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HomeMy WebLinkAbout1983-405 ,--- , , '. RESOLUTION NO. 83-405 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO FINDING THAT AN APPLICATION FOR INDUSTRIAL DEVELOPMENT BOND FINANCING HAS BEEN SUBMITTED PURSUANT TO THE PROVISIONS OF ORDINANCE NO. 3815 OF THE CITY FOR A CERTAIN PROJECT, FINDING THAT SAID APPLICATION COMPLIES WITH THE PROVISIONS AND REQUIREMENTS OF SAID ORDINANCE NO. 3815; APPROVING SAID APPLICATION AND THE PROJECT TO WHICH IT REFERS; DIRECTING THE PREPARATION OF A PROJECT AGREEMENT, A RESOLUTION OF ISSUANCE AND SUCH OTHER LEGAL DOCUMENTS AS MAY BE NECESSARY TO CARRY OUT SAID PROJECT AND PROVIDE FOR THE ISSUANCE OF INDUSTRIAL DEVELOPMENT REVENUE BONDS THEREFOR; AND MAKING CERTAIN OTHER FINDINGS AND DETERMINATIONS IN CONNECTION THEREWITH. (BAI/MEDlCAL EQUITIES OF CALIFORNIA, INC.) WHEREAS, the City of San Bernardino ("City" herein) is a "home rule city" duly organized and existing under and pursuant to a Charter adopted under the provisions of the Constitution of the State of California; and WHEREAS, pursuant to its home rule powers, the City duly and regularly enacted Ordinance No. 3815 ("Ordinance" herein) to finance various types of projects, as defined in the Ordinance, and to issue its special revenue bonds for the purpose of paying the cost of financing such projects, and has amended the same from time to time; and WHEREAS, said Ordinance No. 3815, as amended, is intended to finance the development of industry and commerce and to thereby broaden the employment opportunities for residents of the City and its tax and revenue base; and WHEREAS, there has been presented to this Mayor and Common Council an Application by BAI/Medical Equitiesof California, Inc. , requesting the issuance of industrial development bonds in the principal amount of, not to exceed, $.,3,000,000 for the purpose of financing, on behalf of the Applicant, -1- , , ' a certain Project to wit: To finance the construction of a 40,000 sq. ft. Medical Office Building to be built on the St Bernardine Hospital Campus located on the eastern half of the block bounded by Highland Avenue on the north; 21st Street on the south; Crestview Avenue on the east; and Waterman Avenue on the west, including without limitation, equipment and off-street parking for motor vehicles and all off-site and on-site improvements necessary therefor and appurtenances and appurtenant work.(ltThe Projectlt) NOW, THEREFORE, JT JS HEREBY RESOLVED, DETERMINED AND ORDERED BY THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS: SECTION 1. That the recitals set forth hereinabove are true and correct in all respects. SECTION 2. The City of San Bernardino, California, is a municipal corporation duly created, established and authorized to transact business and exercise its powers, all under and pursuant to the Constitution and laws of the State of California, and the City Charter of the City, and the powers of the City include the power to issue bonds for any of its corporate purposes. SECTION 3. Pursuant to the Charter of the City and Ordinance No. 3815, as amended, of the City, the City is legally authorized to issue special revenue bonds for the permanent financing as described in the recitals hereof. SECTION 4. This body constitutes the governing body of the City and is legally authorized to provide for the issuance of such special revenue bonds by the CUy. SECTION 5. The Project referred to in the recitals hereof constitutes a project which may be financed by the issuance of such special revenue bonds by the City and located within the juriSdiction of the City. SECTION 6. The Application referred to in the recitals hereof complies with the provisions and requirements of said Ordinance No. 3815, as amended, and the Project involved in such application is hereby approved and the provisions of Subsection Cd) of Section 10 and Subsection Ca) of Section 11 of said Ordinance No. 3815 shall not apply. -2- SECTION 7. The City hereby declares its intention to exercise the authority referred to in Section 3 hereof by issuing bonds of the City in such amounts as will be adequate to implement the City financing of the Project. SECTION B. The bonds shall be payable from the revenues described in said Ordinance 3B15, as amended. SECTION 9. The bonds shall be and are special obligations of the City, and, subject to the right of the City to apply monies as provided in the applicable laws, are secured by such revenues as are specified in the proceedings for the issuance of such bonds and funds and accounts to be held by the trustee or fiscal agent, and are payable as to principal, redemption price, if any, and interest from the revenues of the City as therein described. The bonds are not a debt of the City, the State of California, or any of its political sub- divisions, and neither the City, the State, nor any of its political subdivisions is liable thereon, nor, in any event, shall the bonds be payable out of any funds