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Exhibit 10.24
THE LIMITED PARTNERSHIP INTERESTS CREATED BY THIS AGREEMENT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY SECURITIES
LAWS OF ANY STATE OR OTHER JURISDICTION AND ARE BEING OFFERED AND SOLD IN
RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF SUCH ACTS. EXCEPT
AS SPECIFICALLY OTHERWISE PROVIDED IN THIS AGREEMENT, THE INTERESTS MAY NOT BE
SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED WITHOUT REGISTRATION UNDER SUCH ACTS
OR AN OPINION OF COUNSEL THAT SUCH TRANSFER MAY BE LEGALLY EFFECTED WITHOUT SUCH
REGISTRATION. ADDITIONAL RESTRICTIONS ON TRANSFER AND SALE ARE SET FORTH IN THIS
AGREEMENT.
AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT
OF
ALIGNED BUSINESS CONSORTIUM GROUP, L.P.
(a Delaware Limited Partnership)
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TABLE OF CONTENTS
1. DEFINITIONS................................................................................1
1.1 "Act".............................................................................1
1.2 "Additional Limited Partner"......................................................1
1.3 "Adverse Terminating Event".......................................................2
1.4 "Affiliate".......................................................................2
1.5 "Agreement".......................................................................2
1.6 "Approval of the Partners" or "Approved by the Partners"..........................2
1.7 "Bankruptcy"......................................................................2
1.8 "Brim"............................................................................2
1.9 "Brim Services Agreement".........................................................2
1.10 "Capital Account".................................................................2
1.11 "Capital Contribution"............................................................3
1.12 "Code"............................................................................3
1.13 "Columbia"........................................................................3
1.14 "Columbia Affiliate"..............................................................3
1.15 "Columbia Services Agreement".....................................................3
1.16 "Columbia Sub"....................................................................3
1.17 "Competitive Activities"..........................................................3
1.18 "General Partner".................................................................3
1.19 "Limited Partner".................................................................3
1.20 "Liquidator"......................................................................3
1.21 "Partners"........................................................................3
1.22 "Partnership".....................................................................3
1.23 "Person"..........................................................................3
1.24 "Services Agreements".............................................................4
1.25 "Sharing Percentage"..............................................................4
1.26 "Substituted Limited Partner".....................................................4
1.27 "Terminating Event"...............................................................4
1.28 "Treasury Regulations" or "Regulation"............................................4
1.29 "Units"...........................................................................4
2. FORMATION OF PARTNERSHIP...................................................................4
2.1 Formation.........................................................................4
2.2 Name..............................................................................4
2.3 Principal Office..................................................................5
2.4 Term..............................................................................5
2.5 Registered Agent and Office.......................................................5
3. PURPOSES AND POWERS OF THE PARTNERSHIP; NATURE OF THE BUSINESS OF THE
PARTNERSHIP................................................................................5
3.1 Purposes..........................................................................5
3.2 Powers............................................................................5
4. CAPITAL CONTRIBUTIONS, LOANS, CAPITAL ACCOUNTS.............................................6
4.1 Capital Contributions.............................................................6
4.2 Additional Capital Contributions..................................................6
4.3 Capital Accounts..................................................................6
4.4 Additional Provisions Regarding Capital Accounts..................................8
4.5 Loans.............................................................................9
(i)
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5. ALLOCATIONS...............................................................................10
5.1 Allocations of Income and Losses.................................................10
6. DISTRIBUTIONS.............................................................................10
6.1 Distribution of Excess Cash......................................................10
7. BANK ACCOUNTS, BOOKS OF ACCOUNT, TAX COMPLIANCE AND FISCAL YEAR...........................10
7.1 Bank Accounts; Investments.......................................................10
7.2 Books and Records................................................................10
7.3 Determination of Profit and Loss: Financial Statements; Annual Budgets...........11
7.4 Tax Returns and Information......................................................11
7.5 Tax Audits.......................................................................11
7.6 Fiscal Year......................................................................12
8. RIGHTS, OBLIGATIONS AND INDEMNIFICATION OF THE GENERAL PARTNER............................12
8.1 Rights of the General Partner as Manager.........................................12
8.2 Right to Rely on the General Partner.............................................13
8.3 Specific Limitations on the General Partner......................................14
8.4 Additional Limitations on the Authority of the General Partner...................14
8.5 Management Obligations of the General Partner....................................14
8.6 Indemnification of the General Partner...........................................15
8.7 Reimbursement....................................................................15
8.8 Independent Activities...........................................................16
9. RIGHTS AND STATUS OF LIMITED PARTNERS.....................................................17
9.1 General..........................................................................17
9.2 Limitation of Liability..........................................................17
9.3 Bankruptcy; Death, Etc...........................................................17
10. SPECIAL COVENANTS OF THE PARTNERS.........................................................17
10.1 Non-ownership Provision..........................................................17
10.2 Limitation.......................................................................18
11. MEETINGS AND MEANS OF VOTING..............................................................18
11.1 Meetings of the Partners.........................................................18
11.2 Vote By Proxy....................................................................18
11.3 Conduct of Meeting...............................................................19
11.4 Action Without a Meeting.........................................................19
11.5 Closing of Transfer Record; Record Date..........................................19
12. Intentionally left blank..................................................................19
13. TRANSFER OF UNITS AND ADDITIONAL LIMITED PARTNERS.........................................19
13.1 Transfers by Limited Partners....................................................19
13.2 Substituted Limited Partner......................................................20
13.3 Basis Adjustment.................................................................21
13.4 Transfer by General Partner......................................................21
13.5 Admission of Additional Limited Partners.........................................21
13.6 Transfer Procedures..............................................................21
13.7 Invalid Transfer.................................................................21
13.8 Distributions and Allocations in Respect of a Transferred Ownership Interest.....22
(ii)
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13.9 Additional Requirements of Admission to Partnership..............................22
13.10 Amendment to Exhibit "B".........................................................22
14. RIGHT TO LIQUIDATE OR PURCHASE PARTNERSHIP INTERESTS......................................22
14.1 Partnership's and General Partner's Right of First Refusal.......................22
14.2 Occurrence of Terminating Event or Adverse Terminating Event.....................23
14.3 Payment for Partnership Interest.................................................24
14.4 Buy/Sell Option..................................................................25
14.5 Federal Income Tax Treatment.....................................................26
14.6 Right to Participate.............................................................26
15. DISSOLUTION...............................................................................27
15.1 Causes...........................................................................27
15.2 Reconstitution...................................................................27
15.3 Interim Manager..................................................................28
16. WINDING UP AND TERMINATION................................................................28
16.1 General..........................................................................28
00.0 Xxxxx Xxxxxxxxxxx of Liquidator..................................................29
16.3 Liquidation......................................................................29
16.4 Creation of Reserves.............................................................30
16.5 Final Statement..................................................................30
17. POWER OF ATTORNEY.........................................................................30
17.1 General Partner as Attorney-in-Fact..............................................30
17.2 Nature of Special Power..........................................................30
18. MISCELLANEOUS.............................................................................31
18.1 Notices..........................................................................31
18.2 Governing Law....................................................................31
18.3 Successors and Assigns...........................................................31
18.4 Construction.....................................................................31
18.5 Time.............................................................................31
18.6 Waiver of Partition..............................................................31
18.7 Entire Agreement.................................................................32
18.8 Amendments.......................................................................32
18.9 Severability.....................................................................33
18.10 Gender and Number................................................................33
18.11 Exhibits.........................................................................33
18.12 Additional Documents.............................................................33
18.13 Section Headings.................................................................33
18.14 Counterparts.....................................................................33
(iii)
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AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT
OF
ALIGNED BUSINESS CONSORTIUM GROUP, L.P.
(a Delaware Limited Partnership)
This Amended and Restated Limited Partnership Agreement is entered into and
shall be effective as of the 1st day of June, 1997 by and between Xxxxx
Holdings, Inc., a Delaware corporation ("Columbia Sub"), as the General Partner,
and Columbia/TSP Holdings, Inc., a Nevada corporation ("Columbia/TSP"), Brim
Healthcare, Inc., an Oregon corporation ("Brim"), and each other Person whose
name is set forth on Exhibit "B" attached to this Limited Partnership Agreement
as Limited Partners.
WITNESSETH:
WHEREAS, the General Partner and Columbia/TSP are parties to that
certain Limited Partnership Agreement of Aligned Business Consortium Group L.P.
(the "Original Partnership Agreement");
WHEREAS, the General Partner, Columbia/TSP and Brim desire to amend and
restate the Original Partnership Agreement, as provided herein; and
WHEREAS, Brim desires to be admitted as a Limited Partner (as defined
herein) of the Partnership, and Columbia Sub and Columbia/TSP desire to admit
Brim as a Limited Partner, as provided herein;
NOW, THEREFORE, the General Partner, Columbia/TSP and Brim hereby amend
and restate the Original Partnership Agreement as follows:
1. DEFINITIONS
As used herein the following terms have the following meanings:
1.1 "ACT" means the Delaware Revised Uniform Limited Partnership Act,
as amended from time to time.
1.2 "ADDITIONAL LIMITED PARTNER" means a Person who is admitted into
the Partnership as a Limited Partner pursuant to the terms of Section 13.5
hereof.
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1.3 "ADVERSE TERMINATING EVENT" means, with respect to any Limited
Partner, the Limited Partner has breached the terms and conditions of this
Agreement, including without limitation, violating the transfer restrictions set
forth in Article 13 hereof, as determined in the reasonable discretion of the
General Partner.
1.4 "AFFILIATE" means, with respect to any Partner, (i) any Person that
directly or indirectly controls, is controlled by, or is under common control
with, a Partner, (ii) any entity of which a Partner owns 10% or more of the
outstanding voting securities, (iii) any entity of which a Partner is an
officer, director, or general partner, or (iv) any child, grandchild (whether
through marriage, adoption or otherwise), sibling (whether through adoption or
otherwise), parent or spouse of a Partner. As used in this definition of
"Affiliate," the term "control" means possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of an
entity whether through ownership of voting securities, by contract or otherwise.
1.5 "AGREEMENT" means this Amended and Restated Limited Partnership
Agreement of Aligned Business Consortium Group, L.P., as from time to time
amended pursuant to Section 18.8 hereof.
1.6 "APPROVAL OF THE PARTNERS" or "APPROVED BY THE PARTNERS" means the
approval of those Partners (including the General Partner and its Affiliates)
who have collective ownership interests of at least fifty-one percent (51%) of
the aggregate Sharing Percentage of all Partners at the time the proposed
Partnership action is being considered for approval.
1.7 "BANKRUPTCY" means, as to any Partner, the Partner's taking or
acquiescing to the taking of any action seeking relief under, or advantage of,
any applicable debtor relief, liquidation, receivership, conservatorship,
bankruptcy, moratorium, rearrangement, insolvency, reorganization or similar law
affecting the rights or remedies of creditors generally, as in effect from time
to time. For the purpose of this definition, the term "acquiescing" shall
include, without limitation, the failure to file within the time specified by
law, an answer or opposition to any proceeding commenced against such Partner
under any such law and a failure to file, within thirty (30) days after its
entry, a petition, answer or motion to vacate or to discharge any order,
judgment or decree providing for any relief under any such law.
1.8 "BRIM" means Brim Healthcare, Inc., an Oregon corporation, and any
successor thereto.
1.9 "BRIM SERVICES AGREEMENT" means the Services Agreement, of even
date herewith, by and among Brim and the Partnership.
1.10 "CAPITAL ACCOUNT" shall have the meaning set forth in Section 4.3
hereof.
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1.11 "CAPITAL CONTRIBUTION" means, as to any Partner, the amount of
cash or the Agreed Value (as defined in Exhibit "A" attached hereto) of all
property contributed to the Partnership by the Partner, which is set forth
opposite such Partner's name on the attached Exhibit "B" under the heading
"Capital Contribution."
1.12 "CODE" means the Internal Revenue Code of 1986, as amended from
time to time. All references herein to sections of the Code shall include any
provision or corresponding provisions of succeeding law.
1.13 "COLUMBIA" means Columbia/HCA Healthcare Corporation, a Delaware
corporation, and any successor in interest.
1.14 "COLUMBIA AFFILIATE" means any Affiliate of Columbia (other than
a natural person).
1.15 "COLUMBIA SERVICES AGREEMENT" means that certain Services
Agreement, of even date herewith, by and among the Partnership and Columbia Sub.
1.16 "COLUMBIA SUB" means Xxxxx Holdings, Inc., a Delaware corporation
and a Columbia Affiliate, and any successor thereto.
1.17 "COMPETITIVE ACTIVITIES" shall have the meaning set forth in
Section 8.8(b) hereof.
1.18 "GENERAL PARTNER" means Columbia Sub or any replacement general
partner of the Partnership, but excluding any Person who ceases to be a general
partner of the Partnership pursuant to this Agreement.
1.19 "LIMITED PARTNER" means Brim, Columbia/TSP, any Limited Partner
whose name is set forth on Exhibit "B" hereto, and any Substituted Limited
Partner or Additional Limited Partner, but excluding any Person who ceases to be
a limited partner of the Partnership pursuant to this Agreement. "LIMITED
PARTNERS" means all of the Persons who are limited partners of the Partnership
as defined in this Section 1.19.
1.20 "LIQUIDATOR" means the Person who liquidates the Partnership under
Article 16 hereof.
1.21 "PARTNERS" means the General Partner and the Limited Partners,
collectively. "Partner" means any one of the Partners.
1.22 "PARTNERSHIP" means the limited partnership governed by this
Agreement.
1.23 "PERSON" means any individual, partnership, corporation, limited
liability company, trust or other entity.
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1.24 "SERVICES AGREEMENTS" means the Columbia Services Agreement and
the Brim Services Agreement.
1.25 "SHARING PERCENTAGE" means, as to a Partner, the percentage
obtained by dividing the Units of such Partner by the total Units of all
Partners at that time. The Partners hereby agree that their Sharing Percentages
shall constitute their "interests in the Partnership profits" for purposes of
determining their respective shares of the Partnership's "excess nonrecourse
liabilities" within the meaning of section 1.752-3(a)(3) of the Regulations.
1.26 "SUBSTITUTED LIMITED PARTNER" means any Person admitted to the
Partnership pursuant to Section 13.2.
1.27 "TERMINATING EVENT" means, with respect to any Limited Partner,
the Limited Partner is in Bankruptcy.
1.28 "TREASURY REGULATIONS" or "REGULATIONS" means the regulations,
promulgated by the United States Department of the Treasury pursuant to and with
respect of provisions of the Code. All references herein to sections of the
Treasury Regulations or the Regulations shall include any corresponding
provision or provisions of succeeding, similar or substitute proposed, temporary
or final regulations.
1.29 "UNITS" means all or a certain percentage, as the context
requires, of the issued and outstanding ownership interests of the Partnership
held by the Partners. "UNIT" means any one of the Units. "GENERAL PARTNER UNITS"
or "LIMITED PARTNER UNITS" means Units held by the General Partner, or the
Limited Partners, respectively.
2. FORMATION OF PARTNERSHIP
2.1 FORMATION. Columbia/TSP and the General Partner formed the
Partnership pursuant to the Act, and caused the Certificate of Limited
Partnership to be filed in the office of the Secretary of State of Delaware on
January 20, 1997 and have complied with all other legal requirements to form and
operate the Partnership. Except as stated in this Agreement, the Act shall
govern the rights and liabilities of the Partners.
2.2 NAME. The name of the Partnership is Aligned Business Consortium
Group, L.P., and the business of the Partnership shall be conducted under that
name or such other name or names as may be Approved by the Partners from time to
time.
2.3 PRINCIPAL OFFICE. The principal office of the Partnership shall be
located at Xxx Xxxx Xxxxx, Xxxxxxxxx, XX 00000 or at such other place or places
as the General Partner may from time to time determine.
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2.4 TERM. The Partnership began on the date the General Partner filed
the Certificate of Limited Partnership with the Secretary of the State of
Delaware as provided in Section 2.1 hereof, and shall continue until the date on
which the Partnership is dissolved pursuant to Article 15 and thereafter, to the
extent provided for by applicable law, until wound up and terminated pursuant to
Article 16 hereof.
2.5 REGISTERED AGENT AND OFFICE. The registered agent of the
Partnership shall be the Xxxxxxxx-Xxxx Corporation System, Inc. and the
registered office of the Partnership shall be located at 0000 Xxxxxx Xxxx,
Xxxxxxxxxx, XX, 00000-0000. The registered office or the registered agent, or
both, may be changed by the General Partner from time to time upon filing the
statement required by the Act. The Partnership shall maintain at its registered
office such records as may be specified by the Act.
3. PURPOSES AND POWERS OF THE PARTNERSHIP; NATURE OF THE BUSINESS
OF THE PARTNERSHIP
3.1 PURPOSES. The purposes of the Partnership are (i) to own, manage,
develop and operate a membership organization formed for the purpose of
aggregating purchasing activities in order to achieve economic benefits for its
members (a "Group Purchasing Organization") for hospital supplies, services and
materials and (ii) generally to engage in such other businesses and activities
and to do any and all other acts and things that the General Partner deems
reasonably necessary, appropriate or advisable from time to time in furtherance
of the purposes of the Partnership as set forth in this Section 3.1 (subject to
the provisions of Section 8.3 and 8.4 hereof); provided, however, that the
Partners agree that the business operations of the Partnership shall not include
any group purchasing of healthcare supplies, services and materials by Columbia
or any Columbia Affiliate for any hospital that is leased, managed or owned,
directly or indirectly, by Columbia or any Columbia Affiliate, including,
without limitation, hospitals owned indirectly or directly by Columbia or
Columbia Affiliates through a partnership, limited liability company,
corporation (including any not-for-profit corporation), joint venture, trust or
other entity. Notwithstanding the foregoing, the Partners agree that any
administrative fees received by the Partnership from any hospital that is
leased, managed or owned, directly or indirectly, by Columbia (or any Columbia
Affiliate) or by Brim (or any of its Affiliates) shall be paid by the
Partnership to Columbia or Brim (so long as it or any of its Affiliates is a
Partner), respectively, or if paid directly to Columbia or Brim, may be retained
by Columbia or Brim (so long as it or any of its Affiliates is a Partner).
3.2 POWERS. Subject to the limitations contained in this Agreement and
in the Act, the Partnership purposes may be accomplished by the General Partner
taking any action permitted under this Agreement that in the good faith judgment
of the General Partner, is customary or reasonably related to accomplishing such
purposes.
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4. CAPITAL CONTRIBUTIONS, LOANS, CAPITAL ACCOUNTS
4.1 CAPITAL CONTRIBUTIONS. Each Partner has contributed its Capital
Contribution to the capital of the Partnership.
