AGREEMENT OF LIMITED PARTNERSHIP
OF
GREAT LAKES LITHOTRIPSY LIMITED PARTNERSHIP
AGREEMENT
OF LIMITED PARTNERSHIP
OF
GREAT LAKES LITHOTRIPSY LIMITED PARTNERSHIP
TABLE OF CONTENTS
Article Heading Page
1. FORMATION..................................................1
2. NAME.......................................................1
3. OFFICES....................................................1
4. PURPOSE....................................................2
5. TERM.......................................................2
6. CERTAIN DEFINED TERMS......................................2
7. CAPITAL CONTRIBUTIONS AND DILUTION OFFERINGS...............6
8. GUARANTIES.................................................6
9. CONDITIONS TO THE CAPITAL CONTRIBUTIONS OF THE LIMITED
PARTNERS...................................................7
10. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
GENERAL PARTNER............................................7
11. ADMISSION OF LIMITED PARTNERS..............................7
12. CAPITAL ACCOUNTS...........................................8
13. ALLOCATIONS................................................9
14. DISTRIBUTIONS.............................................10
15. RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS................10
16. LIMITED LIABILITY.........................................12
17. TRANSFER OF INTERESTS AND ADMISSION OF PARTNERS...........12
18. OPTIONAL PURCHASE OF LIMITED PARTNERSHIP INTERESTS ON CERTAIN
EVENTS....................................................16
19. SALE, ASSIGNMENT OR OTHER TRANSFER OF THE GENERAL
PARTNER'S INTEREST........................................20
20. TERMINATION OF THE SERVICES OF THE GENERAL PARTNER........21
21. MANAGEMENT AND OPERATION OF BUSINESS......................21
22. RESERVES..................................................24
23. INDEMNIFICATION AND EXCULPATION OF THE GENERAL
PARTNER...................................................24
24. DISSOLUTION OF THE PARTNERSHIP............................24
25. DISTRIBUTION UPON DISSOLUTION.............................26
26. BOOKS OF ACCOUNT, RECORDS AND REPORTS.....................26
27. NOTICES...................................................27
28. AMENDMENTS................................................27
29. LIMITATIONS ON AMENDMENTS.................................27
30 MEETINGS, CONSENTS AND VOTING.............................28
31. SUBMISSIONS TO THE LIMITED PARTNERS.......................28
32. ADDITIONAL DOCUMENTS......................................29
33. SURVIVAL OF RIGHTS........................................29
34. INTERPRETATION AND GOVERNING LAW..........................29
35. SEVERABILITY..............................................29
36. AGREEMENT IN COUNTERPARTS.................................29
37. THIRD PARTIES.............................................29
38. POWER OF ATTORNEY.........................................30
39. ARBITRATION...............................................30
40. CREDITORS.................................................30
Schedule A............... Schedule of Partnership Interests
THE LIMITED PARTNERSHIP INTERESTS REPRESENTED BY THIS LIMITED PARTNERSHIP
AGREEMENT HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, UNDER THE WISCONSIN SECURITIES
LAWS, AS AMENDED, OR UNDER SIMILAR LAWS OR ACTS OF OTHER STATES IN RELIANCE UPON
EXEMPTIONS UNDER SUCH LAWS.
AGREEMENT
OF LIMITED PARTNERSHIP
OF
GREAT LAKES LITHOTRIPSY
LIMITED PARTNERSHIP
THIS AGREEMENT OF LIMITED PARTNERSHIP (the "Agreement") is
made as of October 21, 1997, by and among PRIME KIDNEY STONE TREATMENT,
INC., a New Jersey corporation (the "General Partner"), and the persons listed
on Schedule A attached hereto as the Limited Partners.
1. FORMATION.
The Partnership was originally formed under the name Wisconsin
Lithotripsy Limited Partnership I pursuant to a filing in the Office of the
Secretary of State of Wisconsin on or about May 14, 1997 of a Certificate of
Limited Partnership. Subsequently, the name of the Partnership was changed to
Great Lakes Lithotripsy Limited Partnership pursuant to the filing of a
Certificate of Amendment in the Office of the Secretary of State of Wisconsin on
or about May 16, 1997 in accordance with the provisions of the Act.
2. NAME.
2.1 The name of the Partnership is "Great Lakes Lithotripsy
Limited Partnership."
2.2 The Partnership business shall be conducted under such
names as the General Partner may from time to time deem necessary or advisable,
provided that appropriate amendments to this Agreement and all necessary filings
under applicable assumed or fictitious name statutes or the Act are first
obtained.
3. OFFICES.
3.1 The principal office of the Partnership shall be at ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇-▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, or at such other
place as the General Partner may, from time to time, designate by notice to the
Limited Partners (the "Records Office").
3.2 The Partnership may have such additional offices as the
General Partner may, from time to time, deem necessary or advisable.
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4. PURPOSE.
The purpose and business of the Partnership shall be: (i) to
operate one or more extracorporeal, shock-wave lithotripters for the treatment
of renal stones primarily in northern Indiana and Wisconsin, or in such other
location(s) as the General Partner may determine, in its sole discretion, to be
in the best interests of the Partnership, (ii) to acquire and operate in the
future any other urological device or equipment that as of the date of
acquisition by the Partnership has received FDA premarket approval; and (iii) to
engage in any and all activities incidental or related to the foregoing, upon
and subject to the terms and conditions of this Agreement.
5. TERM.
The Partnership shall terminate on May 31, 2047 unless sooner
terminated as herein provided.
6. CERTAIN DEFINED TERMS.
Certain terms used in this Agreement shall have the following
meanings:
Act. The Act means the Wisconsin Uniform Limited Partnership
Act, as then in effect.
Affiliate. An Affiliate is (i) any person, partnership,
corporation, association or other legal entity ("person") directly or indirectly
controlling, controlled by or under common control with another person; (ii) any
person owning or controlling 10% or more of the outstanding voting interest of
such other person; (iii) any officer, director or partner of such person; and
(iv) if such other person is an officer, director or partner, any entity for
which such person acts in such capacity.
Agreement. This Agreement of Limited Partnership, as the same
may be amended from time to time.
Bank. First Citizens Bank & Trust Company.
Capital Account. The Partnership capital account of a Partner
as computed pursuant to Article 11 of this Agreement.
Capital Contributions. All capital contributions made by a
Partner or his predecessor in interest which shall include, without limitation,
contributions made pursuant to Article 7 of this Agreement.
Capital Transaction. Any transaction which, were it to
generate proceeds, would produce Partnership Sales Proceeds or Partnership
Refinancing Proceeds.
Code. The Internal Revenue Code of 1986, as amended, or
corresponding provisions of subsequent, superseding revenue laws.
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Dilution Offering. As provided in Section 7.4 of this
Agreement, the future offering of additional limited partnership interests in
the Partnership by the General Partner. Any successful Dilution Offering will
proportionately reduce the Percentage Interests of the then current Limited
Partners in the Partnership.
Domestic Proceeding. Any divorce, annulment, separation or
similar domestic proceeding between a married couple.
Equipment. The initial equipment to be acquired by the
Partnership for the operation of the Mobile Lithotripsy System. The initial
equipment to be used in the operation of the Mobile Lithotripsy system will
include the lithotripter, the Trailer, the Truck, and miscellaneous medical
equipment and supplies.
FDA. The United States Food and Drug Administration.
General Partner. The General Partner of the Partnership,
Prime Kidney Stone Treatment, Inc., a New Jersey corporation.
Guaranty. The Guaranty Agreement pursuant to which each
Limited Partner will guarantee a portion of the Partnership's obligation to the
Bank under the Loan. The form of the Guaranty Agreement is included in the
Subscription Packet accompanying the Memorandum.
Initial Limited Partner. ▇▇▇ ▇. ▇▇▇▇▇, M.D., a resident of
North Carolina and an Affiliate of the General Partner. The Initial Limited
Partner is to be the only limited partner of the Part nership until such time as
the new Limited Partners are admitted to the Partnership, at which time the
Initial Limited Partner shall withdraw from the Partnership.
Limited Partners. The Limited Partners are those investors in
the Units admitted to the Partnership and any person admitted as a Limited
Partner in accordance with the provisions of this Agreement.
Loan. The loan of up to $1,056,000 from the Bank to the
Partnership. Loan proceeds will be used by the Partnership to (i) acquire an
extracorporeal shock-wave lithotripter together with options (up to $650,000),
(ii) acquire and upfit a mobile Trailer to house the lithotripter (up to
$300,000), (iii) acquire the Truck for hauling the Trailer housing the
lithotripter (up to $50,000), and (iv) pay the Wisconsin use tax on the Trailer
and the lithotripter (up to $56,000).
Losses. The net loss (including Net Losses from Capital
Transactions) of the Partnership for each Year of the Partnership as determined
for federal income tax purposes.
Majority in Interest of the Limited Partners. The Limited
Partners who hold more than 50% of the Limited Partner Percentage Interests in
the Partnership.
Memorandum. The Confidential Private Placement Memorandum of
the Partnership dated May 21, 1997, as amended or as supplemented.
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Mobile Lithotripsy System. The Trailer and Truck with the
installed and operational lithotripter.
Net Gains from Capital Transactions. The gains realized by the
Partnership as a result of or upon any sale, exchange, condemnation or other
disposition of the capital assets of the Partnership (which assets shall include
Code Section 1231 assets) or as a result of or upon the damage or destruction of
such capital assets.
Net Losses from Capital Transactions. The losses realized by
the Partnership as a result of or upon any sale, exchange, condemnation or other
disposition of the capital assets of the Partnership (which shall include Code
Section 1231 assets) or as a result of or upon the damage or destruction of such
capital assets.
Partners. The General Partner and the Limited Partners,
collectively, where no distinction is required by the context in which the term
is used herein.
Partnership. Great Lakes Lithotripsy Limited Partnership, a
Wisconsin limited partnership.
