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EXHIBIT 3.5
SECOND AMENDMENT TO THE
AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT
OF
DODGE CITY HEALTHCARE GROUP, L.P.
This Second Amendment to the Amended and Restated Limited Partnership
Agreement of Dodge City Healthcare Group, L.P. is entered into as of April 8,
1999 (this "Amendment") by and among Columbia/HCA of Dodge City, Inc., a Kansas
corporation (the "General Partner"), Western Plains Regional Hospital, Inc., a
Kansas corporation ("WPRH"), Western Plains Regional Hospital, LLC, a Delaware
limited liability company ("Western Plains LLC") and Dodge City Outpatient
Surgical Facility, Inc., a Kansas corporation ("DCSF"). All capitalized terms
used herein but not defined shall have the meanings given to them in the Amended
and Restated Limited Partnership Agreement of Dodge City Healthcare Group, L.P.
dated as of March 1, 1995 among the General Partner, American Medicorp
Development Co., WPRH and DCSF, as amended by the Amendment to Article 6.1 of
Limited Partnership Agreement dated June 13, 1997 (collectively, the
"Partnership Agreement").
W I T N E S S E T H :
WHEREAS, Columbia/HCA Healthcare Corporation ("Columbia"), the parent
of WPRH, desires to undertake an internal restructuring (the "Restructuring") in
connection with a proposed pro-rata distribution by Columbia of all of the
shares of stock of two directly or indirectly wholly-owned subsidiaries to
Columbia's shareholders (the "Spin-off");
WHEREAS, as part of the Restructuring, it is proposed that (i) WPRH
transfer and assign all of its Units in the Partnership to Western Plains LLC,
of which WPRH is the sole member, (ii) WPRH merge into HealthTrust, Inc. - The
Hospital Company, another wholly-owned subsidiary of Columbia ("HealthTrust"),
which subsidiary will succeed to WPRH's 100% limited liability company interest
in Western Plains LLC and 100% stock ownership interest in the General Partner
(the "Merger"), (iii) HealthTrust contribute such ownership interests in Western
Plains LLC and the General Partner (the "HealthTrust Contribution") to LifePoint
Hospitals, Inc., one of the directly or indirectly wholly-owned subsidiaries of
Columbia whose stock will be distributed to Columbia's shareholders in
connection with the Spin-off ("LifePoint"), (iv) LifePoint transfer, assign or
contribute its 100% limited liability company interest in Western Plains LLC and
its 100% stock ownership interest in the General Partner to one of its directly
or indirectly wholly-owned subsidiaries (the "LifePoint Contribution") and (v)
additional transfers, assignments or contributions of such 100% limited
liability company interest in Western Plains LLC and its 100% stock
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ownership interest in the General Partner may be made by one or more directly or
indirectly wholly-owned subsidiaries of LifePoint to other indirectly
wholly-owned subsidiaries of LifePoint (collectively, the "Additional
Contributions");
WHEREAS, the General Partner, WPRH and DCSF are parties to the
Partnership Agreement; and
WHEREAS, the General Partner, WPRH, as a withdrawing Limited Partner,
Western Plains LLC, as a Substituted Limited Partner in place of WPRH, and DCSF,
as a Limited Partner, desire to amend the Partnership Agreement on the terms and
conditions set forth herein to account for, among other things, (i) the
admission of Western Plains LLC as a Substituted Limited Partner in place of
WPRH as a result of the transfer and assignment by WPRH to Western Plains LLC of
all of its Units in the Partnership and (ii) the proposed contribution of WPRH's
100% limited liability company interest in Western Plains LLC and 100% stock
ownership interest in the General Partner to LifePoint in connection with the
Spin-off, as a result of which Spin-off neither the General Partner nor Western
Plains LLC shall be a Columbia Affiliate as such term is defined in the
Partnership Agreement;
NOW, THEREFORE, in consideration of the mutual covenants,
representations, warranties and agreements set forth herein, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Amendment of Certain Definitions.
