EXHIBIT 10.29
-----------------------------------------
AMENDED AND RESTATED
OPERATING AGREEMENT
OF
ELDER HEALTHCARE DEVELOPERS, LLC
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Effective Date
April 1, 1997
Date of Restatement
November 18, 1997
TABLE OF CONTENTS
SECTION PAGE
1. Formation; Name and Organizational Matters............................1
1.1 Formation and Name...............................................1
1.2 Principal Office.................................................1
1.3 Purposes.........................................................1
1.4 Company's Power..................................................1
1.5 Term.............................................................2
2. Grant of Exclusive Development Rights.................................2
3. Capital...............................................................2
3.1 Initial Capital Contributions of Members.........................2
3.2 No Liability of Members..........................................2
3.3 No Interest on Capital Contributions.............................2
3.4 Withdrawal of Capital............................................2
3.5 Capital Account..................................................2
3.6 Borrowing by the Company.........................................3
4. Accounting............................................................4
4.1 Books and Records................................................4
4.2 Fiscal Year......................................................4
4.3 Reports..........................................................4
4.4 Tax Returns......................................................4
4.5 Member's Request for Additional Information......................5
4.6 Revaluation of Company Property..................................5
4.7 Bank Accounts....................................................5
5. Allocation of Net Income and Net Loss.................................5
5.1 Net Income and Net Loss..........................................5
5.2 Allocation of Excess Nonrecourse Liabilities.....................7
5.3 Allocations in Event of Transfer, Admission of New Member, Etc...7
6. Distributive Shares and Federal Income Tax Elections..................7
6.1 Distributive Shares..............................................7
6.2 Elections........................................................7
6.3 Partnership Tax Treatment........................................7
7. Distributions.........................................................8
7.1 Net Cash Flow....................................................8
7.2 Distributions of Net Cash Flow...................................8
7.3 Property Distributions...........................................8
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TABLE OF CONTENTS
SECTION PAGE
7.4 Distributions on Sale of an Assisted Living Facility.............8
8. Management............................................................9
8.1 Management Committee.............................................9
8.2 Day to Day Management...........................................12
8.3 Tax Matters Partner.............................................12
8.4 Standard of Care of Members; Indemnification....................13
8.5 Payments for Services Provided by Members.......................13
8.6 Expenses Deductible.............................................14
8.7 Other Activities................................................14
8.8 Reimbursement of Expenses of Members............................15
9. Dissolution..........................................................15
9.1 Dissolution.....................................................15
9.2 Effective Date of Dissolution...................................15
9.3 Sale of Assets Upon Dissolution.................................15
9.4 Distributions Upon Dissolution..................................15
9.5 No Contribution for Negative Capital Accounts...................16
9.6 Liquidation of a Member's Interest..............................16
10. Withdrawal, Assignment and Addition of Members.......................16
10.1 Assignment of a Member's Interest...............................16
10.2 Voluntary Transfers.............................................16
10.3 Involuntary Transfers...........................................16
10.4 Purchase Price and Terms........................................17
10.5 Substitute Member...............................................18
10.6 Admission of New Member.........................................18
11. General.............................................................18
11.1 Representations, Warranties and Covenants of Members............18
11.2 Power of Attorney...............................................18
11.3 Notices.........................................................19
11.4 Amendment.......................................................20
11.5 Captions; Section References....................................20
11.6 Number and Gender...............................................20
11.7 Severability....................................................20
11.8 Arbitration.....................................................21
11.9 Binding Agreement...............................................21
11.10 Applicable Law.................................................21
11.11 Entire Agreement...............................................21
11.12 Counterparts...................................................22
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TABLE OF CONTENTS
SECTION PAGE
11.13 No Right of Partition..........................................22
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EXHIBITS
DESCRIPTION EXHIBIT
Development Agreement................................................... A
Management Agreement.................................................... B
DEFINITIONS
DEFINED TERM SECTION
AAA................................................................. 11.8(a)
Act....................................................................... 1
Affiliates........................................................... 8.7(b)
Agreement.......................................................... Preamble
Assisted Care...................................................... Preamble
Assisted Living Facilities........................................... 1.3(a)
Atria.............................................................. Preamble
Capital Account......................................................... 3.5
Code.................................................................... 3.5
Company................................................................... 1
Company Interest........................................................ 3.5
Computed Value...................................................... 12.7(a)
Contributed Assets................................................... 5.1(g)
Credit Facility......................................................... 3.6
Development Agreement................................................ 1.3(a)
Development Fee.............................................. 8.5(a), 8.5(a)
Effective Date...................................................... 10.4(a)
Facilities' Adjusted Cost............................................ 8.5(a)
Fiscal Year............................................................. 4.2
Involuntary Option.................................................. 10.3(a)
Lender............................................................... 3.6(a)
Management Committee................................................. 8.1(a)
Members............................................................ Preamble
Net Cash Flow........................................................... 7.1
Partnership......................................................... Recital
Percentage Interest.................................................. 5.1(a)
Representatives...................................................... 8.1(b)
Securities Act...................................................... 13.1(e)
TMP.................................................................. 8.3(a)
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AMENDED AND RESTATED
OPERATING AGREEMENT
OF
ELDER HEALTHCARE DEVELOPERS, LLC
THIS OPERATING AGREEMENT ("Agreement") is made as of the 1st day of April,
1997, by and between (i) ATRIA COMMUNITIES, INC., a Delaware corporation
("Atria"), and (ii) ASSISTED CARE DEVELOPERS, L.L.C., a Georgia limited
liability company ("Assisted Care"), and amended and restated by the parties
this 18th day of November, 1997. The foregoing parties are collectively
referred to herein as "Members" and individually as a "Member." For purposes of
this Agreement, the term "Members" includes all persons then acting in such
capacity in accordance with the terms of this Agreement.
1. FORMATION; NAME AND ORGANIZATIONAL MATTERS.
1.1 FORMATION AND NAME. On March 25 1997, the Members formed a limited
liability company ("Company") pursuant to the provisions of the Georgia Limited
Liability Company Act (Ga. Code ▇▇▇. (S)(S) ▇▇-▇▇-▇▇▇, et. seq.) ("Act"). The
name of the Company shall be ELDER HEALTHCARE DEVELOPERS, LLC.
1.2 PRINCIPAL OFFICE. The Company's principal office shall be at ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇, or at such other place as
"Management Committee" (as defined in Section 8.1) shall determine from time to
time. The Management Committee shall maintain the books of the Company at the
principal place of business of Atria or such other place that the Management
Committee deems appropriate. The Company shall designate an agent for service
of process in Georgia in accordance with the provisions of the Act. The Company
shall maintain, at its principal office, those items referred to in Ga. Code
▇▇▇. (S) ▇▇-▇▇-▇▇▇.