Partnership Cash Flow. For the applicable period the excess,
if any, of (A) the sum of (i) all gross receipts from any source for such
period, other than from Partnership loans, Capital Transactions and Capital
Contributions, and (ii) any funds released by the Partnership from previously
established reserves, over (B) the sum of (i) all cash expenses paid by the
Partnership for such period; (ii) the amount of all payments of principal on
loans to the Partnership; (iii) capital expenditures of the Partnership; and
(iv) such reasonable reserves as the General Partner shall deem necessary or
prudent to set aside for future repairs, improvements or equipment replacement
or additions, or to meet working capital requirements or foreseen or unforeseen
future liabilities and contingencies of the Partnership; provided, however, that
the amounts referred to in (B)(i), (ii) and (iii) above shall be taken into
account only to the extent not funded by Capital Contributions, loans or paid
out of previously established reserves. Such term shall also include all other
funds deemed available for distribution and designated as "Partnership Cash
Flow" by the General Partner.
Partnership Interest. The interest of a Partner in the
Partnership as defined by the Act and this Agreement.
Partnership Refinancing Proceeds. The cash realized from the
refinancing of Partnership assets after retirement of any secured loans and less
(i) payment of all expenses relating to the transaction and (ii) establishment
of such reasonable reserves as the General Partner shall deem necessary or
prudent to set aside for future repairs, improvements, or equipment replacement
or additions, or to meet working capital requirements or foreseen or unforeseen
future liabilities or contingencies of the Partnership.
Partnership Sales Proceeds. The cash realized from the sale,
exchange, casualty or other disposition of all or a portion of Partnership
assets after the retirement of all secured loans and less (i) the payment of all
expenses related to the transaction and (ii) establishment of such reasonable
reserves as the General Partner shall deem necessary or prudent to set aside for
future repairs, improvements, or
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equipment replacement or additions, or to meet working capital requirements or
foreseen or unforeseen future liabilities or contingencies of the Partnership.
Percentage Interest. The interest of each Partner in the
Partnership, to be determined initially in the case of a Limited Partner by
reference to his or her Unit ownership based upon the Limited Partners holding
an aggregate 80% Percentage Interest in the Partnership, with each initial Unit
sold representing an initial 1% interest. The General Partner initially will own
a 20% Percentage Interest in the Partnership. A Partner's Percentage Interest
may be reduced by a future Dilution Offering. The Partners' Percentage Interests
in the Partnership as of the date hereof are as set forth in Schedule A attached
hereto. Any future adjustments in the Partners' Percentage Interests, due to
future Dilution Offerings or otherwise, will be reflected by revisions to
Schedule A.
PKST. Prime Kidney Stone Treatment, Inc., a New Jersey
corporation, and the sole General Partner of the Partnership.
Profit. The net income of the Partnership (including Net
Gains from Capital Transactions) for each Year of the Partnership as determined
for federal income tax purposes.
Pro Rata Basis. In connection with an allocation or
distribution, an allocation or distribution in proportion to the respective
Percentage Interests of the class of Partners to which reference is made.
Sales Agency Agreement. The sales agency agreement through
which MedTech Investments, Inc., an Affiliate of the General Partner and a
broker-dealer company registered with the Securities and Exchange commission and
a member of the National Association of Securities Dealers, Inc. shall offer and
sell the limited partnership interest of the Partnership pursuant to the
Memorandum.
Sales Commission. The $250 sales commission paid to MedTech
Investments, Inc. for each Unit sold.
Service. The Internal Revenue Service.
Trailer. The new or reconditioned mobile Trailer upfitted to
house the lithotripter.
Truck. The used tractor-trailer truck to be utilized for
hauling the Trailer.
Units. The 80 equal limited partner interests in the
Partnership offered pursuant to the Memorandum for a price per Unit of $2,500 in
cash, plus a personal guaranty of 1% of the Partnership's obligations under the
Loan (up to a $10,560 principal guaranty obligation).
Year. An annual accounting period ending on December 31 of
each year during the term of the Partnership.
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7. CAPITAL CONTRIBUTIONS AND DILUTION OFFERINGS.
7.1 General Partner Contribution. On or before the date of
this Agreement, the General Partner will contribute to the capital of the
Partnership cash in an amount equal to 20% (up to $50,000) of the total cash
contributed to the Partnership by the Partners in the offering made pursuant to
the Memorandum.
7.2 Limited Partner Contribution. Each Limited Partner hereby
agrees to contribute and shall contribute to the capital of the Partnership on
the date of his admission to the Partnership the cash amount set forth opposite
his name on Schedule A attached hereto.
7.3 No Interest. Except as otherwise provided herein, no
interest shall be paid on any contribution to the capital of the Partnership.
7.4 Dilution Offerings. If the General Partner, in its sole
discretion, determines that it is in the best interest of the Partnership, the
General Partner may, from time to time, issue, offer and sell additional limited
partnership interests in the Partnership (a "Dilution Offering") to local
urologists who are not already Limited Partners ("Qualified Investors"). The
primary purpose of any Dilution Offering would be (i) to raise additional
capital for any legitimate Partnership purpose as set forth in Article 4, and
(ii) to assure the highest quality of patient care by admitting Qualified
Investors to the Partnership who would be dedicated and motivated as owners to
follow the Partnership's treatment protocol, and comply with its quality
assurance and outcome analysis programs. Any limited partnership interests
offered by the Partnership in a Dilution Offering shall be sold in the manner
and according to the terms prescribed in the sole discretion of the General
Partner; provided, however, that any additional limited partnership interests
offered in a Dilution Offering will be sold for a price no lower than the
highest price for which proportionate limited partnership interests in the
Partnership have been previously sold by the Partnership. Any sale of additional
limited partnership interests will result in the proportionate dilution of the
Partnership Percentage Interests of the existing Partners. Notwithstanding the
above, in the event of a Dilution Offering, the General Partner and/or its
Affiliates may elect, in their sole discretion, to prevent dilution of the
Percentage Interests of the General Partner and/or its Affiliates by either
contributing a proportionate amount of additional capital to the Partnership or
purchasing additional limited partnership interests in any Dilution Offering.
Limited Partners will have no right to purchase additional limited partnership
interests in any Dilution Offering. Any investor acquiring a limited partnership
interest in a Dilution Offering shall agree to be bound by the terms of this
Agreement, and shall be automatically admitted as a Limited Partner of the
Partnership. Any adjustment in the Partners' Percentage Interests resulting from
a Dilution Offering shall be set forth on Schedule A attached hereto.
8. GUARANTIES.
Each Partner agrees to execute and deliver to the Partnership
on the date of his or her admission to the Partnership a Guaranty agreement in
the amount set forth opposite his or her name on Schedule A attached hereto.
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9. CONDITIONS TO THE CAPITAL CONTRIBUTIONS OF THE
LIMITED PARTNERS.
The obligations of the Limited Partners to make cash Capital
Contributions hereunder are subject to the condition that the representations,
warranties, agreements and covenants of the General Partner set forth in Article
10 of this Agreement are and shall be true and correct or have been and will
have been complied with in all material respects on the date such Capital
Contributions are required to be made, except to the extent that any such
representation or warranty expressly pertains to an earlier date.
10. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
GENERAL PARTNER.
10.1 The General Partner hereby represents and warrants to the
Limited Partners that:
(a) The Partnership is a limited partnership formed in
accordance with and validly existing under the Act and the other
applicable laws of the State of Wisconsin;
(b) The interests in the Partnership of the Limited Partners
will have been duly authorized or created and validly issued and the
Limited Partners shall have no personal liability to contribute money
to the Partnership other than the amounts agreed to be contributed by
them in the manner and on the terms set forth in this Agreement,
subject, however, to such limitations as may be imposed under the Act;
(c) No material breach or default adverse to the Partnership
exists under the terms of any other material agreement affecting the
Partnership; and
(d) The General Partner is a New Jersey corporation formed and
existing under the laws of the State of New Jersey.
10.2 The General Partner hereby covenants to the Limited
Partners that:
(a) It will at all times act in a fiduciary manner with
respect to the Partnership and the Limited Partners;
(b) Except as provided in Article 19, it will serve as the
General Partner of the Partnership until the Partnership is terminated
without reconstitution; and
(c) It will cause the Partnership to carry adequate public
liability, property damage and other insurance as is customary in the
business to be engaged in by the Partnership.
11. ADMISSION OF LIMITED PARTNERS.
The General Partner may permit the offer and sale of limited
partnership interests on the terms and conditions provided in the Memorandum or
future Dilution Offering and may admit persons
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subscribing for interests as Limited Partners in the Partnership on the terms
and conditions set forth in this Article 11.
(a) The General Partner shall have approved of the admission
of said person in writing on such terms and conditions as the General
Partner shall determine;
(b) Said person shall have executed such documents or
instruments as the General Partner may deem necessary or desirable to
effect his admission as a Limited Partner;
(c) Said person shall have accepted and adopted all of the
terms and provisions of this Agreement, as then amended;
(d) Said person (if a corporation) shall deliver to the
General Partner a certified copy of a resolution of its Board of
Directors authorizing it to become a Limited Partner under the terms
and conditions of this Agreement; and
(e) Said person, upon request by the General Partner, shall
pay such reasonable expenses as may be incurred in connection with its
admission as a Limited Partner.
12. CAPITAL ACCOUNTS.
A capital account shall be established for each Partner and
shall at all times be determined and maintained as provided by the Final
Treasury Regulations under Section 704(b) of the Code, as the same may be
amended. A Partner shall not be entitled to withdraw any part of his capital
account or to receive any distribution from the Partnership, except as provided
in Articles 14 and 25.
(a) Each Partners' capital account shall be increased by:
(i) The amount of his Capital Contribution pursuant
to Article 7; and
(ii) The amount of Profits allocated to him pursuant
to Article 13; and
(iii) The Partner's pro rata share (determined in the
same manner as such Partner's share of Profits and Losses
allocated pursuant to Article 13 hereof) of any income or gain
exempt from tax.
