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Finance and Administration Committee - X. Designation of UT Methodist Physicians, LLC, as a Faculty Practice Plan for the College of Medicine in Memphis - ActionOPERATING AGREEMENTOFUT METHODIST PHYSICIANS, LLCTHIS OPERATING AGREEMENT ("Agreement") is made and adopted on the 7 th day ofFebruary, 2012 as the Operating Agreement of UT METHODIST PHYSICIANS, LLC, aTennessee non-profit limited liability company (the “Company”), by and among the Company,Methodist Healthcare - Memphis Hospitals, a Tennessee not-for-profit corporation (sometimesreferred to herein as "Methodist" or the "Member") and the University of Tennessee, through itsHealth Science Center (“UT”) in accordance with the Fifth Amendment to Addendum A to theAmended and Restated Master Affiliation Agreement between Methodist and UT.8ARTICLE IDEFINITIONSAs used in this Agreement, unless the context otherwise requires, the following termsshall have the meanings set forth below:"Act" means the Tennessee Nonprofit Revised Limited Liability Company Act, codifiedat Tennessee Code Annotated Sections 48-101-801 et seq., which incorporates 48-249-101 etseq., as amended from time to time, and any corresponding provisions of any successorlegislation."Affiliate" shall mean, as to a specific person or entity, a person or entity directly orindirectly controlling, controlled by or under common control with such person or entity."Articles" shall mean the Articles of Organization of the Company, as filed with theSecretary of State of Tennessee, as amended or restated from time to time."Board" or "Board of Directors" shall mean the Directors elected as provided in thisAgreement."Business Day" means any day other than a Saturday, a Sunday or a day on whichnational banks located in Memphis, Tennessee, are authorized or obligated to close their regularbanking business."Capital Account" shall mean the Capital Account maintained for the Member to whichthere shall be credited the Member's Capital Contributions and the amount of any Companyliabilities assumed by the Member or which are secured by any Property distributed to theMember, and to which there shall be debited the amount of cash and the value of any Propertydistributed to the Member pursuant to any provision of this Agreement, and the amount of anyliabilities of the Member assumed by the Company or which are secured by any Propertycontributed by the Member to the Company."Capital Contribution" shall mean, with respect to the Member, the amount of money andthe value of any property (other than money) contributed to the Company with respect to thePage 1198
Finance and Administration Committee - X. Designation of UT Methodist Physicians, LLC, as a Faculty Practice Plan for the College of Medicine in Memphis - ActionMembership Interest held by the Member."Code" shall mean the Internal Revenue Code of 1986, as amended from time to time."Company" shall mean UT METHODIST PHYSICIANS, LLC, the nonprofit limitedliability company described in this Agreement and formed pursuant to the Act."Directors" shall mean, collectively, all natural persons elected or appointed to serve onthe Board of Directors. "Director" shall refer, individually, to each of such persons.“Fair Market Value” shall mean the price at which the Member’s Membership Interestwould transfer between a hypothetical willing and able buyer and a hypothetical willing and ableseller, acting at arms-length in an open and unrestricted market, when neither is under anyobligation to buy or sell and when both have reasonable knowledge of all relevant facts, exceptthat Fair Market Value shall not include “goodwill” nor any intangible assets belonging to theCompany, Methodist, or UT, nor shall it be based, in whole or in part, directly or indirectly, on(a) the volume or value of any referrals between the parties to this Agreement or any health careprovider(s) employed or contracted by the Company, or (b) any other business generated by oneor more parties or any health care provider(s) employed or contracted by the Company for anyother party to this Agreement—all as determined in good faith by an independent, competentmedical practice valuation firm mutually agreed upon in writing by Methodist and UT.8"Financial Rights" shall mean the Member's right to profits, losses, and distributions, andto receive interim distributions and liquidation distributions as provided in this Agreement andthe Act."Governance Rights" shall mean the right of the Directors and the Member to vote and allother rights the Member has as the sole member of the Company other than its Financial Rights."Liability", for purposes of Article XII, means the obligation to pay a judgment,settlement, penalty, fine (including an excise tax assessed with respect to an employee benefitplan), or expenses (including attorney's fees) actually and reasonably incurred with respect to aproceeding."Membership Interest" shall mean, with respect to the Member, the Member's 100%interest in the Company consisting of all of the Financial Rights and the Member’s GovernanceRights of the Company."Notice" means any notice, payment, demand or communication required or permitted tobe given by any provision of this Agreement, which shall be in writing (the term 'writing" shallinclude communications by facsimile, electronic mail or other electronic transmission) and shallbe delivered as set forth in Section 14.7 hereof."Officers" shall mean, collectively, the Chairman, the President and Chief ExecutiveOfficer, the Vice President, the Treasurer, the Secretary, and each other officer elected by theBoard. "Officer" shall mean, individually, any such person."Property" shall mean all property, real or personal, tangible or intangible, includingPage 2199
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