LIMITED LIABILITY COMPANY AGREEMENT OF PHOENIXVILLE HOSPITAL COMPANY, LLC April 27, 2004 LIMITED LIABILITY COMPANY AGREEMENT OF PHOENIXVILLE HOSPITAL COMPANY, LLC
EXHIBIT 3.66
OF
PHOENIXVILLE HOSPITAL COMPANY, LLC
April 27, 2004
OF
PHOENIXVILLE HOSPITAL COMPANY, LLC
THIS LIMITED LIABILITY COMPANY AGREEMENT (“Agreement”) is made as of the 27th day of April, 2004,
by and between (i) Pennsylvania Hospital Company, LLC, a Delaware limited liability company, and
(ii) Hallmark Healthcare Corporation, a Delaware corporation. The foregoing parties are
collectively referred to herein as “Members” and individually as a “Member.” For purposes of this
Agreement, the term “Members” includes all persons then acting in such capacity in accordance with
the terms of this Agreement.
1.1 Formation. The Members do hereby form a limited liability company (the “Company”) pursuant to
the provisions of the Delaware Limited Liability Company Act (“Act”).
2.1 Name. The name of the Company shall be Phoenixville Hospital Company, LLC.
2.2 Principal Office. The principal office of the Company shall be at 000 Xxxxxxxx Xxxx, Xxxxx 000,
Xxxxxxxxx, Xxxxxxxxx 00000, or at such other place as shall be determined by the Board (as
hereinafter defined). The books of the Company shall be maintained at such registered place of
business or such other place that the Board shall deem appropriate. The Company shall designate an
agent for service of process in Delaware in accordance with the provisions of the Act.
(a) To acquire, own, manage and operate certain healthcare facilities.
(b) To engage in such other lawful activities in which a limited liability company may engage under
the Act as is determined by the Members from time to time.
(c) To do all other things necessary or desirable in connection with the foregoing, or otherwise
contemplated in this Agreement.
3.3 Term. The term of the Company shall commence as of the date of the filing of a Certificate of
Formation with the Delaware Secretary of State’s Office, and shall continue until dissolved in
accordance with Section 15.
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funds in connection with the cash management system employed by Community Health System, Inc. on
behalf of its affiliated hospitals and health care facilities.
(a) Except as otherwise provided herein, the net income and net loss of the Company for each Fiscal
Year, computed without regard to net gains resulting from the sale or other disposition of any
hospital owned by the Company, shall be allocated to the Interest Holders in accordance with their
respective Percentage Interests. For purposes of this Agreement, the term “Percentage Interest”
shall mean the percentage that the number of Units owned by an Interest Holder bears to the
aggregate number of Units owned by all of the Interest Holders.
(b) Notwithstanding anything herein to the contrary, if an Interest Holder has a deficit balance in
such Interest Holder’s Capital Account (excluding from such Interest Holder’s deficit Capital
Account any amount which such Interest Holder is obligated to restore in accordance with Treas.
Reg. § 1.704-1 (b)(2)(ii)(c), as well as any amount such Interest Holder is treated as obligated to
restore under Treas. Reg. §§ 1.704-2(g)(1) and 1.704-2(i)(5)) and unexpectedly receives an
adjustment, allocation or distribution described in Treas. Reg. § 1.704- 1(b)(2)(ii)(d)(4), (5) or
(6), then such Interest Holder will be allocated items of income and gain in an amount and manner
sufficient to eliminate the deficit balance in such Interest Holder’s Capital Account as quickly as
possible. If there is an allocation to an Interest Holder pursuant to this Section 7.1(b), then
future allocations of net income pursuant to Section 7.1 shall be adjusted so that those Interest
Holders who were allocated less income, or a greater amount of loss, by reason of the allocation
made pursuant to this Section 7.1(b), shall be allocated additional net income in an equal amount.
It is the intention of the parties that the provisions of this Section 7.1(b) constitute a
“qualified income offset” within the meaning of Treas. Reg. § 1.704- 1(b)(2)(ii)(d), and such
provisions shall be so construed.