(b) Each Partner's capital account shall be decreased by:
(i) The amount of Losses allocated to him pursuant to
Article 13; and
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(ii) The amount of Partnership Cash Flow, Partnership
Sales Proceeds and Partnership Refinancing Proceeds
distributed to him pursuant to Article 14; and
(iii) The Partner's pro rata share of any other
expenditures of the Partnership which are not deductible in
computing Partnership Profits or Losses and which are not
added to the tax basis of any Partnership property, including,
without limitation, expenditures described in Section
705(a)(2)(B) of the Code. The Partner's pro rata share of such
expenditures shall be determined in the same manner as such
Partner's share of Profits and Losses allocated pursuant to
Article 13.
13. ALLOCATIONS
(a) Profits and Losses. The Profits and Losses of the
Partnership shall be allocated among the Partners in accordance with
their respective Percentage Interests. In allocating Profits and
Losses, Net Gains and Losses from Capital Transactions (a part of
Profits and Losses), if any, shall be allocated first.
(b) Qualified Income Offset. If any Partner unexpectedly
receives any adjustment, allocation or distribution described in
Treasury Regulations Section 1.704- 1(b)(2)(ii)(d)(4) through (6) which
causes or increases a deficit balance in such Partner's Capital Account
(adjusted for this purpose in the manner provided in Treasury
Regulations Section 1.704-1(b)(2)(ii)(d)), items of Partnership income
and gain shall be specially allocated to each such Partner in an amount
and manner sufficient to eliminate, to the extent required by the
Regulations, the deficit Capital Account of such Partner as quickly as
possible, provided that an allocation pursuant to this Article 13(b)
shall be made if and only to the extent that such Partner would have a
deficit Capital Account after all other allocations provided for in
this Article 13 have been tentatively made as if this Article 13(b)
were not in the Agreement. This provision is intended to be a
"qualified income offset," as defined in Treasury Regulations Section
1.704- 1(b)(2)(ii)(d), such Regulation being specifically incorporated
herein by reference.
(c) Sales Commission. The Sales Commission shall be allocated
to the Units which are not held by the General Partner and its
Affiliates in proportion to their respective capital contributions
represented by such Units (i.e., $250 in Sales Commissions per each
such Unit). The purpose of this Article 13(c) is to allocate the Sales
Commission to those Partners who actually bore the burden of paying the
Sales Commission.
(d) Allocations Between Transferor and Transferee. In the
event of the transfer (other than the pledges of the General Partner's
interest permitted by Article 19 or Permitted Pledges described in
Article 17.2(b)) of all or any part of a Partner's interest (in
accordance with the provisions of this Agreement) in the Partnership at
any time other than at the end of a Year, or the admission of a new
Partner (in accordance with the
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terms of this Agreement), the transferring Partner or new Partner's
share of the Partnership's income, gain, loss, deductions and credits,
as computed both for accounting purposes and for Federal income tax
purposes, shall be allocated between the transferor Partner and the
transferee Partner (or Partners), or the new Partner and the other
Partners, as the case may be, in the same ratio as the number of days
in such Year before and after the date of the transfer or admission;
provided, however, that if there has been a sale or other disposition
of the assets of the Partnership (or any part thereof) during such
Year, then the General Partner may elect, in its sole discretion, to
treat the periods before and after the date of the transfer or
admission as separate Years and allocate the Partnership's net income,
gain, net loss, deductions and credits for each of such deemed separate
Years. Notwithstanding the foregoing, the Partnership's "allocable cash
basis items," as that term is used in Section 706(d)(2)(B) of the Code,
shall be allocated as required by Section 706(d)(2) of the Code and the
regulations thereunder.
(e) Tax Withholding. The Partnership shall be authorized to
pay, on behalf of any Partner, any amounts to any federal, state or
local taxing authority, as may be necessary for the Partnership to
comply with tax withholding provisions of the Code or the other income
tax or revenue laws of any taxing authority. To the extent the
Partnership pays any such amounts that it may be required to pay on
behalf of a Partner, such amounts shall be treated as a cash
Distribution to such Partner and shall reduce the amount otherwise
distributable to such Partner.
14. DISTRIBUTIONS.
(a) Distribution of Partnership Cash Flow. Partnership Cash
Flow shall be distributed to the Partners within 60 days after the end
of each Year, or earlier in the discretion of the General Partner, in
proportion to their respective Percentage Interests at the time of
distribution.
(b) Distribution of Partnership Refinancing Proceeds and
Partnership Sales Proceeds. Partnership Refinancing Proceeds and
Partnership Sales Proceeds shall be distributed to the Partners within
60 days of the Capital Transaction giving rise to such proceeds, or
earlier in the discretion of the General Partner, in proportion to
their respective Percentage Interests at the time of distribution.
(c) Distribution in Liquidation. Upon liquidation of the
Partnership, all of the Partnership's property shall be sold and
Profits and Losses allocated accordingly. Proceeds from the liquidation
of the Partnership shall be distributed in accordance with Article 25.
15. RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS.
15.1 Management. The Limited Partners shall not take part in
the management of the business, nor transact any business for the Partnership,
nor shall they have power to sign for or to bind the Partnership. The
Partnership may, however, contract with one or more Limited Partners to act as
the
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local manager of the Mobile Lithotripsy System. No Limited Partner may withdraw
from the Partnership except as expressly permitted herein.
15.2 Operation of Mobile Lithotripsy System. The Limited
Partners shall not operate or utilize the Mobile Lithotripsy System or other
Partnership equipment except pursuant to (i) an Agreement with the Partnership;
or (ii) any other arrangement specifically approved by the General Partner.
15.3 Outside Activities. The Limited Partners agree that they
owe a fiduciary duty to the Partnership and, as a consequence, each Limited
Partner (that is not an Affiliate of the General Partner) shall not directly or
indirectly own, lease or sublease a Mobile Lithotripsy System (or similar
equipment used for lithotripsy of renal stones) or any other therapeutic device
acquired by the Partnership while they are Limited Partners in the Partnership
(collectively, the "Outside Activities"). Prohibited indirect ownership of a
competing device shall include the ownership of any interest in a business
venture (through stock ownership, partnership interest ownership, or as
otherwise determined in the sole discretion of the General Partner) involving
the ownership, purchase, use, lease, sublease or operation of a Mobile
Lithotripsy System (or similar equipment used for lithotripsy of renal stones)
or other competing device or equipment, unless the General Partner determines
that such activity by the Limited Partner is not detrimental to the best
interest of the Partnership. In the event a Limited Partner elects to engage in
an Outside Activity in violation of this Article 15.3, he or she must provide
written notice of such intent to the General Partner prior to engaging in such
activity, and such election shall be deemed an election by the Limited Partner
to withdraw from the Partnership (the "Notice of Withdrawal"). If a Limited
Partner engages in an Outside Activity without first notifying the General
Partner of his or her election to do so, the Limited Partner shall be deemed to
have given a Notice of Withdrawal on the date the General Partner first becomes
aware of the Limited Partner's Outside Activity. Upon receiving a Limited
Partner's Notice of Withdrawal or equivalent thereof, the Partnership's sole
remedy shall be the purchase rights provided in Article 18.3.
15.4 Disclosure of Confidential Information. Each Limited
Partner acknowledges and agrees that his or her participation in the Partnership
under this Agreement necessarily involves his or her understanding of and access
to certain trade secrets and other confidential information pertaining to the
business of the Partnership. Accordingly, each Limited Partner agrees that at
all times during his or her participation in the Partnership as a Limited
Partner and thereafter, he or she will not, directly or indirectly, without the
express written authority of the Partnership, unless required by law or directed
by a applicable legal authority having jurisdiction over the Limited Partner,
disclose or use for the benefit of any person, corporation or other entity
(other than the Partnership), or himself or herself, (i) any trade, technical,
operational, management or other secrets, any patient or customer lists or other
confidential or secret data, or any other proprietary, confidential or secret
information of the Partnership or (ii) any confidential information concerning
any of the financial arrangements, financial positions, hospital or physician
contracts, third party payor arrangements, quality assurance and outcome
analysis programs, competitive status, customer or supplier matters, internal
organizational matters, technical abilities, or other business affairs of or
relating to the Partnership. The Limited Partners acknowledge that all of the
foregoing constitutes proprietary information, which is the exclusive property
of the Partnership. In the event of breach of this Article 15.4 as determined by
the General Partner, the Partnership shall be entitled to any remedy at law or
equity with respect to such breach, including without limitation, an injunction
or suit for damages.
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16. LIMITED LIABILITY.
No Limited Partner shall be required to make any contribution
to the capital of the Partnership except as set forth in Article 7, nor shall
any Limited Partner in his or her capacity as such, be bound by, or personally
liable for, any expense, liability or obligation of the Partnership except to
the extent of his or her (i) interest in the Partnership; (ii) Guaranties of
Partnership obligations; and (iii) obligation to return distributions made to
him or her under certain circumstances as required by the Act.
17. TRANSFER OF INTERESTS AND ADMISSION OF PARTNERS.
17.1 Transferability.
(a) The term "transfer" when used in this Agreement with
respect to a Partnership Interest includes a sale, assignment, gift,
pledge, exchange, or any other disposition (but does not include the
issuance of new Partnership Interests pursuant to a Dilution Offering);
(b) Except as otherwise provided herein, the General Partner
shall not at any time transfer or assign its interest or obligation as
General Partner;
(c) The Partnership Interest of any Limited Partner shall not
be transferred, in whole or in part, except in accordance with the
conditions and limitations set forth in Articles 17.2 or 18;
(d) The transferee of a Partnership Interest by assignment,
operation of law or otherwise, shall have only the rights, powers and
privileges enumerated in Article 17.3 or otherwise provided by law and
may not be admitted to the Partnership as a Limited Partner except as
provided in Article 17.4 or as a General Partner except as provided in
Article 17.5;
(e) Notwithstanding any provision herein to the contrary, the
Partnership Agreement shall in no way restrict the issuance or
transfers of stock of the General Partner; and
(f) Notwithstanding any provision herein to the contrary, the
issuance of Partnership Interests pursuant to a Dilution Offering and
the admission of new Limited Partners pursuant to a Dilution Offering
shall be governed by the provisions of Section 7.4 of this Agreement.