1.3 PURPOSES. The purposes of the Company are as follows:
(a) To purchase real property and design, construct and operate
assisted living facilities, homes for the aged, congregate care homes, personal
care homes or other similar facilities designed to provide assisted living to
the aged in accordance with the terms of this Agreement ("Assisted Living
Facilities") and the terms of the Development Agreement, a copy of which is
attached as Exhibit A (the "Development Agreement");
(b) To acquire, own, use, lease and sell such assets as are
necessary or appropriate for the foregoing; and
(c) To do all other things necessary or desirable in connection
with the foregoing, or otherwise described in this Agreement.
1.4 COMPANY'S POWER. In furtherance of the purposes of the Company as
set forth in Section 1.3, the Company shall have the power to do any and all
things whatsoever necessary, appropriate or advisable in connection with such
purposes, or as otherwise described in this
Agreement. The Company shall not engage in any business other than as set forth
in Section 13, nor take any action not described in this Agreement.
1.5 TERM. The term of the Company shall commence as of the date of the
filing of Articles of Organization with the Secretary of State's Office, and
shall continue until dissolved in accordance with Section 9.
2. GRANT OF EXCLUSIVE DEVELOPMENT RIGHTS. In connection with the formation
of the Company, Atria shall grant the Company the exclusive right to develop
assisted living facilities in accordance with the provisions of the Development
Agreement attached as Exhibit A.
3. CAPITAL.
3.1 INITIAL CAPITAL CONTRIBUTIONS OF MEMBERS. Upon the request of the
Management Committee, each of the Members shall make an initial capital
contribution to the Company in the amount set forth below opposite each of their
respective names:
MEMBER CONTRIBUTION
------ ------------
Atria $ 500.00
Assisted Care $4,500.00
3.2 NO LIABILITY OF MEMBERS. Except as otherwise specifically provided
in the Act, no Member shall have any personal liability for the obligations of
the Company. Except as provided in Sections 3.1 and 3.6, no Member shall be
obligated to contribute funds or loan money to the Company. The Members shall
pay their own costs, including attorneys' fees, associated with the formation of
the Company and the Company shall bear none of those expenses.
3.3 NO INTEREST ON CAPITAL CONTRIBUTIONS. No Member shall be entitled
to interest on any capital contributions made to the Company.
3.4 WITHDRAWAL OF CAPITAL. No Member shall be entitled to withdraw any
part of such Member's capital contributions to the Company, except as provided
in Sections 7 and 9. No Member shall be entitled to demand or receive any
property from the Company other than cash, except as otherwise expressly
provided for herein.
3.5 CAPITAL ACCOUNT. The Company shall establish on its books a capital
account ("Capital Account") for each Member and shall maintain the Capital
Account in accordance with the provisions of Treas. Reg. (S) 1.704-1(b)(2)(iv).
This Agreement shall be so construed; and, accordingly, such Capital Account
shall initially be credited with the initial capital contribution of the Member
and thereafter shall be increased by (a) any cash or the fair market value of
any property contributed by such Member (net of any liabilities assumed by the
Company or to which the contributed property is subject) and (b) the amount of
all net income (whether or not exempt from tax) and gain allocated to such
Member hereunder, and decreased by (a) the amount of all
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net losses allocated to such Member hereunder (including expenditures described
in section 705(a)(2)(B) of the Internal Revenue Code of 1986, as amended
("Code"), or treated as such an expenditure by reason of Treas. Reg. (S) 1.704-
1(b)(2)(iv)(i)) and (b) the amount of cash, and the fair market value of
property (net of any liabilities assumed by such Member or to which the
distributed property is subject), distributed to such Member pursuant to
Sections 7 and 9. If a Member transfers all or any part of such Member's
interest in the Company ("Company Interest") in accordance with the terms of
this Agreement, the Capital Account of the transferor shall become the Capital
Account of the transferee to the extent of the Company Interest transferred.
3.6 BORROWING BY THE COMPANY.
(a) Unless the Members otherwise agree, the Company shall seek from
Empire Financial Services, Inc. or another financial institution not an
Affiliate of any Member (a "Lender") financing to pay for the (1) acquisition of
real estate, (2) ▇▇▇▇▇▇▇ money advance relating to real estate purchase
contracts, (3) pre-development activities, and (4) development and construction
costs of each Assisted Living Facility, including anticipated startup operating
losses, of Assisted Living Facilities of the Company. The Members agree to
provide a guarantee or other collateral acceptable to Lender sufficient to
secure any portion of the indebtedness of the Company. The Members agree that
such obligation shall be joint and several as to a Lender but as between the
Members all liabilities to any Lender shall be allocated among Members (the
"Member's Proportionate Share") in accordance with their respective "Percentage
Interest" (as defined in Section 5.1(a)).
(b) If the Company is unable to obtain financing from a Lender to
cover any operating loss of an Assisted Living Facility managed by Atria, or if
actual losses exceed the anticipated losses, then Atria shall lend such funds to
the Company in accordance with the provisions of this Section 3.6(b), unless the
Members agree to contribute additional capital to the Company to fund such
working capital deficit. Assisted Care shall guarantee the repayment by the
Company of that percentage of funds lent to the Company by Atria that equals
Assisted Care's Percentage Interest, in a form of guarantee reasonably
acceptable to Atria. The source of payment under any such guarantee relating to
loans to cover losses that exceed anticipated losses of an Assisted Living
Facility shall be limited to the value of Assisted Care's interest in that
facility. Funds lent to the Company by Atria shall bear interest at a variable
rate equal to .25% in excess of Atria borrowing rate on it then current credit
facility, as such rate may change from time to time. Interest shall be due and
payable monthly and principal and all accrued but unpaid interest shall be due
in full on the earlier (1) the date such credit facility is due or (2) the date
that the Assisted Living Facility is sold. The Company may pre-pay the
indebtedness to Atria at any time without penalty.
(c) If any Member incurs a liability (a "Paying Member") arising
out of or resulting from any indebtedness of the Company that exceeds the Paying
Member's Proportionate Interest of such indebtedness, the other Member (the
"Contributing Member") shall be obligated to pay, subject to the limitations of
Section 3.6(b) above, to the Paying Member the amount by which the indebtedness
of the Company that was satisfied by the Paying Member exceeds the Paying
Member's Proportionate Share of the such indebtedness. The Contributing Member
hereby agrees to indemnify the Paying Member from all liabilities, losses,
damages , claims costs and expenses
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(including attorneys' fee) arising out of Contributing Member failure to fulfill
its obligations under the provisions of Section 3.6.
4. ACCOUNTING.
4.1 BOOKS AND RECORDS. The Company shall maintain full and accurate
books of the Company at the Company's principal place of business, or such other
place as the Management Committee shall determine, showing all receipts and
expenditures, assets and liabilities, net income and loss, and all other records
necessary for recording the Company's business and affairs, including those
sufficient to record the allocations and distributions provided for in Sections
5, 7 and 9. Except as otherwise specifically provided herein, such books and
records shall be maintained, and the net income and net loss of the Company
shall be determined, in the same manner as the Company computes its income and
expenses for Federal income tax purposes. Such books and records shall be open
to the inspection and examination by all Members in person or by their duly
authorized representatives at all reasonable times.
4.2 FISCAL YEAR. The fiscal year of the Company shall be the calendar
year ("Fiscal Year").