or properties other than all or any part of the revenues, mortgage loans, and funds and accounts as in this Resolution set forth. The bonds do not constitute an indebtedness within the meaning of any constitutional or statutory debt limitation or restriction. Neither the persons serving as the Mayor and Common Council nor any persons executing the bonds shall be liable personally on the bonds or subject to any personal liability or accountability by reason of the issuance thereof. SECTION 10. The details of such bonds, including the establishing of the aggregate face amount of such obligations, shall be authorized by indenture, resolution or resolutions of the City at a meeting or meetings to be held for such purpose. The City Staff, Bond Counsel, Underwriters, the Applicants and the Agents and Representatives of same are hereby authorized and directed to prepare or cause to be prepared the necessary legal documents, including the Project Agreements, Resolutions of Issuance, and such other documents as may be necessary to effect said Project and the issuance of Industrial Development Revenue Bonds therefor, and to present same to said Mayor and Common Council. The Mayor of the -3- City is hereby authorized and directed to coordinate the efforts of all concerned relating to the issuance and sale of the bonds, and the City staff, consultants, legal counsel to the City and Bond Counsel are hereby directed to take such steps as shall be appropriate to implement such sale and delivery of the bonds, including working with persons who may acquire vested rights as the result of such actions. SECTION 11. This Resolution constitutes a proper exercise of the powers of this Mayor and Common Council and conforms to State and local legal require- ments relating to the issuance of such special revenue bonds and other bonds or debt obligations by a charter city in this State. SECTION 12. It is intended that this Resolution shall constitute such "official action" toward the issuance of the bonds within the meaning of the United States Treasury Regulations, the United States Tax Laws, and any legisla- tion now or hereafter pending in the Congress of the United States which may require official action in order for the bonds to be exempt from Federal income taxation. SECTION 13. At the closing of the financing, there shall be paid to the City the fee set forth in Resolution No. 81-108. as amended by Resolution No. 81-410, of the Mayor and Common Council. adopted September 24.1981. -4- 1-- I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and Conmon Council of the City of San Bernardino at an adjourned regular Meeting thereof, held on the 29th day of November. 1983. by the following vote, to wit: AYES: COUNCIL MEMBERS: Castaneda, Reilly, Hernandez, ~~arks, Ouiel NAYS: ABSENT: None Council nembers Frazier, Strickler ~P7?L?/~ CIl'Y CLERK The foregoing Resolution is hereby approved this Jo/7t day of November . 198.3. APPROVED AS TO FORM: ~~~/tlt~~_ CITY HORNEY -5- ,- PART I. GENERAL AND BUSINESS INFORMATION 1.1 Legal Name California, to-be-formed of Applicant: BAI/Medical Equities Inc.. as the General Partner for Californta Partnership. of a 1.2 Line of Business: General Partner for a partnership that will own and operate a medical office bUilding. 1.3 Mailing Address: c/o Medical Building Corporation 7777 Girard Avenue. Suite 202 La Jolla, CA 92037 1.4 Employee Tax 1.0. Number: BAI/Medical Equities of California. Inc. Tax 1.0. Number is 74-2230355. The partnership to be formed will apply for an Employee 1.0. Number at a later date. 1.5 Name and Title of Principal Contact: Walker L. Patton, Vice President of BAI/Medical Equities of California, Inc., the General Partner. 1.6 Telephone: 619/454-3196 1.7 Type of Business Organization: The General Partner is a Corporation; The Partnership will be a California Partnership. 1.7.1 Place of Organization: 7777 Girard Avenue, Suite 202 La Jolla. CA 92037 1.7.2 Date of Organization: March 29. 1982 1.7.3 The stockholders of BAI/Medical Equities of California, Inc. are: Vernon Barge II, Thomas F. Marshall, James W. WUbbena, Harrry Puckett, Jack Lewis, and Vernon Barge III. 1.8 Constitution of ownership of the company, including percentage of of holdings by general public. Company will be owned by physicians and other partners interested in the medical office bUilding. No portions will be owned by the general public. All units will be purchased through a private offering. 1.9 Names and locations of key officials, including: 1.9.1 Principal Officers of BAI/Medical Equities of California, Inc.. the General Partner are: Vernon Barge. President 4849 Greenville Suite 1400 Dallas. TX 75206 1 Thomas F. Marshall, Secretary Treas. 4849 Greenville Suite 1400 Dallas, TX 75206 -~d L. Hock, Vice President 4849 Greenville Suite 1400 Dallas, TX 75206 Walker L. Patton, Vice President 7777 Girard Ave. La Jolla, CA 92037 John J. Feehan, Jr., Vice President 7777 Girard Ave. Suite 202 La Jolla, CA 92037 1.9.3 Directors: The Directors are Vernon Barge II, Thomas Marshall, and Edward L. Hock. 1.9.3 Principal Stockholders (over 10S ownership): Vernon Barge II, and Thomas F. Marshall. 