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EXHIBIT 7.a.
PARTNERSHIP AGREEMENT
OF
SCTC PARTNERSHIP
THIS AGREEMENT OF GENERAL PARTNERSHIP entered into as of the 22nd day of
December, 1997, between Xxxxx Xxxxx as Managing General Partner, and the
parties named as other General Partners on Schedule A to this Agreement. The
Managing General Partner and any other General Partners(s) are sometimes
collectively referred to as the "Partners."
Said Partnership shall be from and after the date hereof upon the following
terms and conditions:
ARTICLE I
FORMATION
The Partners have agreed to form, and have formed a General Partnership
(the "Partnership") pursuant to the Uniform Partnership Act as set forth in the
laws of the State of Tennessee, Tennessee Code Annotated, 61-1-101 et seq.
ARTICLE II
NAME AND OFFICE
The name of the Partnership shall be SCTC Partnership. The office of the
Partnership shall be at 000 Xxxxx Xxxx Xxxx., Xxxxx 000, Xxxxxxx, Xxxxxxxxx
00000. The Managing General Partner, in their sole discretion, may from time
to time change the name and/or the place or places of business of the
Partnership.
ARTICLE III
PURPOSES
The purposes of the Partnership are:
(a) To purchase, sell, and own and to finance the acquisition and
ownership of, equity investments in publicly traded entities including
Physician Resource Group, Inc. or related investment ("PRG").
(b) To incur or guaranty indebtedness, with or without security, in
connection with the purchase of such equity investments, or for other
purposes of the Partnership.
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(c) To lend any of the monies or other assets of the Partnership
with or without security.
(d) To grant options, for considerations, to promote any of the
purposes of the Partnership.
(e) To invest and reinvest the assets of the Partnership in, and to
purchase or otherwise acquire, hold, sell, transfer, exchange or otherwise
dispose of, or realize upon, securities of all types and descriptions and
any other interests in business ventures.
(f) Any other purposes as are necessary to protect or enhance the
assets of the Partnership.
ARTICLE IV
TERM
The Partnership shall commence on the date hereof, and shall terminate on
December 31, 2036, provided however, that the Partnership shall be terminated
prior to such date:
(a) Upon the occurrence of either (i) the bankruptcy, or liquidation
of a General Partner which is not a natural person; or (ii) the bankruptcy,
incompetency, incapacity or death of a General Partner who is a natural
person, unless the surviving General Partners, if any, shall elect to
continue the business of the Partnership as provided for in Article XI
hereunder.
(b) By decision of a majority in interest of the Partners.
ARTICLE V
DISTRIBUTIONS TO PARTNERS AND ALLOCATION
OF PROFITS AND LOSSES AMONG PARTNERS
(a) Distributions of cash will be made from time to time, at the
discretion of the Managing General Partner, but not less frequently than
once a year. Such cash distributions will not be less than one hundred
percent (100%) of the adjusted cash flow of the fiscal year for which the
distribution is made. For this purpose, "adjusted cash flow" is defined as
the sum of (i) all cash generated by the operation of the Partnership and
(ii) any cash proceeds realized on the refinancing or disposition of
Partnership property, less the sum of (i) any cash charges and expenses
incurred in the operation of the Partnership, including mortgage payments,
and (ii) such amounts which the Managing General Partner, in his sole
discretion,
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reasonably determines to be necessary for the prudent conduct of the
business of the Partnership.
(b) Distributions of cash shall be made to the Partners in
accordance with the percentage interests of the Partners set forth in
Schedule A to this Agreement.
(c) For each fiscal year of the Partnership, each item of
income, gain, loss, deduction or tax credit shall be allocated amongst
the Partners in accordance with the percentages set forth in Schedule A
to this Agreement.
(d) In the case of any sale, assignment, transfer or other
disposition of all or any part of a Partner's interest in the
Partnership during a taxable year of the Partnership made in accordance
with this Agreement, all profits and losses of the Partnership for such
taxable year shall be allocated between the transferor and the
transferee of such Partnership interest under any reasonable method
allowed under 706 of the Code as determined by the Managing General
Partner.
ARTICLE VI
CAPITAL CONTRIBUTIONS
(a) The initial capital contribution of the Partnership shall be One
Hundred and No/100 Dollars ($100.00) which the Partners shall contribute in cash
to the Partnership in accordance with the amounts and percentages set forth in
Schedule A to this Agreement.
