has not then been met, ACHS shall
nonetheless, as between the parties to this Agreement, assume responsibility for performance of
the contract and the City shall cooperate in facilitating such performance as needed as a conduit.
2.1.7 Moveable Equipment and Furnishings. Any equipment, furnishings, fixtures, and
machinery, except fixed equipment.
2.1.8 Liabilities and Obligations. Any obligations, debts, claims, demands, expenses,
of any character, regardless of by whom or when asserted or the legal basis on which asserted,
based on acts or circumstances which occurred before the Effective Date, with the sole exception
of those claims, demands, and expenses which relate to Excluded Liabilities as defined in Section
2.2.2 (collectively, the "Assumed Liabilities"). It is the intent of the parties that, except for
Excluded Liabilities, the assumption of Assumed Liabilities by ACHS be interpreted broadly and
liberally so as to include and transfer to ACHS primary responsibility for all possible costs,
expenses and liabilities of City, its officials, employees, agents and/or representatives, relating to
Former ACH, to the extent they are not actually covered and paid by insurance coverage on
behalf of the City and/or subject to the Oregon Tort Claims Act. To that end, and except for
Excluded Liabilities, total responsibility shall be transferred to ACHS for any legal obligation or
responsibility of whatever character or cause related to the ownership and operation of Former
ACH prior to the Effective Date to which the Oregon Tort Claims Act or insurance in force with
respect to the City, its officials, employees, agents and/or representatives, does not apply, whether
known or unknown, discovered or undiscovered, matured or inchoate, contingent or not, asserted
or unasserted, accrued or not, in contract, tort or other legal basis, and regardless of the nature
of damages or other remedy sought or the category of claimant.
City also hereby assigns and transfers to ACHS, and authorizes ACHS to assert against third
parties (not including City, its officials and/or employees) any right of offset, credit, or defense
which City may have against such third parties which is in any way based on or related to City's
ownership or operation of Former ACH. City further hereby assigns and transfers to ACHS and
authorizes ACHS to assert against any third party (not including City, its officials and/or
WGISEA 237837.05 Page 3
June 5, 1996
employees) any right including the right of subrogation which City may have against third parties
responsible in whole or in part for any claim, demand, damage or expense for which ACHS has
made payment as part of its obligations concerning Assumed Liabilities.
2.2 Exclusions from Transfer. Assets and liabilities related to the operation of Former ACH
which are excluded from the transfer of assets and liabilities to ACHS include the following, all
of which shall be retained by the City:
2.2.1 Real Property and Improvements. All real property and improvements owned by
the City as of the Effective Date which prior to the Effective Date were used or available for use
in the operation of Former ACH, including land, land improvements, buildings and fixed
equipment, all as further described on Exhibit 2.2.1.
2.2.2 Excluded Liabilities. The balance outstanding as of the Effective Date of any
long-term debt incurred to acquire, construct and/or renovate the real property and improvements
described in Section 2.2.1, together with contracts, liens and other obligations related to such real
property and improvements.
2.3 Use of Assets. ACHS hereby agrees that from and after the Effective Date, it shall use
the assets transferred to it pursuant to this Agreement in a manner consistent with the purposes
set forth in its articles of incorporation as approved by the City from time to time to provide
healthcare and related services, programs and facilities for the benefit of residents and visitors
in Ashland and the surrounding service area.
ARTICLE 3
LEASE OF REAL PROPERTY AND IMPROVEMENTS
3.1 Facilities Lease. City hereby agrees to enter into a long-term lease (the "Facilities Lease")
with ACHS effective as of the Effective Date pursuant to which it shall lease to ACHS all of the
real property and improvements described in Section 2.2.1 (the "Leased Premises"). Terms and
conditions of the Facilities Lease shall not be inconsistent with the following provisions:
3.1.1 Use and Occupancy. ACHS shall have the right to occupy and use the Leased
Premises for purposes consistent with its corporate articles.
3.1.2 Lease Payments. ACHS shall be obligated to make lease payments to the City in
an amount sufficient to meet as due any and all principal and interest payments on the Excluded
Liabilities described in Section 2.2.2 as the same become due and payable and to defray the out-
of-pocket costs incurred by the City which but for its roles as Member of ACHS and Lessor
under the Facilities Lease could have been avoided.