4.3 REPORTS.
(a) Within 90 days after the close of each Fiscal Year of the
Company, the Company shall furnish to each person who was a Member at any time
during such Fiscal Year all the information relating to the Company that is
necessary for each Member to prepare its Federal and state income or other tax
returns.
(b) Within 90 days after the close of each Fiscal Year of the
Company, the Company shall furnish to each Member a report of the business and
operations of the Company during such Fiscal Year. Such report shall, unless the
Management Committee determines otherwise, contain unaudited financial
statements, which shall include a balance sheet as of the end of such Fiscal
Year, an income or loss statement for such Fiscal Year and such other
information as in the judgment of the Management Committee is reasonably
necessary for the Members to be advised of the results of the Company's
operations.
(c) On or before the 20th day of each month, the Company shall
furnish to each of the Members a report of the Company's operations for the
preceding month. Such report shall contain, at a minimum, a balance sheet as of
the end of such month and an income statement for such month.
4.4 TAX RETURNS. The Company shall prepare, or cause to be prepared,
and timely filed, all Federal, state and local income tax returns and
information returns, if any, which the Company is required to file. All
expenses incurred in connection with such tax returns and information returns,
as well as for the reports referred to in Sections 4.3 and 4.5, shall be
expenses of the Company.
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4.5 MEMBER'S REQUEST FOR ADDITIONAL INFORMATION. The Company shall
also furnish to any Member such other reports of the Company's operations and
condition as may reasonably be requested by any Member.
4.6 REVALUATION OF COMPANY PROPERTY. If (a) an acquisition of a
Company Interest for more than a de minimis capital contribution occurs, or (b)
a distribution (other than a de minimis distribution) to a Member in
consideration for a Company Interest occurs, the Members may revalue the assets
of the Company at the then fair market value and adjust the Capital Accounts of
the Members in the same manner as provided in Section 7.3 in the case of a
property distribution. If there is a reallocation pursuant to this Section 4.6,
then Capital Accounts shall thereafter be adjusted for allocations of
depreciation (cost recovery) and gain or loss in accordance with the provisions
of Treas. Reg. (S) 1.704-1(b)(2)(iv)(f) and (g), and the Members' distributive
shares of depreciation (cost recovery) and gain or loss computed in accordance
with the principles of section 704(c) of the Code and the regulations
promulgated thereunder using the traditional method (within the meaning of
Treas. Reg. (S) 1.704-3(b)).
4.7 BANK ACCOUNTS. The Company shall deposit all of its funds in its
name into such checking, savings or money market accounts or any combination
thereof or time certificates as designated by the Management Committee.
Withdrawals therefrom shall be made upon such signature or signatures as the
Management Committee may designate. The Company shall not commingle any of its
funds with those of any other person or entity.
5. ALLOCATION OF NET INCOME AND NET LOSS.
5.1 NET INCOME AND NET LOSS.
(a) Except as otherwise provided herein, the net income and net
loss of the Company for each Fiscal Year shall be allocated to the Members in
accordance with their respective Percentage Interests. For purposes of this
Agreement, the term "Percentage Interest" shall mean the percentage which the
Capital Account of a Member bears to the aggregate Capital Accounts of all of
the Members.
(b) Notwithstanding anything herein to the contrary, if a Member
has a deficit balance in such Member's Capital Account (excluding from such
Member's deficit Capital Account any amount which such Member is obligated to
restore in accordance with Treas. Reg. (S) 1.704-1(b)(2)(ii)(c), as well as any
amount such Member is treated as obligated to restore under Treas. Reg. (S)(S)
1.704-2(g)(1) and 1.704-2(i)(5)) and unexpectedly receives an adjustment,
allocation or distribution described in Treas. Reg. (S) 1.704-1(b)(2)(ii)(d)(4),
(5) or (6), then such Member will be allocated items of income and gain in an
amount and manner sufficient to eliminate the deficit balance in such Member's
Capital Account as quickly as possible. If there is an allocation to a Member
pursuant to this Section 5.1(b), then future allocations of net income pursuant
to Section 5.1(a) shall be adjusted so that those Members who were allocated
less income, or a greater amount of loss, by reason of the allocation made
pursuant to this Section 5.1(b), shall be allocated additional net income in an
equal amount. It is the intention of the parties that the
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provisions of this Section 5.1(b) constitute a "qualified income offset" within
the meaning of Treas. Reg. (S) 1.704-1(b)(2)(ii)(d), and such provisions shall
be so construed.
(c) If there is a net decrease in the Company's Minimum Gain (within the
meaning of Treas. Reg (S) 1.704-2(b)(2)) or Partner Nonrecourse Debt Minimum
Gain (within the meaning of Treas. Reg. (S) 1.704-2(i)(3)) during any Fiscal
Year, each Member shall be allocated, before any other allocations hereunder,
items of income and gain for such Fiscal Year (and subsequent Fiscal Years, if
necessary), in an amount equal to such Member's share (determined in accordance
with Treas. Reg. (S)(S) 1.704-2(g) and 1.704-2(i)(5), as applicable) of the net
decrease in the Company's Minimum Gain or Partner Nonrecourse Debt Minimum Gain,
as applicable, for such Fiscal Year; provided, however, that no such allocation
shall be required if any of the exceptions set forth in Treas Reg. (S) 1.704-
2(f) apply. It is the intention of the parties that this provision constitute a
"minimum gain chargeback" within the meaning of Treas. Reg. (S)(S) 1.704-2(f)
and 1.704-2(i)(4), and this provision shall be so construed.
(d) Notwithstanding anything herein to the contrary, the Company's
partner nonrecourse deductions (within the meaning of Treas. Reg. (S) 1.704-
2(i)(2)) shall be allocated solely to the Member who has the economic risk of
loss with respect to the partner nonrecourse liability related thereto in
accordance with the provisions of Treas. Reg. (S) 1.704-2(i)(1).
(e) Notwithstanding the provisions of Section 7.1, no net losses shall
be allocated to a Member if such allocation would result in such Member having a
deficit balance in such Member's Capital Account (excluding from such Member's
deficit Capital Account any amount such Member is obligated to restore in
accordance with Treas. Reg. (S) 1.704-1(b)(2)(ii)(c), as well as any amount such
Member is treated as obligated to restore under Treas. Reg. (S)(S) 1.704-2(g)(1)
and 1.704-2(i)(5)). In such case, the net loss that would have been allocated to
such Member shall be allocated to the other Members to whom such loss may be
allocated without violation of the provisions of this Section 5.1(e).
(f) Notwithstanding the provisions of Section 7.1, to the extent losses
are allocated to Members by virtue of Section 5.1(e), the net income of the
Company thereafter recognized shall be allocated to such Member until such time
as the net income of the Company allocated to such Member pursuant to this
Section 5.1(f) equals the net losses allocated to such Member pursuant to
Section 5.1(e).