1.10 Description of other business affiliations of principal officers, directors, and principal stockholders: Barge Associates, Inc. - Holding Company. Associates Funding, Inc. - Real Estate Financial Services. Associates Management, Inc. - Real Estate Management. BAI/Medical Equities of California, Inc. - General Partner for a California Limited Partnership. BAI/Medical Equities of Texas, Inc. - General Partner for a Texas Limited Partnership. BAI/Medical Place, Inc. - General Partner for a Texas Limited Partnership. Barge Aviation, Inc. - Corporate Aviation. BankDesign and Construction - Development and Construction Company for Bank Buildings. Medical Building Corporation - Development and Construc- tion Company for Medical Office Buildings. Barge, Marshall, and Puckett, Inc. - Development and Construction Company for Multi-Family Buildings. 1.11 Employees 1.11.1 Number of Employees in California: None. 1.11.2 Locations in California: 7777 Girard Avenue, Suite 202, La Jolla, California 92037 1.12 Expert Services: 1.12.1 The applicant's accountant and principal contact at such firm: Not yet selected. 2 1.12.2 The applicant's attorney and principal contact at such firm: 1.12.3 Mr. Fred Jay,-~artner Friedman, Jay and Cramer 111 Elm Street San Diego, CA Any experts or firms of experts that will be involved and the principal contact at each firm. Mr. Walker Patton, Vice President Mr. John J. Feehan, Jr., Development Officer Medical Building Corporation 7777 Girard Avenue, Suite 202 La Jolla, CA 92037 Mr. James Lazar, Vice President Associates Funding Inc. 4849 Greenville, Suite 1403 Dallas, TX 75206 1.13 Principal bank of account and name of officer handling account: Not selected as yet. 1.14 Source of Funding for the Project: The source of funding for the project will be a combination of cash contributed by BAI/Medical Equities of California, Inc.; physicians subscribing to the to-be-formed partnership; BAI/Medical Equities of California, Inc. shareholders and possible affiliates; and loan proceeds from Industrial Development Bonds issued under the auspices of the City of San Bernardino. PART II. BOND ISSUE 2.1 Provide the estimated total amount of the financing with a tabulation of the proposed use of bond proceeds including: 2.1.1 Project Cost: $3,971,000 includes cost of building approximately a 40,000 square foot shell, suite finish allowance, site preparation, architectural and engineering fees, construction management, leasing and suite design fees, and soft costs described below. Of the above, $3,000,000 in bonds is requested. $971,000 will be contributed by the partners for a total proj~ct capitaliza- tion of $3,971,000. 2.1.2 Legal, printing and related fees: $70,000. 2.1.3 Financing costs and fees: $130,000 3 2.1.4 Capitalized interest: $146,000 2.1.5 Other miscellaneous costs: Appraisal fees: Inspection fees: Title Insurance: Misc. & Contingency: $ 5,000 $ 5,000 $10,000 $55,000 2.2 Estimated Target Date of Financing: May 1984. 2.3 Estimated Times of Financing: May 1984 - March 1986 2.4 Type of Bond Sale: Private placement with institutional purchaser. PART III. FINANCIAL INFORMATION 3.1 Financial statements certified or prepared by a CPA, from three most recent fiscal years, including the following: 3.1.1 Balance Sheet: NIA at this time. 3.1.2 Income Statement: NIA at this time. 3.1.3 Analysis of sources and application of funds: NIA at this time. Per phone converation with Ms. Glenda Saul, Acting Executive Director of the Redevelopment Agency, on Nov. 16, 1983, no financial information need be attached since the partnership making application has not yet been formed. If financial information is required at a later date, she will advise accordingly. 3.2 Advise as to whether applicant is a small business, and a description of the applicant's ranking and relative size (small, medium, large) in its industry. If a small business loan is involved, please give details, and if a federal guarantee is to be used, a certificate of financial disadvantage should be provided by the qualified sponsor. Partnership making application will be small in its industry ranking. No small business loan will be involved. PART IV. PROJECT INFORMATION 4.1 A short summary of the purpose, objective and function of the proposed project. The purpose of the project is to construct a 40,000 square foot medical office building on the campus of St. Bernardine Hospital, San Bernardino, California. 4 ,. The proposed project will function as an office building for a wide range of physician primary care and surgical specialities. It is anticipated a building this size will house approximately 30-35 physicians and related ancillary services. Depending ~n St. Bernardine's final decision regarding ancillary services, the actual size may vary. Enclosed are information brochures that describe recent similar type projects. 