(b) As funds are needed for payment of reduction of principal and
interest on debt of the Partnership, and other Partnership expenditures, each
Partner shall, upon notice by the Managing General Partner, make an additional
cash contribution for his proportionate share of such expenses. In the event
that any Partner fails to make such contribution within thirty (30) days after
demand by the Managing General Partner, then the interest of any such
defaulting Partner shall be reduced proportionately based on the total capital
of the Partnership after such additional contributions by the non-defaulting
Partners, and the interest of the non-defaulting Partners shall be similarly
increased. Schedule A to this Agreement and distributions under Articles V and
XVI shall reflect adjustments as determined under this paragraph (b).
(c) No Partner shall be entitled to interest on any capital
contributions.
(d) The Partnership shall maintain a capital account in
accordance with the tax accounting principles of Section 704(b) of the Code on
behalf of the Partners. There have been and shall be credited thereto the
amounts of each Partner's capital contributions as made and received and each
Partner's share of Partnership profits allocated to him pursuant to Article V
hereof. Each
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Partner's capital account shall be debited with that Partner's share of
Partnership losses allocated to him and any distributions made to him pursuant
to Article V hereof.
ARTICLE VII
NO LIMITED PARTNERS
All members of this Partnership shall be General Partners.
ARTICLE VIII
ADMISSION OF ADDITIONAL GENERAL PARTNERS
Additional General Partners may be admitted to the Partnership at any time
upon approval of the Managing General Partner. The terms and conditions of the
admission of such additional General Partners shall be determined by the
Managing General Partner. Additional General Partner shall be liable for all of
the debts and obligations of the Partnership as if they were original parties to
this Agreement.
ARTICLE IX
THE MANAGING GENERAL PARTNERS
(a) Decisions affecting the management and conduct of the Partnership
business shall be made by the Managing General Partner, chosen from time to
time, and serving at the pleasure of the Partners acting by a majority in
interest. The initial Managing General Partner shall be Xxxxx Xxxxx. The
Managing General Partner shall have the exclusive right and power to manage and
operate the Partnership and do all things necessary to carry on the business of
the Partnership for all the purposes described in Article III. The Managing
General Partner shall devote so much of his time to the business of the
Partnership as in his judgement the conduct of its business shall reasonably
require. The Managing General Partner may engage in business ventures of any
nature and description, independently or with another, including but not
limited to business of the character described in Article III hereof, and
neither the Partnership nor any of the other Partners shall have any rights in
and to such independent ventures or income or profits derived therefrom. No
other Partner shall have authority to bind the Partnership or its Partners.
(b) The Managing General Partner is specifically authorized and
empowered, on behalf of the Partnership, without any further consent of the
other Partners, to do any act or to execute any documents or to enter into any
contract or agreement of any nature necessary or desirable, which in the
opinion of the Managing General Partner, is in pursuance of the purposes of the
Partnership.
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(c) The Managing General Partner is specifically authorized and
empowered, on behalf of the Partnership, to execute a promissory note in favor
of First Tennessee Bank National Association, Memphis, Tennessee, in the
approximate principal amount of $3,000,000 for the purpose of acquiring and
holding stock in PRG.
(d) All expenses of the Partnership, including without limitation,
expenses of operation and administration, shall be paid by the Partnership.
(e) The Managing General Partner shall cause the Partnership to carry
adequate casualty and liability insurance.
(f) The Managing General Partner is authorized to contract with,
including without limitation, accountants, agents, appraisers, architects,
attorneys, brokers, consultants, contractors, engineers, insurance brokers,
maintenance personnel, managers, mortgage brokers, real estate brokers,
trustees and other individuals for services needed by the Partnership; whether
or not any such persons are General Partners, or affiliates of these, or
employees, officers, directors or stockholders of any corporate General
Partner, or are creditors of the Partnership or any General Partner, or are
employees, officers, directors or stockholders of any corporate General
Partner, or affiliates of any of the above, provided that the price paid for
such service is fair and reasonable.
(g) The Managing General Partner is authorized, on behalf of the
Partnership, to conduct business transactions of every nature and description
under such terms and conditions as the Managing General Partner in his sole
discretion determine to be fair and reasonable, including but not limited to
the sale of or lease of Partnership property to, or the purchase of or lease of
Partnership property by, an individual or legal entity without regard to the
fact that he, she or it is a General Partner or employee, officer, director or
stockholder of any corporate General Partner or because he, she or it is a
creditor of the Partnership or General Partner, or is an employee, officer,
director or stockholder of any corporate General Partner, or affiliates of any
of the above.