3.1.3 Maintenance and Repair. ACHS shall be responsible to use the Leased Premises
with due care and shall be obligated to maintain them in good order and repair, making such
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June 5, 1996
repairs, restorations, replacements and additions as may be necessary or desirable during the term
of the Facilities Lease, including those caused by ordinary wear and tear and those which become
structurally necessary or desirable; provided, however, that the City will not unreasonably
withhold its agreement to acquire and finance such structural repairs, restorations, replacements
and additions if requested to do so by ACHS so long as ACHS is willing and able to adjust its
lease payments under the Facilities Lease by an amount sufficient to meet the additional principal
and interest payments on debt incurred in connection therewith.
3.1.4 Insurance. ACHS shall maintain adequate comprehensive public liability and
replacement value property damage insurance on the Leased Premises and the activities being
carried on in or around the Leased Premises and shall agree to save, indemnify, defend and hold
the City harmless with respect to any loss or damage incurred with respect to the Leased
Premises.
3.1.5 Term. Subject to the continued existence of ACHS, the initial term of the
Facilities Lease shall be ten (10) years. In addition, ACHS shall have an option to extend the
Facilities Lease for four (4) additional terms of five (5) years each, up to an aggregate of thirty
(30) years, provided it is not in default under the Facilities Lease at the time of such extension
and further provided that this provision shall not permit the aggregate term of the Facilities Lease
to be extended beyond the maximum number of years permitted by law.
3.1.6 Termination and Recovery of Assets. The City shall have the right but not the
obligation to terminate the Facilities Lease and assume responsibility for operation of the Leased
Premises if one or more of the following events occurs:
3.1.6.1 Material Breach. ACHS materially breaches the Facilities Lease or its lease
payment obligations and fails to cure such breach within the specified timeframe;
3.1.6.2 Insolvency. ACHS becomes insolvent; the term "insolvent" as used herein
is defined to mean: a condition in which for a period of thirty (30) or more days, ACHS'
cash and other liquid assets are insufficient to meet its debts or discharge its liabilities
when due.
3.1.6.3 Capital Depletion. ACHS's working capital ratio, as defined in accordance
with generally accepted accounting principles, at the end of any two consecutive calendar
quarters is less than 2 to 1;
3.1.6.4 Debt Service Coverage. ACHS's debt service coverage (including lease
payments under the Facilities Lease) for any fiscal year is less than 1.25 to 1; "debt
service coverage" as used herein is determined by dividing "a" by "b" where "a" is the
sum of (1) the excess of revenues and gains over expenses and losses, (2) depreciation
expense, and (3) interest expense, and "b" is the sum of (1) principal payments due in the
current period and (2) interest expense.
WGISEA 237837.05 Page 5
June 5, 1996
3.1.6.5 License. ACHS fails to maintain its state hospital license;
3.1.6.6 Accreditation. ACHS fails to maintain its accreditation with the Joint
Commission on Accreditation of Healthcare Organizations or an acceptable equivalent for
acute care general hospitals in the State of Oregon, or fails to take reasonable corrective
action with respect to one or more significant patient care deficiencies noted in an
accreditation survey.
3.1.7 Provision of Financial Information. ACHS shall be required to timely furnish the
City with audited annual financial statements, periodic unaudited financial information, and other
information concerning ACHS's operations, to the extent reasonably requested from time to time
by the City.
3.1.8 Dissolution of ACHS. If an event occurs which gives the City the right to
terminate the Facilities Lease, the City shall also be entitled as sole member of ACHS but not
obligated to dissolve ACHS and assume operating responsibility for ACHS's healthcare services
and activities.
ARTICLE 4
EMPLOYEES OF FORMER ACH
4.1 Identification of Employees and Personal Service Contractors of Former ACH. City
represents that attached hereto as Exhibit 4.1 is a current, correct an91 complete list of all
employees and personal service contractors of Former ACH as of ~'//~' , 1996, and for
employees of Former ACH, their job titles, full or part-time status, rate" of pay (including any
bonus eligibility and its terms), accrued sick leave, vacation and other leave time, and length of
service recognized for pension, seniority and other personnel purposes at Former ACH as of the
date of that exhibit.
