EXHIBIT 3.2.7
HARBORSIDE HEALTHCARE LIMITED PARTNERSHIP
AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
DATED AS OF MAY 28, 1987
AS AMENDED AND RESTATED AS OF JULY 1, 1995
TABLE OF CONTENTS
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ARTICLE I DEFINITIONS......................................................................................... 1
ARTICLE II FORMATION; NAME; AND PURPOSE........................................................................ 4
Section 2.1 Formation.................................................................................... 4
Section 2.2 Name and Office.............................................................................. 4
Section 2.3 Purpose...................................................................................... 5
Section 2.4 Authorized Acts.............................................................................. 5
Section 2.5 Term and Dissolution......................................................................... 6
ARTICLE III SALE AND OTHER TRANSACTIONS......................................................................... 6
ARTICLE IV PARTNERS: CAPITAL................................................................................... 6
Section 4.1 General Partner.............................................................................. 6
Section 4.2 Limited Partner.............................................................................. 7
Section 4.3. Partnership Capital.......................................................................... 7
Section 4.4. Liability of Partners; Further Capital Contributions......................................... 7
Section 4.5. Additional Limited Partners.................................................................. 7
ARTICLE V RIGHTS, POWERS AND DUTIES OF THE GENERAL PARTNER.................................................... 8
Section 5.1. Business..................................................................................... 8
Section 5.2. Action by General Partner.................................................................... 8
Section 5.3. Devotion of Time; Expense Reimbursement...................................................... 10
Section 5.4. Liability; Indemnification................................................................... 10
Section 5.5. Other Business Ventures...................................................................... 10
Section 5.6. Provisions Concerning Loans.................................................................. 10
Section 5.7. Actions Upon Dissolution..................................................................... 11
ARTICLE VI WITHDRAWAL; CONTINUATION OF PARTNERSHIP; NEW
GENERAL PARTNERS; TRANSFER OF GENERAL PARTNER
INTERESTS........................................................................................... 11
Section 6.1. Continuation of Partnership.................................................................. 11
Section 6.2. Designation of Successor or Additional General Partners;
Reconstitution of the Partnership.......................................................... 11
Section 6.3. Interest of Withdrawn General Partner........................................................ 12
Section 6.4. Additional General Partners.................................................................. 12
Section 6.5. Amendment to Certificate..................................................................... 13
Section 6.6. Special Restrictions......................................................................... 13
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ARTICLE VII TRANSFERABILITY OF LIMITED PARTNER INTERESTS........................................................ 13
Section 7.1. Restrictions on Transfer..................................................................... 13
Section 7.2. Substituted Limited Partners................................................................. 15
Section 7.3. Additional Restrictions...................................................................... 15
Section 7.4. Purchase of Limited Partner Interest Upon Termination of Employment.......................... 16
ARTICLE VIII BORROWINGS AND LOANS................................................................................ 18
ARTICLE IX PROFITS, LOSSES AND CREDITS; DISTRIBUTIONS.......................................................... 18
Section 9.1. Profits, Losses and Credits.................................................................. 18
Section 9.2. Distributions Prior to Dissolution........................................................... 19
Section 9.3. Distributions Upon Dissolution............................................................... 19
Section 9.4. Adjustment of Shares of Profits, Losses and Distributions to
Insure 1% to the General Partner........................................................... 20
ARTICLE X BOOKS AND RECORDS; ACCOUNTING; TAX ELECTIONS........................................................ 20
Section 10.1 Books and Records............................................................................ 20
Section 10.2 Bank Accounts................................................................................ 21
Section 10.3 Accountants.................................................................................. 21
Section 10.5. Tax Elections; Special Basis Adjustments..................................................... 21
Section 10.6. Maintenance of Books for Accounting and Tax Purposes; Fiscal Years........................... 21
ARTICLE XI GENERAL PROVISIONS.................................................................................. 22
Section 11.1. Transfer of All Partners' Interest in Exchange............................................... 22
Section 11.2. Appointment of General Partner as Attorney-in-Fact........................................... 22
Section 11.3 Notices...................................................................................... 23
Section 11.4 Word Meanings................................................................................ 24
Section 11.5 Other Agreements............................................................................. 24
Section 11.6 Binding Effect............................................................................... 24
Section 11.7 Applicable Law; Supremacy of Uniform Act..................................................... 24
Section 11.8 Counterparts................................................................................. 24
Section 11.9 Separability of Provisions................................................................... 24
Section 11.10 Waiver....................................................................................... 25
Section 11.11 No Jury Trial; Liability; Statute of Limitations; Venue; Jurisdiction........................ 25
Section 11.12 Advice of Counsel............................................................................ 25
Section 11.13 Amendments................................................................................... 25
Section 11.14 Effective Date............................................................................... 25
Section 11.15 Limited Partner Signature Pages.............................................................. 26
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HARBORSIDE HEALTHCARE LIMITED PARTNERSHIP
AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
THIS AGREEMENT OF LIMITED PARTNERSHIP, dated as of May 28, 1987 and amended
and restated as of July 1, 1995, has been entered into by and among KHI
Corporation as the General Partner; and each of the Persons listed on Schedule
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II annexed hereto as Limited Partners.