(c) If there is a net decrease in the Company’s Minimum Gain (within the meaning of Treas. Reg. §
1.704-2(b)(2)) or Partner Nonrecourse Debt Minimum Gain (within the meaning of Treas. Reg. §
1.704-2(i)(3)) during any Fiscal Year, each Interest Holder shall be allocated, before any other
allocations hereunder, items of income and gain for such Fiscal Year (and subsequent Fiscal Years,
if necessary), in an amount equal to such Interest Holder’s share (determined in accordance with
Treas. Reg. §§ 1.704-2(g) and 1.704-2(i)(5), as applicable) of the net decrease in the Company’s
Minimum Gain or Partner Nonrecourse Debt Minimum Gain, as applicable, for such Fiscal Year;
provided, however, that no such allocation shall be required if any of the exceptions set forth in
Treas. Reg. §§ 1.704-2(f) or 1.704-2(i)(4) apply. It is the intention of the parties that this
provision constitute a “minimum gain chargeback” within the meaning of Treas. Reg. §§ 1.704-2(f)
and 1.704-2(i)(4), and this provision shall be so construed.
(d) Notwithstanding anything herein to the contrary, the Company’s partner nonrecourse deductions
(within the meaning of Treas. Reg. § 1.704-2(i)(2)) shall be allocated solely to the Interest
Holder who has the economic risk of loss with respect to the partner nonrecourse liability related
thereto in accordance with the provisions of Treas. Reg. § 1.704-2(i)(1).
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(e) Notwithstanding the provisions of Section 7.1(a), no net losses shall be allocated to an
Interest Holder if such allocation would result in such Interest Holder having a deficit balance in
such Interest Holder’s Capital Account (excluding from such Interest Holder’s deficit Capital
Account any amount such Interest Holder is obligated to restore in accordance with Treas. Reg. §
1.704-1 (b)(2)(ii)(c), as well as any amount such Interest Holder is treated as obligated to
restore under Treas. Reg. §§ 1.704-2(g)(1) and 1.704-2(i)(5)). In such case, the net loss that
would have been allocated to such Interest Holder shall be allocated to the other Interest Holders
to whom such loss can be allocated without violation of the provisions of this Section 7.1(e) in
proportion to their respective Percentage Interests among themselves.
(f) Notwithstanding the provisions of Section 7.1(a), to the extent losses are allocated to the
Interest Holders by virtue of Section 7.1(e), the net income of the Company thereafter recognized
shall be allocated to such Interest Holders (in proportion to the losses previously allocated to
them pursuant to Section 7.1(e)) until such time as the net income of the Company allocated to them
pursuant to this Section 7.1(f) equals the net losses allocated to them pursuant to Section 7.1(e).
(g) For Federal, state and local income tax purposes only, with respect to any assets contributed
by an Interest Holder to the Company (“Contributed Assets”) which have an agreed fair market value
on the date of their contribution which differs from the Interest Holder’s adjusted basis as of the
date of contribution, the allocation of depreciation and gain or loss with respect to such
Contributed Assets shall be determined in accordance with the provisions of section 704(c) of the
Code and the regulations promulgated thereunder using the method selected by the Board. For
purposes of this Agreement, an asset shall be deemed a Contributed Asset if it has a basis
determined, in whole or in part, by reference to the basis of a Contributed Asset (including an
asset previously deemed to be a Contributed Asset pursuant to this sentence). Notwithstanding the
foregoing, if the gain from the sale of any Contributed Asset is being reported on the installment
method for income tax purposes, then the total amount of gain which is to be recognized by each of
the Interest Holders in accordance with the above provision in all taxable years shall be computed
and the amount of gain to be recognized by each of the Interest Holders in each taxable year shall
be in proportion to the total gain to be recognized by each of the Interest Holders in all taxable
years.
(a) First, such excess nonrecourse liabilities shall be allocated to the Interest Holders up to the
amount of built-in gain allocable to such Interest Holders on section 704(c) property (as defined
in Treas. Reg. § 1.704-3(a)(3(ii)) or property for which reverse section 704(c) allocations are
applicable (as described in Treas. Reg. § 1.704-3(a)(6)(i)) where such property is subject to the
nonrecourse liability, to the extent such gain exceeds the gain described in Treas. Reg. §
1.752-3(a)(2).
(b) Second, the balance of such excess nonrecourse liabilities, if any, shall be allocated to the
Interest Holders in accordance with their respective Percentage Interests.
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7.3 Allocations in Event of Transfer, Admission of New Member, Etc. In the event of (i) the
transfer of all or any part of an Interest Holder’s Units (in accordance with the provisions of
this Agreement), (ii) the admission of a new Member or (iii) disproportionate capital
contributions, at any time other than at the end of a Fiscal Year, the transferring Interest
Holder’s, new Member’s or Interest Holders’ shares of the Company’s income, gain, loss, deductions
and credits allocable to such Units, as computed both for accounting purposes and for Federal
income tax purposes, shall be allocated between the transferor Interest Holder and the transferee
Interest Holder (or Interest Holders), the new Member and the other Interest Holders, or among the
Interest Holders, as the case may be, in the same ratio as the number of days in such Fiscal Year
before and after the date of such transfer, admission or disproportionate capital contributions;
provided, however, that the Board shall have the option to treat the periods before and after the
date of such transfer, admission or disproportionate capital contributions as separate Fiscal Years
and allocate the Company’s net income, gain, net loss, deductions and credits for each of such
deemed separate Fiscal Years in accordance with the Interest Holders’ respective interests in the
Company for such deemed separate Fiscal Years. Notwithstanding the foregoing, if the Company uses
the cash receipts and disbursements method of accounting, the Company’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 promulgated thereunder.