4.2 ADDITIONAL CAPITAL CONTRIBUTIONS. If Additional Capital
Contributions (herein so called) are required in the determination of the
General Partner for any expenditure (in accordance with the purpose of the
Partnership as set forth in Section 3.1 hereof) of the Partnership, the General
Partner shall have the right to request that the Partners make such Additional
Capital Contributions (pro rata in accordance with each Partner's Sharing
Percentage) to the Partnership in excess of its initial Capital Contribution. If
the General Partner makes such a request, no Partner shall be required to make
such Additional Capital Contribution, provided that if any Partner elects not to
make the Additional Capital Contribution (a "Noncontributing Partner"), the
other Partners (the "Contributing Partners") shall have the right to contribute
to the Partnership the amount of cash that the Noncontributing Partner or
Partners failed to contribute. The Partners shall have thirty (30) days from the
General Partner's request in which to elect to make or not make such Additional
Capital Contributions. Effective as of the end of such thirty (30) day period,
the Partners' Sharing Percentages shall be adjusted to a fraction (converted to
a percentage), the numerator of which is the amount of such Partner's Capital
Account and the denominator of which is the aggregate amount of all Partner's
Capital Accounts. The number of Units held by each Partner shall be adjusted
automatically to reflect any change in the Partners' Sharing Percentages under
this section.
4.3 CAPITAL ACCOUNTS. A Capital Account (herein so called) shall be
established and maintained for each Partner for the full term of this Agreement
in accordance with the capital accounting rules of section 1.704-1(b)(2)(iv) of
the Regulations. Each Partner shall have only one Capital Account, regardless of
the number or classes of Units or other interests in the Partnership owned by
such Partner and regardless of the time or manner in which such Units or other
interests were acquired by such Partner. Pursuant to the basic capital
accounting rules of section 1.704-l(b)(2)(iv) of the Regulations, the balance of
each Partner's Capital Account shall be:
(a) Increased by the amount of money contributed by such
Partner (or such Partner's predecessor in interest) to the capital of
the Partnership pursuant to this Article 4 and decreased by the amount
of money distributed to such Partner (or such Partner's predecessor in
interest) pursuant to Article 6 hereof;
(b) Increased by the fair market value of each property
(determined without regard to section 7701(g) of the Code) contributed
by such Partner (or such Partner's predecessor in interest) to the
capital of the Partnership pursuant to this Article 4 (net of all
liabilities secured by such property that the Partnership is considered
to assume or take subject to under section 752 of the Code) and
decreased by the fair market value of each property (determined without
regard to section 7701(g) of the Code) distributed to such Partner (or
such Partners predecessor in interest) by the Partnership pursuant to
Article 4
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hereof (net of all liabilities secured by such property that such
Partner is considered to assume or take subject to under section 752 of
the Code);
(c) Increased by the amount of each item of Partnership profit
allocated to such Partner (or such Partner's predecessor in interest)
pursuant to Section 3.1 of Exhibit "A" hereto;
(d) Decreased by the amount of each item of Partnership loss
allocated to such Partner (or such Partner's predecessor in interest)
pursuant to Section 3.1 of Exhibit "A" hereto; and
(e) Otherwise adjusted as follows:
(i) Effective immediately prior to any "Revaluation
Event" (as defined Exhibit "A" hereto), the balances of all Partners'
Capital Accounts shall be adjusted to reflect the manner in which items
of profit or loss, as computed for book purposes, equal to the
"Unrealized Book Gain Or Loss" (as defined in Exhibit "A" hereto) then
existing with respect to each Partnership property (to the extent not
previously reflected in the Partners' Capital Account) would be
allocated among the Partners pursuant to Section 3.1 of Exhibit "A"
hereto if there were a taxable disposition of such property immediately
prior to such Revaluation Event for its fair market value (as
determined by the General Partner taking section 7701 (g) of the Code
into account (i.e., such value shall not be less than the amount of
nonrecourse liabilities to which such property is subject));
(ii) With respect to items of Partnership profit and
loss, the balances of all the Partners' Capital Accounts shall be
adjusted solely for allocations of such items, as computed for book
purposes, under Section 3.1 of Exhibit "A" hereto and shall not be
adjusted for allocations of correlative Tax Items under Section 3.2 of
Exhibit "A" hereto;
(iii) immediately before giving effect under Section
4.3(b) hereof to any adjustment attributable to the distribution of
property to a Partner, the balances of all the Partners' Capital
Accounts first shall be adjusted to reflect the manner in which items
of profit or loss, as computed for book purposes, equal to the
Unrealized Book Gain Or Loss existing with respect to the distributed
property (to the extent not previously reflected in the Partners'
Capital Accounts) would be allocated among the Partners pursuant to
Section 3.1 of Exhibit "A" hereto if there were a taxable disposition
of such property, on the date of such distribution, by the Partnership
for its fair market value at the time of such distribution (as agreed
to in writing by the Partners taking section 7701(g) of the Code into
account (i.e., such value shall not be agreed to be less than the
amount of Nonrecourse Liabilities to which such property is subject));
and
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(iv) Upon the transfer of all or part of any Unit or other
interest in the Partnership, the Capital Account of the transferor
Partner, to the extent attributable to the transferred interest, shall
carry over to the transferee Partner; provided, however, if the
transfer causes the termination of the Partnership for federal income
tax purposes under section 708(b)(1)(B) of the Code, the Capital
Account that carries over to the transferee Partner shall be subject to
adjustment in accordance with Section 4.3(e)(i) hereof in connection
with the resulting constructive liquidation of the Partnership for
federal income tax purposes.
4.4 ADDITIONAL PROVISIONS REGARDING CAPITAL ACCOUNTS.
(a) If a Partner pays any Partnership indebtedness or forgives
any Partnership indebtedness owing to such Partner, such payment or
forgiveness shall be treated as a cash contribution by that Partner to
the capital of the Partnership, and the Capital Account of such Partner
shall be increased by the amount so paid by such Partner.
(b) Except as otherwise provided herein, no Partner may
contribute capital to, or withdraw capital from, the Partnership. To
the extent any monies which any Partner is entitled to receive pursuant
to the Agreement would constitute a return of capital, each of the
Partners consents to the withdrawal of such capital.
(c) A loan by a Partner to the Partnership shall not be
considered a contribution of money to the capital of the Partnership,
and the balance of such Partner's Capital Account shall not be
increased by the amount so loaned. No repayment of principal or
interest on any such loan, reimbursement made to a Partner with respect
to advances or other payments made by such Partner on behalf of the
Partnership or payments of fees to a Partner which are made by the
Partnership shall be considered a return of capital or in any manner
affect the balance of such Partner's Capital Account.
(d) No Partner with a deficit balance in its Capital Account
shall have any obligation to the Partnership or any other Partner to
restore such deficit balance. In addition, no venturer or partner in
any Partner shall have any liability to the Partnership or any other
Partner for any deficit balance in such venturer's or partner's capital
account in the Partner in which it is a partner or venturer.
Furthermore, a deficit Capital Account balance of a Partner (or a
capital account of a partner or venturer in a Partner) shall not be
deemed to be a liability of such Partner (or of such venturer or
partner in such Partner) or a Partnership asset or property. The
provisions of this Section 4.4(d) shall not affect any Partner's
obligation to make capital contributions to the Partnership that are
required to be made by such Partner pursuant to this Agreement.
(e) Except as otherwise provided herein, no interest shall be
paid on any capital contributed to the Partnership or the balance in
any Partner's Capital Account.
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(f) All of the provisions of this Agreement relating to the
maintenance of Capital Accounts are intended to comply with section
1.704-l(b) of the Regulations, and shall be interpreted and applied in
a manner consistent with such Regulations. If the General Partner
determines that it is prudent to modify the manner in which the Capital
Accounts, or any debits or credits thereto (including, without
limitation, debits or credits relating to liabilities that are secured
by contributed or distributed property or that are assumed by the
Partnership or any of the Partners) are computed in order to comply
with the Regulations, the General Partner may make such modifications,
provided that such modifications are not likely to have a material
effect on the amounts distributable to any Partner from the
Partnership. The General Partner shall also make appropriate
modifications in the event unanticipated events might otherwise cause
this Agreement not to comply with section 1.704-l(b) of the
Regulations.
4.5 LOANS. The General Partner or any Limited Partner, with the consent
of the General Partner, may lend money to the Partnership. If the General
Partner or, with the written consent of the General Partner, any Limited Partner
makes any loan or loans to the Partnership, the amount of any such loan shall
not be treated as a contribution to the capital of the Partnership but shall be
a debt due from the Partnership. Any Partner's loan to the Partnership shall be
repayable out of the Partnership's cash and shall bear interest at prevailing
market rates. None of the Partners nor any of their Affiliates shall be
obligated to loan money to the Partnership.
5. ALLOCATIONS
5.1 ALLOCATIONS OF INCOME AND LOSSES. All items of income or loss of
the Partnership shall be allocated to the Partners in accordance with the
provisions of Exhibit "A" attached hereto, which is hereby incorporated by
reference for all purposes of this Agreement.
6. DISTRIBUTIONS
6.1 DISTRIBUTION OF EXCESS CASH. Except as otherwise may be provided in
Section 16.3, or as otherwise may be prohibited or required by applicable law,
as soon as practicable and in any event within ninety (90) days after the end of
each fiscal year, the General Partner shall determine in its reasonable
discretion the extent (if any) that the Partnership's cash on hand exceeds its
current and anticipated needs, including without limitation, for operating
expenses, debt service, acquisitions, capital expenditures, and a reasonable
contingency reserve. If the General Partner determines that such an excess
exists, the General Partner shall cause the Partnership to distribute such
excess to the Partners, pro rata in accordance with their respective Sharing
Percentages; provided, however, that, to the extent that the Partnership
distributes any such excess relating to the Partnership's operations during the
period beginning on the date hereof and ending on the first anniversary of such
date, the General Partner shall cause the Partnership to make such distributions
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as if Brim's Sharing Percentage was 30% and Columbia Sub's and Columbia/TSP's
cumulative Sharing Percentage was 70%; provided, further, that if Additional
Limited Partners are admitted to the Partnership during such period, then such
percentages shall be proportionally reduced in accordance with the existing
Partners actual Sharing Percentages.
7. BANK ACCOUNTS, BOOKS OF ACCOUNT, TAX COMPLIANCE AND FISCAL YEAR
7.1 BANK ACCOUNTS: INVESTMENTS. The General Partner may (i) establish
one or more bank accounts as provided in Section 8.1 (g) into which all
Partnership funds shall be deposited or (ii) deposit Partnership funds in a
central account established in the name of Columbia, Columbia Sub or a Columbia
Affiliate, provided that detailed separate entries are made on the books and
records of the Partnership and on the books and records of Columbia, Columbia
Sub or such Columbia Affiliate with respect to amounts received from the
Partnership and deposited in such central account for the account of the
Partnership. The daily balances of the funds of the Partnership deposited into
such central account shall bear interest at a current market rate. Funds
deposited in the Partnership's bank accounts may be withdrawn only to pay
Partnership debt or obligations or to be distributed to the Partners under this
Agreement. Partnership funds, however, may be invested in such securities and
investments, as the General Partner may select until withdrawn for Partnership
purposes.
7.2 BOOKS AND RECORDS. The General Partner shall keep books of account
and records relative to the Partnership's business. The books shall be prepared
in accordance with generally accepted accounting principles using the accrual
method of accounting. The accrual method of accounting shall also be used by the
Partnership for income tax purposes. The Partnership's books and records shall
at all times be maintained at the principal business office of the Partnership
or its accountants (and to the extent required by the Act, at the registered
office of the Partnership) and shall be available for inspection by the Limited
Partners or their duly authorized representatives during reasonable business
hours. The books and records shall be preserved for at least four (4) years
after the term of the Partnership ends.
7.3 DETERMINATION OF PROFIT AND LOSS: FINANCIAL STATEMENTS:
ANNUAL BUDGETS.
(a) All items of Partnership income, expense, gain, loss,
deduction and credit shall be determined with respect to, and allocated
in accordance with, this Agreement for each Partner for each
Partnership fiscal year. Within one hundred twenty (120) days after the
end of each Partnership fiscal year, the General Partner shall cause to
be prepared, at the Partnership's expense, unaudited financial
statements of the Partnership for the preceding fiscal year, including,
without limitation, a balance sheet, profit and loss statement,
statement of cash flows and statement of the balances in the Partners'
Capital Accounts, prepared in accordance with the terms of this
Agreement and generally accepted accounting principles consistently
applied. These financial statements shall be available for inspection
and copying
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during ordinary business hours at the reasonable request of any
Partner, and shall be furnished to all Limited Partners by the
Partnership as soon as practicable upon their completion.
(b) Prior to the end of each fiscal year, the Partnership
shall provide to Brim a copy of the Partnership's annual and capital
expenditure budget for the next succeeding fiscal year.
7.4 TAX RETURNS AND INFORMATION. The Partners intend for the
Partnership to be treated as a partnership, rather than as an association
taxable as a corporation, for federal income tax purposes. The General Partner
shall prepare or cause to be prepared all federal, state and local income and
other tax returns which the Partnership is required to file, provided that the
General Partner may request an extension with respect to any federal, state and
local income and other tax returns which the Partnership is required to file.
The General Partner shall furnish such returns to the Limited Partners, together
with a copy of each Limited Partner's Form K-l and any other information which
any Limited Partner may reasonably request relating to such returns, within
ninety (90) days after the end of each Partnership fiscal year or within 30 days
after the filing of such returns pursuant to an extension.
7.5 TAX AUDITS. The General Partner shall be the tax matters partner of
the Partnership under Section 623l(a)(7) of the Code. The General Partner shall
inform the Limited Partners of all matters which may come to its attention in
its capacity as tax matters partner by giving the Limited Partners notice
thereof within ten (10) days after becoming so informed. The General Partner
shall not take any action contemplated by Sections 6222 through 6232 of the Code
unless the General Partner has first given the Limited Partners notice of the
contemplated action and received the Approval of the Partners to the
contemplated action. This provision is not intended to authorize the General
Partner to take any action which is left to the determination of the individual
Partner under Sections 6222 through 6232 of the Code.
7.6 FISCAL YEAR. The Partnership fiscal year shall be the calendar
year.
8. RIGHTS, OBLIGATIONS AND INDEMNIFICATION OF THE GENERAL PARTNER
8.1 RIGHTS OF THE GENERAL PARTNER AS MANAGER. Subject to the
limitations imposed upon the General Partner in this Agreement (including,
without limitation, Sections 8.3, 8.4 and 8.5 hereof) the General Partner shall
have full, exclusive and complete duty and right to manage and control, and,
within its reasonable discretion, shall make all decisions and take any
necessary or appropriate action in connection with the Partnership's business.
Without limiting the General Partner's power or authority under this Agreement
or the Act, the General Partner may (without obtaining the consent or approval
of any Partners) take the following actions if and when it deems any such action
to be reasonably necessary, appropriate or advisable, at the sole cost and
expense of
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the Partnership, subject however in all respects to the limitations imposed on
the General Partner in this Agreement (including, without limitation, Sections
8.3, 8.4 and 8.5):
(a) Subject to the last sentence of Section 8.5 hereof, borrow
money from any source, including, without limitation, from the General
Partner, Columbia, Columbia/TSP or a Columbia Affiliate and, if
security is required therefor, to mortgage or subject to any other
security device any portion of the Partnership's property, to obtain
replacements of any mortgage or other security device, and to prepay,
in whole or in part, refinance, increase, modify, consolidate or extend
any mortgage or other security device, all of the foregoing on such
terms and in such amounts as the General Partner deems, in its
reasonable discretion, to be in the best interest of the Partnership;
(b) Acquire and enter into any contract of insurance which the
General Partner deems reasonably necessary and proper for the
protection of the Partnership, for the conservation of the
Partnership's assets, or for any purpose convenient or beneficial to
the Partnership;
(c) Employ, from time to time on behalf of the Partnership,
individuals (including employees of the General Partner, the Limited
Partners, or any of their Affiliates) on such terms and for such
compensation as the General Partner shall determine (but not in an
amount which would be considered unreasonable based upon the scope of
an individual employee's duties and responsibilities), and enter into
agreements for the transfer of interests to such Persons as provided
in Article 13 and 14 hereof;
(d) Make decisions as to accounting principles and elections,
whether for book or tax purposes (and such decisions may be different
for each purpose);
(e) Set up or modify record keeping, billing and accounts
payable accounting systems;
(f) Alienate, mortgage, pledge or otherwise encumber, sell,
exchange, lease or purchase real and/or personal property in
fulfillment of the Partnership purposes and for the operation of other
Partnership property;
(g) Open checking and savings accounts, in banks or similar
financial institutions, in the name of the Partnership, and deposit
cash in and withdraw cash from such accounts, provided that any such
deposits are made in federally insured banks or financial institutions;
(h) Adjust, arbitrate, compromise, xxx or defend, abandon, or
otherwise deal with and settle any and all claims in favor of or
against the Partnership, as the General Partner shall, in its sole
discretion, deem proper (subject to the General Partner's fiduciary
duties as the General Partner of the Partnership);
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(i) Execute, make, perform and carry out on behalf of and in
the name of the Partnership all types of contracts, leases, agreements,
instruments, notes, certificates, titles or other documents of any kind
or nature as deemed reasonably necessary and desirable by the General
Partner, including without limitation contracts, leases, other
agreements and documents and cash management systems with Columbia
Affiliates or any Partner, and amend, extend, or modify, any contact,
lease or agreement at any time entered into by the Partnership,
provided that the General Partner uses its best efforts to insure that
all such contracts, leases, or agreements are representative of fair
market value; and
(j) Do all acts reasonably necessary or desirable to carry out
the business for which the Partnership is formed or which may
facilitate the General Partner's exercise of its powers hereunder.
8.2 RIGHT TO RELY ON THE GENERAL PARTNER. No Person or governmental
body dealing with the Partnership shall be required to inquire into, or to
obtain any other documentation as to, the authority of the General Partner to
take any action permitted under Section 8.1. Furthermore, any Person dealing
with the Partnership may rely upon a certificate signed by the General Partner
as to the following:
(a) The identity of the General Partner or any Limited
Partner;
(b) The existence or nonexistence of any fact or facts that
constitute a condition precedent to acts by the General Partner or
which are in any other manner germane to the affairs of the
Partnership;
(c) The Persons who are authorized to execute and deliver any
instrument or document of the Partnership; or
(d) Any act or failure to act by the Partnership on any other
matter whatsoever involving the Partnership or any Partner.
8.3 SPECIFIC LIMITATIONS ON THE GENERAL PARTNER. Notwithstanding
anything to the contrary in this Agreement or the Act, without the prior written
approval of all of the Limited Partners to the specific act in question, the
General Partner shall have no right, power or authority to do any of the
following acts, each of which is considered outside the ordinary course of
Partnership business:
(a) To do any act in contravention of this Agreement;
(b) To change or reorganize the Partnership into any other
legal form; or
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(c) To knowingly perform any act that would subject any
Limited Partner to liability as a general partner in any jurisdiction.