4.2 Present Benefits. As of the Effective Date, to the extent that they qualify under the terms
of the applicable plan, the employees of Former ACH participate in the City employee benefit
plans listed on Exhibit 4.2A, copies of which plans have been provided to ACHS. A description
of all employee benefits in force as of the Effective Date is set forth in Exhibit 4.2B. The
employees of Former ACH who are listed on Exhibit 4.2C are at the date of that exhibit on
maternity, family, disability or other leave, as indicated on that exhibit.
4.3 Collective Bargaining Agreements. City represents that it is not a party to or otherwise
subject to any collective bargaining agreements with respect to any of the employees of Former
ACH and that there is no pending or threatened labor dispute, strike, work stoppage, or election
concerning bargaining representation concerning such employees.
4.4 Offer of Employment by ACHS and Related Processes. As of the Effective Date, ACHS
shall offer employment in positions comparable to their last employment or personal services
WGISEA 237837.05 Page
June 5, 1996
contract with Former ACH to all employees and personal services contractors of Former ACH,
with an initial total compensation package and total benefits package comparable in value to that
in effect immediately prior to the Effective Date, including but not limited to retirement benefits.
ACHS shall not be required to offer or provide identical benefits to employees of Former ACH.
City shall assign and ACHS shall assume sponsorship of those Former ACH Employee Benefit
Plans listed on Exhibit 4.2B; City and ACHS shall execute such other agreements and take any
and all other actions necessary or appropriate to effectuate the assignment and assumption of such
plans. City hereby agrees to terminate as of the Effective Date those Former ACH Employee
Benefit Plans listed on Exhibit 4.2D.
ACHS shall recognize Former ACH-recognized continuous length of service for employees of
Former ACH as if earned at ACHS for purposes of eligibility and accrual of vacation, sick leave,
bereavement leave, and other ACHS employee benefits. If, for any reason, ACHS does not
continue the participation of the employees of Former ACH in the PERS retirement plan, the
parties hereto agree to cooperate with respect to the termination (or freezing of the assets) of such
plan, and ACHS agrees that in such event it will use its best efforts to replace such coverage with
a similar retirement plan.
ACHS shall carry forward accumulated vacation and sick leave (as shown on Exhibit 4.2E, as
updated to the Effective Date) for all employees of Former ACH except as City has paid such
persons for such accruals pursuant to its legal obligations and notified ACHS in writing of the
extinguishment of the accrual in that manner, prior to or as of the Effective Date. Time carried
forward shall be limited to any maximum accumulation provisions in ACHS's employment
policies, and the future use, forfeiture, and other terms of the time carried forward shall be
subject to ACHS's current or then existing policies in all respects. ACHS shall notify City in
writing not less than 5 days before the Effective Date of any accumulated time which exceeds
its maximum accumulation policies, and City shall make any legally-required payment for time
which cannot be carried forward.
ACHS's future relationships with the employees of Former ACH will be subject to applicable
policies of ACHS and will not be based on their prior City employment or contract status. After
the Effective Date, ACHS shall be free to implement its own employee policies and programs,
provided that the specific requirements of this Agreement shall be honored in doing so. ACHS
shall be under no continuing commitment or obligation to continue the employment of any or all
of the Former ACH employees.
4.5 Termination by City of Employees of Former ACH. City shall take all steps and give all
notices required to terminate all employees of Former ACH. Such notices will be given in
compliance with any employment agreements then in effect and all applicable laws and
regulations, including giving notice of any lay off or "plant closure" required under federal or
state law by reason of such terminations. ACHS shall be responsible to give any required noticc
of layoff or "plant closure" under federal or state law by reason of any failure to timely offer and
implement employment for employees of Former ACH or any subsequent decision to terminate
or lay off some or all of them after the Effective Date.
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June 5, 1996
4.6 Employees on Leave or Special Status. At the time of this Agreement, City has certain
Former ACH employees on workers' compensation leave, special duty or other special status due
to asserted on-the-job injury or other cause, as more fully described in Exhibit 4.2F. ACHS
agrees to continue such special status or appropriate alternative arrangements and to reinstate such
workers when they are released to return to work in the same maimer as would have been
required of City by law had such persons continued in the employ of City following the Effective
Date.