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WHEREAS, the General Partner and the Limited Partners desire to amend and
restate the Agreement of Limited Partnership of Harborside Healthcare Limited
Partnership dated as of May 28, 1987, as set forth herein;
NOW THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, the parties hereby agree as follows:
ARTICLE I
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DEFINITIONS
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As used herein the following terms shall have the following meanings:
"Accountants" means the accountants for the Partnership engaged by the
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General Partner from time to time pursuant to Section 10.3 hereof.
"Affiliated Person" means any of the following: (i) a General Partner,
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(ii) the legal representative of the estate or the successor or assignee of any
General Partner, (iii) a trustee of a trust established or maintained primarily
for the benefit of any General Partner, (iv) an Entity of which a majority of
the voting interests is owned by any one or more of the persons or Entities
referred to in the preceding clauses, or (v) a Person who is an officer,
director, trustee, employee, stockholder (15% or more) or partner of any Person
or Entity referred to in the preceding clauses.
"Agreement" means this Agreement of Limited Partnership as it may be
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amended from time to time hereafter.
"Appraised Value" as defined in Section 7.4(b).
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"Capital Contribution" means the total amount of cash and the fair market
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value of other property contributed or agreed to be contributed to the
Partnership by each Partner all as set forth in Schedules I and II hereto as
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amended from time to time. Any reference in this Agreement to the Capital
Contribution of a then Partner shall include a Capital Contribution previously
made by any prior Partner in respect of the Partnership interest of such then
Partner.
"Capital Transaction" means a sale, refinancing, exchange or other
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disposition by the partnership of all or substantially all of its assets or of
an Other Partnership Interest or by an Other partnership of a real property
(including related personal property) then owned by such Other Partnership.
"Cash Flow" means (i) all cash received by the Partnership as a result of
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its business activities, other than (a) Capital Contributions, (b) Net Cash
Proceeds from Capital Transactions, and (c) proceeds of loans made to the
Partnership, less (ii) all cash expended by the Partnership in the course of its
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business (other than from equity investments in or loans to the Partnership or
from Net Cash proceeds of Capital Transactions), or allocated to reasonable
reserves established by the General Partner (less amounts of cash withdrawn from
such reserves) or used to repay the principal of loans made by the Partnership.
"Certificate" means the Certificate of Limited Partnership of the
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Partnership filed hereunder, as such Certificate shall be amended or restated
from time to time hereafter.
"Code" means the Internal Revenue Code of 1986, as amended from time to
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time, or corresponding provisions of subsequent law.
"Consent of the Limited Partners" means the specific written consent or
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approval of one or more Limited Partners whose aggregate Capital Contributions
(as reflected on Schedule II hereto) represent at least two-thirds of the total
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Capital Contributions of the Limited Partners.
"Controlling" 70%" as defined in Section 11.1.
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"Entity" means any general partnership, limited partnership, corporation,
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joint venture, trust, business trust, association, or estate.
"Facility" or "Facilities" means a nursing home, retirement home,
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congregate care facility, rehabilitation facility, psychiatric facility,
substance abuse facility, or other health care related commercial property, and
any equity interest of the Partnership therein, whether direct or indirect,
through nominee, joint venture or otherwise.
"General Partner" means any Person designated as a General Partner in
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Schedule I hereto or any other Person who becomes a General Partner as provided
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herein, in such Person's capacity as a General Partner of the Partnership; and
"General Partners" means, collectively all Persons in such capacity of General
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Partner.