8.4 ADDITIONAL LIMITATIONS ON THE AUTHORITY OF THE GENERAL PARTNER.
Without (i) the prior Approval of the Partners and (ii) the prior written
approval of Brim (so long as Brim or any of its Affiliates is a Partner), the
General Partner shall have no authority to do any of the following:
(a) Amend this Agreement (except as provided in Section 18.8);
(b) Change the nature of the business of the Partnership;
(c) Sell all or substantially all of the assets of the
Partnership; or
(d) Dissolve the Partnership.
The limitations in Sections 8.3(b) and this Section 8.4 shall not be applicable
to any General Partner or any Liquidator in winding up and liquidating the
business of the Partnership under Article 16.
8.5 MANAGEMENT OBLIGATIONS OF THE GENERAL PARTNER. The General Partner
shall devote such time to the Partnership as may be necessary to manage and
supervise the Partnership business and affairs, but nothing in this Agreement
shall preclude the General Partner, at the expense of the Partnership, from
employing any Columbia Affiliate or a third party to provide management or other
services to the Partnership, always subject, however, to the control of the
General Partner. Any transaction between the Partnership and the General
Partner, Columbia, Columbia/TSP or any Columbia Affiliate is hereby expressly
authorized provided that the terms of such transactions are generally no less
favorable to the Partnership than the terms that would be made available to the
Partnership in arm's length transactions with independent third parties.
8.6 INDEMNIFICATION OF THE GENERAL PARTNER.
(a) Except to the extent such indemnification may be
prohibited by law, the Partnership, its receiver, or its trustee shall
indemnify, hold harmless, and pay all judgments and claims against the
General Partner relating to any liability or damage incurred or
suffered by the General Partner by reason of any act performed or
omitted to be performed (but not constituting willful misconduct or
gross negligence) by the General Partner or its agents or employees in
connection with the Partnership's business, including reasonable
attorneys' fees incurred by the General Partner in connection with the
defense of any claim or action based on any such act or omission,
which attorneys' fees may be paid as incurred (provided that the
General Partner shall be required to reimburse the Partnership for any
such attorneys' fees paid as incurred if the General Partner is not
entitled to indemnification for the claims, actions or liabilities
relating to such fees).
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(b) In the event any Limited Partner shall bring a legal
action against the General Partner, including a Partnership derivative
suit, the Partnership shall indemnify, hold harmless, and pay all
expenses of the General Partner, including but not limited to
attorneys' fees incurred in the defense of such action, unless the
General Partner shall be adjudicated guilty of gross negligence or
willful misconduct in connection with the performance of its duties as
General Partner to the Partnership.
(c) The Partnership shall indemnify, hold harmless, and pay
all expenses, costs or liabilities of the General Partner which (or
who) for the benefit of the Partnership makes any deposit, acquires any
option, makes any payment, or assumes any obligation in connection with
any property proposed to be acquired by the Partnership and which (or
who) suffers any financial loss as a result of such action.
(d) Any indemnification required herein to be made by the
Partnership shall be made promptly following the fixing of any loss,
liability, or damage incurred or suffered. If, at any time, the
Partnership has insufficient funds to provide such indemnification as
herein provided, it shall provide such indemnification if and as the
Partnership generates sufficient funds, and prior to any distribution
to the Partners.
Notwithstanding the foregoing provisions of this Section 8.6, the
General Partner shall not be indemnified by the Partnership from any liability
for actions or omissions that constitute willful misconduct or gross negligence
on the part of the General Partner.
8.7 REIMBURSEMENT. The General Partner shall be entitled to be
reimbursed for any and all reasonable costs and expenses incurred by it in
connection with managing and operating the Partnership and its properties and
business. Such reimbursement shall be paid by the Partnership, upon the written
application of the General Partner, as soon as funds are available therefor.
8.8 INDEPENDENT ACTIVITIES.
(a) Subject to the limitations set forth in Section 8.8(b)
hereof, the General Partner, Columbia/TSP and any of their Affiliates
may engage in or possess interests in other business ventures of every
nature and description, independently, and with others, whether such
activities are competitive with the Partnership or otherwise without
having or incurring any obligation to offer any interest in such
activities to the Partnership or any Partner. Subject to the
limitations set forth in Section 8.8(b) hereof, neither this Agreement
nor any activity undertaken hereunder shall prevent the General
Partner, Columbia/TSP or any of their Affiliates from engaging in such
other activities or require the General Partner, Columbia/TSP or any of
their Affiliates to permit the Partnership or any Limited Partner to
participate in such activities. Furthermore, as a material part of the
consideration for the General Partner and Columbia/TSP executing this
Agreement and admitting the Limited
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Partners to the Partnership, the Limited Partners herein waive,
relinquish and renounce any right or claim of participation in any such
activities.
(b) Notwithstanding the foregoing, neither the General
Partner, Columbia/TSP or their Affiliates nor Brim or its Affiliates
may engage in or possess any interests in any other business venture
that (i) owns, manages, develops or operates a national Group
Purchasing Organization for purchasing for hospitals, surgery centers,
long-term care facilities, assisted living facilities and skilled
nursing facilities ("Competitive Businesses") and (ii) is competitive
with the Partnership ("Competitive Activities"); provided, however,
that such Competitive Activities shall not include, without limitation,
the owning, managing, developing or operating of (w) any Group
Purchasing Organization for healthcare supplies, services and materials
purchasing which operates within a specific geographic market or
markets that is or are not national in scope, (x) any international
healthcare or hospital related businesses or matters (including,
without limitation, any Group Purchasing Organizations), (y) any Group
Purchasing Organization for purchasing for activities which are not
Competitive Businesses, such as Group Purchasing Organizations for
equipment, supplies or other materials and services used in physician
practices or pharmaceuticals (whether or not distributed in hospitals),
and any Group Purchasing Organization or similar arrangement for an
array of products whose usage in hospitals is relatively minor and who
have not traditionally been offered through Group Purchasing
Organizations, or (z) any Group Purchasing Organization or Group
Purchasing Organizations that is or are owned, managed or operated by a
Person that is acquired by the General Partner, Columbia/TSP or any of
their Affiliates or by Brim or any of its Affiliates after the date
hereof, provided that the operations of such Group Purchasing
Organization or Group Purchasing Organizations do not comprise more
than twenty percent (20%) of the consolidated revenues of such Person.
In the event of an actual or threatened breach by the General Partner,
Columbia/TSP or their Affiliates or Brim or its Affiliates of this
Section 8.8(b), the non-breaching party shall be entitled to an
injunction in any appropriate court, restraining the actual or
threatened breach by such other party. If a court shall hold that the
duration and/or scope (geographic or otherwise) of the agreement
contained in this Section 8.8(b) is unreasonable, then, to the extent
permitted by law, the court may prescribe a duration and/or scope
(geographic or otherwise) that is reasonable and judicially
enforceable.
9. RIGHTS AND STATUS OF LIMITED PARTNERS
9.1 GENERAL. The Limited Partners have the rights and the status of
limited partners under the Act. Except to the extent expressly otherwise
provided in this Agreement, the Limited Partners shall not take part in the
management or control of the Partnership business, or sign for or bind the
Partnership, such powers being vested exclusively in the General Partner.
9.2 LIMITATION OF LIABILITY. No Limited Partner shall have any personal
liability whatsoever, solely by reason of its status as a Limited Partner of
the Partnership, whether to the
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Partnership, the General Partner or any creditor of the Partnership, for the
debts of the Partnership or any of its losses beyond the amount of the Limited
Partner's obligation to contribute its Capital Contribution to the Partnership.
9.3 BANKRUPTCY; DEATH, ETC. Neither the Bankruptcy, death, disability
nor declaration of incompetence or incapacity of a Limited Partner shall
dissolve the Partnership, but the rights of a Limited Partner to share in the
profits and losses of the Partnership and to receive distributions of
Partnership funds shall, on the happening of such an event, devolve upon the
Limited Partner's estate, legal representative or successor in interest, as the
case may be, subject to this Agreement, and the Partnership shall continue as a
limited partnership under the Act. The Limited Partner's estate, representative
or successor in interest shall be entitled to receive distributions and
allocations with respect to such Limited Partner's interest in the Partnership
and shall be liable for all of the obligations of the Limited Partner. However,
the Limited Partner's estate, representative or successor in interest shall have
no right to any information or accounting of the affairs of the Partnership,
shall not be entitled to inspect the books or records of the Partnership, and
shall not be entitled to any of the rights of a general partner or limited
partner (other than the right to receive distributions and allocations as
described in the foregoing sentence) under the Act or this Agreement unless such
estate, representative or successor in interest is admitted to the Partnership
as a Substituted Limited Partner in accordance with Section 13.2.
10. SPECIAL COVENANTS OF THE PARTNERS
10.1 NON-OWNERSHIP PROVISION. Each Limited Partner (other than
Columbia/TSP and any of its Affiliates) agrees that while it is a Limited
Partner and for three (3) years thereafter neither it nor any of its Affiliates
shall, directly or indirectly, hold an ownership interest in any Competitive
Activities without the prior written consent of the General Partner. Each such
Limited Partner expressly agrees that neither it nor any of its 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 three (3) years thereafter.
Notwithstanding anything in this Section 10.1 to the contrary, at any time after
a Limited Partner is no longer a Partner in the Partnership, such Limited
Partner and its Affiliates may utilize the services of another Group Purchasing
Organization or contract directly with suppliers, but only in connection with
hospitals actually owned, leased or managed by such Limited Partner or its
Affiliates. In addition, notwithstanding anything in this Section 10.1 to the
contrary, each of the parties hereto agrees and acknowledges that nothing in
this Section 10.1 shall limit or negate Columbia Sub's or its Affiliates'
obligations or rights under Section 8.8(b) hereof.
10.2 LIMITATION. In the event of an actual or threatened breach by any
Limited Partner of Section 10.1, the General Partner shall be entitled to an
injunction in any appropriate court, restraining the actual or threatened breach
by such Partner. If a court shall hold that the duration and/or scope
(geographic or otherwise) of the agreement contained in Section 10.1 is
unreasonable, then, to the extent permitted by law, the court may prescribe a
duration and/or scope (geographic or
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otherwise) that is reasonable and judicially enforceable. The parties agree to
accept such determination, subject to their rights of appeal, which the parties
hereto agree may be substituted in place of any and every offensive part of
Section 10.1, and as so modified, Section 10.1 of this Agreement shall be as
fully enforceable as if set forth herein by the parties in the modified form.
Nothing herein stated shall be construed as prohibiting any party hereto from
pursuing any other remedies available for such breach or threatened breach,
including the recovery of damages.
11. MEETINGS AND MEANS OF VOTING
11.1 MEETINGS OF THE PARTNERS. Meetings of the Partners may be called
by the General Partner and shall be promptly called upon the written request of
any one or more Limited Partners who own in the aggregate 15% or more of the
aggregate Sharing Percentage in the Partnership. The notice of a meeting shall
state the nature of the business to be transacted at such meeting, and actions
taken at any such meeting shall be limited to those matters specified in the
notice of the meeting. Notice of any meeting shall be given to all Partners not
less than ten (10) and not more than sixty (60) days prior to the date of the
meeting.
Except as otherwise expressly provided in this Agreement or required by
the express provisions of the Act, the requisite vote of the Partners shall be
the Approval of the Partners which shall control all decisions for which the
vote of the Partners is required hereunder. Each Partner's voting rights shall
be the same as that Partner's Sharing Percentage at the time of the vote. The
Partners may, at their election, participate in any regular or special meeting
by means of telephone conference or similar communications equipment by means of
which all Persons participating in the meeting can hear each other. A Partner's
participation in a meeting pursuant to the preceding sentence shall constitute
presence in person at such meeting for all purposes of this Agreement, and such
presence shall constitute a waiver of notice of the meeting with respect to such
Partner.
11.2 VOTE BY PROXY. Each Partner may authorize any Person to act on
Partner's behalf by proxy on all matters in which a Partner is entitled to
participate, whether by waiving notice of any meeting, or voting or
participating at a meeting. Every proxy must be signed by the Partner
authorizing such proxy or such Partner's attorney-in-fact. No proxy shall be
valid after the expiration of eleven (11) months after the date thereof unless
otherwise provided in the proxy. Every proxy shall be revocable at the pleasure
of the Partner executing it.
11.3 CONDUCT OF MEETING. Each meeting of Partners shall be conducted by
the General Partner or by a Person appointed by the General Partner. The meeting
shall be conducted pursuant to such reasonable rules as may be adopted by the
General Partner or the Person appointed by the General Partner for the conduct
of the meeting.
11.4 ACTION WITHOUT A MEETING. Notwithstanding anything to the contrary
in this Agreement, any action that (i) may be taken at a meeting of the Partners
and (ii) requires only the
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Approval of Partners and not the consent or approval of any individual Partner
may be taken without a meeting if a consent in writing setting forth the action
so taken is Approved by the Partners, which consent may be executed in multiple
counterparts. In the event any action is taken pursuant to this Section 11.4, it
shall not be necessary to comply with any notice or timing requirements set
forth in Section 11.1. Prompt written notice of the taking of action without a
meeting shall be given to the Partners who have not consented in writing to such
action.
11.5 CLOSING OF TRANSFER RECORD; RECORD DATE. For the purpose of
determining the Partners entitled to notice of or to vote at any meeting of
Partners, any reconvening thereof, or to act by consent, the General Partner may
provide that the transfer record shall be closed for at least ten (10) days
immediately preceding such meeting (or such shorter time as may be reasonable in
light of the period of the notice) or the first solicitation of consents in
writing. If the transfer record is not closed and if no record date is fixed for
determining the Partners entitled to notice of or to vote at a meeting of
Partners or by consent, the date on which the notice of the meeting is mailed or
the first written consent is received by the General Partner shall be the record
date for such determination.
12. Intentionally left blank.
13. TRANSFER OF UNITS AND ADDITIONAL LIMITED PARTNERS
13.1 TRANSFERS BY LIMITED PARTNERS. Except as otherwise set forth in
this Article 13 and Article 14, a Limited Partner may not sell, assign,
transfer, pledge or hypothecate all or any part of its interest in the
Partnership without the prior written consent of each of the General Partner and
Brim. Each of the General Partner and Brim in its sole discretion may withhold
its consent to any transfer for which such consent is required with or without
reasonable cause. Notwithstanding the foregoing, (i) if Brim or any of its
Affiliates requests in writing the prior written consent of the General Partner
to any sale, assignment, transfer, pledge or hypothecation of its interest in
the Partnership pursuant to this Section 13.1, and such request is denied or
disapproved, then Brim or any of its Affiliates shall have the right to exercise
the Buy/Sell Option pursuant to the terms of Section 14.4 hereof by giving the
Buy/Sell Notice even if such notice and exercise are to occur prior to the date
of the fifth anniversary hereof and (ii) if Columbia Sub or any of its
Affiliates or Columbia/TSP or any of its Affiliates requests in writing the
prior written consent of Brim to any sale, assignment, transfer, pledge or
hypothecation of its interest in the Partnership pursuant to this Section 13.1,
and such request is denied or disapproved, then Columbia Sub or any of its
Affiliates or Columbia/TSP or any of its Affiliates shall have the right to
exercise the Buy/Sell Option pursuant to the terms of Section 14.4 hereof by
giving the Buy/Sell Notice even if such notice and exercise are to occur prior
to the date of the fifth anniversary hereof. If a Limited Partner receives the
prior consent of the General Partner and Brim, it may sell its interest in the
Partnership if the following conditions are satisfied:
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(a) The sale, transfer or assignment is with respect to one or
more Units;
(b) The sale, transfer or assignment, when aggregated with any
prior sales, transfers or assignments of Partnership interests, does
not result in a sale or exchange within a twelve (12) month period of
fifty percent (50%) or more of the total interests in the Partnership's
capital and profits within the meaning of Code Section 708(b) (provided
that such sale, transfer or assignment may be completed if Approved by
the Partners);
(c) The Limited Partner and its transferee execute,
acknowledge and deliver to the General Partner such instruments of
transfer and assignment with respect to such transaction as are in form
and substance reasonably satisfactory to the General Partner;
(d) Unless waived in writing by the General Partner, the
Limited Partner delivers to the General Partner an opinion of counsel
reasonably satisfactory to the General Partner, covering such
securities and tax laws and other aspects of the proposed transfer as
the General Partner may reasonably request;
(e) The Limited Partner has furnished to the transferee a
written statement showing the name and taxpayer identification number
of the Partnership in such form and together with such other
information as may be required under Section 6050K of the Code and the
Regulations thereunder; and
(f) The Limited Partner pays the Partnership a transfer fee
that is sufficient to pay all reasonable expenses of the Partnership
(which shall include any and all reasonable expenses of the General
Partner and Brim) in connection with such transaction.
Any Limited Partner who thereafter sells, assigns or otherwise transfers all or
any portion of its interest in the Partnership shall promptly notify the General
Partner of such transfer and shall furnish to the General Partner the name and
address of the transferee and such other information as may be required under
Section 6050K of the Code and the Regulations thereunder. Any transferee
obtaining the interest of a Limited Partner in accordance with this Section 13.1
hereof shall be deemed a Substituted Limited Partner for purposes of this
Agreement without any further action or approval.
13.2 SUBSTITUTED LIMITED PARTNER. No Person taking or acquiring, by
whatever means, the interest of any Limited Partner in the Partnership, except
as provided in Section 13.1 hereof, shall be admitted as a Substituted Limited
Partner without the consent of the General Partner (which consent may not be
unreasonably withheld) and unless such Person:
(a) Elects to become a Substituted Limited Partner by
delivering notice of such election to the Partnership;
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(b) Executes, acknowledges and delivers to the Partnership
such other instruments as the General Partner may deem reasonably
necessary or advisable to effect the admission of such Person as a
Substituted Limited Partner, including, without limitation, the written
acceptance and adoption by such Person of the provisions of this
Agreement; and
(c) Pays a transfer fee to the Partnership in an amount
sufficient to cover all reasonable expenses connected with the
admission of such Person as a Substituted Limited Partner, provided
that such Person has not previously paid a transfer fee to the
Partnership pursuant to Section 13.l(f) hereof.
13.3 BASIS ADJUSTMENT. Upon the transfer of all or part of an interest
in the Partnership, at the request of the transferee of the interest the General
Partner may, in its sole discretion, cause the Partnership to elect, pursuant to
Section 754 of the Code or the corresponding provisions of subsequent law, to
adjust the basis of the Partnership properties as provided by Sections 734 and
743 of the Code.
13.4 TRANSFER TO COLUMBIA AFFILIATES AND BY THE GENERAL PARTNER.
Notwithstanding any of the provisions of this Agreement to the contrary, the
General Partner and Columbia/TSP may transfer, convey, sell or assign any of the
Units held by such General Partner and Columbia/TSP to any Columbia Affiliate
without the consent of or notice to any other Partner. Except as otherwise set
forth in this Article 13 and Article 14, the General Partner may not sell,
assign, transfer, pledge or hypothecate all or any part of its interest in the
Partnership without the prior written consent of Brim.
