FOURTH AMENDMENT TO
AGREEMENT OF LIMITED PARTNERSHIP OF
INDIANA LITHOTRIPTERS LIMITED PARTNERSHIP I
THIS AMENDMENT, effective as of the 30th day of September,
1999, is entered into by and among Lithotripters, Inc., a North Carolina
corporation and the General Partner of Indiana Lithotripters Limited Partnership
I, an Indiana limited partnership (the "Partnership"), and the Limited Partners
of the Partnership.
R E C I T A L S:
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1. The General Partner and the Limited Partners, hereinafter
collectively referred to as the "Partners," are parties to that certain
Agreement of Limited Partnership of Indiana Lithotripters Limited Partnership I,
as amended (the "Agreement").
2. Effective as of September 30, 1999, the General Partner and
the requisite percentage of the Limited Partners consented in writing to the
following amendments to the Agreement, such amendments intended to: (i) allow
the General Partner the authority to periodically offer and sell additional
limited partner interests (a "Dilution Offering") to local investors;(ii)
clarify and strengthen the noncompetition provisions of Articles 15.3 and 18.3
of the Agreement; (iii) add a new provision to the Agreement to prevent the
disclosure of Confidential Partnership Information that might harm the
Partnership and its Partners; and (iv) allow the General Partner, in its sole
discretion, to elect to assign to the Partnership its rights under Article 18 of
the Agreement to purchase the Partnership Interest of any deceased, insolvent or
competing Limited Partner:
NOW, THEREFORE, in accordance with Articles 28 and 29 of the
Partnership Agreement and pursuant to the written consent of the General Partner
and the requisite percentage of the Limited Partners, the parties hereto agree
as follows:
The Agreement is hereby amended as set forth in
Exhibits A, B and C attached hereto.
[Signature Page Follows]
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IN WITNESS WHEREOF, the Partners have hereunto set their hands
and seals effective as of the date first above written.
GENERAL PARTNER:
LITHOTRIPTERS, INC., a North Carolina corporation and
sole general partner of the Partnership
By:_________________________________________
Title:________________________________________
ALL THE LIMITED PARTNERS OF
THE PARTNERSHIP WHOSE NAMES
APPEARED ON SCHEDULE A-3
By:/s/ Xxxxxx Xxxxxxx, M.D.
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Xxxxxx Xxxxxxx, M.D.
Attorney-in-Fact*
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*Pursuant to a Power of Attorney given by the Limited Partners in the
Agreement.
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EXHIBIT A
DILUTION OFFERING AMENDMENT
1. Capitalized terms used in this Exhibit and not otherwise defined shall
have the same meaning as provided in the Agreement of Limited
Partnership (the "Partnership Agreement") of Indiana Lithotripters
Limited Partnership I (the "Partnership").
2. The purpose of this Exhibit is to set forth a proposed amendment to the
Partnership Agreement that would give the General Partner the authority
periodically to offer and sell additional limited partner interests
("Dilution Offerings") to local investors who are not Limited Partners
in the Partnership ("Qualified Investors"). As required by Article 29
of the Partnership Agreement, to be effective this amendment must be
approved by the Partners representing two-thirds of the aggregate
interests in the Partnership.
3. The purposes of a Dilution Offering are (i) to raise additional capital for
any valid Partnership purposes, and (ii) to assure the highest quality of
patient care by admitting Qualified Investors to the Partnership who will
be dedicated and motivated as owners to follow the Partnership's treatment
protocol, and comply with its quality assurance and outcome analysis
programs. Any additional capital raised by the Partnership in a Dilution
Offering can be used for any legitimate Partnership purpose, including
upgrading the imaging components of the Partnership's Siemens
Lithostar(TM)extracorporeal shockwave lithotripter and funding Partnership
expenses as the General Partner deems appropriate.
4. In the event the Dilution Offering Amendment receives the requisite
approval of the Limited Partners, the General Partner intends to
conduct a Dilution Offering for the purposes of raising additional
capital to upgrade the imaging components of the Partnership's
Lithostar(TM) and to fund other Partnership expenses deemed appropriate
by the General Partner.
5. Any sale of limited partner interests to Qualified Investors will
result in the proportionate dilution of the Partnership Percentage
Interests of the existing Partners; i.e., the interests of the General
Partner and the Limited Partners in Partnership allocations, cash
distributions and voting rights will be proportionately reduced by a
successful Dilution Offering.