ARTICLE 5
RELATED ORGANIZATIONS
5.1 Foundation. The City shall work with the directors and officers of the Ashland
Community Hospital Foundation (the "Foundation") to accomplish such changes in the
Foundation's corporate articles and bylaws as are necessary or desirable in order for the
Foundation to be structured as a support organization to ACHS. Further, the City will cooperate
to the fullest extent, including but not limited to communicating with donors and executing
appropriate documents, to maximize the availability to ACHS of pledges and donations received
by the Foundation prior to the Effective Date that were given by donors with the explicit or
implicit understanding that such amounts would be used for the benefit of Former ACH.
5.2 Auxiliary. The City shall work with the directors and officers of the Ashland Community
Hospital Auxiliary (the "Auxiliary") to accomplish such changes in the Auxiliary's organizational
documents as are necessary or desirable for the Auxiliary to be a related organization to ACHS.
5.3 Medical Staff. ACHS shall take all steps necessary to officially recognize ACHS's
relationship to the Ashland Community Hospital Medical Staff (the "Medical Staff''), including
ratification of Medical Staff bylaws, rules and regulations which shall have been modified in
ways that are reasonably acceptable to the Medical Staff and ACHS's Board.
ARTICLE 6
OTHER PROVISIONS
6.1 Execution of Signature Cards. On the Effective Date and thereafter as required, City and
ACHS shall execute any signature or access cards, asset transfer forms or instructions, or other
documents necessary to effectively remove City's name and authority from accounts transferred
to ACHS pursuant to Section 2.1.1 and to substitute ACHS's name therefor. ACHS shall have
the responsibility to determine any such documents required and to timely present them to the
City for execution.
6.2 Notification Regarding Assignment of Accounts Receivable. After the Effective Date, at
ACHS's request, City shall promptly sign appropriate notices of assignment of accounts
receivable to be given by ACHS to all payers and other relevant parties, and City shall otherwise
WGISEA 237837.05 Page 8
June 5, 1996
give reasonable assurances of the assignment to any other party as necessary to facilitate ACHS's
collection efforts. City shall promptly forward to ACHS any payments received after the
Effective Date on accounts assigned to ACHS pursuant to this Agreement.
6.3 Notification of Third Parties Regarding Assignment of Contracts and Leases. Prior to the
Effective Date, City shall notify each other person or entity which is a party to a contract or lease
assumed by ACHS pursuant to Section 2.1.8 whose consent to assignment is required, of City's
intent to transfer such contract or lease to ACHS as of the Effective Date. ACHS shall assist and
cooperate with City in providing any financial statement or other assurance reasonably necessary
to induce such other parties to accept the proposed assignment. If any such person or entity fails
to respond favorably, objects or attempts to impose some condition which has not then been met,
ACHS shall nevertheless, as between the parties to this Agreement, assume responsibility for
performance of such contract or lease and City shall cooperate in facilitating such performance
as needed as a conduit.
6.4 Licenses and Provider Numbers. ACHS shall take all actions necessary to obtain any
license or transfer of license required for its future operation of the assets transferred and leased
by the City pursuant to this Agreement, and arrange for transfer of Former ACH's existing
provider number(s), or issuance of any new provider agreement and number necessary for its
continued participation in federally or state funded healthcare programs, including but not limited
to Medicare and Medicaid. City shall assist and cooperate by signing any necessary documents
releasing the prior license or hospital provider number.
6.5 Extended Reporting (i.e, "Tail") Insurance. For a period of five years from the Effective
Date, ACHS shall (a) obtain an extended reporting ("tail") insurance extension for at least a five
year period for any coverage related to Former ACH or its operations which is being terminated
by the City; or (b) procure a new policy of insurance for ACHS operations which is endorsed for
coverage of prior unreported claims arising from the City's ownership and operation of Former
ACH prior to the Effective Date.
Any replacement insurance shall be designed to leave no gap based on the reporting date for
liabilities prior to the Effective Date and claims not reported within the five-year period following
the Effective Date.
City agrees to cooperate with ACHS to the fullest extent to see that its liability protection under
the Oregon Tort Claims Act is made fully applicable to any financial responsibility assumed by
ACHS with respect to such claims arising prior to the Effective Date.