(a) The tax matters partner (“TMP”) for the Company shall be Pennsylvania Hospital Company, LLC so
long as it is a Member. The TMP shall have such authority as is granted a TMP under the Code.
(b) The TMP shall employ experienced tax counsel to represent the Company in connection with any
audit or investigation of the Company by the Internal Revenue Service and in connection
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with all subsequent administrative and judicial proceedings arising out of such audit. The fees and
expenses of such counsel, as well as all other expenses incurred by the TMP in serving as the TMP,
shall be a Company expense and shall be paid by the Company.
(c) The Company shall indemnify and hold harmless the TMP against judgments, fines, amounts paid in
settlement and expenses (including attorneys’ fees) reasonably incurred by the TMP in any civil,
criminal or investigative proceeding in which the TMP is involved or threatened to be involved by
reason of it being the TMP, provided that the TMP acted in good faith, within what the TMP
reasonably believed to be the scope of the TMP’s authority and for a purpose which the TM’)
reasonably believed to be in the best interests of the Company or the Interest Holders. The TMP
shall not be indemnified under this provision against any liability to the Company or its Interest
Holders to which the TMP would otherwise be subject by reason of willful misconduct or gross
negligence in its duties involved in acting as TMP.
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10. 7 Meetings. The Board may hold regular or special meetings in or out of the State of Delaware.
The Board may permit any or all directors to participate in a regular or special meeting by, or
conduct the meeting through the use of, any means of communication by which all directors
participating may simultaneously hear each other during the meeting. A director participating in a
meeting by this means shall be deemed to be present in person at the meeting.
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meetings and for authenticating records of the Company. If such office shall not be created and
filled, then the Board shall delegate to one of the officers of the Company such responsibility.
11.7 President. The President, if that office be created and filled, shall be the chief executive
officer of the Company, unless a Chairman is appointed and designated chief executive officer
pursuant to Section 11.6. If no Chairman has been appointed or, in the absence of the Chairman, the
President shall preside at all meetings of the Members. The President may sign certificates for
Units, any deeds, mortgages, bonds, contracts or other instruments which the Board has authorized
to be executed, except in cases where the signing and execution thereof shall be expressly
delegated by the Board or by this Agreement to some other officer or agent of the Company, or shall
be required by law to be otherwise signed or executed. The President shall, in general, perform all
duties incident to the office of President of a Delaware corporation and such other duties as may
be prescribed by the Board or the Chairman from time to time. Unless otherwise ordered by the
Board, the President shall have full power and authority on behalf of the Company to attend, act
and vote in person or by proxy at any meetings of shareholders of any corporation in which the
Company may hold stock, and at any such meeting shall hold and may exercise all rights incident to
the ownership of such stock which the Company, as owner, would have had and could have exercised if
present. The Board may confer like powers on any other person or persons.
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11.9 Treasurer. The Treasurer, if that office be created and filled, shall have charge and custody
of, and be responsible for, all funds and securities of the Company, receive and give receipts for
monies due and payable to the Company from any source whatsoever, and deposit all such monies in
the name of the Company in such banks, trust companies and other depositories as shall be selected
in accordance with the provisions of Section 6.1, and in general, perform all the duties incident
to the office of Treasurer of a Delaware corporation and such other duties as from time to time may
be assigned to such person by the Chairman, the President or the Board. If required by the Board,
the Treasurer shall give a bond for the faithful discharge of such officer’s duties in such sum and
with such surety or sureties as the Board shall determine.
11.10 Secretary. The Secretary, if that office be created and filled, shall keep the minutes of the
Members’ meetings and of the Board’s meetings in one or more books provided for that purpose, see
that all notices are duly given in accordance with the provisions of this Agreement or as required
by law, be custodian of the Company records and of the seal, if any, of the Company, be responsible
for authenticating records of the Company, keep a register of the mailing address of the Members,
which shall be furnished to the Secretary by the Members, sign with the President or a
Vice-President certificates for Units, have general charge of the transfer books of the Company,
and, in general, perform all duties incident to the office of Secretary of a Delaware corporation
and such other duties as from time to time may be assigned to such person by the Chairman, the
President or the Board.