(h) In the event of an audit of the Partnership by the Internal Revenue
Service, Xxxxxxx X. Xxxxxxx agrees to serve as "Tax Matters Partner" if one may
be designated under the Code. As such Tax Matters Partner, Xxxxxxx X. Xxxxxxx
shall be responsible for representing the Partners in all proceedings with the
Internal Revenue Service. The Tax Matters Partner shall advise all Partners of
the beginning of an administrative proceeding at the Partnership level with
respect to any Partnership item. In addition, the Tax Matters Partner shall
advise each Partner of the final Partnership administrative adjustment proposed
by the Internal Revenue Service. The Tax Matters Partner may enter into any
settlement or agree to any proposed adjustment without the prior written
consent of the other Partners. Any settlement agreement reached by the Tax
Matters Partner shall be binding on all Partners unless a Partner notifies the
Internal Revenue Service and the Tax Matters Partner of its separate
representation and revocation of authority granted to the Tax Matters Partner
pursuant to this paragraph (g). A Partner who finally determines with the
Internal Revenue Service any matter pertaining to the Partnership shall
immediately so notify the Tax Matters Partner. All
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costs and expenses incurred by the Tax Matters Partner in connection with any
such negotiations and settlement, other than any applicable tax, interest and
penalties which may be owing, including, without limitation, legal, accounting
and other costs, shall be at the expense of the Partnership.
(i) In addition to the specific rights and powers herein granted to the
Managing General Partner, he shall exclusively possess and may enjoy and
exercise all the rights and power of a General Partner as provided in the
Partnership Law of the State of Tennessee.
(j) The Managing General Partner shall not be liable to the Partnership
or the other Partners for any act or omission performed or omitted by him in
good faith pursuant to the authority granted to them by this Agreement.
(k) The Partnership shall indemnify and save harmless the Managing
General Partner from any loss or damage incurred by him by reason of any act
reasonably believed by him to be lawful, and performed by it on behalf of the
Partnership or in furtherance of the Partnership's interest.
ARTICLE X
SUBSTITUTION AND ASSIGNABILITY OF
PARTNER INTERESTS
A Partner may not transfer, convey, assign or otherwise dispose of any or
all of his interest in the Partnership nor substitute an assignee in his place
without the prior written consent of the Managing General Partner.
ARTICLE XI
REMOVAL AND REPLACEMENT OF MANAGING GENERAL PARTNER
The Managing General Partner may be removed at any time by a majority in
interest of the Partners which majority may designate a successor Managing
General Partner. Upon removal of a Managing General Partner, such former
Managing General Partner shall remain a General Partner with the same
percentage ownership as held prior to removal.
ARTICLE XII
BANKRUPTCY, WITHDRAWAL OR DEATH OF
THE GENERAL PARTNERS
Upon the occurrence of either (i) the bankruptcy or liquidation of a
Partner which is not a natural person; or (ii) the bankruptcy, incompetency,
incapacity or death of a Partner who is a natural
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person, the Partnership shall be dissolved and terminated; provided, however,
that the remaining Partners, by unanimous agreement, shall have the right to
continue the business of the Partnership. In the event that the Partner which
shall become unable to function is the Managing General Partner, the remaining
Partner(s), if any, may designate by a majority in interest a successor Managing
General Partner with all the rights, duties and authorities pertaining thereto.
ARTICLE XIII
ACCOUNTING
(a) The fiscal year of the Partnership shall be the calendar year.
(b) The Managing General Partner shall keep or cause to be kept full and
accurate records of all transactions of the Partnership; and these records
shall be open to the other Partners for examination.
(c) The Managing General Partner shall prepare, or cause to be prepared,
a federal income tax return for the Partnership, and in connection therewith,
make any available or necessary elections, including elections with respect to
the useful life of properties of the Partnership and the rates of depreciation
of such properties.
ARTICLE XIV
REPORTS
As soon as reasonably practicable after the end of each fiscal year of the
Partnership, the Managing General Partner shall deliver to each Partner:
(a) Such information as shall be necessary for the preparation of his
federal and state income or other tax returns in reference to the Partnership.