4.2 A description of the components and the estimated total cost of the functional parts of the project, including: 4.2.1 Land - The building will be situated on a parcel of land located on the campus of St. Bernardine Hospital. The hospital will lease the land to a Partnership consisting of BAI/Medical Equities of California, Inc., as the General Partner and a to-be-formed group of physicians and General Partner affiliates acting as additional partners. The land will be leased for a period of 65 years. 4.2.2 Buildings - square foot, There will be one 40,000 gross three story medical office building. 4.2.3 A tabulation of equipment - Equipment contained as part of the building will be: . Internal cabinet and reception desks within each suite finish allowance. Central hot water heater with circulation loop. Electrical main switch gear and panels. Rooftop heating, ventilation, and air condition- ing system. Hydraulic elevator equipment. Restrooms. . . . . . 4.2.4 Engineering and technical services: To be provided as part of services recorded in connection with construction of medical office building. 4.2.5 Other or miscellaneous items (describe and tabulate): H/A NOTE: The regulations of the Internal Revenue Service define eligible facilities, and formulate their nonproductive values. They should b~ consulted for its definitions. 5 , . 4.3 Estimated Construction period: 4.3.1 Scheduled starting date: Dec. 1984 4.3.2 Scheduled completion date: Jan. 1985 4.4 Name and location of the applicant's supervising or consulting engineer responsible for design of the project: Medical Building Corporation 7777 Girard Avenue, Suite 202 La Jolla, CA 92037 4.5 The location installations all. of the proposed project. If duplicated in several locations, list all addresses of The project will be on bounded by Highland Avenue South, Crestview Avenue on the West. the eastern on the North, the East, and half of the block 21st Street on the Waterman Avenue on 4.6 Advise as to whether project site is a new location. If not, describe what expansion or alteration will be made. The project will be on a new location. The land is currently used as a parking lot. 4.7 Name of legal owner of location: 4.7.1 If not owned by applicant, advise terms and nature of occupancy. The land shall be leased from St. Bernardine Hospital for a period of 65 years. The rent shall be payable as follows: $100 per year for the first two years; years three and four $25,000 per year; years five through fourteen the minimum rent shall be $45,000 annually, CPI adjusted from a base year of 1983. Year fifteen and thereafter the minimum rent shall be 101 of the fair market value of the property. 4.7.2 If there is or will be a legal relationship between the applicant and owner of the location, describe the relationship. The legal relationship between the applicant and owner will be a contractual one embod1ed in the terms of the ground lease. The owner of the location may also lease space in the project. 6 ~.8 A description of the operations that are or are to be conducted at the location of the proposed project, and the scope, magnitude and process relationships of the proposed project, including: ~.8.1 An 8-1/2" X 11" map showing the site location of the project is enclosed as exhibit 1. A description of the plant process. N/A ~.8.2 ~.9 List the environmental quality regulations, standards or requirements which are to be met within this project. Any environmental review, permit process, will be Bernardino. which is part of the building considered by the City of San ~.10 A list and copies of all permits, enforcement orders, air pollution permits evidence of other actions evidencing need of this project. N/A water quality and variances or for installation ~.11 List pollution control agencies (local, state and federal) imposing the applicable regulations, standards or requirements for operations or disposal. The building shall comply public health codes of Bernardino. with all applicable building and the City and County of San 4.12 Describe the regional county or basin plan to which this project is to conform, and the manner in which it will provide conformance. The project will conform to all the zoning and building code requirements of the City of San Bernardino. In addition, it shall be reviewed by the City of San Bernardino to conform to all parking, bulk, height, and setback requirements in accordance with any master plan filed by St. Bernardine Hospital. 4.13 Describe the by-products or residues of the project, and where and how ultimate disposal will be accomplished. If recycling or salvage is to be a function, advise as to market opportunities. NIA 7 PART V. PUBLIC BENEFITS 5.1 Describe the benefits that will accrue its citizens as a_ result of the facility and the use of this method of a conventional method. to the City and installation of this financing. vis-a-vis Population growth forecasts by State of California Office of Statewide Health Planning and Development. San Bernardino Area Chamber of Commerce. and Chase Econometrics indicate that the population of the San Bernardino area will grow at an annual rate between 1982 and 1988 of 3.691. 