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interest hereunder the provisions of Section
16, shall continue to apply to the assignor,
as well as to the assignee, and the interest
held by the assignee shall be subject to
repurchase as provided in Section 19 hereof,
upon the breach of Section 16 by the
assignor, the assignee [or] their Affiliates.
The General Partnership’s Acquisition of the Operating
Partnership Interest
Effective April 30, 1990, the General Partnership entered
into an amended and restated agreement of the Operating
Partnership in accordance with the Revised Limited Partnership
Act of the State of California. Pursuant to this agreement, the
General Partnership acquired, for approximately $3 million, a 61-
percent general partnership interest in the Operating
Partnership.4 As part of the purchase price, the General
Partnership agreed to contribute $1,598,495 by delivering to the
limited partners (with the exception of Beaver Medical Clinic)
shares of SCA common stock with an equivalent market value.5
4 Prior to Apr. 30, 1990, the three general partners of the
Operating Partnership were two individuals who had aggregate
ownership interests of 24 percent, and Beaver Medical Clinic,
Inc., which had a 6-percent ownership interest. Effective Apr.
30, 1990, the two individual general partners sold their
aggregate 24-percent interests, and Beaver Medical Clinic, Inc.
converted its 6-percent general partner interest into a 10.3-
percent limited partner interest. The other limited partners are
physicians who are also on the medical staff of Redlands
Hospital.
5 The General Partnership subsequently reduced its ownership
interest in the Operating Partnership to 59 percent as a result
of the sale of 2 percent of the general partner interest to a
(continued...)
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