11.11 Assistant Treasurers and Assistant Secretaries.
(a) Assistant Treasurer. The Assistant Treasurer, if that office be created and filled, shall, if
required by the Board, give bond for the faithful discharge of such officer’s duty in such sum and
with such surety as the Board shall determine.
(b) Assistant Secretary. The Assistant Secretary, if that office be created and filled, and if
authorized by the Board, may sign, with the President or Vice-President, certificates for Units.
(c) Additional Duties. The Assistant Treasurers and Assistant Secretaries, in general, shall
perform such additional duties as shall be assigned to them by the Treasurer or the Secretary,
respectively, or by the Chairman, the President or the Board.
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the Company performed or omitted by them in good faith with the care a corporate officer of like
position would exercise under similar circumstances and in a manner reasonably believed by them to
be in the best interests of the Company, and, with respect to any criminal proceeding, had no
reasonable cause to believe their conduct was unlawful.
(a) To the fullest extent permitted by the Act, the Company shall indemnify each director or
officer of the Company against reasonable expenses (including reasonable attorneys’ fees),
judgments, taxes, penalties, fines (including any excise tax assessed with respect to an employee
benefit plan) and amounts paid in settlement (collectively “Liability”), incurred by such person in
connection with defending any threatened, pending or completed action, suit or proceeding (whether
civil, criminal, administrative or investigative, and whether formal or informal) to which such
person is, or is threatened to be made, a party because such person is or was a director or officer
of the Company, or is or was serving at the request of the Company as a director, officer, partner,
member, employee or agent of another domestic or foreign corporation, partnership, limited
liability company, joint venture, trust or other enterprise, including service with respect to
employee benefit plans, provided that the director or officer has met the standard of conduct
described in Section 12.1. A director or officer shall be considered to be serving an employee
benefit plan at the Company’s request if such person’s duties to the Company also impose duties on
or otherwise involve services by such person to the plan or to participants in or beneficiaries of
the plan.
(b) To the fullest extent authorized or permitted by the Act, the Company shall pay or reimburse
reasonable expenses (including reasonable attorneys’ fees) incurred by a director or officer who is
a party to a proceeding in advance of final disposition of such proceeding if:
(1) The director or officer furnishes the Company a written affirmation of his good faith belief
that he has met the standard of conduct described in Section 12.1;
(2) The director or officer furnishes the Company a written undertaking, executed personally or on
the director’s or officer’s behalf, to repay the advance if it is ultimately determined that the
director or officer did not meet the standard of conduct. Such undertaking shall be an unlimited
general obligation of the director or officer, but shall not be required to be secured and may be
accepted without reference to financial ability to make repayment; and
(3) A determination is made that the facts then known to those making the determination would not
preclude indemnification under the provisions of this Section 12.2.
(c) The indemnification against Liability and advancement of expenses provided by, or granted
pursuant to, this Section 12.2 shall not be deemed exclusive of any other rights to which those
seeking indemnification or advancement may be entitled under any agreement, action of the Members
or disinterested directors or otherwise, both as to action in their official capacity and as to
action in another capacity while holding such office of the Company, shall continue as to a person
who has ceased to be a director or officer of the Company, and shall inure to the benefit of the
heirs, executors and administrators of such a person.
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(d) Any repeal or modification of this Section 12.2 by the Members shall not adversely affect any
right or protection of a director or officer of the Company under this Section 12.2 with respect to
any act or omission occurring prior to the time of such repeal or modification.
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14.3 Place of Members’ Meeting. The Board may designate any place within or without the State of
Delaware as the place for any meeting of the Members called by the Board. If no designation of
place is properly made, the place of the meeting shall be at the principal office. If a meeting is
called at the demand of the Members and the Members designate any place, either within or without
the State of Delaware, as the place for the holding of such meeting, the meeting shall take place
at the place designated. If no designation is properly made, the place of meeting shall be at the
principal office.
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officer or agent authorized to tabulate votes has received written notice thereof. All proxies
shall be filed with the Secretary or the person authorized to tabulate votes before or at the time
of the meeting.
(a) First, to the payment and discharge of all of the Company’s debts and liabilities, to the
necessary expenses of liquidation and to the establishment of any cash reserves which the Board
determines to create for unmatured and/or contingent liabilities or obligations of the Company.