17.2 Restrictions on Transfers by Limited Partners.
(a) All or part of a Partnership Interest may be transferred
by a Limited Partner only with the prior written approval of the
General Partner, which approval may be granted or denied in the sole
discretion of the General Partner. In no event may a Partnership
Interest be transferred if such transfer would result in a default
under the Guaranties, unless otherwise agreed to in writing by the
General Partner.
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(b) The General Partner shall not approve any transfer of a
Partnership Interest, except a pledge of any Partnership Interest by
the General Partner to any bank, insurance company or other financial
institution to secure payment of indebtedness (a "Permitted Pledge"),
or otherwise unless the proposed transferee shall have furnished the
General Partner with a sworn statement that:
(i) The proposed transferee proposes to acquire his
or her Partnership Interest as a principal, for investment and
not with a view to resale or distribution;
(ii) The proposed transferee meets such requirements
regarding sophistication, income and net worth as required by
applicable state and federal securities laws;
(iii) The proposed transferee has met such net worth
and income suitability standards as have been established by
the General Partner;
(iv) The proposed transferee recognizes that
investment in the Partnership involves certain risks and has
taken full cognizance of and understands all of the risk
factors related to the purchase of a Partnership Interest; and
(v) The proposed transferee has met all other
requirements of the General Partner for the proposed transfer.
(c) Other than in the case of a Permitted Pledge, a transfer
of a Partnership Interest may be made only if, prior to the date
thereof, the Partnership upon request receives an opinion of counsel,
satisfactory in form and substance to the General Partner, that neither
the offering nor the proposed transfer will require registration under
federal or applicable state securities laws or regulations.
17.3 Rights of Transferee.
Unless admitted to the Partnership in accordance with Article
17.4, the transferee of a Partnership Interest or a part thereof or any right,
title or interest therein shall not be entitled to any of the rights, powers, or
privileges of his predecessor in interest, except that he shall be entitled to
receive and be credited or debited with his proportionate share of Partnership
income, gains, Profits, Losses, deductions, credits or Distributions.
17.4 Admission of Limited Partners.
Except as otherwise provided in Article 18, the General
Partner, or the transferee of all or part of the Partnership Interest of either
a General Partner or a Limited Partner, may be admitted to the Partnership as a
Limited Partner upon furnishing to the General Partner all of the following:
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(a) The written approval of a Majority in Interest of all of
the Limited Partners (except the assignor Partner), or the assignor
Partner alone, which approval may be granted or denied in the sole
discretion of such Partners or Partner (as the case may be);
(b) The written approval of the General Partner, which
approval may be granted or denied in the sole discretion of the General
Partner;
(c) Acceptance, in a form satisfactory to the General Partner,
of all the terms and conditions of this Agreement and any other
documents required in connection with the operation of the Partnership
pursuant to the terms of this Agreement;
(d) A properly executed power of attorney substantially
identical to that contained in Article 38;
(e) Such other documents or instruments as may be required in
order to effect his or her admission as a Limited Partner; and
(f) Payment of such reasonable expenses as may be incurred in
connection with his or her admission as a Limited Partner.
17.5 Admission of General Partners.
A Limited Partner, or the transferee of all or part of the
Partnership Interest of the General Partner, may be admitted to the Partnership
as a general partner upon furnishing to the General Partner all of the
following:
(a) The written consent of both the General Partner and a
Majority in Interest of the Limited Partners, which consent may be
granted or denied in the sole discretion of the Partners;
(b) Such financial statements, guarantees or other assurances
as the General Partner may require with regard to the ability of the
proposed general partner to fulfill the financial obligations of a
general partner hereunder;
(c) Acceptance, in form satisfactory to the General Partner,
of all the terms and provisions of this Agreement and any other
documents required in connection with the operation of the Partnership
pursuant to the terms of this Agreement;
(d) A certified copy of a resolution of its Board of Directors
(if it is a corporation) authorizing it to become a general partner
under the terms and conditions of this Agreement;
(e) A power of attorney substantially identical to that
contained in Article 38;
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(f) Such other documents or instruments as may be required in
order to effect its admission as a general partner; and
(g) Payment of such reasonable expenses as may be incurred in
connection with its admission as a general partner.
Notwithstanding the above, a transferee that controls or is
controlled by the General Partner or one or more of its Affiliates that receives
all or part of the Partnership Interest of the General Partner may be admitted
to the Partnership as a general partner upon complying with all the provisions
of this Article 17.5 except for subparagraph 17.5(a). As long as the transferee
either controls or is controlled by the General Partner or one or more of its
Affiliates, no Limited Partner consents will be required to admit such
transferee as a General Partner to the Partnership.
17.6 Amendment of Certificate of Limited Partnership and
Qualification.
The General Partner shall take all steps necessary and
appropriate to prepare and record any amendments to the Certificate of Limited
Partnership, as may be necessary or appropriate from time to time to comply with
the requirements of the Act, including, without limitation, upon the admission
to the Partnership of any general partner pursuant to the provisions of Article
17.5, and may for this purpose exercise the power of attorney delivered to the
General Partner pursuant to Article 17.5 or 38. In addition, the General Partner
shall take all steps necessary and appropriate to prepare and record any and all
documents necessary to qualify the Partnership to do business in jurisdictions
where the Partnership is doing business, and may for this purpose exercise the
power of attorney delivered to the General Partner pursuant to Articles 17.4,
17.5 or 38.
17.7 Fundamental Changes.
In the event a plan is approved by the General Partner
providing for the merger or consolidation of the Partnership with another person
or entity, or the sale of all or substantially all of the Partnership Interests,
including without limitation the exchange of Partnership Interests for equity
interests in another person or entity or for cash or other consideration or
combination thereof, then and in such event, the Limited Partners shall be
obligated to take or refrain from taking, as the case may be, such actions as
the plan may provide, including, without limitations, executing such
instruments, and providing such information as the General Partner shall
reasonably request. Any plan described in this Article 17.7 may also effect an
amendment to the Partnership Agreement or the adoption of a new partnership
agreement in connection with the merger of the Partnership with another person
or entity. The plan may also provide that the General Partner and its Affiliates
shall receive fees for services rendered in connection with the operation of the
Partnership or any successor entity following the consummation of the
transactions described in the plan, and neither the Partnership nor the Partners
shall have any right by virtue of this Agreement in the income derived
therefrom. Any securities or other consideration to be distributed to the
Partners pursuant to the plan shall be distributed in the manner set forth in
Article 25(c) as though the Partnership were being liquidated. For this purpose
only, the fair market value of the securities or other consideration to be
received pursuant to the plan shall be treated as "Profits" and the capital
accounts of the Partners shall be increased in the manner provided in Article
12(a)(ii). No Partner shall be entitled to any appraisal or similar rights in
connection with a plan contemplated by this Article 17.7.
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17.8 Withdrawal of Initial Limited Partner.
Upon the date the first Limited Partner is admitted to the
Partnership in accordance with Article 11 of this Agreement, the Initial Limited
Partner shall withdraw from the Partnership, and thereupon his Capital
Contribution shall be returned and his Partnership Interest shall be reallocated
to the Limited Partners.
18. OPTIONAL PURCHASE OF LIMITED PARTNERSHIP INTERESTS ON
CERTAIN EVENTS.
18.1 Death.
Upon the death of a Limited Partner, the deceased Limited
Partner's executor, administrator, or other legal or personal representative
shall give written notice of that fact to the General Partner. The General
Partner shall have the option to purchase at the Closing (as defined below) the
Partnership Interest of the deceased Limited Partner (whose executor,
administrator or other legal or personal representative shall then become
obligated to sell such Partnership Interest) at the price determined in the
manner provided in Article 18.6 of this Agreement and on the terms and
conditions provided in Article 18.7 of this Agreement. The General Partner shall
have a period of thirty (30) days following the date of notice of the death of
the Limited Partner (the "Option Period") within which to notify in writing the
deceased Limited Partner's executor, administrator or other legal or personal
representative, whether the General Partner wishes to purchase all or a portion
of the Partnership Interest of the deceased Limited Partner. If the General
Partner does not elect to purchase the entire Partnership Interest of the
deceased Limited Partner before the expiration of the Option Period and in the
manner provided herein, the portion of the Partnership Interest not purchased
shall be held by the deceased Limited Partner's executor, administrator, or
other legal representative pursuant to the terms of this Agreement. The General
Partner, in its sole discretion, may elect to assign its rights to purchase the
Partnership Interest of a deceased Limited Partner under this Article 18.1 to
the Partnership and, in such case, the Partnership shall have the same rights as
provided for the General Partner under this Article 18.1.
18.2 Bankruptcy, Insolvency or Assignment for Benefit of
Creditors of a Limited Partner.
In the event that an involuntary or voluntary proceeding
under the Federal Bankruptcy Code, as amended, is filed for or against any
Limited Partner, or if any Limited Partner shall make an assignment for the
benefit of his creditors, or if any Limited Partner has a receiver or custodian
appointed for his assets, or any Limited Partner generally fails to pay his
debts when due, the insolvent Limited Partner shall give written notice (the
"Notice of Insolvency") to the General Partner of the commencement of any such
proceeding or the occurrence of such event within five days of the first notice
to him of such commencement or occurrence of such event. The General Partner
shall have the option to purchase at the Closing (as defined below) the
Partnership Interest of the insolvent Limited Partner (which insolvent Limited
Partner or his trustee, custodian, receiver or other personal or legal
representative, as the case may be, shall then become obligated to sell such
Partnership Interest) at the price determined in the manner provided in Article
18.6 of this Agreement and on the terms and conditions provided in Article 18.7
of this Agreement. The General Partner shall have a period of thirty
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(30) days following the date of the Notice of Insolvency (the "Option Period")
within which to notify in writing the insolvent Limited Partner or his trustee,
custodian, receiver, or other legal or personal representative, whether the
General Partner wishes to purchase all or a portion of the Partnership Interest
of the insolvent Limited Partner. If the General Partner does not elect to
purchase the entire Partnership Interest of the insolvent Limited Partner before
the expiration of the Option Period and in the manner provided herein, the
portion of the Partnership Interest not purchased shall be held by the insolvent
Partner, his trustee, custodian, receiver or other legal or personal
representative pursuant to the terms of this Agreement. The General Partner, in
its sole discretion, may elect to assign its rights to purchase the Partnership
Interest of an insolvent Limited Partner under this Article 18.2 to the
Partnership and, in such case, the Partnership shall have the same rights as
provided for the General Partner under this Article 18.2.