"Indebtedness" as defined in Section 7.4.
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"Legal Representatives" as defined in the definition of Related Person.
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"Limited Partner" means any Person designated as a Limited Partner in
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Schedule II hereto, or any other Person who becomes a Limited Partner as
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provided herein, in such Person's capacity as a Limited Partner of the
Partnership; and "Limited Partners" means, collectively, all persons in such
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capacity as Limited Partner.
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"Net Cash Proceeds" from a Capital Transaction means the cash received by
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the Partnership as a result of such transaction in its capacity as an owner or
equity participant (and not as a creditor), less (i) all debts, expenses and
liabilities of the Partnership arising as a result of or payable from such
transaction (including, among other matters, any brokerage fees and expenses for
which the Partnership shall become liable as a result thereof), and (ii) any
reserves for contingent liabilities of the Partnership arising as a result of
such transaction, to the extent deemed reasonable by the General Partner,
provided that, at the expiration of such period as the General Partner shall
deem advisable, the balance of such reserves remaining after payment of such
contingencies shall be distributed in the manner provided for Net Cash Proceeds
(but to those Persons who, but for the setting aside of the reserve, would have
received the amount so reserved).
"Non-consenting Limited Partner" as defined in Section 11.2(c)(iii).
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"Note" as defined in Section 7.4(g).
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"Other Partnership" means any general or limited partnership in which the
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Partnership shall act as a general and/or limited partner.
"Other Partnership Interest" means the general and/or limited partnership
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interest held by the Partnership in any Other Partnership.
"Partner" means any General Partner or Limited Partner; and "Partners"
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means, collectively, the General Partners and Limited Partners.
"Partnership" means the limited partnership governed by this Agreement as
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said limited partnership may from time to time be constituted and amended.
"Person" means any individual or Entity, and the heirs, executors,
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administrators, legal representatives, successors and assigns of such Person
where the context so admits.
"Preferred Return" means $7,000,000 reduced by any distributions made under
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Sections 9.2(b) and 9.3 hereof.
"Profit-Sharing Ratio" means, with respect to each Partner specified on
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Schedule III hereto, the percentages set forth in such Schedule.
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"Prohibited Transfer" as defined in Section 7.1(b).
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"Related Persons" shall mean (i) in relation to any individual, (A) any
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spouse or issue of such individual or any spouse of any such issue, (B) any
trust for the benefit of any one or more of such individuals, any spouse or
issue of such individuals or any spouse of any such issue, and (C) any executor,
administrator or other legal representative (any of the foregoing a "Legal
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Representative") of any such individual, any spouse or issue of such individual
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or any spouse of any such issue; (ii) in relation to any corporation, any
subsidiary in which such corporation is a holder of at least a majority
interest, or any successor entity by merger or consolidation; (iii) in
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relation to trusts, any settlor or any beneficiary thereof; and (iv) in relation
to the estate of any deceased individual, (A) any Legal Representative of such
individual, (B) any legatee or heir of such individual or (C) any trust for the
benefit of any one or more of such legatees and heirs. For purposes of this
definition, the word "issue" shall also include issue by adoption; and the word
"spouse" shall not include a spouse from whom an individual is legally separated
or in the process of obtaining a separation or divorce.
"Substituted Limited Partner" means any Person admitted to the Partnership
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as a Limited Partner under the provisions of Section 7.2.
"Uniform Act" means the Uniform Limited Partnership Act as set forth in
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Chapter 109 of the General Laws of the Commonwealth of Massachusetts as from
time to time in effect.