(g) For Federal state and local income tax purposes only, with respect
to any assets contributed by a Member to the Company ("Contributed Assets")
which have an agreed fair market value on the date of their contribution which
differs from the Member's adjusted basis therefor as of the date of
contribution, the allocation of depreciation and gain or loss with respect to
such Contributed Assets shall be determined in accordance with the provisions of
section 704(c) of the Code and the regulations promulgated thereunder using the
traditional method within the meaning of Treas. Reg. (S) 1.704-3(b). For
purposes of this Agreement, an asset shall be deemed a Contributed Asset if it
has a basis determined, in whole or in part, by reference to the basis of a
Contributed Asset (including an asset previously deemed to be a Contributed
Asset pursuant to this sentence). Notwithstanding the foregoing, if the gain
from the sale of any Contributed Asset
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is being reported on the installment method for income tax purposes, then the
total amount of gain which is to be recognized by each of the Members in
accordance with the above provision in all taxable years shall be computed and
the amount of gain to be recognized by each of the Members in each year shall be
in proportion to the total gain to be recognized by each of the Members in all
taxable years.
5.2 ALLOCATION OF EXCESS NONRECOURSE LIABILITIES. For purposes of
section 752 of the Code and the regulations thereunder, the excess nonrecourse
liabilities of the Partnership (within the meaning of Treas. Reg. (S) 1.752-
3(a)(3)), if any, shall be allocated to the Members in accordance with their
respective Percentage Interests.
5.3 ALLOCATIONS IN EVENT OF TRANSFER, ADMISSION OF NEW MEMBER, ETC. In
the event of the transfer of all or any part of a Member's Company Interest (in
accordance with the provisions of this Agreement) at any time other than at the
end of a Fiscal Year, the admission of a new Member or disproportionate capital
contributions, the transferring Member's, new Member's and Members' shares of
the Company's income, gain, loss, deductions and credits allocable to such
Company Interest, as computed both for accounting purposes and for Federal
income tax purposes, shall be allocated between the transferor Member and the
transferee(s), the new Member and the other Members or among the Members, as the
case may be, in the same ratio as the number of days in such Fiscal Year before
and after the date of such transfer, admission or disproportionate capital
contributions; provided, however, that the Management Committee shall have the
option to treat the periods before and after the date of such transfer,
admission or disproportionate capital contributions as separate Fiscal Years and
allocate the Company's net income, gain, net loss, deductions and credits for
each of such deemed separate Fiscal Years in accordance with the Members'
respective interests in the Company for such deemed separate Fiscal Years.
6. DISTRIBUTIVE SHARES AND FEDERAL INCOME TAX ELECTIONS.
6.1 DISTRIBUTIVE SHARES. For purposes of Subchapter K of the Code, the
distributive shares of the Members of each item of Company taxable income,
gains, losses, deductions or credits for any Fiscal Year shall be in the same
proportions as their respective shares of the net income or net loss of the
Company allocated to them pursuant to Section 5.1. Notwithstanding the forego
ing, to the extent not inconsistent with the allocation of gain provided for in
Section 5.1, gain recognized by the Company which represents ordinary income by
reason of recapture of depreciation or cost recovery deductions for Federal
income tax purposes shall be allocated to the Member (or the Member's successor-
in-interest) to whom such depreciation or cost recovery deduction to which such
recapture relates was allocated.
6.2 ELECTIONS. The election permitted to be made by section 754 of the
Code, and any other elections required or permitted to be made by the Company
under the Code, shall be made in such a manner as shall be determined by the
Management Committee.
6.3 PARTNERSHIP TAX TREATMENT. It is the intention of the Members that
the Company be treated as a partnership for Federal, state and local income tax
purposes, and the Members shall not take any position or make any election, in a
tax return or otherwise, inconsistent with such
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treatment. The Members shall cause the Company to file the appropriate forms
with the Internal Revenue Service to elect partnership status.
7. DISTRIBUTIONS.
7.1 NET CASH FLOW. For purposes of this Agreement, the term "Net Cash
Flow" for any period shall mean the excess, if any, of (A) the sum of (i) all
gross receipts from any sources for such period, other than from capital
contributions, plus (ii) any funds released by the Management Committee from
previously established reserves (referred to in (B)(ii) below), over (B) the sum
of (i) all cash expenditures of the Company for such period not funded by
capital contributions or paid out of previously established reserves (referred
to in (B)(ii) below) plus (ii) a reasonable reserve for future expenditures as
determined by the Management Committee.
7.2 DISTRIBUTIONS OF NET CASH FLOW. Except as otherwise required by
Section 7.4, the Net Cash Flow of the Company for each Fiscal Year (other than
Net Cash Flow arising in connection with the liquidation of the Company, which
Net Cash Flow shall be distributed as provided in Section 9.4) shall be
distributed at such time or times as shall be determined by the Management
Committee. All such distributions shall be made to the Members in accordance
with their respective Percentage Interests as of the close of the period with
respect to which the distribution is being made.
7.3 PROPERTY DISTRIBUTIONS. If any property of the Company other than
cash is distributed by the Company to a Member (in connection with the
liquidation of the Company or otherwise), the fair market value of such property
shall be used for purposes of determining the amount of such distribution. The
difference, if any, of such fair market value over (or under) the value at which
such property is carried on the books of the Company shall be credited or
charged to the Capital Accounts of the Members in accordance with the ratio in
which the Members share in the gain and loss of the Company pursuant to Section
5.1. The fair market value of the property distributed shall be agreed to by
the Management Committee and the distributee Member in good faith. If any such
property distribution is made other than in exchange for a Company Interest,
such distribution shall be made in the same manner as Net Cash Flow is
distributed.
7.4 DISTRIBUTIONS ON SALE OF AN ASSISTED LIVING FACILITY. Upon the sale
of any Assisted Living Facility by the Company, the proceeds from such sale
shall be distributed within 30 days of the date of such sale as follows:
(a) first, to the payment and discharge of all the Company's debts
and liabilities advanced by Atria or lenders pursuant to the Credit Facility as
such indebtedness relates to the Assisted Living Facility that was sold by the
Company; and
(b) second, to the Members in accordance with their respective
Capital Accounts.
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8. MANAGEMENT.
8.1 MANAGEMENT COMMITTEE.
(a) Except as otherwise expressly provided herein, the business of
the Company shall be managed by the Members by means of a management committee
composed of the persons designated pursuant to Section 8.1(b) ("Management
Committee"). Except as otherwise expressly provided herein, no act shall be
taken, sum expended, decision made or obligation incurred by the Company, unless
such matter has been approved by the Management Committee.
(b) The regular members of the Management Committee
("Representatives") shall consist of one representative of each Member. Each
Member shall designate from time to time its one Representative by notice to the
Company. By like notice, each Member may designate alternative Representative to
act in the absence of its regular Representative. The Representative appointed
by each Member shall cast one vote on each matter brought before the Management
Committee. The Management Committee shall act only upon the unanimous vote of
its Representatives. Each Member shall have the power and authority to remove
the Representative or alternate Representative appointed by it by delivering
written notice of such removal to the Company and the other Member. Vacancies on
the Management Committee shall be filled by the Member which appointed the
Representative or alternate Representative previously holding the position which
is then vacant.