In order to maximize the benefits of City-procured insurance, ACHS shall promptly report to City
any notice of claim or other information it derives or receives at any time following the Effective
Date indicating a potential specific claim based on acts, inaction, conditions or conduct of City
or any person or entity for which it is or might be legally responsible, for periods prior to the
Effective Date, and shall cooperate fully with City's insurer(s) in the investigation and defense
of all such claims.
WGISEA 237837.05 Page 9
June 5, 1996
6.6 Indemnification of the Parties.
6.6.1 Indemnification of City. ACHS hereby agrees to save, indemnify, defend and hold
City, its officials, employees, agents and representatives harmless from and against all claims,
losses, liabilities, damages, awards, judgments, assessments, costs and expenses of any kind or
nature, including reasonable attorneys' fees, arising out of or caused or incurred by virtue of or
attributable to ACHS's failure to satisfy or perform its obligations and duties arising under this
Agreement, or ACHS's negligence, illegal or wrongful misconduct, or intentional acts or
omissions related to this Agreement. In addition, by entering into this transaction, ACHS
concurrently assumes and undertakes binding obligations to save, indemnify, defend and hold
City, its officials, employees, agents and/or representatives harmless from City obligations
assumed pursuant to Section 2.1.8 and to defend and indemnify City, its officials, employees,
agents and/or representatives from all expenses, claims, obligations and liabilities to the extent
provided in Section 2.1.8. Neither ACHS's assumption of liabilities and obligations nor its
agreement to defend and indemnify City, its officials, employees, agents and/or representatives
shall create any new or additional rights in any third party. ACHS's responsibilities with respect
to third parties shall be limited to assumption or indemnification of those third-party rights which
such persons and/or entities would have had at the time of their assertion if asserted against the
City, its officials, employees, agents and/or representatives in the absence of this transaction.
Notwithstanding anything to the contrary set forth herein, for purposes of this Agreement, ACHS
shall be under no obligation to City's officials, employees, agents and/or representatives unless
the City has a legal duty to indemnify, defend and hold such persons harmless by reason of any
acts or obligations existing as of the Effective Date or as provided for in this Agreement.
6.6.2 Indemnification of ACHS. To the extent permitted by the Oregon Constitution and
the City's Charter, the City shall, within the limits of the Oregon Tort Claims Act, indemnify
ACHS, its employees, agents and representatives, against any liability for damage to life or
property arising from the City's activity under this Agreement. The City shall not be required
to indemnify ACHS, its employees, agents and/or representatives for any such liability arising out
of the wrongful acts of ACHS or the employees, agents and/or representatives of ACHS.
6.6.3 Related Notices. Each party hereto shall promptly notify the other party in writing
of any claim, demand, obligation, liability, damage, recovery or deficiency for which it asserts
the other party has the primary responsibility to perform or pay or to defend and indemnify it
under any of the terms of this Agreement. Such notice shall include a brief description and
furnish reasonable details with regard to any such matter, and the notifying party shall thereupon
tender defense of such matter to the other party. The notifying party shall have the additional
right, if it so elects, to participate in the defense of any such matter through counsel of its own
selection but shall do so at its own expense unless separate counsel is legally or ethically required
to be offered by the other party. The notifying party shall fully cooperate with the indemnifying
party and its counsel and make available all books, records and documents in its possession and
all personnel who have information which the indemnifying party or its attorneys request.
WGISEA 237837.05 Page
June 5, 1996
6.7 Disclaimer of Warranties. The assets transferred by City to ACHS pursuant to Section
2.1 are being transferred and accepted in their condition as of the Effective Date, "AS IS", WITH
NO WARRANTIES, INCLUDING THE WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE, any and all of which warranties (both express and
implied) City disclaims. Notwithstanding the foregoing, City shall use its best efforts to secure
the transfer of any merchant's or manufacturer's warranty currently in effect with respect to any
of the assets transferred.