"Withdrawal" (and correlatively the terms "Withdraw", "Withdrawing" or
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"Withdrawn") means, as to a General Partner, the occurrence of death,
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adjudication of insanity or incompetence, bankruptcy, dissolution, or any other
voluntary or involuntary withdrawal from the Partnership for any reason as
specified in the Uniform Act. Involuntary Withdrawal shall occur whenever a
General Partner may no longer continue as a General Partner by law or pursuant
to any terms of this Agreement. Withdrawal by any General Partner from the
Partnership by reason of ill health or an adjudication of insanity or
incompetence shall be deemed involuntary. Bankruptcy shall be deemed to have
occurred whenever a General Partner shall petition or apply for the appointment
of a trustee or other custodian, liquidator or receiver of the General Partner
or of any substantial part of the assets of the General Partner or shall
commence any case or other proceeding relating to the General Partner under any
bankruptcy, reorganization, arrangement, insolvency, readjustment of debt,
dissolution or liquidation or similar law of any jurisdiction, now or hereafter
in effect (collectively "Bankruptcy Laws"), or shall take any action to
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authorize or in furtherance of any of the foregoing, or if any such petition or
application shall be filed or any such case or proceeding shall be commenced
against the General Partner and the General Partner shall indicate its approval
thereof, consent thereto or acquiescence therein or such petition or application
shall not have been dismissed within sixty days following the filing thereof. A
merger, combination or other reorganization (other than pursuant to any
Bankruptcy Laws) of any corporation or other Entity which serves as a General
Partner into another corporation or Entity shall not be considered a Withdrawal,
but rather the surviving corporation or other Entity of such merger, combination
or other reorganization shall continue to serve as a General Partner in place of
such former corporation or other Entity.
ARTICLE II
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FORMATION; NAME; AND PURPOSE
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Section 2.1. Formation. The parties hereto hereby agree to continue the
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Partnership as a limited partnership under this Agreement and the Uniform Act.
Section 2.2. Name and Office. The Partnership shall continue to be
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conducted under the name and style of "Harborside Healthcare Limited
Partnership" with a principal office at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇. The General Partner may at any time change the
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location of such principal office and shall give due notice of any such change
to the Limited Partners. The Partnership shall at all times maintain in
Massachusetts (i) an office at which shall be kept the basic Partnership
documents described in Section 10.1. hereof, and (ii) an agent for service of
process selected by the General Partner in accordance with any relevant
provisions of the Uniform Act as then in effect.
Section 2.3. Purpose. The purpose of the Partnership is to acquire, own,
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lease, invest in, improve, hold, encumber, sell, manage, maintain, operate and
otherwise deal with Facilities, and real estate and personal property related
thereto; to be a general and/or limited partner in any Other Partnership which
conducts activities within the scope of this Section; and to conduct any other
business activity allowed under the Uniform Act.
Section 2.4. Authorized Acts. In furtherance of its purposes, the
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Partnership is hereby authorized:
(i) To become and act as a general and/or limited partner in any
Other Partnership.
(ii) To acquire by purchase, lease or otherwise any facility and any
real or personal property which may be necessary, convenient or incidental
to the accomplishment of the purposes of the Partnership.
(iii) To construct, operate, manage, maintain, finance and improve,
and to own, sell, convey, assign, mortgage, or lease any Facilities and any
real estate and any personal property necessary, convenient or incidental
to the accomplishment of the purposes of the Partnership.
(iv) To borrow money and issue evidence of indebtedness, and to
guaranty the indebtedness of other Persons including, without limitation,
Other Partnerships, in furtherance of any or all of the purposes of the
Partnership, and to secure the same by mortgage, pledge or other lien on
any assets of the Partnership including, without limitation, Other
Partnership Interests then held by the Partnership.
(v) To enter into, perform and carry out, contracts, agreements and
other documents of any kind, including contracts with Affiliated Persons,
necessary to, or in connection with or incidental to, the accomplishment of
the purposes of the Partnership, specifically including, but not limited
to, the execution and delivery of partnership agreements, certificates of
limited partnership, and other agreements and documents pertaining to Other
Partnerships.
(vi) To enter into any kind of activity necessary to, or in
connection with, or incidental to, the accomplishment of the purposes of
the Partnership, so long as said activities may be lawfully carried on or
performed by a partnership, to the extent applicable, under the laws of the
Commonwealth of Massachusetts.
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Section 2.5. Term and Dissolution.
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(a) The term of this Partnership commenced on the filing of the
Certificate with the Massachusetts Secretary of State, and shall continue in
full force and effect for fifty (50) years from the date of such filing, except
that the term of the Partnership may be extended for an additional term of up to
thirty (30) years by consent of the General Partner or the unanimous consent of
the General Partners, as the case may be, and the Consent of the Limited
Partners.