13.5 ADMISSION OF ADDITIONAL LIMITED PARTNERS. The General Partner is
authorized to issue limited partnership interests in the Partnership to any
Person and to admit them to the Partnership as Additional Limited Partners,
which in all instances shall comply with applicable securities laws. The General
Partner shall have reasonable discretion in determining the consideration, which
must be based on then current value (which must be fully paid in cash or
property at the time of subscription), and the terms and conditions with respect
to the Partnership for admitting Additional Limited Partners. The General
Partner will not permit any Person to become an Additional Limited Partner
unless such Person agrees to be bound by the terms of this Agreement. The
General Partner shall do all things necessary to comply with the Act and is
authorized to do all things it deems to be necessary or advisable in connection
with the Partnership for admitting any Additional Limited Partner, including,
but not limited to, complying with any statute, rule, regulation or guideline
issued by any Federal, state or other governmental agency.
13.6 TRANSFER PROCEDURES. The General Partner shall establish a
transfer procedure consistent with this Article 13 to ensure that all conditions
precedent to the admission of a Substituted Limited Partner or Additional
Limited Partner have been complied with.
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13.7 INVALID TRANSFER. No transfer of an interest in the Partnership
that is in violation of this Article 13 or Article 14 hereof shall be valid or
effective, and the Partnership shall not recognize any improper transfer for the
purposes of making allocations, payments of profits, return of capital
contributions or other distributions with respect to such Partnership interest,
or part thereof. The Partnership may enforce the provisions of this Article 13
or Article 14 either directly or indirectly or through its agents by entering an
appropriate stop transfer order on its books or otherwise refusing to register
or transfer or permit the registration or transfer on its books of any proposed
transfers not in accordance with this Article 13 or Article 14.
13.8 DISTRIBUTIONS AND ALLOCATIONS IN RESPECT OF A TRANSFERRED
OWNERSHIP INTEREST. If any Partner sells, assigns or transfers any part of its
interest in the Partnership during any accounting period in compliance with the
provisions of this Article 13, Partnership income, gain, deductions and losses
attributable to such interest for the respective period shall be divided and
allocated between the transferor and the transferee by taking into account their
varying interests during the appropriate accounting period in accordance with
Code Section 706(d), using the daily proration method. All Partnership
distributions before the effective date of such transfer shall be made to the
transferor, and all such Partnership distributions on and after the effective
date of such transfer shall be made to the transferee. Solely for purposes of
making Partnership tax allocations and distributions, the Partnership shall
recognize a transfer on the day following the day of transfer. Neither the
Partnership nor the General Partner shall incur any liability for making
Partnership allocations and distributions in accordance with the provisions of
this Section 13.8.
13.9 ADDITIONAL REQUIREMENTS OF ADMISSION TO PARTNERSHIP. The General
Partner shall not admit any Person as a Limited Partner if such admission would
have the effect of causing the Partnership to be re-classified for federal
income tax purposes as an association (taxable as a corporation under the Code),
or would violate any Medicare or other health care law, rule or regulation, or
would not meet applicable exemptions from securities registration and securities
disclosure provided under Federal and state securities laws.
13.10 AMENDMENT TO EXHIBIT "B". The General Partner shall amend Exhibit
"B" attached to this Agreement from time to time to reflect the admission of any
successor General Partner, Substituted Limited Partners or Additional Limited
Partners, or the reduction or termination of any Partner's interest in the
Partnership.
14. RIGHT TO LIQUIDATE OR PURCHASE PARTNERSHIP INTERESTS
14.1 PARTNERSHIP'S AND GENERAL PARTNER'S RIGHT OF FIRST REFUSAL.
Subject to the restrictions on transfer set forth in Article 13, if any Limited
Partner receives or obtains an offer from a third party to acquire in any manner
all or any part of its interest in the Partnership which offer the Limited
Partner intends to accept the Limited Partner shall promptly notify the General
Partner in writing of the offer received, including the name of the offeror, the
number of whole or partial Units
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offered to be purchased, the proposed purchase price and the other terms and
conditions of the offer. The Partnership shall have the option for a period of
sixty (60) days from the day the General Partner receives notice of such offer
to purchase such Limited Partner's interest in the Partnership on the same terms
and conditions contained in the offer. The Partnership may exercise its option
by notifying the Limited Partner proposing to sell prior to the end of such
sixty (60) day period of its exercise of the option and shall thereafter
purchase such Limited Partner's interest within such sixty (60) day period
(unless such exercise is subsequently revoked). If the Partnership does not
exercise its option, the General Partner shall have the option to purchase such
Limited Partner's interest in the Partnership on the same terms and conditions
within the same sixty (60) day period. If the Partnership and the General
Partner fail to or both indicate in writing that they will not exercise the
option, within the period provided, or if either the Partnership or the General
Partner exercises the option but fails to effect the purchase within the
prescribed period, the Limited Partner, in accordance with and subject to the
provisions of Article 13 (including the provisions of Section 13.1 hereof
requiring the consent of the General Partner) may convey or dispose of the part
of the Partner's interest in the Partnership that was the subject of the offer
but only at the price, terms and conditions, and to the party specified in the
offer notice to the General Partner. If terms and conditions more favorable to
the proposed purchaser than, or in any material manner different from, those
offered to the Partnership and the General Partner should be agreed to by the
Limited Partner, the Partnership and the General Partner shall again have the
option to purchase the selling Limited Partner's interest in the Partnership
which is subject to the more favorable or different purchase terms in accordance
with this Section 14.1. Neither the General Partner nor the Partnership shall be
liable or accountable to any Limited Partner which attempts to transfer its
interest in the Partnership for any loss, damage, expense, cost, or liability
resulting from the Partnership's or General Partner's exercise or failure to
exercise the purchase option under this Section 14.1 within sixty (60) day
period described herein, or from the Partnership's or General Partner's failure
to notify the Limited Partner within such sixty (60) day period of the
Partnership's or the General Partner's intention not to exercise the purchase
option.
14.2 OCCURRENCE OF TERMINATING EVENT OR ADVERSE TERMINATING EVENT.
(a) In the event a Terminating Event shall occur with respect
to any Limited Partner, such Partner or the Partner's successor or
other legal representative, including a trustee in a Bankruptcy, shall
give written notice thereof to the Partnership within thirty (30) days
of the occurrence of such event. Upon the receipt of such notice, the
Partnership shall have the right, but not the obligation, for the
ensuing sixty (60) days to purchase such Partner's interest in the
Partnership. If the Partnership has not received written notice of a
Terminating Event with respect to any Limited Partner as required under
this Section 14.2(a) the Partnership will have the right to purchase
such Partner's interest in the Partnership for sixty (60) days after
the Partnership has actual knowledge of the occurrence of any such
event and gives written notice thereof to the Limited Partner.
Notwithstanding anything to the contrary in this Agreement, the failure
of a Limited Partner to notify the Partnership of
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the occurrence of a Terminating Event as required under this Section
14.2(a) shall not constitute the occurrence of an Adverse Terminating
Event.
(b) In the event the General Partner determines that an
Adverse Terminating Event has occurred with respect to any Limited
Partner, the Partnership shall give written notice thereof to such
Partner and, for a period of sixty (60) days from the date of such
notice, the Partnership shall have the right, but not the obligation,
to purchase such Partner's interest in the Partnership.
(c) In the event the Partnership does not elect to exercise
its right to purchase such Partner's interest in the Partnership
pursuant to subsections (a) or (b) above, then the General Partner
shall have the right, but not the obligation, within the time period
indicated in Section 14.2(a) hereof to purchase such Partner's
interest, pursuant to the same terms provided in Section 14.3 hereof,
for Partnership purchases of such Partner's interest.
14.3 PAYMENT FOR PARTNERSHIP INTEREST.
(a) If any Limited Partner's interest in the Partnership is
purchased because of the occurrence of a Terminating Event prior to the
third anniversary of the date of this Agreement, the amount the
Partnership will pay for each Unit owned by such Partner shall be equal
to the greater of (i) the "Fair Market Value" of each of its Units, as
determined in accordance with Section 14.3(c); or (ii) the amount the
Partner paid to acquire its Units less any distributions to such
Partner pursuant to Section 6.1 hereof; and if any Limited Partner's
interest in the Partnership is purchased because of the occurrence of a
Terminating Event on or after the third anniversary of the date of this
Agreement, the amount the partnership will pay for each Unit owned by
such Partner shall be equal to the Fair Market Value of each of his
Units, as determined in accordance with Section 14.3(c) hereof.
(b) If the Partnership purchases any Limited Partner's
interest in the Partnership as a result of an Adverse Terminating
Event, the amount to be paid by the Partnership to such Partner shall
be equal to the lesser of (i) the Fair Market Value of such Partner's
interest, as determined in accordance with Section 14.3(c) hereof; or
(ii) the amount paid by the Limited Partner to acquire its Units less
any distributions to such Partner pursuant to Section 6.1 hereof.
(c) If the Partnership purchases any Limited Partner's
interest in the Partnership as provided in this Section 14.3, the Fair
Market Value of each Unit owned by such Limited Partner shall be equal
to four times the average annual Net Cash From Operations earned with
respect to a Unit during the three years immediately preceding the date
a Terminating Event (or Adverse Terminating Event, as the case may be)
has occurred with respect to such Partner (or if the Partnership has
been in existence less than three years, the period of time the
Partnership has been in existence). For purposes of this Section
14.3(c), the term "Net
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Cash From Operations" means the gross cash revenues received from
Partnership operations less amounts used to pay or establish reserves
for all Partnership expenses, debt payments (principal and interest),
capital improvements, capital replacements and contingencies, all as
determined by the General Partner. Net Cash From Operations shall not
be reduced by depreciation, amortization, cost recovery deductions or
similar allowances, but shall be increased by any reductions or
reserves previously established.
(d) If the Partnership purchases any Limited Partner's
interest in the Partnership as provided in this Section 14.3, the
Partnership shall pay any such amounts owed therefor to such Partner or
its successor in a lump sum or, at the discretion of the General
Partner, in up to sixty (60) equal monthly payments with interest at
the "prime" or base rate as established from time to time by Chemical
Bank on the unpaid principal balance. If the General Partner exercises
its discretion to pay for a Partnership interest in monthly
installments, the first such installment will be paid to the Partner or
its successor in interest on the first day of the month after thirty
(30) days have expired since the Partner's interest in the Partnership
has been purchased. Each subsequent installment shall be paid on the
first day of each successive month until the full amount owed to the
Partner or its successor in interest has been paid. The Partnership's
obligation to pay the Partner in monthly installments under this
Section 14.3 will be evidenced by a nonrecourse promissory note
executed by the General Partner on behalf of the Partnership.
14.4 BUY/SELL OPTION.
(a) At any time following the fifth anniversary of the date
hereof, each of Columbia Sub, Columbia TSP and Brim (the "Initiating
Partner") shall have the option (the "Buy/Sell Option") to give the
others written notice (the "Buy/Sell Notice") of intent to rely on this
Section 14.4, and to sell its interest in the Partnership or purchase
the other Partners' interest in the Partnership, whereupon the
provisions of this Section 14.4 shall apply.
(b) The Initiating Partner shall specify in its Buy/Sell
Notice the cash purchase price at which the Initiating Partner would be
willing to purchase an undivided one hundred percent (100%) interest in
the Partnership (the "Buy/Sell Valuation Price").
(c) Upon receipt of the Buy/Sell Notice, the other Partner
(the "Responding Partner") shall then be obligated either:
(i) to sell to the Initiating Partner for cash its
Partnership interest at a price equal to the amount the
Responding Partner would have been entitled to receive upon
dissolution of the Partnership pursuant to the liquidation
provisions set forth in Section 16.3 hereof as if the
Partnership assets had been sold for cash to a third party at
the Buy/Sell Valuation Price; or
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(ii) to purchase the interest of the Initiating
Partner for cash at a price equal to the amount the Initiating
Partner would have been entitled to receive upon dissolution
of the Partnership pursuant to the liquidation provisions set
forth in Section 16.3 hereof as if the Partnership assets had
been sold for cash to a third party at the Buy/Sell Valuation
Price.
(d) The Responding Partner shall notify the Initiating Partner
of its election under Section 14.4(c) hereof within forty-five (45)
days after the date of receipt of the Buy/Sell Notice. Failure to give
such notice within the required time period shall be deemed an election
not to purchase, but to sell its Partnership Interest to the Initiating
Partner pursuant to Section 14.4 (c)(i).
(e) If following an election by the Responding Partner to
purchase under Section 14.4(c)(ii), the Responding Partner shall fail
to consummate the purchase of the Initiating Partner's interest in the
Partnership within sixty (60) days of receipt of the notice received
pursuant to Section 14.4(d) hereof, then the Responding Partner shall
sell to the Initiating Partner pursuant to Section 14.4(c)(i).
14.5 FEDERAL INCOME TAX TREATMENT. In the event the Partnership
exercises the right to purchase any Partner's interest in the Partnership under
this Article 14, one hundred percent (100%) of all payments made by the
Partnership to such Partner hereunder in consideration for such Partner's
Partnership interest will, for federal income tax purposes, be classified as a
Code Section 736(b) payment except for such Partner's share of the Partnership's
"unrealized receivables," as defined in Code Section 751(c) which will be
classified as a Code Section 736(a)(1) payment. The General Partner, shall
conclusively determine or cause to be determined any such Partner's share of
"unrealized receivables." Neither the Partnership nor the General Partner shall
be liable to any Person for any inaccuracy in determining any such Partner's
share of the Partnership's "unrealized receivables."
14.6 RIGHT TO PARTICIPATE. If at anytime Brim (or any of its
Affiliates) is no longer a Partner, including, without limitation, as a result
of the exercise of the Buy/Sell Option by Columbia Sub or Columbia/TSP pursuant
to Section 14.4 hereof, a transfer by Brim of its entire interest in the
Partnership pursuant to Article 13 or Article 14 hereof, or the dissolution of
the Partnership pursuant to Article 15 hereof, then Brim (and its Affiliates)
shall, for the period beginning on the date Brim (or any of its Affiliates)
ceases to be a Partner and ending on the date which is five (5) years thereafter
(the "Participation Period"), continue to have the right on behalf of or in the
name of any hospital owned, managed or leased by Brim (or any of its Affiliates)
to participate in the Partnership's Group Purchasing Organization for purchasing
hospital supplies, services and materials on the same terms and conditions
contained in the Form of Corporate Purchasing Agreement attached as Exhibit "C"
hereto, provided that such right shall immediately terminate if the Partnership
terminates its operation of a Group Purchasing Organization for hospital
supplies, services and materials. If Brim (or any of its Affiliates) elect to
continue to participate in the
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Partnership's Group Purchasing Organization pursuant to this Section 14.6, then
the Partnership and Brim (or any of its Affiliates) shall enter into a Corporate
Purchasing Agreement substantially in the form of Exhibit "C" hereto.
Notwithstanding the foregoing sentence, neither Brim (nor any of its Affiliates)
shall be entitled to any right under this Section 14.6 if Brim (or any of its
Affiliates) is no longer a Partner as a result of an Adverse Terminating Event.
15. DISSOLUTION
15.1 Causes. Each Partner expressly waives any right which it might
otherwise have to dissolve the Partnership except as set forth in this Article
15. The Partnership shall be dissolved upon the first to occur of the following:
(a) The Bankruptcy, dissolution or any other occurrence which
would legally disqualify the General Partner from acting hereunder;
(b) The Approval by the Partners of an instrument dissolving
the Partnership;
(c) The dissolution of the Partnership by judicial decree;
(d) The General Partner in its reasonable discretion
determines that a rule, ordinance, regulation, statute or government
pronouncement has been enacted that makes any material aspect of this
Agreement or the activities conducted by the Partnership unlawful or
eliminates or substantially reduces, either directly or indirectly, the
benefits that would accrue to the Partners (including the General
Partner) with respect to continuing the Partnership's business
operations;
(e) There remains only one Partner in the Partnership; or
(f) December 31, 2050.
Nothing contained in this Section 15.1 is intended to grant to any
Partner the right to dissolve the Partnership at will (by retirement,
resignation withdrawal or otherwise), or to exonerate any Partner from liability
to the Partnership and the remaining Partners if it dissolves the Partnership at
will. Any dissolution at will of the Partnership, including dissolution caused
under Section 15.1 (a), shall be in contravention of this Agreement for purposes
of the Act. Dissolution of the Partnership under Section 15.1(c) shall not
constitute a dissolution at will.
15.2 RECONSTITUTION. If the Partnership is dissolved as a result of an
event described in Section 15.l(a), the Partnership may be reconstituted and its
business continued if, within ninety (90) days after the date of dissolution,
Limited Partners holding ninety percent (90%) of the outstanding Units held by
Limited Partners (including Units held as a limited partner by Columbia
Affiliates) affirmatively elect to reconstitute the Partnership, agree on the
identity of the new general partner
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or partners, and execute an instrument confirming such facts. If the Partnership
is reconstituted, an amendment to this Agreement shall be executed and an
amended Certificate of limited Partnership filed of record.
15.3 INTERIM MANAGER. If the Partnership is dissolved as a result of an
event described in Section 15.l(a) and the General Partner is unable to continue
acting as the General Partner of the Partnership, those Partners who own Units
representing a majority of the aggregate Sharing Percentage of all of the
Partners (excluding Units owned by the General Partner) may appoint an interim
manager of the Partnership, who shall have and may exercise only the rights,
powers and duties of a general partner necessary to preserve the Partnership
assets, until (a) the new general partner is elected under Section 15.2, if the
Partnership is reconstituted; or (b) a Liquidator is appointed under Section
16.1, if the Partnership is not reconstituted. The interim manager shall not be
liable as a general partner to the Limited Partners and shall, while acting in
the capacity of interim manager on behalf of the Partnership, be entitled to the
same indemnification rights as are set forth in Section 8.6. The interim manager
appointed as provided herein shall be entitled to receive such reasonable
compensation for its services as may be agreed upon by such interim manager and
those Partners who appointed the interim manager.
16. WINDING UP AND TERMINATION
16.1 GENERAL. If the Partnership is dissolved and is not reconstituted,
the General Partner (or in the event that the General Partner has withdrawn or
is deemed to be in Bankruptcy), a Liquidator or liquidating committee selected
by those Limited Partners who own at least 67% of the aggregate Partners'
Sharing Percentage (excluding Units owned by the General Partner), shall
commence to wind up the affairs of the Partnership and to liquidate and sell the
Partnership's assets. The party or parties actually conducting such liquidation
in accordance with the foregoing sentence, whether the General Partner, a
Liquidator or a liquidating committee, is herein referred to as the
"Liquidator." The Liquidator (if other than the General Partner) shall have
sufficient business expertise and competence to conduct the winding up and
termination of the Partnership and, in the course thereof, to cause the
Partnership to perform any contracts which the Partnership has or thereafter
enters into. The Liquidator shall have full right and unlimited discretion to
determine the time, manner and terms of any sale or sales of Partnership
property under such liquidation, having due regard for the activity and
condition of the relevant market and general financial and economic conditions.