6. The General Partner has determined that the purchase price per 1%
Partnership Interest offered in the initial planned Dilution Offering
will be at its fair market value as determined by an independent third
party appraiser. The price for Units sold in future Dilution Offerings
also must be at a price no less than fair market value as determined by
the General Partner.
7. Upon the successful sale of Partnership Interests in a Dilution
Offering, the General Partner will prepare and attach a new Schedule A
to the Partnership Agreement to reflect (i) the Partners' adjusted
Percentage Interests in the Partnership, and (ii) the admission of the
new Limited Partners to the Partnership.
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EXHIBIT B
NONCOMPETITION PROVISION AND
CONFIDENTIALITY PROVISION AMENDMENTS
Capitalized terms used in this Exhibit and not otherwise
defined shall have the same meaning as provided in the Agreement of Limited
Partnership (the "Partnership Agreement") of Indiana Lithotripters Limited
Partnership I (the "Partnership").
Noncompetition Provision Amendment
Article 15.3 of the Partnership Agreement is hereby amended by
deleting the current provision in its entirety and by substituting the language
set forth below:
15.3 Outside Activities. The Limited Partners agree
that they owe fiduciary duties to the Partnership and, as a
consequence, each Limited Partner (that is not the General Partner or
an Affiliate of the General Partner) agrees that he or she shall not
engage in "Outside Activities" (as defined below) in the "Market Area"
(as defined below) while he or she is a Limited Partner in the
Partnership. The phrase "Outside Activities" means directly or
indirectly owning, leasing or subleasing a lithotripter (or any similar
equipment or competing devices used for treating renal or biliary stone
disease) or any other therapeutic equipment acquired by the Partnership
as permitted by Article 4. Prohibited indirect ownership shall include
the direct or indirect ownership of any interest in a business venture
(through stock ownership, partnership interest ownership, ownership by
or through a close family member, or as otherwise determined in good
faith by the General Partner) involving the ownership, purchase, lease,
sublease, promotion, management or operation of a lithotripter (or
similar equipment or competing devices used for treating renal or
biliary stone disease) or other competing device or equipment, unless
the General Partner determines that such activity by the Limited
Partners is not detrimental to the best interests of the Partnership.
Upon the termination or transfer of a Limited
Partner's interest in the Partnership for any reason, including a
transfer pursuant to Article 18.3 hereof, the withdrawing Limited
Partner shall not, for a period of two (2) years following the date of
his or her withdrawal, engage in any Outside Activities in any "Market
Area" in which the Partnership is transacting business or within the
prior twelve months has transacted business (the "Restricted
Facilities"). For the purposes of this Article 15.3, the term "Market
Area" shall mean (i) the area within a ten mile radius of any
Restricted Facility, but if such area is determined by a court of
competent jurisdiction to be too broad, then it shall mean (ii) the
area within a five mile radius of any Restricted Facility, but if such
area is determined by a court of competent jurisdiction
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to be too broad then it shall mean (iii) the area within a two mile
radius of any Restricted Facility.
In the event a Limited Partner wishes and intends to
engage in an Outside Activity in a Market Area, he or she must provide
written notice of such intent to the General Partner prior to engaging
in the Outside Activity. The written notice shall be deemed an election
by the Limited Partner to withdraw from the Partnership (the "Notice of
Withdrawal"), and shall give the General Partner the purchase rights as
provided in Article 18.3 hereof. After the Notice of Withdrawal, the
former Limited Partner may engage in an Outside Activity in the Market
Area only after waiting the period of two years specified in this
Article 15.3. In the event of breach of the waiting period, the
Partnership shall be entitled to any remedy at law or equity with
respect to such breach, including without limitation an injunction or
suit for damages.
If a Limited Partner during his or her participation
in the Partnership engages in an Outside Activity in a Market Area
without first notifying the General Partner in violation of this
Article 15.3, the Limited Partner shall be deemed to have given a
Notice of Withdrawal on the date the General Partner first becomes
aware of the Limited Partner's Outside Activity in the Market Area.
Upon receiving a Limited Partner's Notice of Withdrawal or equivalent
thereof, the General Partner may invoke the purchase rights provided in
Article 18.3 and shall be entitled to any other remedy at law or equity
including without limitation an injunction or suit for damages.
Article 18.3 of the Partnership Agreement is hereby amended by
deleting the current provision in its entirety and by substituting the language
set forth below.