(b) Notwithstanding the foregoing, the Partnership shall be earlier
dissolved upon the happening of any of the following events:
(i) The sale or other disposition of all or substantially all the
assets of the Partnership, unless such sale is for equity interests in an
entity to which the sale or other disposition is made or unless the General
Partners elect to continue the life of the Partnership to the extent
required for the purpose of the collection of any notes or other
consideration received by the Partnership upon sales or other disposition
of Partnership assets; or
(ii) The Withdrawal of any General Partner if the business of the
Partnership is not continued by the remaining General Partner(s); or
(iii) The Withdrawal of a General Partner if no General Partner
remains and the Partnership is not reconstituted with a successor General
Partner pursuant to Article VI; or
(iv) Any other event which shall cause the termination, dissolution
and/or winding up of the Partnership under the Uniform Act.
ARTICLE III
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SALE AND OTHER TRANSACTIONS
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The General Partner is authorized to sell, exchange, otherwise transfer or
convey, and to mortgage, pledge or otherwise grant security interests in, all or
substantially all the assets of the Partnership without approval of the Limited
Partners, which approval shall conclusively be deemed to have been granted by
each of the Limited Partners upon his execution of this Agreement.
ARTICLE IV
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PARTNERS: CAPITAL
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Section 4.1. General Partner. The Capital Contribution of the General
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Partner is as set forth in Schedule I, as amended from time to time in the
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manner set forth herein.
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Section 4.2. Limited Partner. The Capital Contributions of the Limited
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Partners are as set forth in Schedule II, as amended from time to time in the
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manner set forth herein.
Section 4.3. Partnership Capital. The capital of the Partnership shall be
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the aggregate amount of the cash and the aggregate fair market value of other
property or Facilities contributed by the General Partner and by the Limited
Partners as set forth in Schedules I and II. An individual capital account
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shall be maintained for each Partner in accordance with generally accepted
accounting principles then being followed by the Partnership. Without
limitation of the foregoing, each such capital account shall be credited with
the Partner's Capital Contributions and with his share of profits, and shall be
charged with his, her or its share of losses and distributions. No interest
shall be paid on any Capital Contribution to the Partnership. No Partner shall
be entitled to bring an action for partition against the Partnership, or to
demand or receive any distribution of or with respect to this Capital
Contribution except as is specifically provided under this Agreement.
Section 4.4. Liability of Partners; Further Capital Contributions. No
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Limited Partner shall be liable for any debts, liabilities, contracts, or
obligations of the Partnership or be required to lend funds to the Partnership.
Except with respect to repayments to the Partnership of distributions to the
Partners (and interest thereon) required by the Uniform Act or other applicable
law, no Partner shall have any obligation to eliminate a deficit balance from
his capital account. A Limited Partner's liability shall be limited to the
amount of his, her or its Capital Contribution. After such Capital Contribution
has been made, no General Partner or Limited Partner shall, except as required
by the Uniform Act, be required to make any further Capital Contributions to the
Partnership, and no Limited Partner shall be permitted to make any such further
Capital Contributions without the consent of the General Partner. No General
Partner shall have any personal liability for the repayment of the Capital
Contribution of any Partner.
Section 4.5. Additional Limited Partners.
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(a) The General Partner shall have the right to admit one or more
additional Limited Partners to the Partnership from time to time without
approval of the Limited Partner, provided that no adverse change in the Profit-
Sharing Ratio of any Partner specified in Schedule III in effect at the time of
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such admission shall be made with respect to the Partnership as a result of such
admission without the written consent of the Partner adversely affected.
(b) Nothing in this Section 4.5 shall impair the right of the Partners
specified in Schedule III to alter the Profit-Sharing Ratios specified on such
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Schedule. In addition, nothing in this Section 4.5 shall impair the right of
the General Partner to admit Substituted Limited Partners under Section 7.2
hereof.
(c) Each incoming Limited Partner shall also agree to be bound by the
provisions of this Agreement and shall also agree to accept such other terms and
conditions set forth in writing to him at the time of admission as the General
Partner may reasonably determine.
(d) Upon the admission of any additional Limited Partner, Schedule II and
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III shall be amended by the General Partner (utilizing the powers of attorney
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set forth in Section 11.1) to
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reflect the names, addresses and Capital Contributions of all Limited Partners
and their Profit-Sharing Ratios. Each Limited Partner shall become signatory
hereto by signing a Limited Partner Signature Page to which shall be attached a
conformed counterpart of this Agreement in such manner as the General Partner
shall determine, and, by so signing, such Limited Partner shall be deemed to
have adopted and to have agreed to be bound by all the provisions of this
Agreement; provided, however, that no such Limited Partner Signature Page or
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counterpart of this Agreement shall be binding until it has been signed by one
or more General Partners.
