Ridge Health Alliance has authorized capital stock consisting
of one million two (1,000,002) shares of common stock, par value
$0.01 per share (the "Common Stock"). The authorized
shares of common stock consist of 1,000,000 shares of Class A
Voting Common Stock and two shares of Class B Voting Common Stock.
In 1994, the Medical Center and the HSF each executed a Shareholders
Subscription Agreement under which each agreed to contribute $4,550,000
as equity capital. Subsequently, the Medical Center and HSF each
were issued one share of Class B Voting Common Stock and shares
of Class A Voting Common Stock. Except for the original obligations
of the founding shareholders under the Founding Shareholders Subscription
Agreements, no shareholder has an obligation to make any loans,
advances or additional equity contributions whatsoever to the
capital of the Corporation. The shareholders have acknowledged
and agreed that the Corporation is expected to retain its earnings
in order to finance growth and that there is no expectation that
the Corporation will pay any cash dividends in the foreseeable
Medical Center contributed a total of $15,000,000 to Blue Ridge
Health Alliance during the period ended June 30, 1998. Also, on
April 6, 1998 the Medical Center loaned $3,800,000 to the Corporation
due on July 6, 1998 and bearing interest at 6.25% per annum. In
July 1998, the Board of Directors of the Corporation issued a
capital call to HSF and the Medical Center for $5,000,000. HSF
elected not to participate in this capital call in accordance
with their rights prescribed in the Shareholders Agreement; accordingly,
the Medical Center contributed the entire $5,000,000, by converting
the $3,800,000 loan to capital and contributing $1,200,000 in
cash. This contribution increased the Medical Center's percentage
ownership to 52.05%. By agreement between HSF and the Medical
Center, HSF relinquished its share of Class B Voting Common Stock
to the Medical Center. Corporate actions enumerated in the Amended
Articles of Incorporation require approval of the holders of all
of the shares of the Class B Voting Common Stock. Except for this
special voting requirement, the shares of Class A and Class B
Voting Common Stock have equal rights, privileges, and dividend
distribution rights. On November 25, 1998 the Medical Center provided
a loan to the corporation as evidenced by a promissory note in
the amount of $6,678,595 due February 24, 1999 at 4.50 percent
per annum. This note was renewed on February 25, 1999 with a due
date of March 26, 1999. The note was renewed again on March 27,
1999 and was structured to have an optional renewal each month.
On March 5, 1999, the Medical Center loaned $250,000 to the Corporation,
which was to be due December 31, 1999 bearing interest at 4.50
percent per annum. Effective September 15, 1999, Blue Ridge Health
Alliance revised its Shareholders' Agreement to provide additional
capital and to affect a transfer of shares among the shareholders.
Under this agreement, the debt owed to the Medical Center was
converted to capital. HSF contributed an additional $9,500,000
and Martha Jefferson Hospital contributed an additional $336,393.
Once these additional contributions had been made the Medical
Center owned 49.9% of the class A stock, HSF owned 46.2% and Martha
Jefferson Hospital owned 3.9%. In addition, the University transferred
to HSF one share of class B common stock so that both HSF and
the University each own one of the two shares, which have been
net investment in Blue Ridge Health Alliance is summarized below.
Complete financial statements for Blue Ridge Health Alliance, Inc.
can be obtained from the corporate offices: Towncenter 1, 1000
Research Park Blvd., Charlottesville, Virginia 22911.
Virginia Health Network, Inc. In May 1995, the Medical Center
joined the Central Virginia Health Network, Inc. (CVHN), a partnership
of eight Richmond area hospitals. Central Virginia Health Network
was formed to provide an efficient and coordinated continuum of
care, with services ranging from acute hospital treatment to primary
physician care and home health services.
Medical Center originally paid $100 for 10,000 shares of common
stock and $109,900 as additional paid-in capital. In addition,
the Medical Center is obligated for monthly dues to Central Virginia
Health Network of $16,750. The net investment in CVHN is summarized
below. Complete financial statements can be obtained from the registered
agent: Steven D. Gravely, Esq., Mezzullo and McCandlish, Post
Office Box 796, Richmond, Virginia 23206.
of Virginia/HEALTHSOUTH L.L.C. The Medical Center entered
into a joint venture with HEALTHSOUTH Corporation to establish
an acute rehabilitation facility. The new facility, located at
the Fontaine Research Park in Charlottesville, Virginia, provides
patient services to the region. The Medical Center made a capital
contribution of $2,230,000 to capitalize the joint venture in
May 1996, which represents a 50 percent interest in the joint
venture. The net investment in HEALTHSOUTH is summarized below.
Complete financial statements can be obtained from the managing
member: HEALTHSOUTH Corporation, 7700 East Parham Road, Richmond,
Health, L.L.C. In November 1997, the Medical Center became
a participant with Rockingham Memorial Hospital and Augusta Health
Care, Inc. in Valiance Health, L.L.C. (Valiance), a joint venture
engaging in the business of integrating and coordinating the delivery
of health care services in Central and Western Virginia. The Medical
Center contributed $100,000 in initial capital which entitles
it to a pro-rata distribution of any profits and losses of Valiance.
Partners, Inc.In May 1995, HealthCare Partners, Inc. (HealthCare
Partners), a non-stock, non-profit corporation, was established
to support networking, external business relationships with neighboring
hospitals and physicians groups and expansion of primary care
activities. The Medical Center and the Health Services Foundation
are the primary contributors to the funding of the corporation.
The corporation is governed by a board of directors composed of
Health Sciences Center staff, community members and University
Board of Visitors appointees.