The Liquidator (if other than the General Partner) appointed as provided herein
shall be entitled to receive such reasonable compensation for its services as
shall be agreed upon by the Liquidator and those Limited Partners who own at
least 67% of the aggregate Partners' Sharing Percentage (excluding that owned by
the General Partner). If the General Partner serves as the Liquidator, the
General Partner shall not be entitled to receive any fee for carrying out the
duties of the Liquidator. The Liquidator may resign at any time by giving
fifteen (15) days prior written notice and may be removed at any time, with or
without cause, by written notice to Limited Partners who own at least 67% of the
aggregate Partner's Sharing Percentage (excluding that owned by the General
Partner). Upon the death, dissolution, removal or resignation of the Liquidator,
a successor and
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substitute Liquidator (who shall have and succeed to all the rights, powers and
duties of the original Liquidator) will within thirty (30) days thereafter be
appointed by those Limited Partners who own at least 67% of the aggregate
Partners' Sharing Percentage (excluding that owned by the General Partner),
evidenced by written appointment and acceptance. The right to appoint a
successor or substitute Liquidator in the manner provided herein shall be
recurring and continuing for so long as the functions and services of the
Liquidator are authorized to continue under the provisions hereof, and every
reference herein to the Liquidator will be deemed to refer also to any such
successor or substitute Liquidator appointed in the manner herein provided. The
Liquidator shall have and may exercise, without further authorization or consent
of any of the parties hereto or their legal representatives or successors in
interest, all of the powers conferred upon the General Partner under the terms
of this agreement to the extent necessary or desirable in the good faith
judgment of the Liquidator to perform its duties and functions. The Liquidator
(if other than the General Partner) shall not be liable as a general partner to
the Limited Partners and shall, while acting in such capacity on behalf of the
Partnership, be entitled to the indemnification rights set forth in Section 8.6.
16.2 COURT APPOINTMENT OF LIQUIDATOR. If, within ninety (90) days
following the date of dissolution or other time provided in Section 16.1, a
Liquidator or successor Liquidator has not been appointed in the manner provided
therein, any interested party shall have the right to make application to any
United States Federal District Judge (in his individual and not judicial
capacity) for the United States Federal Court, District of Nashville, Tennessee
for appointment of a Liquidator or successor Liquidator, and the Judge, acting
as an individual and not in his judicial capacity, shall be fully authorized and
empowered to appoint and designate a Liquidator or successor Liquidator who
shall have all the powers, duties, rights and authority of the Liquidator herein
provided.
16.3 LIQUIDATION. The Liquidator shall give all notices to creditors of
the Partnership and shall make all publications required by the Act. In the
course of winding up and terminating the business and affairs of the
Partnership, the assets of the Partnership (other than cash) shall be sold, its
liabilities and obligations to creditors, including any Partners who made loans
to the Partnership as provided in Section 4.5 hereof, and all expenses incurred
in its liquidation shall be paid, and all resulting items of Partnership income,
gain, loss or deduction shall be credited or charged to the Capital Accounts of
the Partners in accordance with Article 5. All Partnership property shall be
sold upon liquidation of the Partnership and no Partnership property shall be
distributed in kind to the Partners. Thereafter, all Partnership assets shall be
distributed among all Partners having positive Capital Account balances (as
determined after giving effect to all adjustments attributable to allocations of
items of profit and loss realized by the Partnership during the fiscal year in
question (including items of profit and loss realized on the liquidation) and
all adjustments attributable to contributions and distributions of money and
property effected prior to such distribution), pro rata in accordance with such
positive Capital Account balances. This distribution shall be made no later than
the end of the fiscal year during which the Partnership is liquidated (or, if
later, ninety (90) days after the date on which the Partnership is liquidated).
Upon the completion of the liquidation of the Partnership and the distribution
of all the Partnership funds, the Partnership shall terminate and the General
Partner (or the Liquidator, as the case may be) shall have the authority to
execute and record
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all documents required to effectuate the dissolution and termination of the
Partnership. In the discretion of the Liquidator, a pro rata portion of the
distributions that would otherwise be made to the Partners may instead be
distributed to a trust established for the benefit of the Partners for the
purposes of liquidating Partnership property, collecting amounts owed to the
Partnership, and paying any contingent or unforeseen liabilities or obligations
of the Partnership or of the Partners arising out of or in connection with the
Partnership. The assets of any such trust shall be distributed to the Partners
from time to time, in the reasonable discretion of the Liquidator, in the same
proportions as the amount distributed to such trust by the Partnership would
otherwise have been distributed to the Partners pursuant to this Agreement.
16.4 CREATION OF RESERVES. After making payment or provision for
payment of all debts and liabilities of the Partnership and all expenses of
liquidation, the Liquidator may set up such cash reserves as the Liquidator may
deem reasonably necessary for any contingent or unforeseen liabilities or
obligations of the Partnership.
16.5 Final Statement. Within a reasonable time following the completion
of the liquidation, the Liquidator shall supply to each of the Partners a
statement which shall set forth the assets and the liabilities of the
Partnership as of the date of complete liquidation, each Partner's pro rata
portion of distributions under Section 16.3, and the amount retained as reserves
by the Liquidator under Section 16.4.
17. POWER OF ATTORNEY
17.1 GENERAL PARTNER AS ATTORNEY-IN-FACT. Each Limited Partner hereby
makes, constitutes, and appoints the General Partner, with full power of
substitution and resubstitution, its true and lawful attorney-in-fact for it and
in its name, place, and stead and for its use and benefit to sign, execute,
certify, acknowledge, swear to, file, and record (a) this Agreement and all
agreements, certificates, instruments, and other documents which the General
Partner may deem reasonably necessary, desirable, or appropriate including,
without limitation, to reflect (i) the valid exercise by any General Partner of
any power granted to it under this Agreement; (ii) any amendments adopted by the
Partners in accordance with the terms of this Agreement; (iii) the valid
admission of any Substituted Limited Partner or Additional Limited Partner to
the Partnership; or (iv) the valid disposition by any Partner of its interest in
the Partnership; and (b) any, certificates, instruments, or documents as may be
required by, or may be appropriate under, the laws of the State of Delaware or
any other State of the United States.
17.2 NATURE OF SPECIAL POWER. The power of attorney granted pursuant
to this Article 17:
(a) is a special power of attorney coupled with an interest
and is irrevocable;
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(b) may be exercised by any such attorney-in-fact by listing
the Limited Partners executing any agreement, certificate, instrument
or other document with the single signature of any such
attorney-in-fact acting as attorney-in-fact for such Limited Partners;
and
(c) shall survive the death, disability, legal incapacity,
Bankruptcy, insolvency, dissolution, or cessation of existence of a
Limited Partner and shall survive the delivery of an assignment by a
Limited Partner of the whole or a portion of its interest in the
Partnership, except that where the assignment is of such Limited
Partner's entire interest in the Partnership and the assignee, with the
consent of the General Partner, is admitted as a Substituted Limited
Partner, the power of attorney shall survive the delivery of such
assignment for the sole purpose of enabling any such attorney-in-fact
to effect such substitution.
18. MISCELLANEOUS
18.1 NOTICES. All notices given pursuant to this Agreement shall be in
writing and shall be deemed effective when personally delivered or upon being
placed in the United States mail, registered or certified with return receipt
requested, or when sent by prepaid telegram or facsimile followed by
confirmatory receipt. For purposes of notice, the addresses of the Partners
shall be as stated under their names on the attached Exhibit "B"; provided,
however, that each Partner shall have the right to change his address with
notice hereunder to any other location by the giving of thirty (30) days notice
to the General Partner in the manner set forth above.
18.2 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the substantive federal laws of the United States and the
laws of the State of Delaware.
18.3 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
shall inure to the benefit of the Partners, and their respective heirs, legal
representatives, successors and permitted assigns; provided, however, that
nothing contained herein shall negate or diminish the restrictions set forth in
Articles 13 or 14 hereof.
18.4 CONSTRUCTION. Every covenant, term, and provision of this
Agreement shall be construed simply according to its fair meaning and not
strictly for or against any Partner. The failure by any party to specifically
enforce any term or provision hereof or any rights of such party hereunder shall
not be construed as the waiver by that party of its rights hereunder. The waiver
by any party of a breach or violation of any provision of this Agreement shall
not operate as, or be construed to be, a waiver of any subsequent breach of the
same or other provision hereof.
18.5 TIME. Time is of the essence with respect to this Agreement.
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18.6 WAIVER OF PARTITION. Notwithstanding any statute or principle of
law to the contrary, each Partner hereby agrees that during the term of the
Partnership, he or it shall have no right (and hereby waives any right that he
or it might otherwise have had) to cause any Partnership property to be
partitioned and/or distributed in kind.
18.7 ENTIRE AGREEMENT. This Agreement (including the exhibits hereto),
together with the Contribution Agreement dated of even date herewith between the
Partnership and Brim, the Contribution Agreement dated of even date herewith
between the Partnership and Columbia Sub and Columbia/TSP, and the Services
Agreements, contain the entire agreement among the Partners relating to the
subject matter hereof, and all prior agreements relative hereto which are not
contained herein, including, without limitation, the letter agreement, dated
October 17, 1996 between Columbia and Brim and the Original Partnership
Agreement, are terminated.
18.8 AMENDMENTS. Except as otherwise expressly provided in Section 8.4
and this Section 18.8, amendments or modifications may be made to this Agreement
only by setting forth such amendments or modifications in a document (i)
approved by the Partners and (ii) approved in writing by Brim, provided that
Brim (or any of its Affiliates) is a Partner, and any alleged amendment or
modification herein which is not so documented shall not be effective as to any
Partner. The General Partner may, without the consent of any Limited Partner
(including Brim or any of its Affiliates) and without the Approval of the
Partners, amend any provision of this Agreement and execute, swear to,
acknowledge, deliver, file and record whatever documents may be required in
connection therewith to reflect:
(a) a change in the location of the principal place of
business of the Partnership not inconsistent with the provisions of
Section 3.2, or a change in the registered office or the registered
agent of the Partnership;
(b) admission of a Limited Partner into the Partnership or
termination of any Limited Partner's interest in the Partnership in
accordance with this Agreement;
(c) qualification of the Partnership as a limited partnership
under the laws of any state or that is necessary or advisable in the
opinion of the General Partner to ensure that the Partnership will not
be treated as an association taxable as a corporation for federal
income tax purposes, provided, in either case, such action shall not
adversely affect any Limited Partner;
(d) a change (i) that is of an inconsequential nature and does
not adversely affect any Limited Partner in any material respect; (ii)
that is reasonably necessary or desirable to satisfy any requirements,
conditions or guidelines contained in any opinion, directive, order,
ruling or regulation of any federal or state agency or contained in any
federal or state statute, compliance with any of which the General
Partner deems to be in the best interest of the
32
37
Partnership and the Limited Partners; or (iii) that is required or
contemplated by this Agreement;
(e) a change to any provision in this Agreement required to be
so changed by the staff of the Securities and Exchange Commission or
other federal agency or by a State Securities Commissioner or similar
official, which change is deemed by such commission, agency or official
to be for the benefit or protection of the Limited Partners.
However, no amendment or modification which disproportionately affects the
interest of any Partner in the capital, profits or losses of, or distributions
or allocations with respect to, the Partnership shall be effective as to any
Partner unless the same has been set forth in a document duly executed by such
Partner.
18.9 SEVERABILITY. This Agreement is intended to be performed in
accordance with, and only to the extent permitted by, all applicable laws,
ordinances, rules and regulations. If any provision of this Agreement or the
application thereof to any Person or circumstance shall, for any reason and to
any extent, be invalid or unenforceable, but the extent of such invalidity or
unenforceability does not destroy the basis of the bargain among the Partners as
expressed herein, then the remainder of this Agreement and the application of
such provision to other Persons or circumstances shall not be affected thereby,
but rather shall be enforced to the greatest extent permitted by law.
18.10 GENDER AND NUMBER. Whenever required by the context as used in
this Agreement, the singular number shall include the plural and the neuter
shall include the masculine or feminine gender, and vice versa.
18.11 EXHIBITS. Each exhibit to this Agreement is incorporated herein
for all purposes.
18.12 ADDITIONAL DOCUMENTS. Each Partner, upon the request of the
General Partner, agrees to perform all further acts and execute, acknowledge and
deliver any documents that may be reasonably necessary, appropriate or desirable
to carry out the provisions of this Agreement.
18.13 SECTION HEADINGS. The section headings appearing in this
Agreement are for convenience of reference only and are not intended, to any
extent or for any purpose, to limit or define the text of any section.
18.14 COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be an original but all of which shall constitute but one
document.
33
38
IN WITNESS WHEREOF, the Partners have executed this Agreement as of the
effective date first referenced above.
GENERAL PARTNER:
XXXXX HOLDINGS, INC.
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxx
-----------------------------
Title: Senior Vice President
----------------------------
BRIM:
BRIM HEALTHCARE, INC.
By: /s/ Xxx X. Xxxxxx
-------------------------------
Name: Xxx X. Xxxxxx
-----------------------------
Title: President
----------------------------
COLUMBIA/TSP:
COLUMBIA/TSP HOLDINGS, INC.
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxx
-----------------------------
Title: Senior Vice President
----------------------------
34
39
---------------------------
EXHIBIT A
---------------------------
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS
Section 1.1 Definitions.................................................... 1
ARTICLE II
SECTION 704 CAPITAL ACCOUNTS
Section 2.1 Section 704 Capital Accounts................................... 8
ARTICLE III
ALLOCATIONS OF PROFIT AND LOSS
Section 3.1 Allocation of Book Items....................................... 9
Section 3.2 Allocation of Tax Items........................................ 12
Section 3.3 Allocation of Profit And Loss And
Distributions in Respect of Interests Transferred............ 12
EXHIBIT A -- PAGE I
40
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. All capitalized terms used herein
shall have the meanings assigned to them in the Amended and Restated Limited
Partnership Agreement Of Aligned Business Consortium Group. Notwithstanding the
foregoing, the following definitions shall be applicable to the following terms
as used in this Exhibit A:.
(a) Adjusted Net Income Or Loss.
"Adjusted Net Income Or Loss" for any fiscal year (or portion
thereof) shall mean the excess (or deficit) of (x) the Gross Income for such
period (not including Gross Income (if any) allocated during such period
pursuant to Sections 3.1(a), 3.1(b) and 3.1(c) hereof) over (y) the Deductible
Expenses for such period (not including Deductible Expenses (if any) allocated
during such period pursuant to Sections 3.1(d) and 3.l(e) hereof) with the
following modifications:
(i) Any item of Partnership profit that is exempt from federal
income tax and not otherwise taken into account in computing Adjusted
Net Income Or Loss pursuant to this Section 1.1(a) shall be treated as
additional Gross Income and, if not otherwise allocated pursuant to
Section 3.1(a), 3.1(b) or 3.1(c) hereof, added to the amount otherwise
calculated as Adjusted Net Income Or Loss under this Section 1.1(a);
and
(ii) Any Partnership expenditure that is described in section
705(a)(2)(B) of the Code (relating to Partnership expenditures that are
not deductible for federal income tax purposes in computing taxable
income and not properly chargeable to capital), or treated as so
described pursuant to section 1.704-1(b)(2)(iv)(i) of the Regulations,
and not otherwise taken into account in computing Adjusted Net Income
Or Loss pursuant to this Section 1.1(a) shall be treated as an
additional Deductible Expense and, if not otherwise allocated pursuant
to Section 3.1(d) or 3.1(e) hereof, subtracted from the amount
otherwise calculated as Adjusted Net Income Or Loss under this Section
1.1(a).
EXHIBIT A -- PAGE 1 OF 13
41
(b) Agreed Value.
"Agreed Value" of any property contributed to the capital of
the Partnership shall mean the fair market value of such property at the time of
contribution (as agreed to in writing by the Partners without regard to section
7701(g) of the Code (i.e., determined without regard to the amount of
Nonrecourse Liabilities to which such property is subject)).
(c) Book Basis.
The initial "Book Basis" of any Partnership property shall be
equal to the Partnership's initial adjusted tax basis in such property;
provided, however, that the initial "Book Basis" of any Partnership property
contributed to the capital of the Partnership shall be equal to the Agreed Value
of such property. Effective immediately after giving effect to the allocations
of profit and loss, as computed for book purposes, for each Fiscal Year under
Section 3.1 hereof, the Book Basis of each Partnership property shall be
adjusted downward by the amount of Book Depreciation allowable to the
Partnership for such Fiscal Year with respect to such property. In addition,
effective immediately prior to any Revaluation Event, the Book Basis of each
Partnership property shall be further adjusted upward or downward, as necessary,
so as to equal the fair market value of such property at the time of such
Revaluation Event (as agreed to in writing by the Partners taking section
7701(g) of the Code into account (i.e., such value shall not be agreed to be
less than the amount of Nonrecourse Liabilities to which such property is
subject)).
(d) Book Depreciation.
The amount of "Book Depreciation" allowable to the Partnership
for any Fiscal Year with respect to any Partnership property shall be equal to
the product of (1) the amount of Tax Depreciation allowable to the Partnership
for such year with respect to such property, multiplied by (2) a fraction, the
numerator of which is the property's Book Basis as of the beginning of such year
(or the date of acquisition if the property is acquired during such year) and
the denominator of which is the property's adjusted tax basis as of the
beginning of such year (or the date of acquisition if the property is acquired
during such year). If the denominator of the fraction described in clause (2)
above is equal to zero, the amount of "Book Depreciation" allowable to the
Partnership for any Fiscal Year with respect to the Partnership property in
question shall be determined under any reasonable method selected by the General
Partner.
EXHIBIT A - PAGE 2 OF 13
42
(e) Book Gain Or Loss.
"Book Gain Or Loss" realized by the Partnership in connection
with the disposition of any Partnership property shall mean the excess (or
deficit) of (1) the amount realized by the Partnership in connection with such
disposition (as determined under section 1001 of the Code) over (2) the Book
Basis of such property at the time of the disposition.
(f) Book/Tax Disparity Property.
"Book/Tax Disparity Property" shall mean any Partnership
property that has a Book Basis which is different from its adjusted tax basis to
the Partnership. Thus, any property that is contributed to the capital of the
Partnership by a Partner shall be a "Book/Tax Disparity Property" if its Agreed
Value is not equal to the Partnership's initial tax basis in the property. In
addition, once the Book Basis of a Partnership property is adjusted in
connection with a Revaluation Event to an amount other than its adjusted tax
basis to the Partnership, the property shall thereafter be a "Book/Tax Disparity
Property."