(c) The Management Committee shall meet quarterly, unless the
Management Committee decides otherwise. Meetings of the Management Committee
shall also be held upon call therefor by any Representative. Two Representatives
shall constitute a quorum of the Management Committee provided that a
Representative or alternate Representative of each Member shall be one of those
present in order to constitute a quorum. Unless waived by all of the
Representatives, the calling of a meeting of the Management Committee shall
require a minimum of two days' prior notice, except for a regular meeting date
set by the Management Committee, which shall not require any prior notice to the
Representatives. The Management Committee may meet by telephonic conference in
which each participating Representative can hear all other participating
Representatives. Unless the Management Committee decides otherwise, it shall
meet at the principal office of the Company. With advance notice to the
Representative representing the other Member, either Member may invite to any
meeting of the Management Committee any person having an equity interest in the
Member or any legal counsel, consultant or other agent of such Member, provided
that no persons other than the Representatives or alternate Representatives
shall be entitled to vote with respect to any proceedings of the Management
Committee. In addition to actions at formal meetings, the Representative or
alternate Representative representing a Member may rely on written consents and
approvals given by the Representative or alternate Representative representing
the other Member. Representatives and alternate Representatives shall not
receive any compensation or other remuneration from the Company for their
services to the Company as members of the Management Committee. Upon either
Member's ceasing to be a Member of the Company, such Member shall cause the
Representative and alternate Representative appointed by it to resign from the
Management Committee.
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(d) The Management Committee shall have all authority to govern and
direct the affairs of the Company, except as otherwise expressly set forth in
this Agreement. Any action taken by the Company in compliance with the
direction of the Management Committee shall be binding upon the Company and each
Member. The Management Committee is hereby authorized to adopt rules concerning
the conduct of the affairs of the Management Committee and the Company. The
Development Agreement and the Management Agreement, copies of which are attached
as Exhibits to this Agreement, are hereby expressly approved by all Members.
(e) The Management Committee shall have the exclusive power and
authority to do the following:
(1) To approve an annual business plan for the operation of the
Company, annual operating budgets and any material changes from the annual
operating budget or annual business plan, including the amount of any
reserves;
(2) To approve any acquisition of any real property;
(3) To authorize the Company to enter into any contract, agreement
or other arrangement involving the obligation to incur any expense, or the
right to receive any benefit, in excess of $10,000, where such contract,
agreement or arrangement is not directly related to (A) the acquisition of
property, (B) site work related to the due diligence review of any real
property, or (C) the design or construction of an Assisted Living Facility,
where all of the foregoing have been previously approved by the Management
Committee;
(4) To determine whether to commence any legal action and to settle
or otherwise resolve any legal action or claim;
(5) To borrow funds, and to determine the terms of such borrowing
and whether liens, mortgages or other encumbrances can be placed upon the
Company's property in con nection with such borrowing;
(6) To require additional capital contributions other than those
provided for in the approved annual business plan of the Company or in an
approved annual budget.
(7) To purchase or sell of any property having a cost or sales
price in any one transaction of more than $5,000 unless such property is
purchased in connection with the construction of facility pursuant to which
construction plan and designs have been previously approved by the Management
Committee;
(8) To decide to provide any new services or to expand to
additional territory;
(9) To hire or terminate any management employee;
(10) To decide to make any capital improvement in the Company's
existing facilities;
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(11) To approve any and all general construction contracts and
architectural contracts or agreements and all plans and specifications and
drawings for any development or construction of each facility that the Company
undertakes to construct;
(12) To approve any contract or agreement, plan specifications or
drawing related to any restoration, renovation or remodeling of any existing
facility of the Company;
(13) To approve any additions, amendments or change orders to any
existing contract related to the construction of a facility where such change
or series of changes would result in an increase in expenditures for a
facility under construction in excess of $50,000;
(14) To approve any agreements or understandings with real estate
brokers, sales persons or agents not expressly set forth in the agreement for
the purchase of real property;
(15) To approve the type and amount of any insurance to be obtained
by the Company;
(16) To approve the execution of any management contracts and
similar agreements;
(17) To settle any claims for insurance proceeds if the loss
thereunder exceeds $5,000;
(18) To settle any claims for payment of awards or damages arising
out of the exercise of eminent domain by any utility or governmental
authority;
(19) To obligate the Company, as a surety, guarantor or
accommodation party, to any obligation;
(20) To lend funds of the Company to a third person or extend to any
person credit on behalf of the Company other than to employees as an advance
of out-of-pocket expenses to be incurred in the ordinary course of business;
(21) To approve salary, raises, bonuses, awards, dinners, travel and
entertainment or other actions which are a direct benefit to the employees of
a Member or an affiliate of either of them, pertaining directly to the
business of the Company unless specifically set forth in an approved annual
budget;
(22) To commence a voluntary case or other proceeding seeking
liquidation, reorganization or other relief with respect to the Company under
the Federal Bankruptcy Code or under any similar bankruptcy, insolvency or
other law or to consent to any such relief;
(23) To hire any employee of the Company unless specifically set
forth in an annual or individual facility budget approved by the Management
Committee;
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(24) To make any other decision or to take any other action
requiring the approval of a Member under the express provisions of this
Agreement; and
(25) To enter into any agreement or incur any obligation on behalf
of the Company or to take any action with respect to the Company which would
be considered by reasonably prudent persons to be out of the normal day-to-day
management of the Company.
8.2 DAY TO DAY MANAGEMENT.
(a) Assisted Care shall be responsible for locating sites for the
development of the Company's facilities, and shall provide oversight of
architectural design, design engineering, construction and such other services
relating to the design and construction of each Assisted Living Facility.
Assisted Care shall be responsible for obtaining all zoning changes, conditional
use permits and other authorizations necessary or required to operate the
Company's Assisted Living Facilities. After obtaining approval of the
development sites by the Management Committee, the Company shall have the
authority to enter into real estate purchase contracts, which contracts shall be
executed by Assisted Care on the Company's behalf.
(b) Atria shall be responsible for the operation of the Company of
each of the Assisted Living Facilities once such facility has been constructed
and a certificate of occupancy issued by the appropriate authorities. Atria
shall have the right to designate one or more persons who have the
responsibility and authority to direct the day-to-day control and management of
each Assisted Living Facility of the Company. The rights and responsibilities of
Atria as manager of each facility shall be as set forth in the Management
Agreement, a copy of which is attached as Exhibit B to this Agreement.
(c) Subject always to Section 8.1(e) hereof and the other
limitations of this Agreement, the Members, and those persons authorized to act
on their behalf regarding the business and affairs of the Company, shall have
the right, power and authority, on behalf of the Company, to execute any
document or take any action consistent with their respective responsibilities
described in this Section 8.2, including entering into such agreements with
professionals such as attorneys and other providers of services that the Company
may need to accomplish its objectives. Notwithstanding anything herein to the
contrary, neither of the Members, nor any of those persons authorized to act on
their behalf regarding the business and affairs of the Company, may take any
act, expend any sum, make any decision or incur any obligation on behalf of the
Company with respect to any of the matters set forth in Section 8.1(e) without
the prior approval of the Management Committee. Neither Member shall be deemed a
"Manager," as that term is defined in the Act.