(a) The definition of "Class C Limited Partners" set forth in
Section 1.17 of the Partnership Agreement is hereby amended and restated in its
entirety to read as follows:
"1.17 `Class C Limited Partners' means any lawful holder of a
Class C Unit, which shall be limited to those limited partners of
the Partnership who are (i) management level employees of the
General Partner (but not more than ten such employees) and (ii)
Columbia and/or any Columbia Affiliate before the effective date of
the Spin-off and LifePoint and/or any LifePoint Affiliate on or
after the effective date of the Spin-off; together with any person
or entity to which said Unit may be lawfully and properly assigned
under the provisions of this Agreement. Any individual who may
lawfully hole Class C Units pursuant to the foregoing definition is
hereinafter referred to as a
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`Qualified Class C Limited Partner.' `Class C Limited Partner' means
any one of the Class C Limited Partners."
(b) The definition of "Class D Limited Partners" set forth in
Section 1.18 of the Partnership Agreement is hereby amended and restated in its
entirety to read as follows:
"1.18 `Class D Limited Partners' means any lawful holder of a
Class D Unit, which shall be limited to Columbia and/or any Columbia
Affiliate before the effective date of the Spin-off and LifePoint
and/or any LifePoint Affiliate on or after the effective date of the
Spin-off; together with any person or entity to which said Unit may
be lawfully and properly assigned under the provisions of this
Agreement. The sole current Class D Limited Partner is Western
Plains Regional Hospital, LLC."
(c) The definition of "Columbia Affiliate" set forth in Section 1.21
of the Partnership Agreement is hereby amended and restated in its entirety to
read as follows:
"1.21 `Columbia Affiliate' means any corporation or limited
liability company which may be connected with Columbia by a chain of
one or more corporations or limited liability companies linked
through 75% stock ownership or 75% limited liability company
interest, as the case may be, or any partnership (general or
limited) or limited liability company or tiers of partnerships or
limited liability companies of which Columbia Corporate Affiliates
are the sole general partners or members therein, irrespective of
any ownership interest in the Partnership. For this purpose, the
parties agree that if Columbia owns 75% of a subsidiary A and
subsidiary A owns 75% of subsidiary B, subsidiary B is not "linked
through 75% stock ownership" with Columbia (but rather is linked
through 56.25% ownership) and is therefore not a Columbia
Affiliate."
(d) The definition of "General Partner" set forth in Section 1.26 of
the Partnership Agreement is hereby amended and restated in its entirety to read
as follows:
"1.26 `General Partner' means any lawful holder of a Class GP
Unit which shall be limited to Columbia and/or any Columbia
Affiliate before the effective date of the Spin-off and LifePoint
and/or any LifePoint Affiliate on or after the effective date of the
Spin-off; together with any person or entity to which said Units may
be lawfully and properly assigned under the provisions of this
Agreement. The initial General Partner shall be Columbia/HCA of
Dodge City, Inc. The
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interest of the General Partner herein shall be represented by 10 GP
Units."
(e) The definition of "Nonaffiliated Limited Partners" set forth in
Section 1.34 of the Partnership Agreement is hereby amended and restated in its
entirety to read as follows:
"1.34 `Nonaffiliated Limited Partners' means any Limited Partner
which is not Columbia, a Columbia Affiliate before the effective
date of the Spin-off, LifePoint or a LifePoint Affiliate on or after
the effective date of the Spin-off, or the General Partner, or
employed by any of the foregoing."
2. Addition of Certain Definitions. Article 1 of the Partnership
Agreement is hereby amended by adding the following definitions thereto as
Sections 1.53, 1.54 and 1.55.
"1.53 `LifePoint' means LifePoint Hospitals, Inc., a Delaware
corporation to be formed by Columbia or a Columbia Affiliate inn
connection with the Spin-off.
1.54 `LifePoint Affiliate' means any corporation or limited
liability company which may be connected with LifePoint by a chain
of one or more corporations or limited liability companies linked
through 100% stock ownership or 100% limited liability company
interest, as the case may be, or any partnership (general or
limited) or limited liability company or tiers of partnerships or
limited liability companies of which LifePoint Corporate Affiliates
are the sole general partners or members therein, irrespective of
any ownership interest in the Partnership.
1.55 `Spin-off' means the proposed pro-rate distribution by
Columbia of all of the shares of stock of two directly or indirectly
wholly-owned subsidiaries of Columbia, including LifePoint, to
Columbia's shareholders."