(g) Capital Accounts.
"Capital Account" shall have the meaning assigned to such term
in Section 4.3 of the Agreement.
(h) Capital Transaction.
"Capital Transaction" shall mean (1) any transaction pursuant
to which the Partnership borrows funds, all or part of the Partnership's
properties are sold, condemned, exchanged, abandoned or otherwise disposed of,
insurance proceeds or other damages are recovered by the Partnership or (2) any
other transaction which, in accordance with generally accepted accounting
principles, is considered capital in nature (including, without limitation, any
transaction that is entered into in connection with, or results in, the
Liquidation of the Partnership).
(i) Deductible Expenses.
"Deductible Expenses" for any Fiscal Year (or portion
thereof) shall mean all items, as calculated for book purposes, which are
allowable as deductions to the Partnership for such period under Federal income
tax accounting principles (including Book Depreciation but excluding any
expense or deduction attributable to a Capital Transaction).
EXHIBIT A -- PAGE 3 OF 13
43
(j) Economic Risk Of Loss.
"Economic Risk Of Loss" borne by any Partner for any
Partnership liability shall mean the aggregate amount of economic risk of loss
that such Partner and all Related Persons to such Partner are treated as bearing
with respect to such liability pursuant to section 1.752-2 of the Regulations.
(k) Gross Income.
"Gross Income" for any Fiscal Year (or portion thereof) shall
mean the gross income derived by the Partnership from all sources (other than
from capital contributions and loans to the Partnership and other than from a
Capital Transaction) during such period, as calculated for book purposes in
accordance with Federal income tax accounting principles.
(l) Liquidation.
"Liquidation" of a Partner's Unit or other interest in the
Partnership shall mean and be deemed to occur upon the earlier of (1) the date
upon which the Partnership is terminated under section 708(b)(1) of the Code,
(2) the date upon which the Partnership ceases to be a going concern (even
though it may continue in existence for the limited purpose of winding up its
affairs, paying its debts and distributing any remaining Partnership properties
to the Partners) or (3) the date upon which there is a liquidation of the
Partner's Unit or other interest in the Partnership (but the Partnership is not
terminated) under section 1.761-1(d) of the Regulations. "Liquidation" of the
Partnership shall mean and be deemed to occur upon the earlier of (a) the date
upon which the Partnership is terminated under section 708(b)(l) of the Code or
(b) the date upon which the Partnership ceases to be a going concern (even
though it may continue in existence for the limited purpose of winding up its
affairs, paying its debts and distributing any remaining Partnership properties
to the Partners).
(m) Modified 752 Share Of Recourse Debt.
"Modified 752 Share of Recourse Debt" of any Partner shall
mean, as of any date, the Economic Risk Of Loss borne by such Partner with
respect to Recourse Debt of the Partnership (determined, as of the date in
question, by assuming, for purposes of section 1.752-2 of the Regulations, that
the Partnership constructively liquidates on such date (within the meaning of
section 1.752-2 of the Regulations) except that all Partnership properties shall
be deemed thereunder to be transferred in fully taxable exchanges for an
aggregate amount of cash consideration equal to their respective Book Bases and
such consideration shall be deemed thereunder to be used, in the appropriate
order of priority, in full or partial satisfaction of all Partnership
liabilities).
EXHIBIT A -- PAGE 4 OF 13
44
(n) Nonrecourse Deductions.
"Nonrecourse Deductions" shall mean any and all items of Book
Depreciation and other Deductible Expenses that are treated as "nonrecourse
deductions" under section 1.704-2(c) of the Regulations.
(o) Nonrecourse Liability.
"Nonrecourse Liability" shall mean any Partnership liability
treated as a "nonrecourse liability" under section 1.704-2(b)(3) of the
Regulations. Subject to the foregoing sentence, "Nonrecourse Liability" shall
mean any Partnership liability (or portion thereof) for which no Partner bears
the Economic Risk Of Loss.
(p) Partner Nonrecourse Debt Minimum Gain.
"Partner Nonrecourse Debt Minimum Gain" shall mean the amount
of Partnership "minimum gain" that is computed strictly in accordance with the
principles of section 1.704-2(i)(2) of the Regulations. A Partner's share of
such "Partner Nonrecourse Debt Minimum Gain" shall be calculated in accordance
with the provisions of section 1.704-2(i)(5) of the Regulations.
(q) Partner Nonrecourse Debt.
"Partner Nonrecourse Debt" shall mean any Partnership
liability that is treated as a "partner nonrecourse debt" under section
1.704-2(b)(4) of the Regulations.
(r) Partner Nonrecourse Deductions.
"Partner Nonrecourse Deductions" shall mean any and all items
of Book Depreciation and other Deductible Expenses that are treated as "partner
nonrecourse deductions" under section 1.704-2(i) of the Regulations.
(s) Partnership Minimum Gain.
"Partnership Minimum Gain" shall mean the amount of
Partnership "minimum gain" that is computed strictly in accordance with the
principles of section 1.704-2(d)(1) of the Regulations. A Partner's share of
such "Partnership Minimum Gain" shall be calculated in accordance with the
provisions of section 1.704-2(g) of the Regulations.
(t) Recourse Debt.
"Recourse Debt" shall mean any Partnership liability (or
portion thereof) that is neither a Nonrecourse Liability nor a Partner
Nonrecourse Debt.
EXHIBIT A -- PAGE 5 OF 13
45
(u) Related Person.
"Related Person" shall mean, as to any Partner, any person who
is related to such Partner (within the meaning of section 1.752-4(b) of the
Regulations).
(v) Revaluation Event.
"Revaluation Event" shall mean any of the following
occurrences: (1) the contribution of money or other property (other than a de
minimis amount) by a new or existing Partner to the capital of the Partnership
as consideration for the issuance of an additional Unit or other interest in the
Partnership; (2) the distribution of money or other property (other than a de
minimis amount) by the Partnership to a retiring or continuing Partner as
consideration for a Unit or other interest in the Partnership; or (3) the
termination of the Partnership for federal income tax purposes under section
708(b)(l)(B) of the Code; provided, however, under no circumstances shall the
issuance of Units pursuant to Section 13.5 of the Agreement constitute a
Revaluation Event; and provided further, that the occurrence of an event
described in clause (1) or (2) above shall not constitute a Revaluation Event if
the General Partner reasonably determines that it is not necessary to adjust the
Book Bases of the Partnership's assets or the Partners' Capital Accounts in
connection with the occurrence of any such event.
(w) Section 704 Capital Account.
"Section 704 Capital Account" shall have the meaning assigned
to such term in Section 2.1 hereof.
(x) Tax Depreciation.
"Tax Depreciation" for any Fiscal Year shall mean the amount
of depreciation, cost recovery or other amortization deductions allowable to the
Partnership for federal income tax purposes for such year.
(y) Tax Items.
"Tax Items" shall mean, with respect to any property, all
items of profit and loss (including Tax Depreciation) recognized by or allowable
to the Partnership with respect to such property, as computed for federal income
tax purposes.
EXHIBIT A -- PAGE 6 OF 13
46
(z) Unrealized Book Gain Or Loss.
"Unrealized Book Gain Or Loss" with respect to any Partnership
property shall mean the excess (or deficit) of (1) the fair market value of such
property (as agreed to in writing by the Partners taking section 7701(g) of the
Code into account (i.e., such value shall not be agreed to be less than the
amount of Nonrecourse Liabilities to which such property is subject)), over (2)
the Book Basis of such property.
EXHIBIT A -- PAGE 7 OF 13
47
ARTICLE II
SECTION 704 CAPITAL ACCOUNTS
Section 2.1 Section 704 Capital Accounts.
A "Section 704 Capital Account" (herein so called) shall be
determined and maintained for each Partner throughout the full term of the
Agreement. The balance of a Partner's Section 704 Capital Account shall be equal
to such Partner's Capital Account balance (as determined after giving effect to
all adjustments attributable to allocations of items of profit and loss realized
by the Partnership, and all adjustments attributable to contributions and
distributions of money and property effected, on or before the effective date of
such determination), modified as follows:
(a) Increased by the amount (if any) that such
Partner is treated as being obligated to contribute subsequently to the capital
of the Partnership (as determined under section 1.704-1(b)(2)(ii)(c) of the
Regulations);
(b) Decreased by the amount (if any) of cash that
reasonably is expected to be distributed to such Partner pursuant to Article 6
of the Agreement, but only to the extent that the amount thereof exceeds any
offsetting increase to such Partner's Section 704 Capital Account that
reasonably is expected to occur during (or prior to) the Fiscal Year during
which such distributions reasonably are expected to be made (as determined under
section 1.704-1(b)(2)(ii)(d) of the Regulations);
(c) Decreased by the items (if any) of the
Partnership's loss that reasonably are expected to be allocated to such Partner
pursuant to section 704(e)(2) or 706(d) of the Code or section 1.751-1(b)(2)(ii)
of the Regulations (as determined under section 1.704-1(b)(2)(ii)(d) of the
Regulations);
(d) Increased by the amount (if any) of such
Partner's share of Partnership Minimum Gain;
(e) Increased by the amount (if any) of such
Partner's share of Partner Nonrecourse Debt Minimum Gain; and
(f) Increased by the amount (if any) of such
Partner's Modified 752 Share of Recourse Debt.
EXHIBIT A -- PAGE 8 OF 13
48
ARTICLE III
ALLOCATIONS OF PROFIT AND LOSS
Section 3.1 Allocation Of Book Items.
Subject to the provisions of Sections 3.2 and 3.3, all items
of profit and loss realized by the Partnership during each fiscal year shall be
allocated among the Partners (after giving effect to all adjustments
attributable to all contributions and distributions of money and property
effected during such year) in the manner prescribed in this Section 3.1.
(a) Pursuant to section 1.704-2(f) of the Regulations
(relating to minimum gain chargebacks), if there is a net decrease in
Partnership Minimum Gain for such year (or if there was a net decrease in
Partnership Minimum Gain for a prior fiscal year and the Partnership did not
have sufficient amounts of Gross Income and Book Gain during prior years to
allocate among the Partners under this Section 3.1), then items of Gross Income
and Book Gain shall be allocated, before any other allocation is made pursuant
to the succeeding provisions of this Section 3.1 for such year, to each Partner
in an amount equal to such Partner's share of the net decrease in such
Partnership Minimum Gain (as determined under sections 1.704-2(g)(2) of the
Regulations).
(b) Pursuant to section 1.704-2(i)(4) of the
Regulations (relating to minimum gain chargebacks), if there is a net decrease
in Partner Nonrecourse Debt Minimum Gain with respect to a Partner Nonrecourse
Debt for such year (or if there was a net decrease in such Partner Nonrecourse
Debt Minimum Gain for a prior fiscal year and the Partnership did not have
sufficient amounts of Gross Income and Book Gain during prior years to allocate
among the Partners under this Section 3.1(b)), then items of Gross Income and
Book Gain shall be allocated, before any other allocation is made pursuant to
the succeeding provisions of this Section 3.1 for such year, to each Partner
with a share of such Partner Nonrecourse Debt Minimum Gain as of the first day
of such year in an amount equal to such Partner's share of the net decrease in
such Partner Nonrecourse Debt Minimum Gain (as required by sections
1.704-2(i)(4) of the Regulations).
(c) Pursuant to section 1.704-l(b)(2)(ii)(d) of the
Regulations (relating to "qualified income offsets"), Partnership profit shall
be allocated, before any other allocation is made pursuant to the succeeding
provisions of this Section 3.1 for such year, among the Partners with deficit
balances in their Section 704 Capital Accounts (as determined after giving
effect to all adjustments attributable to the allocations provided for in
Sections 3.1(a) and 3.1(b) hereof but before giving effect to any adjustment
attributable
EXHIBIT A -- PAGE 9 OF 13
49
to other allocations provided for in succeeding provisions of this Section 3.1)
in amounts and the manner sufficient to eliminate such deficit balances as
quickly as possible.
(d) All Partner Nonrecourse Deductions attributable
to a Partner Risk Nonrecourse Debt shall be allocated among the Partner bearing
the Economic Risk Of Loss for such debt; provided, however, that if more than
one Partner bear the Economic Risk Of Loss for such debt, the Partner Risk
Nonrecourse Deductions attributable to such debt shall be allocated to and among
such Partners, pro rata in the same proportion that their Economic Risks Of Loss
bear to one another.
(e) All Nonrecourse Deductions shall be allocated
among the Partners, pro rata in accordance with their respective Sharing
Percentages.
(f) Any Adjusted Net Income realized by the
Partnership for such year and, except as otherwise provided in Section 3.1(h)
hereof, any Book Gain derived from a Capital Transaction occurring during such
year and not allocated pursuant to Sections 3.1(a), 3.1(b) and 3.1(c) hereof,
shall be allocated among the Partners, as necessary, so as to cause the balances
in their respective Section 704 Capital Accounts to be in the same ratio to one
another as are their Sharing Percentages, with all remaining amounts of Adjusted
Net Income and Book Gain to be allocated to the Partners, pro rata in accordance
with their respective Sharing Percentages:
(g) Any Adjusted Net Loss realized by the Partnership
for such year and, except as otherwise provided in Section 3.1(h) hereof, any
Book Loss derived from a Capital Transaction occurring during such year and not
allocated pursuant to Sections 3.1(a), 3.1(b) and 3.1(c) hereof, shall be
allocated among the Partners, as necessary, so as to cause the balances in their
respective Section 704 Capital Accounts to be in the same ratio to one another
as are their Sharing Percentages, with all remaining amounts of Adjusted Net
Loss and Book Gain to be allocated to the Partners, pro rata in accordance with
their respective Sharing Percentages.
(h) Book Gain Or Loss derived from a Capital
Transaction that is entered into in connection with, or results in, the
Liquidation of the Partnership shall be allocated among the Partners as follows
in the following order of priority (after giving effect to all adjustments
attributable to allocations of items of Partnership profit and loss made
pursuant to the preceding provisions of this Section 3.1 for such year and after
giving effect to all adjustments attributable to contributions and distributions
or money and property effected prior to such determination):
(i) Book Gain remaining after the
allocations provided for in Sections 3.1(a), 3.1(b) and 3.1(c)
hereof shall be allocated as follows and in the following
order of priority:
EXHIBIT A -- PAGE 10 OF 13
50
(A) First: Book Gain equal to the deficit
balance (if any) in each Partner's Capital Account
shall be allocated to such Partner.
(B) Second: An amount of Book Gain shall be
allocated next among the Partners to the least extent
necessary to cause their positive Capital Account
balances to equal their respective Sharing
Percentages.
(c) Third: All remaining amounts of Book
Gain shall be allocated among the Partners, pro rata
in accordance with their respective Sharing
Percentages.
(ii) Book Loss (if any) shall be allocated as
follows and in the following order of priority:
(A) First: Book Loss shall be allocated to
the Partners to the least extent necessary to cause
the positive balances in their Capital Accounts to be
in the same proportion to one other as are their
respective Sharing Percentages.
(B) Second: Amounts of Book Loss shall be
allocated next among all of the Partners, pro rata in
accordance with their respective Sharing Percentages
until the Capital Account balance of each Partner
equals zero.
(c) Third: Any remaining Book Loss shall be
allocated to the General Partner.
(i) For purposes of determining the nature (as
ordinary or capital) of any Partnership profit allocated among the Partners for
federal income tax purposes pursuant to this Section 3.1, the portion of such
profit required to be recognized as ordinary income pursuant to sections 1245
and/or 1250 of the Code shall be deemed to be allocated among the Partners in
the same proportion that they were allocated and claimed the Book Depreciation
deductions, or basis reductions, directly or indirectly giving rise to such
treatment under sections 1245 and/or 1250 of the Code.
(j) The parties intend that the foregoing allocation
provisions of this Section 3.1 shall produce Capital Account balances of the
Partners that will permit liquidating distributions that are made in accordance
with final Capital Account balances under Section 16.3 of the Agreement to be
made to the Partners, pro rata in accordance with their respective Sharing
Percentages. To the extent that the tax allocation provisions of this Section
3.1 would fail to cause the Partners' final Capital Account balances to be in
EXHIBIT A -- PAGE 11 OF 13
51
such ratio, (i) such provisions shall be amended by the Partners if and to the
extent necessary to produce such result and (ii) taxable income and taxable loss
of the Partnership for prior open years (or items of Gross Income and Deductible
Expenses of the Partnership for such years) shall be reallocated among the
Partners to the extent it is not possible to achieve such result with
allocations of items of income (including Gross Income) and Deductible Expenses
for the current year and future years. This Section 3.01(j) shall control
notwithstanding any reallocation or adjustment of taxable income, taxable loss,
or items thereof by the Internal Revenue Service or any other taxing authority.
Section 3.2 Allocation Of Tax Items.
(a) Except as otherwise provided in the succeeding
provisions of this Section 3.2, each Tax Item shall be allocated among the
Partners in the same manner as each correlative item of profit or loss, as
calculated for book purposes, is allocated pursuant to the provisions of Section
3.1 hereof.
(b) The Partners hereby acknowledge that all Tax
Items in respect of any Book/Tax Disparity Property owned by the Partnership are
required to be allocated among the Partners in the same manner as under section
704(c) of the Code (as specified in sections 1.704-l(b)(2)(iv)(f) and 1.704-1
(b)(2)(iv)(g) of the Regulations) and that the principles of section 704(c) of
the Code require that such Tax Items must be shared among the Partners so as to
take account of the variation between the adjusted tax basis and Book Basis of
each such Book/Tax Disparity Property. Thus, notwithstanding anything in Section
3.1 or 3.2(a) hereof to the contrary, the Partners' distributive shares of Tax
Items in respect of each Book/Tax Disparity Property shall be separately
determined and allocated among the Partners in accordance with the principles of
section 704(c) of the Code. For purposes of making tax allocations pursuant to
section 704(c) of the Code (including allocations pursuant to Section
1.704-1(b)(2)(iv)(f) if a Revaluation Event occurs) the General Partner shall
determine the method or methods to be used by the Partnership.
Section 3.3 Allocations Of Profit And Loss And Distributions
In Respect Of Interests Transferred.
(a) If any Unit or other interest in the Partnership
is transferred, or is increased or decreased by reason of the admission of a new
Partner or otherwise, during any Fiscal Year, each item of Adjusted Net Income
Or Loss, Book Gain Or Loss and other Partnership profit and loss for such year
shall be divided and allocated among the Partners in question by taking account
of their varying interests in the Partnership during such year on a daily,
monthly or other basis, as determined by the General Partner using any
permissible method under section 706 of the Code and the Regulations thereunder.