8.3 TAX MATTERS PARTNER.
(a) The tax matters partner ("TMP") for the Company shall be Atria.
The TMP shall have such authority as is granted a TMP under the Code.
(b) The TMP shall employ experienced tax counsel to represent the
Company in con nection with any audit or investigation of the Company by the
Internal Revenue Service and in
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connection with all subsequent administrative and judicial proceedings arising
out of such audit. The reasonable fees and expenses of such counsel, as well as
all other reasonable and direct expenses incurred by the TMP in serving as the
TMP, shall be a Company expense and shall be paid by the Company.
(c) The Company shall indemnify and hold harmless the TMP against
judgments, fines, amounts paid in settlement and expenses (including attorneys'
fees) reasonably incurred by the TMP in any civil, criminal or investigative
proceeding in which the TMP is involved or threatened to be involved by reason
of it being the TMP, provided that the TMP acted in good faith, within what the
TMP reasonably believed to be the scope of the TMP's authority and for a purpose
which the TMP reasonably believed to be in the best interests of the Company or
the Members. The TMP shall not be indemnified under this provision against any
liability to the Company or its Members to which the TMP would otherwise be
subject by reason of willful misconduct or gross negligence in his duties
involved in acting as TMP.
(d) Nothing herein shall constitute an election to be subject to
the partnership level audit procedures of section 6221 et seq. of the Code.
8.4 STANDARD OF CARE OF MEMBERS; INDEMNIFICATION.
(a) The Members, their Representatives, officers, directors,
shareholders and employees, shall not be liable, responsible or accountable in
damages to any Member or the Company for any act or omission on behalf of the
Company performed or omitted by them in good faith and in a manner reasonably
believed by them to be within the scope of the authority granted to the Member
or Representative by this Agreement and in the best interests of the Company,
unless they have been guilty of gross negligence or willful misconduct in taking
or omitting to take such acts.
(b) The Company shall indemnify the Members and their
Representatives, officers, directors, shareholders and employees for, and hold
them harmless from, any liability, loss, damage or expense (including attorneys'
fees) incurred by them by reason of any act or omission so performed or omitted
by them (and not involving gross negligence or willful misconduct).
8.5 PAYMENTS FOR SERVICES PROVIDED BY MEMBERS.
(a) In connection with the services provided by Assisted Care
pursuant to Section 82, the Company shall pay Assisted Care a development fee
(the "Development Fee") equal to five percent of the "Facilities' Adjusted Cost"
(as defined herein). In no event will the Development Fee for any facility be
less than $175,000 nor more than $250,000. The Company shall pay the development
fee in three installments with the first installment being due at the closing of
the purchase of the land for such facility, the second installment being due at
the rough-in inspection approval for such a facility, and the final installment
upon the receipt of a Certificate of Occupancy for that facility. For the
purposes of this Agreement, the term "Facilities' Adjusted Cost" shall be the
cost of all expenses incurred by the Company in connection with the acquisition
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of the land, construction of the facility and all other reasonable expenses
incurred by the Company in completing the facility and obtaining a Certificate
of Occupancy.
(b) In connection with the Management Services provided by Atria,
pursuant to the terms of the Management Agreement, the Company shall pay Atria a
monthly fee equal to five percent of the collected revenues for that month. The
calculation of the fee and the method of payment shall be as set forth in the
Management Agreement.
8.6 EXPENSES DEDUCTIBLE. Members intend that all payments made to them
in accordance with the provisions of Section 8.5 be considered as occurring
between the Company and one who is not a partner within the meaning of section
707(a) of the Code, deductible in arriving at the taxable income or loss of the
Company and in arriving at the net income or net loss of the Company for book
purposes (unless required to be capitalized).
8.7 OTHER ACTIVITIES.
(a) Each of the Members shall devote such of its time to the
affairs of the Company's business as it shall deem necessary. The Members may
engage in, or possess an interest in, other business ventures of any nature and
description, independently or with others. Neither the Company, nor any Member,
shall have any rights by virtue of this Agreement in and to such independent
ventures, or to the income or profits derived therefrom. Except as required by
the Development Agreement, no Member shall be obligated to present any
particular business opportunity of a character which, if presented to the
Company, could be taken by the Company and each Member and their Affiliates
shall have the right to take for their own account, or to recommend to others,
any such particular business opportunity.
(b) Assisted Care acknowledges that Atria is engaged in its own
business and that it will not devote its full time or attention to the business
of the Company. Nothing herein shall prohibit Atria from continuing to conduct
or expand its existing business. For purposes of this Agreement, the term
"Affiliate" shall mean any person, corporation, partnership, limited liability
company, trust or other entity controlling (directly or indirectly), controlled
by, or under common control with, a Member.
(c) Merely because the Members or their Affiliates are directly or
indirectly interested in or connected with any person, firm or corporation
employed by the Company to render or perform a service, or to or from whom the
Company may purchase, sell or lease property, shall not prohibit the Company
from employing such person, firm or corporation or from otherwise dealing with
him or it, and neither the Company, nor any of the Members, shall have any
rights in or to any income or profits derived therefrom. All such dealings with
the Members or their Affiliates will be on terms which are competitive and
comparable with amounts charged by independent third parties and approved in
advance by the Management Committee.
(d) No Member or Affiliate of a Member shall employ or attempt to
employ any employee of the other Member during the term of this Agreement,
unless such employee's term of employment with the other Member shall have been
terminated for one year.
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8.8 REIMBURSEMENT OF EXPENSES OF MEMBERS. Except as otherwise required
by Section 8.5, the Company shall not reimburse a Member for any expenses which
a Member incurs in performing services on behalf of the Company.
9. DISSOLUTION.
9.1 DISSOLUTION. Notwithstanding anything in the Act to the contrary,
the Company shall dissolve upon, but not before, the first to occur of the
following:
(1) The unanimous decision of the Members to dissolve the Company.
(2) The sale of all, or substantially all, of the Company's assets
and the collection and/or sale of any evidences of indebtedness received in
connection therewith.
9.2 EFFECTIVE DATE OF DISSOLUTION. Dissolution of the Company shall be
effective upon the date on which the event giving rise to the dissolution
occurs, but the Company shall not terminate until the assets of the Company
shall have been distributed as provided in Section 9.4. Notwithstanding
dissolution of the Company, prior to the liquidation and termination of the
Company, the business of the Company and the affairs of the Members, as such,
shall continue to be governed by this Agreement.
9.3 SALE OF ASSETS UPON DISSOLUTION. Following the dissolution of the
Company, the Company shall be wound up and the Management Committee shall
determine whether the assets of the Company are to be sold or whether some or
all of such assets are to be distributed to the Members in kind in liquidation
of the Company.
