Rights and Liabilities of the Limited Partners. The Limited Partners do not have any right to participate in the management of the business of the Partnership and will not transact business for the Partnership. Limited Partners are not required to make any capital contributions to the Partnership except amounts agreed by them to be paid, or pay or be personally liable for, any expense, liability or obligation of the Partnership, except to the extent (i) his Capital Contribution and liability under a Limited Partner Loan, if any; (ii) his proportionate share of the undistributed profits of the Partnership; and (iii) the amount of certain Distributions received from the Partnership as provided by the Act. See "Risk Factors - Other Investment Risks - Limited Partners Obligations to Return Certain Distributions." The Limited Partners may not participate in or own an interest in any competing lithotripsy venture, except with the approval of the General Partner. See "Noncompetition Agreement and Protection of Confidential Information" below. The General Partner may elect to treat participation or ownership by a Limited Partner in a competing venture as an event of default, and such Limited Partner may be required to sell his Partnership Interest. See "Optional Purchase of Limited Partner Interests" below. Restrictions on Transfer of Partnership Interests After acquisition of Units by Investors, no Partnership Interest nor any Units may be transferred without the prior written consent of the General Partner, which approval may be granted or withheld in the General Partner's sole discretion, and subject to the satisfaction of certain other conditions set forth in the Partnership Agreement. The Partnership Agreement contains additional limitations on transfer, including provisions prohibiting transfer that would cause the termination of the Partnership, would violate federal or state securities laws, would prevent the Partnership from being entitled to use any method of depreciation which the Partnership might otherwise be entitled to use, or would adversely affect the status of the Partnership as a partnership for federal income tax purposes. In addition, the Partnership Agreement prohibits the holding or transfer of a Partnership interest by or to a "tax exempt entity" (as defined in Code Section 168(h)) which would affect the method or manner in which the Partnership may depreciate Partnership assets. No transferee of the Units will automatically become a Limited Partner. Admission of a transferee to the Part...
Rights and Liabilities of the Limited Partners. 55 Restrictions on Transfer of Partnership Interests..........................55 Noncompetition Agreement and Protection of Confidential Information........56
Rights and Liabilities of the Limited Partners