18.3 Breach of Article 15.3. In the event the General
Partner either receives a Notice of Withdrawal as provided in Article
15.3 or receives notice of a breach of Article 15.3 by a Limited
Partner (the "Defaulting Limited Partner"), the General Partner may
elect, in its sole discretion, to treat such event as a default under
this Agreement and enforce the provisions of this Article 18.3. If the
General Partner elects to enforce the provisions of this Article 18.3,
the General Partner shall give written notice of such election (the
"Notice of Default") to the Defaulting Limited Partner within 180 days
of the date the General Partner first received notice of the defaulting
event. Upon giving the Notice of Default, the General Partner shall
have the option to purchase at the Closing (as defined below) the
Partnership Interest of the Defaulting Limited Partner (which
Defaulting Limited Partner shall then become obligated to sell such
Partnership Interest) at the price determined in the manner provided in
Article 18.5 of this Agreement and on the terms and conditions provided
in Article 18.6 of this Agreement. The General Partner shall have a
period of thirty (30) days following the date of the Notice of Default
(the "Option Period") within
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which to notify in writing the Defaulting Limited Partner, whether the
General Partner wishes to purchase all or a portion of the Partnership
Interest of the Defaulting Limited Partner. If the General Partner does
not elect to purchase the entire Partnership Interest of the Defaulting
Limited Partner before the expiration of the Option Period and in the
manner provided herein, the portion of the Partnership Interest not
purchased shall be held by the Defaulting Limited Partner pursuant to
the terms of this Agreement.
Confidentiality Provision Amendment
Article 15 of the Partnership Agreement is hereby amended by
adding a new Article 15.4 as set forth below:
15.4 Disclosure of Confidential Information. Each
Limited Partner acknowledges and agrees that his or her participation
in the Partnership under this Agreement necessarily involves his or her
understanding of and access to certain trade secrets and other
confidential information pertaining to the business of the Partnership.
Accordingly, each Limited Partner (other than the General Partner and
its Affiliates that may also hold Limited Partner interests) agrees
that at all times during his or her participation in the Partnership as
a Limited Partner and thereafter, he or she will not, directly or
indirectly, without the express written authority of the Partnership,
unless required by law or directed by a applicable legal authority
having jurisdiction over the Limited Partner, disclose or use for the
benefit of any person, corporation or other entity (other than the
Partnership), or himself or herself, (i) any trade, technical,
operational, management or other secrets, any patient or customer lists
or other confidential or secret data, or any other proprietary,
confidential or secret information of the Partnership or (ii) any
confidential information concerning any of the financial arrangements,
financial positions, hospital or physician contracts, third party payor
arrangements, quality assurance and outcome analysis programs,
competitive status, customer or supplier matters, internal
organizational matters, technical abilities, or other business affairs
of or relating to the Partnership. The Limited Partners (other than the
General Partner and its Affiliates that may also hold Limited Partner
interests) acknowledge that all of the foregoing constitutes
proprietary information, which is the exclusive property of the
Partnership. In the event of breach of this Article 15.4 as determined
by the General Partner, the Partnership shall be entitled to any remedy
at law or equity with respect to such breach, including without
limitation, an injunction or suit for damages.
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EXHIBIT C
PURCHASE OPTION ASSIGNMENT AMENDMENT
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Capitalized terms used in this Exhibit and not otherwise
defined shall have the same meaning as provided in the Agreement of Limited
Partnership (the "Partnership Agreement") of Indiana Lithotripters Limited
Partnership I (the "Partnership").
Purchase Option Assignment Amendment
Articles 18.1, 18.2 and 18.3 are hereby amended to allow the
General Partner to either exercise its purchase option rights during the Option
Period, as provided in such Articles, or to assign such purchase option rights
in whole or in part to the Partnership. If the General Partner's purchase option
rights are assigned to the Partnership as provided herein, the Partnership shall
have the right to use Partnership revenues or borrowings to exercise such
rights. Further, Articles 18.5 and 18.6 are also amended by substituting the
Partnership as a purchaser to the extent the General Partner elects to assign to
the Partnership its purchase option rights under Articles 18.1, 18.2 and 18.3.
If the Partnership acquires a Partnership Interest pursuant to the terms of this
Amendment, then the General Partner shall have the authority to amend Schedule A
to the Partnership Agreement to reflect the deletion of the interests held by
the selling Limited Partners (or their successors in interest), and to reflect
the increased Percentage Interests of the remaining Partners resulting from the
redemption.
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