18.3 Breach of Article 15.3.
In the event the General Partner (the "Defaulting Limited
Partner") either receives a Notice of Withdrawal as provided in Article 15.3 or
receives notice of breach of Article 15.3, the General Partner may elect, in its
sole discretion, to treat such event as a default under this Agreement and
enforce the provisions of this Article 18.3. If the General Partner elects to
enforce the provisions of this Article 18.3, the General Partner shall give
written notice of such election (the "Notice of Default") to the Defaulting
Limited Partner within 180 days of the date the General Partner first received
the Notice of Withdrawal or notice of the defaulting event. The General Partner
shall have the option to purchase at the Closing (as defined below) the
Partnership Interest of the Defaulting Limited Partner (which Defaulting Limited
Partner shall then become obligated to sell such Partnership Interest) at the
price determined in the manner provided in Article 18.6 of this Agreement and on
the terms and conditions provided in Article 18.7 of this Agreement. The General
Partner shall have a period of thirty (30) days following the date of the close
of the date of the Notice of Default (the "First Option Period") within which to
notify in writing the Defaulting Limited Partner, whether the General Partner
wishes to purchase all or a portion of the Partnership Interest of the
Defaulting Limited Partner. If the General Partner does not elect to purchase
the entire Partnership Interest of the Defaulting Limited Partner before the
expiration of the Option Period and in the manner provided herein, the portion
of the Partnership Interest not purchased shall be held by the Defaulting
Limited Partner pursuant to the terms of this Agreement. The General Partner, in
its sole discretion, may elect to assign its rights to purchase the Partnership
Interest of a Defaulting Limited Partner under this Article 18.3 to the
Partnership and, in such case, the Partnership shall have the same rights as
provided for the General Partner under this Article 18.3.
18.4 Domestic Proceeding.
In the event that a spouse of a Limited Partner commences
against a Limited Partner, or a Limited Partner is named in, a Domestic
Proceeding, the Limited Partner shall give written notice (the "Notice of
Domestic Proceeding") to the General Partner of the commencement of any such
proceeding within five days of the first notice to him of such commencement. The
General Partner shall have the option to purchase at the Closing (as defined
below) the Partnership Interest of the Limited Partner involved in the Domestic
Proceeding (which Limited Partner shall then become obligated to sell such
Partnership Interest), at the price determined in the manner provided in Article
18.6 of this Agreement and on the terms and conditions provided in Article 18.7
of this Agreement. The General Partner shall
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have a period of thirty (30) days following the date of the Notice of Domestic
Proceeding (the "Option Period") within which to notify in writing the Limited
Partner involved in the Domestic Proceeding, whether the General Partner wishes
to purchase all or a portion of the Partnership Interest of such Limited
Partner. If the General Partner does not elect to purchase the Partnership
Interest of the Limited Partner involved in the Domestic Proceeding before the
expiration of the Option Period and in the manner provided herein, the portion
of the Partnership Interest not purchased shall be held by such Limited Partner
pursuant to the terms of this Agreement. The General Partner, in its sole
discretion, may elect to assign its rights to purchase the Partnership Interest
of the Limited Partner involved in the Domestic Proceeding under this Article
18.4 to the Partnership and, in such case, the Partnership shall have the same
rights as provided for the General Partner under this Article 18.4.
18.5 Divestiture Option.
If state or federal regulations or laws are enacted or
applied, or if any other legal developments occur, which, in the opinion of the
General Partner adversely affect (or potentially adversely affect) the operation
of the Partnership (e.g., the enactment or application of prohibitory physician
self-referral legislation against the Partnership or its Partners), the General
Partner shall promptly either, in its discretion, (i) take the steps outlined in
this Article 18.5 to divest the Limited Partners of their Partnership Interests,
or (ii) dissolve the Partnership as provided in Article 24.1(d). If the General
Partner chooses option (i), it shall deliver a written notice to all of the
Limited Partners (the "Notice of Election") and purchase such Partnership
Interests for its own account. The purchase price to be paid for each
Partnership Interest shall be determined in the manner as provided in Article
18.6 and shall be on the terms and conditions as provided in Article 18.7. The
transfer of the Partnership Interests and the payment of the purchase price (as
provided in Article 18.6) shall be made at such time as determined by the
General Partner to be in the best interests of the Partnership and its Limited
Partners. Each Limited Partner hereby makes, constitutes and appoints the
General Partner, with full power of substitution, his true and lawful
attorney-in-fact, to take such actions and execute such documents on his behalf
to effect the transfer of his Partnership Interest as provided in this Article
18.5.
18.6 Purchase Price.
The purchase price to be paid for the Partnership Interest of
any Limited Partner whose interest is being purchased pursuant to the provisions
of Articles 18.1, 18.2, 18.3, 18.4 or 18.5 (the "Retiring Limited Partner")
shall be an amount equal to the Retiring Limited Partner's share of the
Partnership's book value, if any, (prorated in the event that only a portion of
his Partnership Interest is being purchased) as reflected by the Capital Account
of the Retiring Limited Partner (unadjusted for any appreciation in Partnership
assets and as reduced by depreciation deductions claimed by the Partnership for
tax purposes). The determination of the Retiring Limited Partner's Capital
Account on the Valuation Date (as defined below) shall be made by the
Partnership's internal accountant (the "Partnership Accountant") upon a review
of the Partnership books of account, and a formal audit is expressly waived. The
statement of the Partnership Accountant with respect to the Capital Account of
the Retiring Limited Partner on the Valuation Date shall be binding and
conclusive upon the Partnership, the purchaser and the Retiring Limited Partner
and his representative. The Valuation Date shall be the last day of the month
immediately preceding the month in which occurs: (i) the death of a Limited
Partner, in the case of a purchase by reason of death; (ii) the bankruptcy or
insolvency of a Limited Partner, in the case of a purchase by reason of such
bankruptcy or insolvency; (iii) the Notice of Default as provided in
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Article 18.3 in the case of a purchase by reason thereof; (iv) the commencement
of the Domestic Proceeding, in the case of a purchase by reason thereof; or (v)
the Notice of Election as provided in Article 18.5, in the case of a purchase by
reason thereof. Any Limited Partner whose Partnership Interest is purchased
pursuant to the provisions of Article 18.1, 18.2, 18.3, 18. or 18.5 shall be
entitled only to the purchase price which shall be paid at the Closing in cash
(or by certified or cashier's check) and shall not be entitled to any
Partnership distributions made after the Valuation Date. Any distributions
inadvertently made to a Retiring Limited Partner after the Valuation Date may be
applied in reduction of the purchase price as determined pursuant to this
Article 18.6. The transfer of a Partnership Interest of a Retiring Limited
Partner shall be deemed to occur as of the Valuation Date and the Retiring
Limited Partner shall have no voting or other rights as a Limited Partner after
such date. The purchaser shall be entitled to any distributions attributable to
the transferred interest after the Valuation Date and shall have the right to
deduct the amount of any such distributions made to the Retiring Limited Partner
from the purchase price.
18.7 Closing.
18.7.1 Closing of Purchase and Sale. The Closing of any
purchase and sale of a Partnership Interest pursuant to Article 18.1,
18.2, 18.3, 18.4 or 18.5 of this Agreement shall take place at the
principal office of the Partnership, or such other place designated by
the General Partner, on the date determined as follows (the "Closing"):
(a) In the case of a purchase and sale occurring by reason of
the death of a Limited Partner as provided in Article 18.1 of this
Agreement, the Closing shall be held on the thirtieth day (or if such
thirtieth day is not a business day, the next business day following
the thirtieth day) next following the last to occur of:
(i) Qualification of the executor or personal
administrator of the deceased Limited Partner's estate;
(ii) The date on which any necessary determination of
the purchase price of the Partnership Interest to be purchased
has been made; or
(iii) The date that coincides with the close of the
Option Period.
(b) In the case of a purchase and sale occurring by reason of
the occurrence of one of the events described in Article 18.2, 18.3,
18.4 or 18.5 of this Agreement, the Closing shall be held on the
thirtieth day (or if such thirtieth day is not a business day, the next
business day following the thirtieth day) next following the later to
occur of:
(i) The date on which any necessary determination of
the purchase price of the Partnership Interest to be purchased
has been made; or
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(ii) The date that coincides with the close of the
Option Period.
At the Closing, although not necessary to effect the transfer, the
Retiring Limited Partner shall concurrently with tender and receipt of
the applicable purchase price, deliver to the purchaser duly executed
instruments of transfer and assignment, assigning good and marketable
title to the portion or portions of the Retiring Limited Partner's
entire Partnership Interest thus purchased, free and clear from any
liens or encumbrances or rights of others therein. The parties
acknowledge that occurrence of any of the triggering events described
in Article 18.1, 18.2, 18.3, 18.4 or 18.5 and compliance with all the
Articles of this Agreement, except the execution of the transfer
documents by the Retiring Partner as provided above in this Article
18.7.1, are sufficient to effect the complete transfer of the Retiring
Limited Partner's interest and the Retiring Limited Partner shall be
deemed to consent to admission of the transferee as a substitute
Limited Partner. Notwithstanding the date of the Closing or whether a
Closing is successfully held, the transfer of a Partnership Interest of
a Retiring Limited Partner shall be deemed to occur as of the Valuation
Date as defined in Article 18.6. The deemed transfer is effective
regardless of whether the Retiring Limited Partner performs the duties
set forth in this Article 18.7.1.