9.4 DISTRIBUTIONS UPON DISSOLUTION. Upon the dissolution of the
Company, the properties of the Company to be sold shall be liquidated in orderly
fashion and the proceeds thereof, and the property to be distributed in kind,
shall be distributed on or before the later to occur of (i) the close of the
Company's taxable year, or (ii) 90 days following the date of such dissolution,
as follows:
(a) First, to the payment and discharge of all of the Company's
debts and liabilities, to the necessary expenses of liquidation and to the
establishment of any cash reserves which the Management Committee determines to
create for unmatured and/or contingent liabilities or obligations of the
Company.
(b) Second, to the Members, in accordance with their respective
Capital Accounts; provided, however, that if the Management Committee
establishes any reserves in accordance with the provisions of Section 9.4, then
the distributions pursuant to this Section 9.4(b) (including distributions of
such reserve) shall be pro rata in accordance with the balances of the Members'
Capital Accounts.
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9.5 NO CONTRIBUTION FOR NEGATIVE CAPITAL ACCOUNTS. No Member shall be
required to contribute any property to the Company or any third party by reason
of having a negative Capital Account.
9.6 LIQUIDATION OF A MEMBER'S INTEREST. If a Member's Company Interest
is to be liquidated by agreement between the Company and such Member (the
Company being under no obligation to do so), the Member shall be entitled to
receive in liquidation an amount equal to the amount of such Member's Capital
Account at such time. For purposes of determining the Capital Account of such
Member, (i) the net income or net loss of the Company to the date of liquidation
shall be allocated to such Member and (ii) if the Management Committee
determines to revalue the assets of the Company in accordance with Section 4.6,
the Members' Capital Accounts shall be adjusted as provided in Section 4.6.
10. WITHDRAWAL, ASSIGNMENT AND ADDITION OF MEMBERS.
10.1 ASSIGNMENT OF A MEMBER'S INTEREST. The Members may not sell,
assign, transfer, pledge, hypothecate, encumber or otherwise dispose of their
Company Interest, nor withdraw from the Company, except as provided in this
Section 10. Any purported transfer which is not in compliance with the
provisions of this Section 10 shall be null and void ab initio and the Member
purporting to make such transfer shall for all purposes hereof remain a Member.
10.2 VOLUNTARY TRANSFERS. No Member shall be entitled to voluntarily
transfer all or any portion of such Member's Company Interest without the prior
written consent of all of the Members. Even if all of the Members consent to
any such transfer, the transferee of the Company Interest shall not become a
substitute Member unless the requirements of Section 10.5 are met, but the
transferee shall nevertheless be subject to the restrictive provisions of this
Agreement. For all purposes of this Agreement, a transferee who is not admitted
as a substitute Member shall only be entitled to receive the distributions to
which the assignor would have been entitled with respect to the Company Interest
assigned.
10.3 INVOLUNTARY TRANSFERS.
(a) If any Member's Company Interest is sought to be transferred by
any involuntary means (other than death or adjudication of incompetency or
insanity), including, attachment, garnishment, execution, levy, bankruptcy,
seizure or transfer in connection with a divorce or marital property settlement,
then the other Members shall have the option ("Involuntary Option") to purchase
all or any portion of the Company Interest sought to be involuntarily
transferred at the price and upon the terms and conditions set forth in Section
10.4. If there is more than one other Member, then each of the other Members
shall have the right to purchase in accordance with their respective Percentage
Interests among themselves, or in such other percentages as they shall
unanimously agree. If not all of the other Members exercise their Involuntary
Options, those other Members exercising their Involuntary Options shall be
entitled to purchase the balance in accordance with their Percentage Interests
among themselves, or in such other percentages as they shall unanimously agree.
If there is only one other Member, such other Member may assign such Member's
rights under the Involuntary Option to a third party if the Member so desires.
-16-
(b) The Involuntary Option period shall commence upon receipt by
the other Members of actual notice of the attempted involuntary transfer and
terminate, unless exercised, 60 days thereafter, unless sooner terminated by
written refusal of the other Members. An election to exercise any Involuntary
Option shall be made in writing and transmitted to the Member whose Company
Interest is sought to be involuntarily transferred.
(c) Upon the failure or neglect of the other Members to purchase
all of the Company Interest sought to be involuntarily transferred in accordance
with this Section 10.3, the unpurchased Company Interest may be involuntarily
transferred, but such transferee may not become a substitute Member unless the
conditions of Section 10.5 have been satisfied.
(d) If, notwithstanding the provisions of this Section 10.3, any
Company Interest is effectively transferred by involuntary means without
compliance with the provisions of Section 10.3, then the Involuntary Option
shall be to purchase such Company Interest from the transferee(s).
10.4 PURCHASE PRICE AND TERMS.
(a) The purchase price for all of a Member's Company Interest to be
purchased pursuant to the exercise of the Involuntary Option shall be the
Capital Account of such Member as of the close of the month following the
exercise of the Involuntary Option ("Effective Date"), prorated if less than all
of a Member's Company Interest is to be purchased; provided, however, that if
the Member has a zero or negative Capital Account, the purchase price for the
Member's entire Company Interest shall be one dollar. Such Capital Account shall
be adjusted to reflect the profit or loss of the Company through the Effective
Date and contributions by, and distributions to, the Member since the close of
the Company's last Fiscal Year to the extent such adjustments have not already
been reflected in the Capital Account of the Member on the books of the Company.
(b) The purchase price shall, at the option of the purchaser, be
paid either by cashier's or certified check on the closing date.
(c) The closing date shall occur within 30 days following the
exercise of the Involuntary Option. At the closing, the selling Member shall
execute such instruments of assign ment as shall be requested by the purchaser
conveying the Member's interest in the Company Interest purchased free and clear
of all liens and encumbrances whatsoever. If the selling Member fails to execute
such document, the Management Committee may do so pursuant to the power of
attorney granted in Section 11.2.
10. SUBSTITUTE MEMBER. Except as otherwise provided herein, no assignee
of a Member's Company Interest shall have the right to become a substitute
Member unless all of the following conditions are satisfied:
(a) except in the case of death or adjudication of incompetency or
insanity, the fully executed and acknowledged written instrument of assignment
has been filed with the Company
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setting forth the intention of the assignor that the assignee become a
substitute Member in place of the assignor with respect to the Company Interest
assigned;
(b) the assignor and assignee execute and acknowledge such other
instruments as the Management Committee deems necessary or desirable to effect
such admission, including, but not limited to, the written acceptance and
adoption by the assignee of the provisions of this Agreement; and
(c) the Management Committee has consented to the assignment and
substitution which shall be in the Management Committee's sole and absolute
discretion.
10. ADMISSION OF NEW MEMBER. No new Member may be admitted to the
Company without the consent of a majority-in-interest of the Members (based upon
Percentage Interests). For purposes of this Section 10.6, a substitute Member
shall not be considered a new Member.
11. GENERAL.
11.1 REPRESENTATIONS, WARRANTIES AND COVENANTS OF MEMBERS. Each of the
Members hereby represents and warrants to, and agrees with, the Company that:
(a) The Member has the full right, power and authority to execute,
deliver and perform the terms of this Agreement.