(b) Distributions of Partnership properties in
respect of a unit or other interest in the Partnership shall be made only to the
Persons or entities who,
EXHIBIT A -- PAGE 12 OF 13
52
according to the Partnership's books and records, are the holders of record of
the Units or other interests in the Partnership in respect of which such
distributions are made on the actual date of distribution. Neither the
Partnership nor the General Partner shall incur any liability for making
distributions in accordance with the provisions of the preceding sentence,
whether or not the Partnership or the General Partner has knowledge or notice of
any transfer or purported transfer of ownership of any unit or other interest in
the Partnership.
(c) Notwithstanding any provision above to the
contrary, Book Gain Or Loss realized in connection with a sale or other
disposition of any Partnership properties shall be allocated solely among the
parties owning units or other interests in the Partnership as of the date such
sale or other disposition occurs.
EXHIBIT A -- PAGE 13 OF 13
53
EXHIBIT B
CAPITAL
GENERAL PARTNER CONTRIBUTION UNITS
---------------------------------------- ------------------ -----------
Xxxxx Holdings, Inc 10,000 100
c/o Columbia/HCA Healthcare
Corporation
Xxx Xxxx Xxxxx
X.X. Xxx 000
Xxxxxxxxx, XX 00000-0000
Attention: General Counsel
CAPITAL
LIMITED PARTNERS CONTRIBUTION UNITS
---------------------------------------- ------------------ -----------
Columbia/TSP Holdings, Inc. 790,000 7,900
c/o Columbia/HCA Healthcare
Corporation
Xxx Xxxx Xxxxx
X.X. Xxx 000
Xxxxxxxxx, XX 00000-0000
Attention: General Counsel
Brim Healthcare, Inc. $200,000 2,000
000 X.X. 000xx Xxxxxx
Xxxxxxxx, XX 00000-0000
Attention: Chief Executive Officer
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EXHIBIT C
FORM OF
CORPORATE FORM OF PURCHASING AGREEMENT
GROUP MEMBER
This Corporate Purchasing Agreement (the "Agreement") is entered into
by and between _______, a _________ (hereinafter "Participant"), located at
___________ and ALIGNED BUSINESS CONSORTIUM GROUP, L.P. a limited partnership
(hereinafter "ABC Group"), located at Xxx Xxxx Xxxxx, Xxxxxxxxx, Xxxxxxxxx
00000, ATTENTION: EXECUTIVE DIRECTOR OF ABC GROUP.
W I T N E S S E T H:
A. ABC Group maintains agreements for purchasing various goods,
supplies, materials, dietary products, pharmaceuticals and equipment
(collectively, "Supplies and Equipment") used by hospitals on a national basis.
The purchase agreements, as amended or modified from time to time, together with
such additional purchase agreements as ABC Group and its affiliates may
hereafter enter into and which are designated by ABC Group as a part of this
program, are herein collectively referred to as the "Supply Contracts."
B. Participant desires to purchase Supplies and Equipment under the
Supply Contracts in accordance with the terms and conditions of those Supply
Contracts; subject however to limitations imposed on Participant under its
existing supply agreements and technological limitations related to
Participant's equipment and operations. The current Supply Contracts are
described on Exhibit A attached hereto.
C. Participant and its affiliates own, operate and/or manage the
hospitals or other health care related facilities and services described on
Exhibit B attached hereto (the "Facilities").
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth, it is agreed as follows:
1. PURPOSE. Participant hereby engages ABC Group to assist in the
purchasing of Supplies and Equipment used in the normal and customary operations
of the Facilities of the Participant and ABC Group agrees to assist in the
purchasing of such Supplies and Equipment, all as more fully set forth below.
2. TERM. Subject to prior termination under Paragraph 7 below, the term
of this Agreement shall be for a period of five (5) years commencing on
_________, and ending on __________ (the "Term"). Upon completion of the Term of
this Agreement, the parties may negotiate with respect to extension or renewal
hereof. If upon the expiration hereof, an agreement has not been negotiated by
the parties, this Agreement shall continue on a month-to-month basis upon the
same terms and
55
conditions as were in effect prior to expiration, subject to termination by
either party upon ninety (90) days written notice to the other.
3. ABC GROUP'S RESPONSIBILITIES.
(A) Upon execution of this Agreement, ABC Group will deliver,
or cause to be delivered, to Participant a copy (or brief summary
hereof) of all Supply Contracts which ABC Group has in effect at that
time. Additionally, ABC Group will, during the Term hereof and any
extension or renewal, provide Participant with copies of any additional
amendments, changes or termination to such agreements on a timely basis
so that Participant can be advised thereof.
(B) ABC Group will provide consultation with Participant to
effect a smooth transition to the purchasing program.
(C) ABC Group shall notify each of the suppliers under the
Supply Contracts that Participant and its affiliates are participating
in those agreements. Participant and its affiliates shall be entitled
to purchase Supplies and Equipment under the Supply Contracts for the
normal and customary use of such Supplies and Equipment in the
operation of the Facilities and, in connection therewith, Participant
and its affiliates shall receive the same discounts thereunder as ABC
Group.
(D) Participant acknowledges that ABC Group has certain
subsidiaries and affiliates which operate in the health care field.
Certain of these subsidiaries or affiliates may, from time to time,
make proposals to or do business with Participant and/or its
affiliates. Participant and its affiliates shall not be required to
accept any such future proposals as a result of this Agreement or any
other business relationship between ABC Group and Participant and its
affiliates.
(E) ABC Group shall consult with Participant and its
affiliates regarding the monitoring and evaluation of the
implementation and utilization of the Supply Contracts.
4. REPRESENTATIONS AND COVENANTS BY PARTICIPANT. Participant
hereby represents and warrants to and covenants with ABC Group as follows:
(A) All purchasing by Participant and its affiliates of
Supplies and Equipment under said Supply Contracts shall be in the name
of Participant or its affiliates, who shall be solely responsible for
payment therefore.
(B) Any purchase under the Supply Contracts by Participant and
its affiliates for Supplies and Equipment for any of the Facilities
will be between Participant or its affiliates, on the one hand, and the
respective contractor, on the other hand. ABC Group shall have no
liability under such agreements or with respect to any such purchases,
or any Supplies and
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56
Equipment furnished thereunder. Without limiting the generality of the
foregoing, ABC Group does not make any warranty, express or implied, as
to such Supplies and Equipment.
(C) Participant and its affiliates shall indemnify and hold
harmless ABC Group, its affiliates, subsidiaries, agents, officers,
directors and employees (the "Indemnified Parties") from any liability,
claim, judgment, penalty, cost or expense (including attorneys fees and
litigation expenses) incurred by, brought or asserted against them or
any of them arising out of this purchasing program, including without
limitation any claims resulting the failure to pay for any Supplies and
Equipment purchased, any product liability claims associated with the
Supplies and Equipment purchased, and any claims resulting from ABC
Group's acts or omissions (except to the extent that any such claims
result from the gross negligence or intentional misconduct of ABC
Group).
(D) During the Term of this Agreement and any extension or
renewal hereof, neither Participant nor any of its affiliates shall
enter into or utilize any other similar group purchasing agreement or
arrangement for purchasing hospital goods, supplies, materials, dietary
products, pharmaceutical and/or equipment except with ABC Group or a
subsidiary or affiliate of ABC Group. The parties intend that this
Agreement shall be the exclusive arrangement that Participant utilizes
for the purchase of Supplies and Equipment through a group purchasing
organization or similar entity.
(E) Participant shall ensure that the Facilities will not
utilize or maintain membership in any other group purchasing
organization except for the group purchasing organization of ABC Group.
(F) Participant covenants, represents and warrants that the
Facilities will maintain a compliance rate of 80% for the ABC Group
Supply Contracts.
(G) Participant shall cause the Facilities to comply with the
payment terms of the Supply Contracts.
5. COMPENSATION.
(A) As compensation for purchasing assistance services
rendered by ABC Group, Participant shall pay a fee of $10,000.00 per
facility for the first year, and $5,000.00 per year per facility for
years two through five. The first payment shall be due upon execution
of this Agreement. The second payment shall be due on the first
anniversary of the execution of this Agreement and each subsequent
payment shall be due on the next succeeding anniversary date. If this
Agreement is extended on a month-to-month basis as described in Section
2 hereof, Participant shall pay to ABC Group in advance on the first of
every month during the continuation of this Agreement $1000 per
facility as compensation for the purchasing assistance services.
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(B) All payments will be made to:
ALIGNED BUSINESS CONSORTIUM GROUP
XXX XXXX XXXXX
XXXXXXXXX, XXXXXXXXX 00000
ATTENTION: XXXXX XXXX, EXECUTIVE DIRECTOR
(C) Participant acknowledges that, as a result of
Participant's participation in the up purchasing program, ABC Group may
receive administrative fees in connection with certain Supplies and
Equipment that are purchased, licensed or leased by Participant and its
affiliates for the Facilities. Such payment shall not exceed 3% of the
purchase price of the goods or services provided by the participating
vendor. All administrative fees collected by ABC Group, with respect to
purchases made by Participant and its affiliates for the Facilities
will be shared with Participant on a fifty-fifty (50-50) basis. ABC
Group shall disclose to Participant, on a quarterly basis, ABC Group's
receipt of these fees and will submit to Participant in writing, on an
annual basis, and to the Secretary of Health and Human Services upon
his or her request, the amount received from each vendor with respect
to purchases made by or on behalf of Participant. Participant is
responsible for disclosing this information to each Facility and for
the payment of any portion of such fees which is due to Participant's
affiliates or the Facilities.
6. LOSS OF ADMINISTRATIVE FEE SHARE. ABC Group shall not be
obligated to share the administrative fees with Participant as described in
SECTION 5 above upon the occurrence of any one or more of the following events:
(A) Failure of Participant and/or its affiliates to maintain
the compliance level described in Section 4.f. for any one or more of
the Facilities.
(B) Failure of Participant and/or its affiliates to comply
with the terms and conditions of Supply Contracts.
7. TERMINATION.
(A) Either party may terminate this Agreement without cause at
any time during the Term or thereafter by giving written notice to the
other, such termination to be effective ninety (90) days after the date
such notice is given.
(B) Upon termination of this Agreement, whether by expiration
of its Term or otherwise, ABC Group shall have no further obligations
hereunder, including, without
C-4
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limitation, no obligation to maintain, update or advise Participant or
its affiliates concerning any system or procedure provided hereunder.
(C) ABC Group may terminate this Agreement on ten (10) days
notice to Participant if Participant or its affiliates fail to meet the
compliance level described in Section 4.f. for any one or more of the
Facilities or if Participant otherwise breaches the terms of this
Agreement.
8. SUCCESSORS AND ASSIGNS.
(A) Neither party may assign its interest in or delegate the
performance of its obligations under this Agreement to any other person
without obtaining the prior written consent of the other party, except
that ABC Group may assign its interest or delegate the performance of
its obligations to a any affiliate of ABC Group or any other party that
is qualified to do business in the states in which the Facilities are
located (if such qualification is required pursuant to the laws of
those states).
(B) Participant shall not have the right to sell, hypothecate,
convey, assign or otherwise transfer this Agreement or assign any of
its interest or the benefits hereunder to any other party without the
prior written consent of ABC Group; provided however that the
affiliates of Participant who are operating the Facilities may
participate in this purchasing program to the extent required for the
normal and customary usage of Supplies and Equipment for those
Facilities.
(C) The terms, provisions, covenants, obligations and
conditions of this Agreement shall be binding upon and shall inure to
the benefit of the successors in interest and the assigns of the
parties hereto, provided that no assignment, transfer, pledge or
mortgage by or through either party, as the case may be, in violation
of the provisions of this Agreement, shall vest any rights in the
assignee, transferee, pledgee or mortgagee.
9. NOTICES. Any notice by any party to the other shall be in writing
and shall be deemed to have been given on the earlier of (a) the date on which
it is personally received or (b) four (4) days after it is deposited in the U.S.
mail, postage prepaid, certified with return receipt requested and addressed to
the party at its address as set forth on Page 1 of this Agreement (or at such
other address as may have been designated by the party pursuant to this
Paragraph 9).
10. APPLICABLE LAW. This Agreement is entered into in the State of
Tennessee and shall be governed by the laws of the State of Tennessee and all
actions concerning this Agreement shall be brought in the courts of the State of
Tennessee with exclusive venue in Davidson County, Tennessee.
11. ACCESS TO BOOKS AND RECORDS OF ABC GROUP BY SECRETARY OF HHS OR
AUTHORIZED REPRESENTATIVE. Upon written request of the Secretary of Health and
Human Services or the Comptroller General or any of their duly authorized
representatives, ABC Group or any other related organization providing services
with a value or cost of ten thousand dollars ($10,000.00) or more, over
C-5
59
a twelve (12) month period, shall make available to the Secretary the contract,
books, documents and records that are necessary to certify the nature and extent
of the costs of providing such services. Such inspection shall be available up
to four (4) years after the rendering of such services. This paragraph is not
intended to prohibit or impede any state audits pursuant to state law.
12. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
of the parties hereto with respect to the subject matter hereof and correctly
sets forth the rights, duties and obligations of the parties as of the date set
forth above. Any and all prior agreements, promises, proposals, negotiations or
representations, whether written or oral, which are not expressly set forth in
this Agreement are hereby superseded and are of no force or effect. No
modification, amendment or change hereof shall be effective or binding on any
party unless set forth in writing, duly executed by the parties.
13. MISCELLANEOUS. The parties acknowledge that this Agreement is the
result of mutual negotiation. Accordingly, this Agreement shall not be construed
against the party preparing and drafting it, but shall be construed as if both
parties jointly prepared and drafted it. Any uncertainty or ambiguity shall not
be interpreted against either party by virtue of such party's actual role in the
preparation and drafting hereof. The waiver by any party hereto of any
requirement or obligation arising hereunder shall be in writing to be effective
and shall not operate or be construed as a subsequent waiver thereof. The
headings in this Agreement are for purposes of reference only and shall not
limit or define the meaning hereof. This Agreement may be executed in one or
more counterparts, each of which shall be an original but all of which shall
constitute one instrument. If any provision contained in this Agreement shall
for any reason be held invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not invalidate this entire
Agreement. Such provision shall be deemed to be modified to the extent necessary
to render it valid and enforceable, and if no such modification shall render it
valid or enforceable, then this Agreement shall be construed as if not
containing such provision. The term "affiliate" shall mean with respect to any
party any entity or person controlling, controlled by or under common control
with such party. This Agreement is intended solely for the benefit of the
parties hereto and is not intended to, and shall not, create any enforceable
third party beneficiary rights.
14. CONFIDENTIALITY. All information, documents and instruments
(including, without limitation, all information relative to the terms and
conditions of the Supply Contracts) delivered to Participant and its affiliates
or their agents, directors, officers and employees are of a confidential and
proprietary nature. Participant agrees that throughout the term of this
Agreement and for a period of five (5) years following the expiration of this
Agreement it will maintain the confidentiality of all such confidential
information, documents or instruments and will only disclose such information,
documents and instruments to its duly authorized officers, directors,
representatives and agents and its affiliates who operate the Facilities.
Participant shall communicate to each of such parties the confidentiality
obligations required under this Agreement and shall be responsible for those
parties compliance with these confidentiality obligations. Participant
acknowledges and agrees that any breach of this section would result in
irreparable harm to ABC Group and its affiliates and that therefore each of them
shall be entitled to an injunction to prohibit any such breach or anticipated
breach, without the necessity of posting a bond, cash or otherwise, in addition
to all of their other legal and equitable remedies.
C-6
60
IN WITNESS WHEREOF, the parties have caused this instrument to be duly
executed by their authorized representatives this _____ day of _____________,
199___.
ALIGNED BUSINESS [PARTICIPANT]
CONSORTIUM GROUP
By:
-------------------------- ----------------------------
SIGNATURE SIGNATURE
-------------------------- ----------------------------
PRINT NAME PRINT NAME
-------------------------- ----------------------------
TITLE TITLE
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EXHIBIT A
LIST OF HOSPITALS AND OTHER HEALTH CARE FACILITIES AND SERVICES
NAME ADDRESS DESCRIPTION OWNED OR MANAGED
---- ------- ----------- ----------------
C-8
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CONTRIBUTION AGREEMENT
THIS CONTRIBUTION AGREEMENT (the "Agreement") is made and entered into
as of this 1st day of June, 1997, by and between Xxxxx Holdings, Inc., a
Delaware corporation, ("Columbia Sub"), Columbia/TSP Holdings, Inc., a Nevada
corporation ("Columbia/TSP," and collectively with Columbia Sub, the "Columbia
Entities"), and Aligned Business Consortium Group, L.P., a Delaware limited
partnership (the "Partnership").
WHEREAS, Columbia Sub currently holds a one percent (1%) interest as a
general partner in the Partnership, and Columbia/TSP currently holds a
ninety-nine (99%) interest as a limited partner in the Partnership.
WHEREFORE, in consideration of: the promises and mutual covenants set
forth herein, each of the Columbia Entities and the Partnership declare and
agree as follows:
1. CONTRIBUTION. Columbia Sub and Columbia/TSP hereby contribute as a
capital contribution to the Partnership the amount of $800,000 in cash, in the
aggregate, with each such Columbia Entity contributing the amount set forth
opposite its name on Schedule 1 hereto.
2. RECORDATION. The Partnership hereby accepts and acknowledges receipt in
full of such contributions to the capital of the Partnership, and shall reflect
such contribution in its required records, and shall also reflect that upon the
consummation of the contribution to the Partnership by Brim Healthcare, Inc., an
Oregon corporation ('Brim"), pursuant to that certain Contribution Agreement of
even date herewith between the Partnership and Brim, the ownership interest of
Columbia Sub shall be a one percent (1%) general partnership interest in the
Partnership and the ownership interest of Columbia/TSP shall be a seventy-nine
percent (79%) limited partnership interest in the Partnership.
3. GOVERNING LAW. This Agreement shall be construed and interpreted in
accordance with the laws of the State of Delaware.
4. MODIFICATION. Neither this Agreement nor any provision hereof shall be
amended or modified (or deemed amended or modified), except by an agreement in
writing duly executed and acknowledged with the same formality as this
Agreement.
5. ATTORNEYS' FEES. In the event of a claim or controversy between the
parties for any matter arising out of this Agreement, the prevailing party in
such claim or controversy shall be entitled to recovery against the other party
of reasonable attorneys' fees and court costs at all levels.
6. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to constitute
one and the same agreement.
7. INDEPENDENT COVENANTS. Each of the respective rights and obligations of
the parties hereunder shall be deemed independent and may be enforced
independently irrespective of any of the other rights and obligations set forth
herein. No waivers, express or implied, by either party or any breach of any of
63
the covenants, agreements or duties hereunder of the other party shall be deemed
to be a waiver of any other breach thereof or the waiver of any other covenant,
agreement or duty.
8. ENTIRE UNDERSTANDING. This Agreement contains the entire understanding
of the parties with respect to the subject matter hereof, who hereby acknowledge
that there have been and are no representations, warranties, covenants or
understandings other than those expressly set further herein.