18.7.2 Terms and Conditions of Purchase. The Partnership
Interest of a Limited Partner shall not be transferred to any Partner
unless the requirements of Articles 17.2 and 17.4 (b) through (f) are
satisfied with respect to it. The purchaser shall be liable for all
obligations and liabilities connected with that portion of the
Partnership Interest transferred to it unless otherwise agreed in
writing.
19. SALE, ASSIGNMENT OR OTHER TRANSFER OF THE GENERAL
PARTNER'S INTEREST.
19.1 The General Partner may not mortgage, pledge,
hypothecate, transfer, sell, assign or otherwise dispose of all or any part of
its interest in the Partnership, whether voluntarily, by operation of law or
otherwise (the foregoing actions being hereafter collectively referred to as
"Transfers" or singularly as a "Transfer") except as permitted by this Article.
19.2 If the General Partner makes a Transfer (other than a
mortgage, pledge or hypothecation) of its general partner interest in the
Partnership pursuant to this Article, it shall be liable for all obligations and
liabilities incurred by it as the General Partner of the Partnership on or
before the effective date of such Transfer, but shall not be liable for any
obligations or liabilities of the Partnership arising after the effective date
of the Transfer.
19.3 No Transfer by the General Partner shall be permitted
unless:
(a) Counsel for the Partnership shall have rendered an opinion
that none of the actions taken in connection with such Transfer will
cause the Partnership to be classified other than as a partnership for
Federal income tax purpose or will cause the termination or dissolution
of the Partnership under state law; and
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(b) Such documents or instruments, in form and substance
satisfactory to counsel for the Partnership, shall have been executed
and delivered as may be required in the opinion of counsel for the
Partnership to effect fully any such Transfer.
Notwithstanding the foregoing provisions of this Article 19.3,
the General Partner may pledge its interest in the Partnership to any bank,
insurance company or other financial institution to secure payment of
indebtedness.
20. TERMINATION OF THE SERVICES OF THE GENERAL PARTNER.
If the General Partner shall be finally adjudged by a court of
competent jurisdiction to be liable to the Limited Partners or the Partnership
for any act of gross negligence or willful misconduct in the performance of its
duties under the terms of this Agreement, the General Partner may be removed and
another substituted with the consent of all of the Limited Partners. Such
consent shall be evidenced by a certificate of removal signed by all of the
Limited Partners. In the event of removal, the new general partner shall succeed
to all of the powers, privileges and obligations of the General Partner, and the
General Partner's interest in the Partnership shall become that of a Limited
Partner, and the General Partner shall maintain its same Percentage Interest in
the Partnership notwithstanding anything contained in the Act to the contrary.
In addition, in the event of removal, the new general partner shall take all
steps necessary and appropriate to prepare and record an amendment to the
Certificate of Limited Partnership to reflect the removal of the General Partner
and the admission of such new general partner.
21. MANAGEMENT AND OPERATION OF BUSINESS.
21.1 All decisions with respect to the management of the
business and affairs of the Partnership shall be made by the General Partner.
21.2 The General Partner shall be under no duty to devote all
of its time to the business of the Partnership, but shall devote only such time
as it deems necessary to conduct the Partnership business and to operate and
manage the Partnership in an efficient manner.
21.3 The General Partner may charge to the Partnership all
ordinary and necessary costs and expenses, direct and indirect, attributable to
the activities, conduct and management of the business of the Partnership. The
costs and expenses to be borne by the Partnership shall include, but are not
limited to, all expenditures incurred in acquiring and financing the Equipment
or other Partnership property, legal and accounting fees and expenses, salaries
of employees of the Partnership, consulting and quality assurance fees paid to
independent contractors, insurance premiums and interest.
21.4 In addition to, and not in limitation of, any rights and
powers covenanted by law or other provisions of this agreement, and except as
limited, restricted or prohibited by the express provisions of this Agreement,
the General Partner shall have and may exercise on behalf of the Partnership all
powers and rights necessary, proper, convenient or advisable to effectuate and
carry out the purposes, business and objectives of the Partnership. Such powers
shall include, without limitation, the following:
(a) To acquire a Mobile Lithotripsy System;
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(b) To acquire on behalf of the Partnership (i) one or more
fixed-base or Mobile Lithotripsy Systems, (ii) any other assets related
to the provision of lithotripsy services, or (iii) any other assets or
equipment consistent with the purposes of the Partnership as provided
in Article 4 (collectively, the "Additional Assets"), at such times and
at such price and upon such terms, as the General Partner deems to be
in the best interest of the Partnership;
(c) To purchase, hold, manage, lease, license and dispose of
Partnership assets (including the Mobile Lithotripsy System), including
the purchase, exchange, trade or sale of the Partnership's assets at
such price, or amount, for cash, securities or other property and upon
such terms, as the General Partner deems to be in the best interest of
the Partnership; provided, that should the Partnership assets be
exchanged or traded for securities or other property (the "Replacement
Property") the General Partner shall have the same powers with regard
to the Replacement Property as it does towards the traded property;
(d) To exercise the option of the General Partner or the
Partnership to purchase a Limited Partner's Partnership Interest
pursuant to Article 18;
(e) To determine the travel itinerary and site locations for
the Mobile Lithotripsy System or other Partnership technology;
(f) To borrow money for any Partnership purpose (including the
acquisition of the Additional Assets) and, if security is required
therefor, to subject to any security device any portion of the property
for the Partnership, to obtain replacements of any other security
device, to prepay, in whole or in part, refinance, increase, modify,
consolidate or extend any encumbrance or other security device;
(g) To deposit, withdraw, invest, pay, retain (including the
establishment of reserves in order to acquire the Additional Assets)
and distribute the Partnership's funds in any manner consistent with
the provisions of this Agreement;
(h) To institute and defend actions at law or in equity;
(i) To enter into and carry out contracts and agreements and
any or all documents and instruments and to do any and all such other
things as may be in furtherance of Partnership purposes or necessary or
appropriate to the conduct of the Partnership activities;
(j) To execute, acknowledge and deliver any and all
instruments which may be deemed necessary or convenient to effect the
foregoing; and
(k) To engage or retain one or more persons to perform acts or
provide materials as may be required by the Partnership, at the
Partnership's expense, and to compensate such person or persons at a
rate to be set by the General Partner, provided that the compensation
is at the then prevailing rate for the type of services and materials
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provided, or both. Any person, whether a Partner, an Affiliate of a
Partner or otherwise, including without limitation the General Partner,
may be employed or engaged by the Partnership to render services and
provide materials, including, but not limited to, management services,
professional services, accounting services, quality assessment
services, legal services, marketing services, maintenance services or
provide materials; and if such person is a Partner or an Affiliate of a
Partner, he shall be entitled to, and shall be paid compensation for
said services or materials, anything in this Agreement to the contrary
notwithstanding, provided that the compensation to be received for such
services or materials is competitive in price and terms with then
prevailing rate for the type of services and/or materials provided. The
Partnership, pursuant to the terms of a Management Agreement, will
contract with the General Partner, with respect to the supervision and
coordination of the management and administration of the day-to-day
operations of the Mobile Lithotripsy System for a monthly fee equal to
the greater of 7.5% of Partnership Cash Flow per month or $8,000 per
month. All costs incurred by the General Partner, excluding the costs
of employing one or more local physicians to act as a Medical Director,
shall be paid by the Partnership directly. The Partnership may also
contract with qualified physicians desiring to use the Mobile
Lithotripsy System for the treatment of patients. Owning an interest in
the Partnership shall not be a condition to using the Mobile
Lithotripsy System. The General Partner and its Affiliates may engage
in or possess an interest in other business ventures of any nature and
description independently or with others, including, but not limited
to, the operation of a mobile lithotripsy unit similar to the Mobile
Lithotripsy System, whether or not such business ventures are in direct
or indirect competition with the Partnership, and neither the
Partnership nor the Partners shall have any right by virtue of this
Agreement in and to said independent ventures or to the income or
profits derived therefrom. Notwithstanding the above, if the General
Partner, in its sole discretion, elects to cause the Partnership to
provide services in the State of Illinois, the General Partner may
determine, in its sole discretion, the terms and conditions that the
Partnership will contract with PKST regarding the provision of
lithotripsy services to hospitals already contracting with PKST, and
shall determine the fee or other remuneration payable to or retained by
PKST.
21.5 In addition to other acts expressly prohibited or
restricted by this Agreement or by law, the General Partner shall have no
authority to act on behalf of the Partnership in:
(a) Doing any act in contravention of this Agreement or the
Partnership's Certificate of Limited Partnership;
(b) Doing any act which would make it impossible to carry on
the ordinary business of the Partnership;
(c) Confessing a judgment against the Partnership in
connection with any threatened or pending legal action;
-23-
(d) Possessing or in any manner dealing with the Partnership's
property or assigning the rights of the Partnership in the
Partnership's property for other than Partnership purposes;
(e) Admitting a person as a Limited Partner or a General
Partner except as provided in this Agreement; or
(f) Performing any act (other than an act required by this
Agreement or any act taken in good faith reliance upon counsel's
opinion) which would, at the time such act occurred, subject any
Limited Partner to liability as a general partner in any jurisdiction.
22. RESERVES.
The General Partner may cause the Partnership to create a
reserve account to be used exclusively for repairs and acquisition of Additional
Assets and for any other valid Partnership purpose. The General Partner shall,
in its sole discretion, determine the amount of payments to such reserve.
23. INDEMNIFICATION AND EXCULPATION OF THE GENERAL
PARTNER.
23.1 The General Partner is accountable to the Partnership as
a fiduciary and consequently must exercise good faith and integrity in handling
Partnership affairs. The General Partner and its Affiliates shall have no
liability to the Partnership which arises out of any action or inaction of the
General Partner or its Affiliates if the General Partner or its Affiliates, in
good faith, determined that such course of conduct was in the best interest of
the Partnership and such course of conduct did not constitute gross negligence
or willful misconduct of the General Partner or its Affiliates. The General
Partner and its Affiliates shall be indemnified by the Partnership against any
losses, judgments, liabilities, expenses and amounts paid in settlement of any
claims sustained by them in connection with the Partnership, provided that the
same were not the result of gross negligence or willful misconduct on the part
of the General Partner or its Affiliates.
