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Both Circle City and Arroyo Grande owned hospitals and other
assets. The asset purchase agreements covered both the hospitals
as well as other assets including parcels of raw land that were
adjacent to the hospitals (nonhospital properties). The
agreements were assignable to "a section 501(c)(3) organization"
and were conditioned upon Alpha Hospital's obtaining financing in
an amount and on terms acceptable to Alpha Hospital in its sole
discretion.
During the summer and early fall of 1990, Alpha Hospital and
AMH worked with Vista Hospital Systems, Inc., a California non-
profit organization, to complete the acquisition of the
properties by Vista. As we discuss below, such acquisition was
to be accomplished by the assignment to Vista of Alpha Hospital's
rights under the asset purchase agreements. First Boston
Corporation, New York, New York (First Boston), agreed to
underwrite the financing of the acquisition, which financing was
to be accomplished by the City of Arroyo Grande's issuing Series
1990 A Certificates of Participation and the City of Corona
issuing Series 1990 B Certificates of Participation (collectively
1990 certificates). During October 1990, First Boston circulated
a Preliminary Official Statement to potential buyers of the 1990
certificates. The principal amount sought during the initial
offering was $61.1 million. First Boston was unable to raise
that amount.
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