3.441. and 3.71 respectively. These figures project the City of San Bernardino and its surrounding area to be one of the fastest growing areas in the country. To accommodate this growth and to provide the City of San Bernardino with the hospital beds that it will need. St. Bernardine has received State approval for and recently completed a 53 bed expansion of the hospital. By 1990. St. Bernardine is planning to add an additional 138 beds. A Certificate of Need for these 138 beds has been applied for. In order to provide adequate patient care and. as a minimum. to keep the current ratio of staff physicians to hospital beds constant. St. Bernardine will need to provide office space for an additional 30 to 35 physicians on campus. An on-campus medical office building is particularly important for keeping health care costs low. When a physician is based in a hospital building close to his patients. he can avoid wasteful daily commuting time between his office and patients. If a physician is as much as ten minutes away from the hospital and makes only two trips per day to see inpatients. he will lose 40 minutes each day in travel time. That 40 minutes can be spent seeing additional patients. This increased practice efficiency. will lower physician overhead costs. Office ratio costs are another important factor in health care costs. Because this will be a physician owned medical office building. a physician's occupancy costs will be less in an ownership situation than as a rental. These savings are a result of depreciation and other tax deductible items not available to a renter. Some physicians. because of age or personal financial circumstances. need to rent rather than own. Exhibit Two illustrates that comparable hospital based medical office buildings in the San Bernardino/Riverside area are currently renting for approximately $1.36/SF/Month. Because of today's higher interest rates and inflation in construction costs. it would not be possible to construct a medical office building with such comparable rents unless tax exempt financing were available. 8 " As the nationwide population of physicians increases over the next five years, it is important that offices be provided so that the City of San Bernardino can obtain its share of these physicians. More physicians will mean more competition. More competition will mean lower health costs. This is particularly true now that third party payers are demanding competitively priced services. A campus physician owned medical office building is a key factor in attracting these physicians. In addition to cost factors, there are the following additional benefits: · Physicians occupying a building adjacent to a hospital enjoy a highly desirable professional atmosphere. Moreover, the higher professional character of such a building tends to preserve itself because of contiguity with the hospital. · While on duty, each physician will only be minutes away from his acutely-ill patients. · The close proximity to enhance the development services. St. Bernardine Hospital will of new and better patient · Physicians' patients needing more sophisticated diagnostic or therapeutic procedures than those offered in their individual suites can obtain these services more readily because of the close proximity of the hospital. · Proximity to other referring physicians. · A new custom-designed, highly-efficient practice space will further improve a physician's productivity. · As noted in City Ordinance 3815, it was determined that "facilitating nonprofit organizations in the providing of health care services with the aim of the reduction of health care costs or the provision of better health care, or both, is a public purpose in which the City has a peculiar and unique interest and also municipal affairs as those terms are defined by California law." This medical office building will help achieve this goal. 5.2 In particular, the application should ad~ress the findings in Section 1 of the Ordinance, and should show that the applicant is locating in the City for long-term business reasons and not merely because of any financial inducement offered by the Ordinance. Applicant should outline the program by which it is expected that its activity in the City will increase long-term employment of local residents and that the City will receive a substantial benefit that exceeds any detriment incurred. 