3. Amendment of Section 6.1. Section 6.1 of the Partnership Agreement
is hereby amended by inserting the following additional paragraphs as the second
and third paragraphs of such section:
"Subject to the preceding paragraph, the General Partner, in
good faith, hereby agrees for each Partnership fiscal year occurring
prior to the time the intercompany debt, as reflected on the
Partnership's financial statements, is retired to cause the Partnership
to distribute to the Partners, on an aggregate basis, ninety percent
(90%) of the annual book pretax income of the Partnership for such
Partnership fiscal year (the "Annual Distribution
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Amount"). The General Partner further agrees to cause the Partnership
to distribute (i) approximately ninety percent (90%) of the Annual
Distribution Amount to the Partners in four quarterly installments on
each of April 15, June 15 and September 15 of each Partnership fiscal
year, and on each January 15 following such Partnership fiscal year, or
on such other dates that coincide with the due dates of estimated
quarterly federal and state income tax payments, and (ii) a final
distribution to the Partners in respect of the Annual Distribution
Amount in the March following such Partnership fiscal year to the
extent necessary to reconcile the quarterly distributions to the Annual
Distribution Amount, provided, however, that to the extent that
quarterly distributions made by the Partnership in accordance with the
above exceeds the Annual Distribution Amount, future quarterly
distributions made in accordance with the above in the succeeding
Partnership fiscal year or years shall be reduced accordingly."
"In addition to the preceding paragraph, as soon as
practicable following the Merger, the HealthTrust Contribution, the
LifePoint Contribution and the Additional Contributions, the General
Partner shall make a one-time distribution of cash to the Partners in
an amount sufficient to reimburse the Partners for the present value of
the tax benefits lost as a result of the Merger, the HealthTrust
Contribution, the LifePoint Contribution and/or any of the Additional
Contributions, as determined by the General Partner and agreed upon by
the Limited Partners. Such distribution shall be made on an after-tax
basis taking into account any income recognized by the Partners as a
result of such distribution and using such assumptions as are set forth
in the paragraph immediately following below."
4. Amendment of Section 10.1. The first paragraph of Section 10.1 of
the Partnership Agreement is hereby amended and restated to read in its entirety
as follows:
"Except as otherwise provided in this Section 10.1, each Class
A and Class C Limited Partner agrees that while he is a Limited Partner
and for four (4) years thereafter neither he nor any of his Affiliates
shall, directly or indirectly, hold an ownership interest in an acute
care hospital, specialty hospital, comprehensive rehabilitation
facility, rehabilitation agency, diagnostic imaging center, inpatient
or outpatient psychiatric or substance abuse facility, or ambulatory or
other type of surgery center that is located within a forty (40) mile
radius of the Hospital ("Competing Business") without the prior written
consent of the General Partner. Each Class A and Class C Limited
Partner expressly agrees that neither he nor any of his Affiliates
shall violate the terms of this Section 10.1 while such Limited Partner
is a limited partner of the Partnership and for a period of four (4)
years thereafter. Notwithstanding anything to the contrary in this
Section
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10.1,. no Class A or Class C Limited Partner will be in violation of
this Section 10.1 if such Limited Partner or any Affiliate of such
Limited Partner held an ownership interest in a Competing Business, and
each such Limited Partner who holds or whose Affiliate holds such an
interest shall give written notice thereof to the General Partner on or
before the earlier of (i) delivery of his or her subscription agreement
for the first Class A or Class C Unit acquired or (ii) the acquisition
of the first said Unit. Nothing in this Section 10.1 is intended to
prevent such a Limited Partner from being a member of the medical staff
of, or referring patients to, any other hospital."
5. Amendment of Section 10.3. Section 10.3 of the Partnership Agreement
is hereby amended and restated in its entirety to read as follows:
"10.3 Capital Improvements. The General Partner agrees, and
the Partners contemplate, that the Partnership will (subject to
identification of proper projects) expend up to the amount of One
Million Dollars ($1,000,000) per annum for capital expenditures during
the entire term of the Partnership. The Board of Advisors shall have
the right to discuss, review, approve and direct the amount, spending
and allocation of any such expenditures in connection with the annual
establishment of a capital budget pursuant to Section 8.4 above. If a
Limited Partner, with representatives on the Board of Advisors and
which owns in the aggregate 50 or more Units, disagrees with the Board
of Advisors' directions with respect to the amount, spending and
allocation of such expenditures, then any such Limited Partner may
elect to file a grievance in accordance with the procedures set forth
in Section 12.5 below."