(b) This Agreement has been duly executed and delivered on behalf
of the Member and constitutes the valid and binding obligation of the Member in
accordance with its terms.
(c) The Member is not subject to any restriction or agreement which
prohibits or would be violated by the execution hereof or the consummation of
the transactions contemplated herein or pursuant to which the consent of any
third person, firm or corporation is required in order to give effect to the
transactions contemplated herein.
11. POWER OF ATTORNEY.
(a) Each Member, as well as persons who subsequently become
Members, hereby irre vocably constitutes and appoints the Other Members, with
full power of substitution, as such Member's true and lawful attorneys-in-fact,
with full power and authority, in such Member's name, place and stead, to make,
execute, consent to, swear to, acknowledge, record and file with respect to the
Company, the following:
(1) Any certificate or other instrument which may be required
to be filed by the Company or the Members under the laws of any state, or any
other jurisdiction in which the Company is conducting, or proposes to conduct,
business.
(2) Any and all amendments or modifications of the instruments
described in Section 11.2(a).
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(3) All instruments of assignment as contemplated in Section
104 if the seller Member fails to do so.
(4) All such other instruments as such attorney-in-fact may
deem necessary or desirable in order to carry out the provisions of this
Agreement in accordance with its terms.
(b) The powers of attorney hereby granted to the Members are a
special power of attorney coupled with an interest, is irrevocable and shall
survive the death, bankruptcy or adjudi cation of incompetency or insanity, of
the Member granting it. The Power of Attorney hereby granted may be exercised on
behalf of the Members by referencing all of the Members on whose behalf a
document is being executed, and with a single signature as attorney-in-fact for
all of them.
(c) Each of the Members hereby agrees to execute and deliver to the
Management Committee within five days after receipt of the Management
Committee's written request therefor, such other and further powers of attorney
and other instruments which the Management Committee, in its sole discretion,
deems necessary or desirable to comply with any laws, rules or regulations
relating to the formation of the Company, or the conduct of business by the
Company.
11.3 NOTICES. All notices, requests, demands and other communications
required or permitted to be given or made under this Agreement shall be in
writing and shall be deemed delivered (a) on the date of personal delivery or
transmission by telegram or facsimile transmis sion, or (b) on the first
business day after the date of delivery to a nationally recognized overnight
courier service, or (c) on the third business day following the date of deposit
in the United States mail, postage prepaid, by registered or certified mail,
return receipt requested, in each case, addressed as follows, or to such other
address, person or entity as either party shall designate by notice to the other
in accordance herewith:
If to Atria: Atria Communities, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
Chief Financial Officer
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
With copy to: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, pllc
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
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If to Assisted Care: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Assisted Care Developers, l.l.c.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
With copy to: ▇▇▇▇▇▇▇ ▇▇▇▇▇ , Esq.
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, L.L.P.
Suite 4300, One Peachtree Center
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
FAX:(▇▇▇) ▇▇▇-▇▇▇▇
11.4 AMENDMENT. Except as provided in Section 14.2(a), this Agreement
may be modified or amended from time to time only upon the written consent of
all Members.
11.5 CAPTIONS; SECTION REFERENCES. Section titles or captions contained
in this Agreement are inserted only as a matter of convenience and reference,
and in no way define, limit, extend or describe the scope of this Agreement, or
the intent of any provision hereof. All references herein to Sections shall
refer to Sections of this Agreement unless the context clearly requires
otherwise.
11.6 NUMBER AND GENDER. Unless the context otherwise requires, when used
herein, the singular shall include the plural, the plural shall include the
singular, and all nouns, pronouns and any variations thereof shall be deemed to
refer to the masculine, feminine or neuter, as the identity of the person or
persons may require.
11.7 SEVERABILITY. If any provision of this Agreement, or the
application thereof to any person, entity or circumstances, shall be invalid or
unenforceable to any extent, the remainder of this Agreement, and the
application of such provision to other persons, entities or circumstances, shall
not be affected thereby and shall be enforced to the greatest extent permitted
by law.
11.8 ARBITRATION.
(a) If the Members are unable to agree on any matter under this
Agreement, the unresolved matter shall be resolved by arbitration if a request
for arbitration, as provided herein, is given. Either Member may initiate
Arbitration by making a demand on the other Member and simultaneously filing
copies of the demand, together with the required fees, with the Nashville,
Tennessee, office of the American Arbitration Association ("AAA"). Within 15
days of meeting with the AAA, each Member shall designate one arbitrator. These
two arbitrators shall, within 15 days after their appointment, select a third
arbitrator. If the first two arbitrators are unable to agree upon the third
arbitrator, then the arbitrators shall apply to the AAA to designate and appoint
a person as the third arbitrator. If the Member upon whom the original
arbitration demand was served fails to designate its arbitrator within the 15-
day period, the arbitrator designated by the
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Member requesting arbitration shall act as the sole arbitrator and shall be
deemed to be the single, mutually approved arbitrator to resolve the matter.
(b) The place of arbitration shall be in Nashville, Tennessee.
Arbitration shall be conducted under the auspices of the AAA. The AAA Rules
shall govern all proceedings unless otherwise provided herein. In case of
conflict between the AAA Rules and this Agreement, the provisions of this
Agreement shall govern.
(c) The Members shall have the right of discovery in accordance
with the Federal Rules of Civil Procedure except that discovery may commence
immediately upon the service of the demand for arbitration. A Member's
unreasonable refusal to cooperate in discovery shall be deemed to be refusal to
proceed with arbitration and, until the arbitration panel is complete, the
Members may enforce their rights (including the right of discovery) in the
courts. Such enforcement in the courts shall not constitute a waiver of a
Member's right to arbitration. Upon the completion of the appointment of the
arbitration panel, the arbitrators shall have the power to enforce the Members'
discovery rights.
(d) The Members expressly covenant and agree to be bound by the
decision of the arbitration panel and accept any such decision as the final
determination of the matter in dispute. A judgment of any court related to this
arbitration in the neutral location may be entered upon any award made pursuant
to this Section 118.
11.9 BINDING AGREEMENT. Except as otherwise provided herein, this
Agreement shall be binding upon, and inure to the benefit of, the Members
hereto, and their respective executors, administrators, heirs, successors and
assigns.
11.10 APPLICABLE LAW. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Georgia without regard to its
conflict of laws rules.
11.11 ENTIRE AGREEMENT. This Agreement contains the entire agreement
between the Members hereto with respect to the subject matter hereof.
11.12 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and all such counterparts shall, for all purposes, constitute one
agreement, binding upon the Members, notwithstanding that all Members are not
signatory to the same counterpart.
11.13 NO RIGHT OF PARTITION. The Members hereby agree that the Company's
properties are not, and will not be, suitable for partition. Accordingly, each
of the Members hereby irrevocably waives any and all rights which such Member
may have to maintain an action for partition of any of the Company's properties.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the date and year first above written.
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▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, INC.
By: /s/ J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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Title: Chief Financial Officer and
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Vice President of Development
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("Atria")
ASSISTED CARE DEVELOPERS, L.L.C.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title: President
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("Assisted Care")
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