ARTICLE V
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RIGHTS, POWERS AND DUTIES OF THE GENERAL PARTNER
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Section 5.1. Business.
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(a) The General Partner shall have the exclusive right to manage the
business of the Partnership. Except as specifically provided herein, the
General Partner shall have the right to perform all actions necessary,
convenient or incidental to the accomplishment of the purposes and authorized
acts of the Partnership, as specified in Sections 2.3 and 2.4, respectively, and
shall possess and may enjoy and exercise all the rights and powers of a general
partner as provided in the Uniform Act. In particular, and without limitation
on the rights and powers of the General Partner set forth elsewhere in this
Agreement, the General Partner shall have the right to set aside from the cash
receipts of the Partnership reasonable reserves to provide for working capital
needs, funds for improvements or replacements or for other contingencies of the
Partnership.
(b) No Limited Partner (except one who may also be a General Partner)
shall participate in or have any control over the Partnership business, except
as required by law. The Limited Partners hereby consent to the exercise by the
General Partner of powers conferred by this Agreement. No Limited Partner
(except one who may also be a General Partner) shall have any authority or right
to act for or bind the Partnership. Without limitation of the authority of the
General Partner, it is specifically authorized to employ and engage, on behalf
of the Partnership, Affiliated Persons to perform services for, or furnish goods
to, the Partnership; provided, however, that any payment for services or goods
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provided to the Partnership shall not exceed an amount which would have been
payable if the transaction were at arms-length.
(c) To assist them in the performance of their duties hereunder, the
General Partner may appoint one or more officers of the Partnership including,
without limitation, a president, one or more executive vice presidents, one or
more other vice presidents, a treasurer, one or more assistant treasurers, a
controller, a secretary, and one or more assistant secretaries. The General
Partner may assign to any such officer from time to time such duties and powers
as the General Partner may deem appropriate subject, however, to the general
provisions of this Article V with respect to the rights, powers and duties of
the General Partner.
Section 5.2. Action by General Partner.
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(a) Any and all actions with respect to the Partnership (whether the
Partnership is then acting on its own behalf or on behalf of an Other
Partnership in which the Partnership is a
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general partner) may be taken by any one or more of the General Partners, acting
either singly or together with one or more other General Partners.
(b) The General Partner, is specifically authorized, without limitation,
to execute, sign, seal and deliver in the name and on behalf of the Partnership
(whether the Partnership is then acting on its own behalf or on behalf of an
Other Partnership in which the Partnership is a general partner):
(i) any and all partnership agreements, certificates, instruments,
and any documents required in connection with the formation or operation of
any Other Partnership or by any buyer, seller or mortgagee from time to
time in connection with the acquisition, sale, ownership, development and
operation of any real or personal property;
(ii) any deed, lease, guarantee, assignment, mortgage, mortgage note,
▇▇▇▇ of sale, security agreement, contract, business certificate, or any
amendments to any of the foregoing; and
(iii) any and all regulatory and other agreements, contracts,
documents, notes, certificates and instruments whatsoever involving the
ownership, construction, development, management, maintenance or operation
of any facilities or any real or personal property or the interest of the
Partnership in any Other Partnership, or otherwise requisite to carrying
out the intention and purpose of this Agreement.
(c) Every contract, deed, mortgage, lease, note, guarantee, assignment,
agreement and other instrument executed by a General Partner shall be conclusive
evidence in favor of every Person relying thereon or claiming thereunder that at
the time of the delivery thereof (A) this Partnership was in existence, (B) this
Agreement had not been terminated or cancelled or amended in any manner so as to
restrict such authority (except as shown in certificates or other instruments
duly filed in the office of the Secretary of State of the Commonwealth of
Massachusetts), and (C) the execution and delivery of such instruments were duly
authorized under this Agreement. Any Person dealing with the Partnership or the
General Partner may always rely on a certificate signed by the General Partner:
(i) as to who are the General Partner or Limited Partners hereunder,
(ii) as to the existence or nonexistence of any fact or facts which
constitute conditions precedent to acts by the General Partner or in any
other manner are germane to the affairs of this Partnership,
(iii) as to who is authorized to execute and deliver any instrument
or document of the Partnership,
(iv) as to the authenticity of any copy of this Agreement and
amendments thereto, or
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(v) as to any act or failure to act by the Partnership or as to any
other matter whatsoever involving the Partnership or any Partner.