6. Amendment of Section 12.2. Section 12.2 of the Partnership Agreement
is hereby amended by (i) deleting "and" from the end of subparagraph (g), (ii)
replacing the period at the end of subparagraph (h) with a semicolon and (iii)
adding the following subparagraphs (i) and (j):
"(i) Payment of any additional management fee to the General
Partner, with the exception of the monthly information system fee, in
excess of the management fee determined to be payable under Section 8.8
hereof; and
(j) Establishing a bonus structure for the Hospital
administration, which shall be established by reference to financial,
patient, physician and employee satisfaction considerations, as well as
other relevant considerations."
7. Amendment of Section 12.5. Section 12.5 of the Partnership Agreement
is hereby amended and restated to read in its entirety as follows:
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"12.5 Grievance Procedure. If one (or more) Limited Partners
owning in the aggregate 50 or more Units has a grievance against the
Partnership or the operation of the Hospital, said Partner(s) shall set
forth the grievance in full in writing and submit it to the General
Partner with a formal statement that the provisions of this Section
12.5 are being invoked. If the matter is not resolved to the
satisfaction of the complaining Partner(s) within 20 days, either the
General Partner or the complaining Partner(s) shall have the right and
privilege to send a copy of the grievance to the Chief Operating
Officer of LifePoint, who shall meet with representatives of the
General Partner and with the complaining Partner(s) in an effort to
mediate a resolution of the grievance. The General Partner shall
utilize its best efforts to secure the cooperation of the Chief
Operating Officer of LifePoint; it being acknowledged and agreed that
LifePoint has represented that its Chief Operating Officer will be
available and willing to undertake the foregoing. Nothing herein shall
preclude any party from pursuing such other remedies as it may have,
regardless of whether and either before or after this grievance
procedure is pursued."
8. Amendment of Section 13.4. (a) The last sentence of Section 13.4(a)
of the Partnership Agreement is hereby amended and restated to read in its
entirety as follows:
"In all events, and regardless of whether any transfer of GP Units
has occurred, the General Partner shall at all times remain either a
Columbia Affiliate before the effective date of the Spin-off or a
LifePoint Affiliate on or after the effective date of the Spin-off
(except as set forth in Section 13.4(c) immediately below)."
(b) Section 13.4(b) of the Partnership Agreement is hereby amended
and restated to read in its entirety as follows:
"The General Partner or any Columbia Affiliate and/or LifePoint
Affiliate holding any GP Units may, if all provisions of this
Agreement are satisfied, do the following without the consent of
any Partner, if, but only if, the General Partner shall at all
times remain a Columbia Affiliate before the effective date of
the Spin-off or a LifePoint Affiliate on or after the effective
date of the Spin-off, and in either case retain operational
control of the Partnership:
(i) Pledge, encumber, or otherwise give as
collateral for loans or other indebtedness, all or
any of its GP Units or any other Units held by it,
and the pledgee or other holder of any such pledge,
encumbrance, or security interest may exercise its
rights with respect thereto, including without
limitation, its rights to foreclose, transfer,
convey, sell or assign such general
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partnership interest or Units, without consent of, or
notice to, any other Partner (provided, however, that
any such foreclosure or shift in operational control
shall render the General Partner before such
foreclosure liable for damages for the breach of the
covenant made in this Section that the General
Partner having operational control shall at all times
remain a Columbia Affiliate before the effective date
of the Spin-off or a LifePoint Affiliate on or after
the effective date of the Spin-off); and
(ii) Transfer all of its GP Units or other
Units held by it to one Columbia Affiliate before the
effective date of the Spin-off or a LifePoint
Affiliate on or after the effective date of the
Spin-off (if such affiliate agrees to be bound by the
provisions hereof, and Western Plains LLC remains
liable as a guarantor for the faithful performance of
this Agreement by such affiliate)."