(b) Information setting forth the holdings of the Partnership.
(c) (i) A year-end income statement; (ii) a year-end balance sheet; and
(iii) the amount of cash which has been distributed during the fiscal year.
ARTICLE XV
BANK ACCOUNTS
All funds of the Partnership shall be deposited in the Partnership's name
in such bank account or accounts as shall be designated by the Managing General
Partner.
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ARTICLE XVI
TERMINATION AND DISSOLUTION
The Dissolution of the Partnership shall occur only upon the termination
of the Partnership as provided in Article IV. Upon the dissolution of the
Partnership, the Managing General Partner shall proceed to the liquidation of
the Partnership and the proceeds of such liquidation shall be applied and
distributed in the following order of priority:
(a) To the payment of debts and liabilities of the Partnership and
expenses of liquidation.
(b) To the setting up of any reserves which the Managing General Partner
may deem reasonably necessary for any contingent or unforeseen liabilities or
obligations of the Partnership or of the General Partners arising out of or in
connection with the Partnership.
(c) To return to the Partners an amount equal to one hundred percent
(100%) of the capital contributions made by the Partners.
(d) Any balance then remaining shall be distributed amongst the General
Partners in accordance with the percentages set forth in Schedule A to this
Agreement.
ARTICLE XVII
AMENDMENTS
This Agreement may be amended at any time or from time to time only by
written consent of a majority in interest of the Partners.
ARTICLE XVIII
NO ORAL MODIFICATION
There shall be no oral modification of this Agreement of Partnership.
ARTICLE XIX
COPY ON FILE
Each Partner hereby agrees that one original of this Agreement, or set of
original counterparts, shall be held at the office of the Partnership.
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ARTICLE XX
NOTICES AND ADDRESSES
All notices shall be directed by certified mail, return receipt requested,
as follows: (i) if to the Partnership, at its principal office and at the office
of each General Partner; (ii) if to a General Partner or a Managing General
Partner, to such Partner at the address set forth on Schedule A to this
Agreement, or to any changed address of which the Partnership is notified in
writing.
ARTICLE XXI
APPLICABLE LAW
This Agreement and the rights of the parties hereunder shall be
interpreted in accordance with the laws of the State of Tennessee.
ARTICLE XXII
AGREEMENT IN COUNTERPARTS
This Agreement may be executed in one or more counterparts and each of
such counterparts shall, for all purposes, be deemed to be an original, but all
of such counterparts shall constitute one and the same instrument.
ARTICLE XXIII
VARIATIONS IN WORDS
All words contained herein in the male gender shall be deemed to include
words in the female gender; all words in the female gender shall be deemed to
include words in the male gender; the plural shall include the singular; the
singular shall include the plural; all words in the neuter shall be deemed to
include words in the male and/or female genders; wherever the context shall so
require.
ARTICLE XXIV
VALIDITY
In the event that any provision of this Agreement shall be held to be
invalid, the same shall not affect in any respect whatsoever the validity of
the remainder of this Agreement.
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ARTICLE XXV
FINAL EXPRESSION AND COMPLETE INTEGRATION
This Agreement is the final expression and complete integration of all the
agreements among the parties.
ARTICLE XXVI
BINDING EFFECT
Except as herein otherwise provided to the contrary, this Agreement shall
be binding upon and inure to the benefit of the Partners hereto, their personal
representatives, successors and assignees.
IN WITNESS WHEREOF, the undersigned have executed this instrument as of
day and year first above written.
GENERAL PARTNERS:
/s/ XXXXX XXXXX, M.D.
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XXXXX XXXXX, M.D.
Managing General Partner
/s/ XXXXXX XXXXXXXX, M.D.
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XXXXXX XXXXXXXX, M.D.
/s/ XXXXXXX X. XXXXXXX
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XXXXXXX X. XXXXXXX
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SCHEDULE A
TO
PARTNERSHIP AGREEMENT
OF
SCTC PARTNERSHIP
Percentage
Interest of
Name and Address Capital Contribution Partnership
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GENERAL PARTNERS:
Xxxxx Xxxxx, M.D.
(Managing General Partner) $ 65.00 65%
Xxxxxx Xxxxxxxx, M.D. $ 25.00 25%
Xxxxxxx X. Xxxxxxx $ 10.00 10%
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TOTAL $100.00
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