(b) Second, to the Interest Holders, in accordance with their respective Capital Accounts;
provided, however, that if the Board has established any reserves in accordance with the provisions
of Section 15.3(a), then the distributions pursuant to this Section 15.3(b) (including
distributions of such reserve) shall be pro rata in accordance with the balances of the Interest
Holders’ Capital Accounts.
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(a) All notices, requests, demands or other communications required or permitted under this
Agreement shall be in writing and be personally delivered against a written receipt, delivered to a
reputable messenger service (such as FedEx, DHL Courier, United Parcel Service, etc.) for overnight
delivery, transmitted by confirmed telephonic facsimile (fax) or transmitted by mail, registered,
express or certified, return receipt requested, postage prepaid, addressed as follows:
(1) If given to the Company, to the Company at its principal office; and
(2) If given to an Interest Holder, to the Interest Holder at the address set forth in the records
of the Company.
(b) All notices, demands and requests shall be effective upon being properly personally delivered,
upon being delivered to a reputable messenger service, upon transmission of a confirmed fax, or
upon being deposited in the United States mail in the manner provided in Section 17.1. However, the
time period in which a response to any such notice, demand or request must be given shall commence
to run from the date of personal delivery, the date of delivery by a reputable messenger service,
the date on the confirmation of a fax, or the date on the return receipt, as applicable; provided,
however, that if any xxxxx rejects delivery, then the time for a response shall commence to run two
days following the mailing of the notice.
(a) Except as provided in Section 17.2(b), this Agreement may be modified or amended from time to
time only upon the consent of the holders of a majority of the Units.
(b) In addition to any amendments authorized by Section 17.1(a), this Agreement may be amended from
time to time by the Board without the consent of the Members to cure any ambiguity, to correct or
supplement any provision hereof which may be inconsistent with any other provision hereof, or to
make any other provisions with respect to matters or questions arising under this Agreement which
will not be inconsistent with the provisions of this Agreement.
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describe the scope of this Agreement, or the intent of any pro-vision hereof. All references herein
to Sections shall refer to Sections of this Agreement unless the context clearly requires
otherwise.
(a) Each Interest Holder agrees not to divulge, communicate, use to the detriment of the Company or
for the benefit of any other person, or misuse in any way, any confidential information or trade
secrets of the Company, including personnel information, secret processes, know-how, customer
lists, formulas or other technical data, except as may be required by law; provided, however, that
this prohibition shall not apply to (i) any information which, through no improper action of such
Interest Holder, is publicly available or generally known in the industry or (ii) any information
which is disclosed upon the consent of the Board. Each Interest Holder acknowledges and agrees that
any information or data such Interest Holder has acquired on any of these matters or items were
received in confidence and as a fiduciary of the Company.
(b) Each Interest Holder agrees that the Company would be irreparably damaged by reason of any
violation of the provisions of Section 17.4(a), and that any remedy at law for a breach of such
provisions would be inadequate. Therefore, the Company shall be entitled to seek and obtain
injunctive or other equitable relief (including, but not limited to, a temporary restraining order,
a temporary injunction or a permanent injunction) against any Interest Holder, for a breach or
threatened breach of such provisions and without the necessity of proving actual monetary loss. It
is expressly understood among the parties that this injunctive or other equitable relief shall not
be the Company’s exclusive remedy for any breach of this Section 17.4 and the Company shall be
entitled to seek any other relief or remedy that the Company may have by contract, statute, law or
otherwise for any breach hereof, and it is agreed that the Company shall also be entitled to
recover its attorneys’ fees and expenses in any successful action or suit against any Interest
Holder relating to any such breach.
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PENNSYLVANIA HOSPITAL COMPANY, LLC
By: /s/Xxxxxx X. Xxxxxxx
Title: XXXXXX X. XXXXXXX
SENIOR VICE PRESIDENT AND GENERAL COUNSEL
By: /s/Xxxxxx X. Xxxxxxx
Title: XXXXXX X. XXXXXXX
SENIOR VICE PRESIDENT AND GENERAL COUNSEL
HALLMARK HEALTHCARE CORPORATION
By: /s/Xxxxxx X. Xxxxxxx
Title: XXXXXX X. XXXXXXX
SENIOR-VICE PRESIDENT AND GENERAL COUNSEL
Title: XXXXXX X. XXXXXXX
SENIOR-VICE PRESIDENT AND GENERAL COUNSEL
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EXHIBIT A
| Name and Address of Member | Amount of Contribution | Number of Units | ||||||
Pennsylvania Hospital Company, LLC |
$ 99.00 | 99 | ||||||
000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000 |
||||||||
Hallmark Healthcare Corporation |
$ 1.00 | 1 | ||||||
000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000 |
||||||||
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