IN WITNESS WHEREOF, Columbia Sub, Columbia/TSP and the Partnership have
caused this Agreement to be duly executed as of the day and year set forth
above.
XXXXX HOLDINGS, INC.
By: /s/ Xxxxxxx X. Xxxxx
----------------------------
Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President
COLUMBIA/TSP HOLDINGS, INC.
By: /s/ Xxxxxxx X. Xxxxx
----------------------------
Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President
ALIGNED BUSINESS CONSORTIUM GROUP, L.P.
By: /s/ Xxxxxxx X. Xxxxx
----------------------------
Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President
64
SCHEDULE 1
COLUMBIA ENTITY CAPITAL CONTRIBUTION
--------------- --------------------
Xxxxx Holdings, Inc. $ 10,000
Columbia/TSP Holdings, Inc. $790,000
65
CONTRIBUTION AGREEMENT
THIS CONTRIBUTION AGREEMENT (the "Agreement") is made and entered into
as of this 1st day of June, 1997, by and between Brim Healthcare, Inc., an
Oregon corporation ("Brim"), and Aligned Business Consortium Group, L.P.,
a Delaware limited partnership (the "Partnership").
WHEREFORE, in consideration of the promises and mutual covenants set
forth herein, each of Brim and the Partnership declare and agree as follows:
1. CONTRIBUTION. As consideration for the issuance of a 20% limited
partnership interest (the "Partnership Interest") in the Partnership, Brim
hereby contributes as a capital contribution to the Partnership (i) the
software, information and tracking systems it uses in connection with its
business of providing administrative and other services for group purchasing, as
described and valued at the amount set forth on Exhibit A attached hereto and
incorporated herein by this reference, (ii) all "know-how," trade secrets and
proprietary information relating to such systems or such business, and (iii) the
amount of $200,000 in cash.
2. RECORDATION. The Partnership hereby accepts and acknowledges receipt in
full of such contributions to the capital of the Partnership. The Partnership
shall reflect such contribution in its required records, and shall also reflect
the issuance of a 20% limited partnership interest in the Partnership to Brim.
3. GOVERNING LAW. This Agreement shall be construed and interpreted in
accordance with the laws of the State of Delaware.
4. REPRESENTATIONS AND WARRANTIES. Brim hereby represents and warrants to
the Partnership that it has good and marketable title to the Assets hereby
contributed to the Partnership, free and clear of any and all liens,
liabilities, obligations, restrictions, encumbrances or any other defects in
title. Brim further represents and warrants to the Partnership that (i) Brim has
no continuing agreement, contract, obligation, promise, or undertaking (whether
written or oral and whether express or implied) with Xxxxx Healthcare
Corporation ("Xxxxx") or its affiliates respecting the Assets or the business
previously conducted by Brim using the Assets, except that Brim has previously
licensed a version of the software referred to in paragraph 1 hereof to Xxxxx
(the "Xxxxx License"), and (ii) the formation of the Partnership and the
performance of any obligations under this Agreement or the Partnership Agreement
will not, indirectly or directly, contravene, conflict with or result in a
violation or breach of, or give any person the right to declare a default or
exercise any remedy under, any agreement, contract, obligation, promise, or
undertaking (whether written or oral and whether express or implied), including
the Xxxxx License, with Xxxxx or its affiliates.
66
5. INDEMNIFICATION. Brim hereby agrees to indemnify, defend and hold the
Partnership and its general partner and limited partners (other than Brim)
harmless from and against, any and all liabilities, indebtedness, commitments or
obligations of any kind whatsoever, including, but not limited to, reasonable
attorney's fees, including fees on appeal, (i) resulting from Brim's breach of
any representation or warranty set forth herein, or (ii) relating to the
transfer of the Assets or any business or activity of Brim prior to the date
hereof which is related to the Assets contributed pursuant hereto.
6. MODIFICATION. Neither this Agreement nor any provision hereof shall be
amended or modified (or deemed amended or modified), except by an agreement in
writing duly executed and acknowledged with the same formality as this
Agreement.
7. ATTORNEYS' FEES. In the event of a claim or controversy between the
parties for any matter arising out of this Agreement, the prevailing party in
such claim or controversy shall be entitled to recovery against the other party
of reasonable attorneys' fees and court costs at all levels.
8. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to constitute
one and the same agreement.
9. INDEPENDENT COVENANTS. Each of the respective rights and obligations of
the parties hereunder shall be deemed independent and may be enforced
independently irrespective of any of the other rights and obligations set forth
herein. No waivers, express or implied, by either party or any breach of any of
the covenants, agreements or duties hereunder of the other party shall be deemed
to be a waiver of any other breach thereof or the waiver of any other covenant,
agreement or duty.
10. ENTIRE UNDERSTANDING. This Agreement contains the entire understanding
of the parties with respect to the subject matter hereof, who hereby acknowledge
that there have been and are no representations, warranties, covenants or
understandings other than those expressly set further herein.
67
IN WITNESS WHEREOF, Brim and the Partnership have caused this Agreement
to be duly executed as of the day and year set forth above.
BRIM HEALTHCARE, INC.
By: /s/ Xxx X. Xxxxxx
-----------------------------
Name: Xxx X. Xxxxxx
Title: President
ALIGNED BUSINESS CONSORTIUM GROUP, L.P.
By: Xxxxx Holdings, Inc.,
its General Partner
By: /s/ Xxxxxxx X. Xxxxx
---------------------------
Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President
68
EXHIBIT A TO
CONTRIBUTION AGREEMENT
All of the Brim Group Purchasing Software and other information and tracking
systems used in connection with its business of providing services for group
purchasing.
69
SERVICES AGREEMENT
THIS SERVICES AGREEMENT (this "Agreement") is made and entered into
this 1st day of June, 1997, by and between Xxxxx Holdings, Inc., a Delaware
corporation ("Columbia"), and Aligned Business Consortium Group, L.P., a
Delaware limited partnership (the "Partnership").
W I T N E S S E T H
WHEREAS, the Partnership has been formed for the purpose of owning,
managing, developing and operating a group purchasing organization for
healthcare supplies, services and materials;
WHEREAS, Columbia is the general partner of the Partnership, and as
such has the authority pursuant to the law of the State of Delaware and the
Amended and Restated Limited Partnership Agreement of the Partnership (the
"Partnership Agreement") to manage and control the business and properties of
the Partnership (all capitalized terms used herein and not otherwise defined are
so defined in the Partnership Agreement);
WHEREAS, Columbia, through its executives, other personnel, and
personnel at Affiliates, possesses certain experience and expertise in the
management, development and operation of businesses like that of Partnership;
and
WHEREAS, the Partnership wishes to retain Columbia to provide certain
services ("Services") for the Partnership, as hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and promises
of the parties hereto, it is mutually agreed as follows:
1. ENGAGEMENT. The Partnership hereby retains Columbia, and
Columbia hereby agrees to be retained by the Partnership, to provide Services
upon the terms and conditions hereinafter set forth.
2. SERVICES. In consideration of the reimbursements to be made by
the Partnership in accordance with paragraph 3 hereof, Columbia will provide, or
may provide through one or more of its Affiliates, the following Services to the
Partnership:
a. MANAGEMENT OVERSIGHT. Columbia shall provide advisory,
consultative and other direct services to the Partnership
to assist the Partnership in achieving its objectives.
b. PERSONNEL. Columbia shall provide and employ all of the
full-time employees of the Partnership (the "Employees").
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70
c. COMPENSATION/BENEFITS. Compensation, benefits and the
terms and conditions of employment ("Benefits") of
the Employees shall, initially, be consistent with
those generally offered to employees of Columbia/HCA
Healthcare Corporation, a Delaware corporation,
("Columbia/HCA"), and its affiliates, provided, that
such Benefits may, subsequently, be amended or
altered by Columbia from time to time so as to be
different from Benefits generally offered to
employees of Columbia/HCA.
d. COMPUTERS AND INFORMATION SYSTEMS. Columbia will provide
the Partnership with access to appropriate computer and
information systems.
e. SPACE. Columbia will provide the Partnership with office
space at its headquarters in Nashville, Tennessee or at
such other location as Columbia shall designate.
f. GROUP PURCHASING. Columbia shall provide the Partnership
with appropriate access to, or the benefit of, Columbia's
purchasing greements or purchasing programs of
Columbia/HCA, to the extent that Columbia is legally or
practically able to do so.
3. REIMBURSEMENT. Columbia shall be reimbursed by the Partnership for
costs and expenses associated with the provision of Services (except for any
Services provided by Xx Xxxxx) to the Partnership as described in paragraph 2
above, including any reasonable out-of-pocket travel costs and expenses
associated with providing such Services to the Partnership.
At all times, Columbia shall allocate the costs and expenses of
providing Services to the Partnership in a manner that is fair and equitable, in
Columbia's reasonable discretion.
4. AFFILIATES. Any Service to be provided hereunder may be provided, at
the option of Columbia, by an Affiliate of Columbia, but Columbia will be
responsible for assuring the quality and timely delivery of all Services
hereunder. In such case, such Affiliate will be a subcontractor of Columbia,
Columbia will be responsible for paying any fees of such Affiliate.
5. TERM. The term of this Agreement shall commence upon the execution
of this Agreement and shall terminate on the fifth anniversary hereof; provided,
however, that, notwithstanding the foregoing, this Agreement shall automatically
terminate at such time as Columbia and the Original Limited Partner or its
Affiliates are no longer Partners in the Partnership.
6. NOTICES. All notices required to be given under this Agreement shall
be in writing, and delivered in person or sent by telecopy, overnight courier or
certified mail, return receipt requested, postage prepaid, to the following
addresses:
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71
Columbia: Xxxxx Holdings, Inc.
Xxx Xxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attn: Chief Executive Officer
Partnership: Aligned Business Consortium Group, L.P.
Xxx Xxxx Xxxxx
Xxxxxxxxx, XX 00000
Attn: Executive Director
with a copy to: Columbia/HCA Healthcare Corporation
Xxx Xxxx Xxxxx
Xxxxxxxxx, XX 00000
Attn: General Counsel
The foregoing addresses may be changed by either of the aforesaid
persons, and additional persons may be added thereto by notifying all of the
other parties hereto in writing and in the manner hereinabove set forth. All
notices shall be effective on the earlier of receipt or five (5) days after
deposited in the U.S. Mail.
7. ASSIGNMENT. Columbia shall have the right to assign this
Agreement without prior written consent of the Partnership if such assignment is
to an entity which is owned directly or indirectly by Columbia. The Partnership
shall not assign this Agreement without the prior written consent of Columbia.
8. INDEMNIFICATION. The Partnership shall indemnify, defend and
hold harmless Columbia and its agents and employees of and from any claims,
losses, liabilities and demands of every kind and nature whatsoever, including,
without limitation, the costs of defending any such claims, liabilities and
demands, including, without limitation, reasonable attorneys' and accountants'
fees therefor, arising in connection with Columbia's authorized activities set
forth herein; provided, however, that the Partnership shall not be required to
indemnify or hold harmless Columbia from any claims, losses, liabilities or
demands which arise from actions (or failures to act) which are performed in bad
faith by Columbia and which arise out of willful misconduct, gross negligence or
fraud by Columbia or any of its agents or employees.
9. MODIFICATION. Neither this Agreement nor any provision hereof
shall be amended or modified (or deemed amended or modified), except by an
agreement in writing duly executed and acknowledges with the same formality as
this Agreement.
10. GOVERNING LAW. All matters affecting the interpretation of
this Agreement and the rights or the parties hereto shall be governed by the
laws of the State of Delaware.
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11. INDEPENDENT COVENANTS. Each of the respective rights and
obligations of the parties hereunder shall be deemed independent and may be
enforced independently irrespective of any of the other rights and obligations
set forth herein. No waivers, express or implied, by either party or any breach
of any of the covenants, agreements or duties hereunder of the other party shall
be deemed to be a waiver of any other breach thereof or the waiver of any other
covenant, agreement or duty.
12. ENTIRE UNDERSTANDING. This Agreement contains the entire
understanding of the parties with respect to the subject matter hereof, which
hereby acknowledge that there have been and are no representations, warranties,
covenants or understandings other than those expressly set further herein.
13. ATTORNEYS' FEES. In the event of a claim or controversy
between the parties for any matter arising out of this Agreement, the prevailing
party in such claim or controversy shall be entitled to recovery against the
other party of reasonable attorneys' fees and court costs at all levels.
14. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to constitute
one and the same agreement.
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IN WITNESS WHEREOF the parties hereunto have executed this Agreement,
as of the day and year first above written.
Columbia: XXXXX HOLDINGS, INC.
By: /s/ Xxxxxxx X. Xxxxx
----------------------------
Name: Xxxxxxx X. Xxxxx
---------------------------
Title: Senior Vice President
-------------------------
Partnership: ALIGNED BUSINESS CONSORTIUM GROUP, L.P.
By: Xxxxx Holdings, Inc.
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------
Name: Xxxxxxx X. Xxxxx
-----------------------
Title: Senior Vice President
----------------------
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SERVICES AGREEMENT
THIS SERVICES AGREEMENT (this "Agreement") is made and entered into
this 1st day of June, 1997, by and between BRIM HEALTHCARE, INC., an Oregon
corporation ("Brim"), and Aligned Business Consortium Group, L.P., a Delaware
limited partnership (the "Partnership").
WITNESSETH
WHEREAS, the Partnership has been formed for the purpose of owning,
managing, developing and operating a group purchasing organization for
healthcare supplies, services and materials; and
WHEREAS, the Partnership wishes to retain Brim to provide certain
services ("Services") for the Partnership, as hereinafter set forth;
All capitalized terms used herein and not otherwise defined are so
defined in the Amended and Restated Limited Partnership Agreement of the
Partnership (the "Partnership Agreement").
NOW, THEREFORE, in consideration of the mutual covenants and promises
of the parties hereto, it is mutually agreed as follows:
1. ENGAGEMENT. The Partnership hereby retains Brim, and Brim hereby
agrees to be retained by the Partnership, to provide Services upon the terms and
conditions hereinafter set forth.
2. SERVICES. In consideration of the reimbursements to be made by the
Partnership in accordance with paragraph 3 hereof, Brim will provide to the
Partnership certain professional consulting services as well as certain other
general services which may include, among other things, information systems
development, education programming and delivery, and product development and
marketing services.
3. REIMBURSEMENT. Brim shall be reimbursed by the Partnership for costs
and expenses associated with the provision of Services by Brim employees (except
for any Services provided by Xxx XxXxxxxx) to the Partnership as described in
paragraph 2 above, including any reasonable out-of-pocket travel costs and
expenses associated with providing such Services to the Partnership; provided,
however, that such costs to be reimbursed by the Partnership shall be
pre-approved in writing by the Partnership through its General Partner.
At all times, Brim shall allocate the costs and expenses of providing
Services to the Partnership in a manner that is fair and equitable, in Brim's
reasonable discretion.
4. TERM. The term Of this Agreement shall commence upon the execution
of this Agreement and shall terminate on the fifth anniversary of such
execution; provided, however, that.
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notwithstanding the foregoing, this Agreement shall automatically terminate at
any such time as Columbia Sub and Brim are no longer Partners in the
Partnership.
5. NOTICES. All notices required to be given under this Agreement shall
be in writing, and delivered in person or sent by telecopy, overnight courier or
certified mail, return receipt requested, postage prepaid, to the following
addresses:
Brim: Brim Healthcare, Inc.
000 X.X. 000xx Xxxxxx
Xxxxxxxx, XX 00000-0000
Attn: Chief Executive Officer
Partnership: Aligned Business Consortium Group, L.P.
Xxx Xxxx Xxxxx
Xxxxxxxxx, XX 00000
Attn: Executive Director
with a copy to: Columbia/HCA Healthcare Corporation
Xxx Xxxx Xxxxx
Xxxxxxxxx, XX 00000
Attn: General Counsel
The foregoing addresses may be changed by either of the aforesaid
persons, and additional persons may be added thereto by notifying all of the
other parties hereto in writing and in the manner hereinabove set forth. All
notices shall be effective on the earlier of receipt or five (5) days after
deposited in the U.S. Mail.
6. ASSIGNMENT. Brim shall have the right to assign this Agreement
without prior written consent of the Partnership if such assignment is to an
entity which is owned directly or indirectly by Brim. The Partnership shall not
assign this Agreement without the prior written consent of Brim.
7. INDEMNIFICATION. The Partnership shall indemnify and hold harmless
Brim and its agents and employees of and from any claims, losses, liabilities
and demands of every kind and nature whatsoever, including, without limitation,
the costs of defending any such claims, liabilities and demands, including,
without limitation, reasonable attorneys' and accountants' fees therefor,
arising in connection with Brim's authorized activities set forth herein;
provided, however, that the Partnership shall not be required to indemnify or
hold harmless Brim from any claims, losses, liabilities or demands which arise
from actions (or failures to act) which are performed by Brim in bad faith and
which arise out of willful misconduct, gross negligence or fraud by Brim, or any
of its agents or employees.
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8. MODIFICATION. Neither this Agreement nor any provision hereof shall
be amended or modified (or deemed amended or modified), except by an agreement
in writing duly executed and acknowledges with the same formality as this
Agreement.
9. GOVERNING LAW. All matters affecting the interpretation of this
Agreement and the rights or the parties hereto shall be governed by the laws of
the State of Delaware.
10. INDEPENDENT COVENANTS. Each of the respective rights and
obligations of the parties hereunder shall be deemed independent and may be
enforced independently irrespective of any of the other rights and obligations
set forth herein. No waivers, express or implied, by either party or any breach
of any of the covenants, agreements or duties hereunder of the other party shall
be deemed to be a waiver of any other breach thereof or the waiver of any other
covenant, agreement or duty.
11. ENTIRE UNDERSTANDING. This Agreement contains the entire
understanding of the parties with respect to the subject matter hereof, which
hereby acknowledge that there have been and are no representations, warranties,
covenants or understandings other than those expressly set further herein.
12. ATTORNEYS' FEES. In the event of a claim or controversy between the
parties for any matter arising out of this Agreement, the prevailing party in
such claim or controversy shall be entitled to recovery against the other party
of reasonable attorneys' fees and court costs at all levels.
13. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to constitute
one and the same agreement.
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IN WITNESS WHEREOF the parties hereunto have executed this Agreement,
as of the day and year first above written.
Brim: BRIM HEALTHCARE, INC.
By: /s/ Xxx XxXxxxxx
----------------------------
Name: Xxx XxXxxxxx
---------------------------
Title: President
-------------------------
Partnership: ALIGNED BUSINESS CONSORTIUM GROUP, L.P.
By: Xxxxx Holdings, Inc.
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------
Name: Xxxxxxx X. Xxxxx
-----------------------
Title: Senior Vice President
----------------------
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