6.8 Costs of the Transaction. The expenses related to this transaction, including but not
limited to costs of transferring the assets and liabilities of former ACH and terminating the
Former ACH employees, which have been incurred (by City, Former ACH and/or ACHS) prior
to the Effective Date shall be borne by Former ACH and, to the extent the same remain unpaid
as of the Effective Date, shall be assumed by ACHS; expenses related to this transaction which
are incurred later than thirty (30) days after the Effective Date shall be borne by the party
incurring such expense.
6.9 Notices. All documents, notices, requests, demands and other communications that are
required or permitted to be delivered or given under this Agreement shall be in writing and shall
be deemed to have been duly delivered or given upon: (a) the date of delivery thereof if
delivered in person, (b) one business day following the date on which such notice is sent by
facsimile or telecopy, or (c) three business days following the date on which such notice is sent
by registered or certified mail, return receipt requested, postage prepaid, properly to the following
addresses and/or telecopy/telefax numbers:
6.9.1 If to City:
City Administrator
City of Ashland
20 East Main
Ashland, OR 97520
6.9.2 If to ACHS:
President
P.O. Box 98
280 Maple Street
Ashland, OR 97520
6.10 Governing Law. This Agreement shall be governed by, construed and enforced in
accordance with the laws of the State of Oregon.
6.11 Captions. The caption headings in this Agreement are for convenience of reference only
and are not intended to be, and should not be construed as, a part of this Agreement.
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June 5, 1996
6.12 Waiver. The provisions of this Agreement may be waived only in writing signed by the
Party or Parties emitled to the benefit thereof. A waiver of any breach or failure to enforce any
provision of this Agreement shall not in any way affect, limit or waive a Party's rights hereunder
at any time to enforce strict compliance thereafter with every provision of this Agreement.
6.13 Parties in Interest. This Agreement shall be binding upon and shall inure solely to the
benefit of the Parties hereto and their respective successors, and nothing in this Agreement,
express or implied, is intended to confer upon any other person any rights or remedies of any
nature whatsoever under or by reason of this Agreement. This Agreement shall not be assignable
other than by operation of law by either Party hereto without the prior written consent of the
other.
6.14 Mutual Cooperation. The ability of each Party to perform under this Agreement depends
at least in part upon the cooperation of the other Party. Accordingly, each Party agrees to
cooperate with the other in good faith so that the purposes of this Agreement may be fulfilled.
6.15 Further Assurances. Each Party hereto hereby agrees that upon the written request of the
other Party hereto it will do all such acts and execute all such further documents as may
reasonably necessary in order to better evidence and/or perfect any of the provisions hereof or
any of the rights, powers, discretions, duties and obligations intended to be created hereby and/or
in order to effectuate any provision hereof or of any such further document.
6.16 Warranties of Authority. Each person signing this Agreement represents and warrants that
he or she is duly authorized to sign as the free and voluntary act and deed of the organization he
or she represents.
6.17 Entire Agreement. This Agreement constitutes the entire agreement and understanding
of the Parties with respect to the transactions contemplated hereby, superseding any and all prior
agreements and understandings relating to the subject matter hereof, and may not be modified,
amended or terminated except in writing signed by both of the Parties.
WGISEA 237837.05 Page 12
June 5, 1996
IN WITNESS WHEREOF, each of the parties hereto has duly executed this Agreement as of the
date first above written.
CITY OF ASHLAND
ASHLAND COMMUNITY HEALTHCARE SERVICES
By
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June 5, 1996
EXHIBIT 2.2.1
REAL PROPERTY AND IMPROVEMENTS
SEE ATTACHED EXHIBITS A, B, & C
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June 5, 1996
EXHIBIT A
LEGAL DESCRIPTION
REAL PROPERTY OF ASHLAND COMMUNITY HEALTHCARE SERVICES
Property:
Address:
Tax Lot:
Document:
Description:
ASHLAND COMMUNITY HOSPITAL
280 Maple, Ashland, OR 97520
39-1E-05DB, Lot 2100
Warranty Deed filed in Jackson County Courthouse (Vol. 487, Pg. 504)
Lots 1,2, and 3 of the Wimer Subdivision to the City of Ashland, Jackson
County, Oregon.