9 , ' The partnership shall be leasing the building for 65 years. After the term of the lease is ended, the building will revert to St. Bernardine Hospital. The construction of the building will proceed because of the hospital's expansion plans. St. Bernardine has been a hospital in the community for over 50 years. -~ts commitment to the health care of San Bernardino is already planned and taking shape for the next century. The construction of this medical office building will enable St. Bernardine Hospital to provide the citizens of San Bernardino the opportunity to obtain additional high quality physician care. Since the bUilding will be owned by the physicians, the physicians will be motivated to take both a long-term interest in the hospital and city. This unique ownership structure allows the bUilding to be built at no cost to taxpayers or hospital revenues. A building of this size is expected to house 30-35 physicians. In addition to the physician staff, it is anticipated that there will be a need for an additional 30-40 registered nurses, 30-40 secretary-receptionists, 30 insurance claim specialists, and 5-15 affiliated health pro- fessionals (pharmacists, physical therapists, psychologists, optometrists, and laboratory/X-ray technicians). It is possible that the hospital may lease space for additional ancillary facilities. Any additional ancillary service shall result in additional long term employment opportunities. PART VI. COMMITMENTS 6.1 The application shall be supplemented with a commitment by the applicant to comply, and/or to assist the City in complying, with all state and federal laws in the issuance of the bonds, including, without limitation, the making of any required application to a governmental department, for authorization, qualifications or registration of the offer, issuance or sale of the bonds, and any amendments thereto, and any permit or other authorization of such governmental department, prior to the delivery by the City of such bonds. The applicant shall comply and will assist the City in complying with all state and federal laws in the issuance of bonds, including without limitation, the making of any required application to a governmental department, for authorization, qualification or registration of the offer, issuance or sale of the bonds, and any amendments thereto, and any permit or other authorizations of such governmental department, prior to the delivery by the-City of such bonds. 6.2 The application shall be supplemented with (i) a commitment by the applicant to cause and/or to assist the City in causing to be printed any prospectus or other written or printed communication proposed to be published in connection with the issuance, offer or sale of bonds, prior to the delivery by the City of such bonds, and, if deemed necessary by the City, following the delivery of such bonds. 10 " The applicant hereby commits to cause and/or assist the City in causing to be printed any prospectus or other written or printed communication proposed to be published in connection with the issuance, ~ffer or sale of bonds, prior to the delivery by the City of such bonds, and, if deemed necessary by the City, following delivery of such bonds. 6.3 All commitments by the applicant shall specifically provide for the applicant to pay all expenses in connection with the issuance, offer or sale of the bonds, whether or not they are finally issued, to hold the City harmless from any and all expenses related thereto and to pay items on an ongoing basis so that neither the City, nor its advisors, attorneys, employees and the like will accumulate any claims against the City. The applicant hereby warrants that it will pay all expenses in connection with the issuance, offer or sale of the bonds, whether or not they are finally issued, to hold the City harmless from any and all expenses related thereto and to pay items on an ongoing basis so that neither the City, nor the advisors, attorneys, employees and the like will accumulate any claims against the City. 6.4 Any additional information, agreements and undertakings as the City may require as a result of various conferences and negotiations shall be reproduced in written, printed or other tangible form, shall be supplied in as many copies as the City prescribes and shall be deemed supplements or amendments to the application. Applicant hereby agrees that any additional information, agreements and undertakings as the City may require as a result of various conferences and negotiations shall be reproduced in written, printed or other tangible form, shall be supplied in as many copies as the City prescribes and shall be deemed supplements or amendments to the application. 1 1 " PART VII. SIGNATURE I hereby certify that I have authority to bind BAI/Med1cal Equities of California, Inc. to the contract terms of this application. To the best of my knowledge, this application contains no false or incorrect information or data, and the application, including exhibits and attachments is truly descriptive of the project. I hereby warrant that I am familiar with Ordinance Number 3815 of the City of San Bernardino which seeks to promote industrial growth within the City approved November 26, 1979. tfL J..Q-c.-...J ~ 57 VERNON BARGE J/ President BAI/Med1cal Equities of California, Inc. 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