23.2 The General Partner shall not be liable for the return of
the Capital Contributions of the Limited Partners, and upon dissolution, Limited
Partners shall look solely to the assets of the Partnership.
24. DISSOLUTION OF THE PARTNERSHIP.
24.1 The Partnership shall be dissolved and terminated and its
business wound up upon the occurrence of any one of the following events:
(a) The expiration of its term on May 31, 2047;
(b) The filing by, on behalf of, or against the General
Partner of any petition or pleading, voluntary or involuntary, to
declare the General Partner bankrupt under any bankruptcy law or act,
or the commencement in any court of any proceeding, voluntary
-24-
or involuntary, to declare the General Partner insolvent or unable to
pay its debts, or the appointment by any court or supervisory authority
of a receiver, trustee or other custodian of the property, assets or
business of the General Partner or the assignment by it of all or any
part of its property or assets for the benefit of creditors, if said
action, proceeding or appointment is not dismissed, vacated or
otherwise terminated within ninety (90) days of its commencement;
(c) The determination of the General Partner that the
Partnership should be dissolved;
(d) The approval of a plan by the General Partner providing
for the merger, consolidation or sale of Partnership Interests as
described in Article 17.7;
(e) The election of the General Partner to dissolve the
Partnership following the occurrence of an event described in Article
18.5;
(f) The sale, exchange or other disposition of all or
substantially all of the property of the Partnership without making
provision for the replacement thereof; and
(g) The dissolution, retirement, resignation, death,
disability or legal incapacity of a general partner, and any other
event resulting in the dissolution or termination of the Partnership
under the laws of the State of Wisconsin.
24.2 Notwithstanding the provisions of Article 24.1, the
Partnership shall not be dissolved and terminated upon the retirement,
resignation, bankruptcy, assignment for the benefit of creditors, dissolution,
death, disability or legal incapacity of a general partner, and its business
shall continue pursuant to the terms and conditions of this Agreement, if any
general partner or general partners remain following such event; provided that
such remaining general partner or general partners are hereby obligated to
continue the business of the Partnership. If no general partner remains after
the occurrence of such event, the business of the Partnership shall continue
pursuant to the terms and conditions of this Agreement, if, within ninety (90)
days after the occurrence of such event, a Majority in Interest of the Limited
Partners agree in writing to continue the business of the Partnership, and, if
necessary, to the appointment of one or more persons or entities to be
substituted as the general partner. In the event the Limited Partners agree to
continue the business of the Partnership, the new general partner or general
partners shall succeed to all of the powers, privileges and obligations of the
General Partner, and the General Partner's interest in the Partnership shall
become a Limited Partner's interest hereunder. Furthermore, in the event a
remaining general partner or the Limited Partners, as the case may be, agree to
continue the business of the Partnership as provided herein, the remaining
general partner or the newly appointed general partner or general partners, as
the case may be, shall take all steps necessary and appropriate to prepare and
record an amendment to the Certificate of Limited Partnership to reflect the
continuation of the business of the Partnership and the admission of a new
general partner or general partners, if any.
-25-
25. DISTRIBUTION UPON DISSOLUTION.
Upon the dissolution and termination of the Partnership, the
General Partner or, if there is none, a representative of the Limited Partners,
shall cause the cancellation of the Partnership's Certificate of Limited
Partnership, shall liquidate the assets of the Partnership, and shall apply and
distribute the proceeds of such liquidation in the following order of priority:
(a) First, to the payment of the debts and liabilities of
the Partnership, and the expenses of liquidation;
(b) Second, to the creation of any reserves which the General
Partner (or the representatives of the Limited Partners) may deem
reasonably necessary for the payment of any contingent or unforeseen
liabilities or obligations of the Partnership or of the General Partner
arising out of or in connection with the business and operation of the
Partnership; and
(c) Third, the balance, if any, shall be distributed to the
Partners in accordance with the Partners' positive Capital Account
balances after such capital accounts are adjusted as provided by
Article 13, and any other adjustments required by the Final Treasury
Regulations under Section 704(b) of the Code. Any general partner with
a negative Capital Account following the distribution of liquidation
proceeds or the liquidation of its interest must contribute to the
Partnership an amount equal to such negative Capital Account on or
before the end of the Partnership's taxable year (or, if later, within
ninety days after the date of liquidation). Any capital so contributed
shall be (i) distributed to those Partners with positive Capital
Accounts until such Capital Accounts are reduced to zero, and/or (ii)
used to discharge recourse liabilities.
26. BOOKS OF ACCOUNT, RECORDS AND REPORTS.
26.1 Proper and complete records and books of account shall be
kept by the General Partner in which shall be entered fully and accurately all
transactions and such other matters relating to the Partnership's business as
are usually entered into records and books of account maintained by persons
engaged in businesses of a like character. The books and records of the
Partnership shall be prepared according to the accounting method determined by
the General Partner. The Partnership's fiscal year shall be the calendar year.
The books and records shall at all times be maintained at the Partnership's
Records Office and shall be open to the reasonable inspection and examination of
the Partners or their duly authorized representatives during reasonable business
hours.
26.2 Within ninety (90) days after the end of each Year, the
General Partner shall send to each person who was a Limited Partner at any time
during such year such tax information, including, without limitation, Federal
tax Schedule K-1, as shall be reasonably necessary for the preparation by such
person of his Federal income tax return. The General Partner will also make
available to the Limited Partners any other information required by the Act.
26.3 The General Partner shall maintain at the Partnership's
Records Office copies of the Partnership's original Certificate of Limited
Partnership and any certificate of amendment, restated
-26-
certificate or certificate of cancellation with respect thereto and such other
documents as the Act shall require. The General Partner will furnish to any
Limited Partner upon request a copy of the Partnership's original Certificate of
Limited Partnership and any certificate of amendment, restated certificate, or
certificate of cancellation, if any.
26.4 The General Partner shall, in its sole discretion, make
for the Partnership any and all elections for federal, state and local tax
purposes including, without limitation, any election, if permitted by applicable
law, to adjust the basis of the Partnership's property pursuant to Code Sections
754, 734(b) and 743(b), or comparable provisions of state or local law, in
connection with transfers of interests in the Partnership and Partnership
Distributions.
26.5 The General Partner is designated as the Tax Matters
Partner (as defined in Section 6231 of the Code) and to act in any similar
capacity under state or local law, and is authorized (at the Partnership's
expense): (i) to represent the Partnership and Partners before taxing
authorities or courts of competent jurisdiction in tax matters affecting the
Partnership or Partners in their capacity as Partners; (ii) to extend the
statute of limitations for assessment of tax deficiencies against Partners with
respect to adjustments to the Partnership's federal, state or local tax returns;
(iii) to execute any agreements or other documents relating to or affecting such
tax matters, including agreements or other documents that bind the Partners with
respect to such tax matters or otherwise affect the rights of the Partnership
and Partners; and (iv) to expend Partnership funds for professional services and
costs associated therewith. The General partner is authorized and required to
notify the federal, state or local tax authorities of the appointment of a Tax
Matters Partner in the manner provided in Treasury Regulations Section
301.6231(a)(7)-IT, as modified from time to time. In its capacity as Tax Matters
Partner, the General Partner shall oversee the Partnership tax affairs in the
manner which, in its best judgment, are in the interests of the Partners.
27. NOTICES.
All notices under this Agreement shall be in writing and shall
be deemed to have been given when delivered personally, or mailed by certified
or registered mail, postage prepaid, return receipt requested. Notices to the
General Partner shall be delivered at, or mailed to, its principal office.
Notices to the Partnership shall be delivered at, or mailed to, its principal
office with a copy to each of its business offices. Notice to a Limited Partner
shall be delivered to such Limited Partner, or mailed to the last address
furnished by him for such purposes to the General Partner. Limited Partners
shall give notice of a change of address to the General Partner in the manner
provided in this Article.
28. AMENDMENTS.
Subject to the provisions of Article 29, this Agreement is
subject to amendment only by written consent of the General Partner and a
Majority in Interest of the Limited Partners; provided, however, the consent of
the Limited Partners shall not be required if such amendments are ministerial in
nature and do not contravene the provisions of Article 29.
29. LIMITATIONS ON AMENDMENTS.
Notwithstanding the provisions of Article 28, no amendment to
this Agreement shall:
-27-
(a) Enlarge the obligations of any Partner under this
Agreement or convert the interest in the Partnership of any Limited
Partner into the interest of a general partner or modify the limited
liability of any Limited Partner, without the consent of such Partner;
(b) Amend the provisions of Article 13, 14, 16 or 25 without
the approval of the General Partner and a Majority in Interest of the
Limited Partners; provided, however, that the General Partner may at
any time amend such Articles without the consent of the Limited
Partners in order to permit the Partnership allocations to be sustained
for Federal income tax purposes, but only if such amendments do not
materially affect adversely the rights and obligations of the Limited
Partners, in which case such amendments may only be made as provided in
this Article 29(b); or
(c) Amend this Article 29 without the consent of all Partners.
30 MEETINGS, CONSENTS AND VOTING.
30.1 A meeting of the Partnership to consider any matter with
respect to which the Partners may vote as set forth in this Agreement may be
called by the General Partner or by Limited Partners who hold more than
twenty-five percent (25%) of the aggregate interests in the Partnership held by
all the Limited Partners. Upon receipt of a notice requesting a meeting by such
Partner or Partners and stating the purpose of the meeting, the General Partner
shall, within ten (10) days thereafter, give notice to the Partners of a meeting
of the Partnership to be held at a time and place convenient to the Limited
Partners on a date not earlier than fifteen (15) days after receipt by the
General Partner of the notice requesting a meeting. The notice of the meeting
shall set forth the time, date, location and purpose of the meeting.