Section 5.3. Devotion of Time; Expense Reimbursement. The General Partner
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shall devote to the affairs of the Partnership such time as it may deem
necessary for the proper performance of its duties. The General Partner shall
also be entitled to charge the Partnership, or to be reimbursed by the
Partnership, for all expenses reasonably incurred by it in connection with the
Partnership business, but shall not receive any compensation for services
provided as a General Partner hereunder.
Section 5.4. Liability; Indemnification. No General Partner shall be
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liable, responsible or accountable in damages or otherwise to the Partnership or
any Limited Partner for any act performed by it within the scope of the
authority conferred by this Agreement, for its failure or refusal to perform any
acts except those expressly required by the terms of this Agreement, or for its
performance or omission to perform any acts on advice of the Accountants or
legal counsel for the Partnership, except in case of willful misconduct. The
Partnership shall indemnify and save harmless each General Partner from any
expenses, loss or damage incurred by it by reason of (i) any act performed by it
within the scope of the authority conferred upon him by this Agreement unless
such act constitutes willful misconduct, or (ii) its failure or refusal to
perform any acts except those expressly required by the terms of this Agreement,
or (iii) its performance or omission to perform any acts on advice of the
Accountants or legal counsel for the Partnership. Any indemnity under this
Section 5.4 shall be provided out of and to the extent of Partnership assets
only, and no Limited Partner shall have any personal liability on account
thereof.
Section 5.5. Other Business Ventures. The General Partner may engage
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independently or may act with others (including acting as a general and/or
limited partner) in other business ventures of every nature or description
including, without limitation, the ownership, operation, management,
syndication, sale, brokerage and development of facilities (including projects
competing with those of the Partnership or of Other Partnerships), and neither
the Partnership nor any Partner shall have any rights in or to such independent
ventures or the income or distributions derived therefrom as a result of being
Partners hereunder. Furthermore, as set forth in Sections 24, 4.5 and 9.1
through 9.4 of this Agreement, the Partnership may now or hereafter act as a
general and/or limited partner in various Other Partnerships which may either
exist as of the date of this Agreement or may hereafter be formed. Except as is
specifically set forth in those Sections (and the Schedules to this Agreement
referred to therein), no Partner (except as set forth in any written employment
agreement executed by the General Partner and its President) shall have any
right to participate either directly or indirectly in any income or
distributions derived from any such Other Partnership.
Section 5.6. Provisions Concerning Loans. In the event that funds not
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otherwise available should be required at any time to pay operating expenses or
any other liabilities of the Partnership, including capital expenditures, the
General Partner may, but shall not be obligated to, lend to the Partnership all
or any such funds. Any loans made pursuant to this Section 5.6
10
shall be repayable in the manner and bear interest at the rate set forth in
Article VIII of this Agreement.
Section 5.7. Actions Upon Dissolution. Upon dissolution of the
------------------------
Partnership, the General Partner (or its trustees, receivers, successors or
legal representatives) shall cause the cancellation of the Certificate and
shall, unless the Partnership is reconstituted pursuant to Section 6.2(a),
liquidate the Partnership assets and apply and distribute the proceeds thereof
in accordance with Section 9.3. Notwithstanding the foregoing, in the event the
liquidating General Partner shall determine that an immediate sale of part or
all of the Partnership's assets would cause undue loss to the Partners (by
reason of incurring taxable gain or otherwise), such liquidating General Partner
may, in order to avoid such loss, either (i) defer liquidation of, and withhold
from distribution for a reasonable time (provided that such deferral of
liquidation and distribution shall not have adverse tax consequences for the
Limited Partners as a class and they shall have been provided with an amount
sufficient to cover any tax liability resulting from such liquidation), the
assets of the Partnership except those necessary to satisfy the Partnership
debts and obligations (including loans of Partners and Affiliated Persons and
accrued interest thereon), or (ii) distribute the shares of such Partnership
assets to the Partners in kind.