Property:
Address:
Tax Lots:
Document:
Description:
JACKSON COUNTY PHYSICAL THERAPY
559 Scenic Drive, Ashland, OR 97520
39-1E-05DB, Lot 2400
Warranty Deed filed in Jackson County Courthouse (95-14481)
Lot Five (5) of the Wimer Subdivision to the City of Ashland, Jackson
County, Oregon, according to the official plot thereof, now of record.
EXCEPTING THEREFROM that portion of said Lot 5 lying West of a
line which is 191.0 feet North 89 53' West of and which line bears North 0
31' West parallel with, the west line of Scenic Drive in said City, as
conveyed to the City of Ashland, by deed recorded in Volume 488 page 21
of the Deed Records of Jackson County, Oregon.
(See map attached)
E~HIBIT A
Page 2
ISOZ
SEE
DETAIL .MAP 2
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I ~-~'~ 15.,~ , ~.~.
EXHIBIT B
DESCRIPTION OF THE FACILITY
ASHLAND COMMUNITY HOSPITAL
Ashland Community Hospital is a multilevel 60,000 sq. ft. facility built in 1961.
Several additions have been made in the interim.
General Construction:
· Type I building with wood framing
· Wood/stucco combination siding
· Concrete basement walls
· Flat, single ply roof with metal mansards
· Metal Windows .. both single and double pane
· Fire protection and fire sprinklers throughout
Floor Plan:
· Three wings extending from a central hub
Adjacent Building:
· One cinder-block outbuilding, consisting of generator room, carpentry ship, storage
area, and medical gas supplies (3200 sq. ft.).
Value:
On June. 30, !996, Ashland ,Community Hospital has a Net Book Value of
$3,200,000:00. This approximation is made up of the following as per the Marshall
& Stevens Asset Report Document:
NOTE:
Land 34,000
Land Improvements 127,000
Buildings 1,996,000
Ffxed Equipment 1,097,000
Details supporting these totals are on file in the Accounting Office of
Ashland Community Hospital.
EXHIBIT C
Description of Non-Hospital Improvements
Property Type:
Office Building
Location:
559 Scenic Drive, Ashland, Oregon
Improvement Description:
Existing wood frame single story
office building with a total gross
building area of approximately
2,248 square feet (including
basement storage). There is one
(1) wood frame single story
detached building of approximately
412 square feet adjacent to the
main building.
Site size:
21,774 square feet or .50 acres.
Zoning:
Value:
Note:
R-2, Low Density Multiple-Family
Residential/HC, Health Care
Services Zone, City of Ashland.
On June 30, 1996 the above
described property has a Book Value
of $219,000.00 as per the Marshall
& Stevens Asset Document.
Details supporting this total are
on file in the Accounting Office of
Ashland Community Hospital.
EXHIBIT 4.1
EMPLOYEES AND SERVICE CONTRACTORS
INFORMATION ON FILE AT ASHLAND COMMUNITY HOSPITAL
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June 5, 1996
EXHIBIT 4.2A
CITY EMPLOYEE BENEFIT PLANS
IN WHICH FORMER ACH EMPLOYEES PARTICIPATE
INFORMATION ON FILE AT ASHLAND COMMUNITY HOSPITAL
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June 5, 1996
EXHIBIT 4.2B
EMPLOYEE BENEFITS
IN FORCE ON THE EFFECTIVE DATE
INFORMATION ON FILE AT ASHLAND COMMUNITY HOSPITAL
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June 5, 1996
EXHIBIT 4.2C
FORMER ACH EMPLOYt~ES
PRESENTLY ON LEAVE
INFORMATION ON FILE AT ASHLAND COMMUNITY HOSPITAL
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Page
EXHIBIT 4.2D
FORMER ACH EMPLOYEE BENEFIT PLANS
WHICH WILL BE TERMINATED BY CITY
INFORMATION ON FILE AT ASHLAND COMMUNITY HOSPITAL
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June 5, 1996
EXHIBIT 4.2E
FORMER ACH EMPLOYI2ES
ACCUMULATED VACATION AND SICK LEAVE
INFORMATION ON FILE AT ASHLAND COMMUNITY HOSPITAL
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EXHIBIT 4.2F
FORMER ACH EMPLOYI2ES
ON SPECIAL STATUS
INFORMATION ON FILE AT ASHLAND COMMUNITY HOSPITAL
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June 5, 1996