30.2 Any consent of a Partner required by this Agreement may
be given as follows:
(a) By a written consent given by the consenting Partner and
received by the General Partner at or prior to the doing of the act or
thing for which the consent is solicited, or
(b) By the affirmative vote by the consenting Partner to the
doing of the act or thing for which the consent is solicited at any
meeting called pursuant to this Article to consider the doing of such
act or thing.
30.3 When exercising voting rights expressly granted under the
Articles of this Agreement, each Partner shall have that number of votes as is
equal to the Percentage Interest of such Partner at the time of the vote,
multiplied by 100.
31. SUBMISSIONS TO THE LIMITED PARTNERS.
The General Partner shall give the Limited Partners notice of
any proposal or other matter required by any provision of this Agreement or by
law to be submitted for consideration and approval
-28-
of the Limited Partners. Such notice shall include any information required by
the relevant provision or by law.
32. ADDITIONAL DOCUMENTS.
Each party hereto agrees to execute and acknowledge all
documents and writings which the General Partner may deem necessary or expedient
in the creation of this Partnership and the achievement of its purpose.
33. SURVIVAL OF RIGHTS.
Except as herein otherwise provided to the contrary, this
Agreement shall be binding upon and inure to the benefit of the parties hereto,
their successor and assigns.
34. INTERPRETATION AND GOVERNING LAW.
When the context in which words are used in this Agreement
indicates that such is the intent, words in the singular number shall include
the plural and vise versa; in addition, the masculine gender shall include the
feminine and neuter counterparts. The Article headings or titles and the table
of contents shall not define, limit, extend or interpret the scope of this
Agreement or any particular Article. This Agreement shall be governed and
construed in accordance with the laws of the State of Wisconsin without giving
effect to the conflicts of laws provisions thereof.
35. SEVERABILITY.
If any provision, sentence, phrase or word of this Agreement
or the application thereof to any person or circumstance shall be held invalid,
the remainder of this Agreement, or the application of such provision, sentence,
phrase, or word to persons or circumstances, other than those as to which it is
held invalid, shall not be affected thereby.
36. AGREEMENT IN COUNTERPARTS.
This Agreement may be executed in several counterparts, each
of which shall be deemed an original, but all of which shall constitute one and
the same instrument. In addition, this Agreement may contain more than one
counterpart of the signature page and this Agreement may be executed by the
affixing of the signatures of each of the Partners to one of such counterpart
signature pages; all of such signature pages shall be read as though one, and
they shall have the same force and effect as though all of the signers had
signed a single signature page.
37. THIRD PARTIES.
The agreements, covenants and representations contained herein
are for the benefit of the parties hereto inter se and are not for the benefit
of any third parties including, without limitation, any creditors of the
Partnership.
-29-
38. POWER OF ATTORNEY.
Each Limited Partner hereby makes, constitutes and appoints
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, severally, with full power of substitution,
his true and lawful attorneys-in-fact, for him and in his name, place and ▇▇▇▇▇
and for his use and benefit to sign and acknowledge, file and record, any
amendments hereto among the Partners for the further purpose of executing and
filing on behalf of each Limited Partner, any and all certificates of limited
partnership or other documents necessary to constitute the Partnership or to
effect the continuation of the Partnership, the admission or withdrawal of a
general partner or a limited partner, the qualification of the Partnership in a
foreign jurisdiction (or amendment to such qualification), the admission of
substitute Limited Partners or the dissolution or termination of the
Partnership, provided such continuation, admission, withdrawal, qualification,
or dissolution and termination are in accordance with the terms of this
Agreement.
The foregoing power of attorney is a special power of attorney
coupled with an interest, is irrevocable and shall survive the death or legal
incapacity of each Limited Partner. It may be exercised by any one of said
attorneys by listing all of the Limited Partners executing any instrument over
the signature of the attorney-in-fact acting for all of them. The power of
attorney shall survive the delivery of an assignment by a Limited Partner of the
whole or any portion of his Unit. In those cases in which the assignee of, or
the successor to, a Limited Partner owning a Unit has been approved by the
Partners for admission to the Partnership as a substitute Limited Partner, the
power of attorney shall survive for the sole purpose of enabling the General
Partner to execute, acknowledge and file any instrument necessary to effect such
substitution.
This power of attorney shall not be affected by the subsequent
incapacity or mental incompetence of any Limited Partner.
39. ARBITRATION.
Any dispute arising out of or in connection with this
Agreement or the breach thereof shall be decided by arbitration in Raleigh,
North Carolina in accordance with the then effective commercial arbitration
rules of the American Arbitration Association, and judgment thereof may be
entered in any court having jurisdiction thereof.
40. CREDITORS.
None of the provisions of this Agreement shall be for the
benefit of or enforceable by any creditors of the Partnership.
[The remainder of this page is intentionally left blank]
-30-
IN WITNESS WHEREOF, the parties have executed this Agreement
of Limited Partnership as of the day and year first above written.
GENERAL PARTNER:
PRIME KIDNEY STONE TREATMENT, INC.,
a New Jersey corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Vice President
ATTEST:
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
__________________ [CORPORATE SEAL]
Secretary
[CORPORATE SEAL]
INITIAL LIMITED PARTNER:
/s/ ▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------
▇▇▇ ▇. ▇▇▇▇▇, M.D.
STATE OF TEXAS )
)
COUNTY OF ▇▇▇▇▇▇ )
On this 21st day of October, 1997, before me, the
undersigned Notary Public in and for the County of ▇▇▇▇▇▇ in the State of Texas,
personally came ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, who, being by me duly sworn, said that he is
President of Prime Kidney Stone Treatment, Inc., the sole general partner of
Great Lakes Lithotripsy Limited Partnership, that the seal affixed to the
foregoing instrument in writing is the corporate seal of the corporation, and
that said writing was signed, sworn to, and sealed by him in behalf of said
corporation by its authority duly given. And the said ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, further
certified that the facts set forth in said writing are true and correct, and
acknowledged said instrument to be the act and deed of said corporation.
WITNESS my hand and notarial seal.
/s/ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇
------------------------------------------
Notary Public
My commission expires:
May 26, ▇▇▇▇
---------------------------
-▇▇-
▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ )
)
COUNTY OF CUMBERLAND )
I, ▇▇▇ ▇▇▇ ▇▇▇▇▇▇, a notary public, do hereby
certify that ▇▇▇ ▇. ▇▇▇▇▇, M.D. personally appeared before me this 21st day of
October, 1997 and acknowledged and swore to the due execution of the foregoing
Limited Partnership Agreement in his capacity as the initial limited partner.
/s/ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇
------------------------------------------
Notary Public
My commission expires:
May 26, 2001
---------------------------
-32-
COUNTERPART SIGNATURE PAGE
By signing this Counterpart Signature Page, the undersigned
acknowledges his or her acceptance of that certain Agreement of Limited
Partnership of Great Lakes Lithotripsy Limited Partnership, and his or her
intention to be legally bound thereby.
Dated this _________ day of ___________________, 1997.
-------------------------------------------
Signature
-------------------------------------------
Printed Name
STATE OF _______________ )
)
COUNTY OF _____________ )
BEFORE ME, the undersigned Notary Public in and for the State
and County set forth above, on the _______ day of __________________, 1997,
personally appeared ___________________, and, being by me first duly sworn,
stated that (s)he signed this Counterpart Signature Page for the purpose set
forth above and that the statements contained therein are true.
-------------------------------------------
Signature of Notary Public
-------------------------------------------
Printed Name of Notary
My Commission Expires:
---------------------------
[SEAL]
-33-
SCHEDULE A
Schedule of Partnership Interests
GREAT LAKES LITHOTRIPSY LIMITED PARTNERSHIP
CONTRIBUTIONS OF CAPITAL TO THE PARTNERSHIP, GUARANTIES
AND PERCENTAGE INTERESTS
Cash Percentage
General Partner Contribution Guaranty(1) Interest
Prime Kidney Stone Treatment, Inc. $50,000 $211,200 20%
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇-▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Limited Partners
▇▇▇▇ ▇▇▇▇▇▇ 10,000 42,240 4%
▇▇▇▇ ▇▇▇▇▇ 10,000 42,240 4%
▇▇▇▇▇ ▇▇▇▇▇▇ 10,000 42,240 4%
▇▇▇▇ ▇▇▇▇▇▇▇ 10,000 42,240 4%
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 10,000 42,240 4%
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 2,500 10,560 1%
▇▇▇▇ ▇▇▇▇▇▇ 5,000 21,120 2%
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 2,500 10,560 1%
▇▇▇▇▇▇ ▇▇▇▇▇▇ 10,000 42,240 4%
▇▇▇▇ ▇▇▇▇▇▇ 10,000 42,240 4%
▇▇▇▇ ▇▇▇▇▇▇ 10,000 42,240 4%
▇▇▇▇ ▇▇▇▇▇▇ 10,000 42,240 4%
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 10,000 42,240 4%
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 10,000 42,240 4%
▇▇▇▇▇ ▇▇▇▇▇▇▇ 10,000 42,240 4%
▇▇▇▇▇ ▇▇▇▇▇▇▇ 10,000 42,240 4%
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ 10,000 42,240 4%
▇▇▇▇▇ ▇▇▇▇ 5,000 21,120 2%
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 5,000 21,120 2%
▇▇▇▇▇ ▇▇▇▇▇▇ 10,000 42,240 4%
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 10,000 42,240 4%
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 10,000 42,240 4%
▇▇▇▇▇▇ ▇▇▇▇▇ 10,000 42,240 4%
----- ------ ---
TOTAL: $250,000 $1,056,000 100%
====== ======= =====
(1) Represents the principal portion of each Partner's guaranty obligation,
as each Partner's obligation under the Guaranty includes not only
principal, but also (as provided in the Guaranty) accrued and unpaid
interest, late payment penalties and all costs incurred by the Bank in
collecting any defaulted obligations. The principal amount of the loan
is up to $1,056,000. The General Partner will guarantee 20% of the Loan
(up to a $211,200 principal guaranty) as provided in the Memorandum.
The Limited Partners will guarantee 1% of the loan (up to a $10,560
principal guaranty) for each unit purchased as provided in the
Memorandum.