9. Amendment of Section 14.1. Subparagraphs (c) and (d) of Section 14.1
of the Partnership Agreement are hereby amended and restated to read in its
entirety as follows:
"(c) Class C Units. Except for transfers to DCSF
under Section 13.4(c), Class C Units may only be held by (i)
Qualified Class C Limited Partners, (ii) until the effective
date of the Spin-off, Columbia or Columbia Affiliates, and on
and after the effective date of the Spin-off, LifePoint or
LifePoint Affiliates, or (iii) as Approved by the Committee;
provided, however, if at any time Class C Units are to be
transferred (other than pursuant to Section 13.4(c)) with the
Approval of the Committee other than to (y) a Qualified
Purchaser or (z) until the effective date of the Spin-off,
Columbia or a Columbia Affiliate, and on and after the
effective date of the Spin-off, LifePoint or a LifePoint
Affiliate, the right of first refusal set forth in Section
14.1(a) above shall apply the same as if it referred to Class
C Units rather than Class A Units (and the decision of whether
or not the Partnership shall exercise said right of first
refusal shall be made by a majority vote of the Nonaffiliated
Limited Partners).
(d) Class D Units. Except for transfers to DCSF under
Section 13.4(c), Class D Units may only be held by (i) the
General Partner, (ii) Western Plains LLC, (iii) until the
effective date of the Spin-off, Columbia or Columbia
Affiliates, and on and after the effective date of the
Spin-off, LifePoint or LifePoint Affiliates, or (iv) as
Approved by the Committee; provided, however, if at any time
Class D Units are to be transferred (other than pursuant to
Section 13.4(c)) with the Approval of the Committee other than
to, until the effective
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date of the Spin-off, Columbia or a Columbia Affiliate, and on
and after the effective date of the Spin-off, LifePoint or a
LifePoint Affiliate, the right of first refusal set forth in
Section 14.1(a) above shall apply the same as if it referred
to Class D Units rather than Class A Units (and the decision
of whether or not the Partnership shall exercise said right of
first refusal shall be made by a majority vote of the
Nonaffiliated Limited Partners)."
10. References to Columbia and/or Columbia Affiliates. Except as
expressly set forth herein, (a) all references to "WPRH" in the Partnership
Agreement shall, as the context requires, be deemed to be references to "Western
Plains LLC" and (b) on and after the effective date of the Spin-off, all
references to "Columbia Affiliates" in the Partnership Agreement shall, as the
context requires, be deemed to be references to "LifePoint" and/or "LifePoint
Affiliates."
11. Amendment of Exhibit A. Exhibit A to the Partnership Agreement is
hereby amended and restated in its entirety to read in the form attached hereto.
12. Effective Time of Amendments. The parties hereto hereby agree that
all of the amendments to the Partnership Agreement set forth in this Amendment
shall be effective as of April 8, 1999.
13. Termination of the Amendments. The parties hereto hereby agree that
if at any time the General Partner receives notice that Columbia, or any duly
authorized committee, officer or director of Columbia, has determined, for any
reason, not to implement, effect or consummate the Spin-off, then all of the
amendments to the Partnership Agreement effected by this Agreement shall be
rescinded, cancelled and terminated with and from effect from the date of any
such determination.
14. Binding Effect. This Amendment shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors and
assigns.
15. Partnership Agreement in Effect. Except as hereby amended, the
Partnership Agreement shall remain in full force and effect and is hereby
ratified and confirmed by the parties hereto.
16. Governing Law. This Amendment shall be governed by the laws of the
State of Kansas.
17. Counterparts. This Amendment may be executed simultaneously in two
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the undersigned have caused this Amendment to be
duly executed as of the day and year first above written.
COLUMBIA/HCA OF DODGE CITY, INC.
By:
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Name:
Title:
WESTERN PLAINS REGIONAL HOSPITAL, INC.
By:
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Name:
Title:
WESTERN PLAINS REGIONAL HOSPITAL, LLC
By:
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Name:
Title:
DODGE CITY OUTPATIENT SURGICAL FACILITY, INC.
By:
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Name:
Title:
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