ARTICLE VI
----------
WITHDRAWAL; CONTINUATION OF
---------------------------
PARTNERSHIP; NEW GENERAL PARTNERS;
----------------------------------
TRANSFER OF GENERAL PARTNER INTERESTS
-------------------------------------
Section 6.1. Continuation of Partnership. Upon the Withdrawal of a
---------------------------
General Partner, the remaining General Partner or General Partners, if any, or,
if none, the Withdrawing General Partner or his heirs, successors or assigns,
shall immediately send notice of such Withdrawal to each Partner, and the
Partnership shall be (i) dissolved if there is no remaining General Partner and
no Person who ▇▇▇▇ thereupon become a successor General Partner under Section
6.2 (subject to possible reconstitution as provided in Section 6.2(a)), or (ii)
continued by the remaining General Partner(s) as provided in the sentence next
following, if such remaining General Partner(s) so elect. The remaining General
Partner(s) shall have the right to continue the business of the Partnership upon
the Withdrawal of a General Partner.
Section 6.2. Designation of Successor or Additional General Partners;
--------------------------------------------------------
Reconstitution of the Partnership.
---------------------------------
(a) If, following the Withdrawal of a General Partner, there is no
remaining General Partner of the Partnership, then and in such event the Limited
Partners may elect by Consent of the Limited Partners, at any time before ninety
(90) days have elapsed following the Withdrawal of the last remaining General
Partner, to reconstitute the Partnership and continue its business for the
balance of the term specified in Section 2.5 hereof. If the Limited Partners so
elect to reconstitute the Partnership and thereupon shall, by Consent of the
Limited Partners, elect one or more Persons as successor General Partner(s),
then such Person(s) shall, if they accept such
11
appointment, be admitted to the Partnership as successor General Partner(s) and
the relationship among the then Partners shall be governed by this Agreement.
(b) If the successor General Partner(s) designated under the preceding
subsection (a) shall be a Limited Partner of the Partnership at the time of his
admission as a General Partner, his interest as a General Partner shall be the
same as it was as a Limited Partner; provided, however, that his interest as a
-------- -------
General Partner may be smaller than his interest as a Limited Partner (retaining
the difference as a Limited Partner) if, in the opinion of tax counsel to the
Partnership, such smaller General Partner interest will not jeopardize the
status of the Partnership as a partnership under the Code. If such successor
General Partner shall not then be a Limited Partner, his interest as a General
Partner shall be such interest as shall thereupon be voluntarily assigned to him
by any General and/or Limited Partners.
Section 6.3 Interest of Withdrawn General Partner.
-------------------------------------
(a) Each General Partner hereby covenants and agrees for himself and his
assigns, successors, heirs, executors and legal representatives to transfer, at
the time of his Withdrawal, to the remaining General Partner(s), or to a
successor General Partner selected in accordance with Section 6.2(a), as the
case may be, such portion of his General Partner interest, if any, as shall be
necessary, in the opinion of tax counsel to the Partnership, to ensure the
continued treatment of the Partnership as a partnership under the Code. No
consideration shall be paid to such Withdrawing Partner (or his estate) by the
remaining General Partners or the successor General Partner in the event of a
transfer pursuant to this Section 6.3. Notwithstanding the foregoing, such
Withdrawal and transfer shall not affect the right of the Withdrawing General
Partner to repayment of any loans made by such Withdrawing General Partner to
the Partnership in accordance with the provisions of Article VIII hereof. For
the purposes of Article IX hereof, the effective date of any transfer pursuant
to the provisions of this subsection (a) of all or any portion of the General
Partner interest of a Withdrawing General Partner shall be deemed to be the date
of Withdrawal, but the Partnership shall not make any distributions to the
designated transferee until the transfer has been made.
(b) That portion of the interest of the Withdrawn General Partner which
shall not have been transferred pursuant to Section 6.3(a) shall be retained by
such Withdrawn General Partner (or pass to his legal representatives, successors
or assigns) and shall, for all purposes hereunder except for purposes of
electing a new General Partner under Section 6.2(a) as a result of such
Withdrawing General Partner's Withdrawal, have the status of an interest of a
Limited Partner with the right to receive that share of the profits, losses and
distributions of the Partnership to which the Withdrawn General Partner, as
such, would have been entitled had he continued as a General Partner, reduced to
the extent of the interest transferred hereunder.
Section 6.4. Additional General Partners. Notwithstanding anything to the
---------------------------
contrary herein contained, the General Partner(s) (acting unanimously if there
shall be more than one such General Partner) shall have the right at any time,
and from time to time, with the Consent of the Limited Partners, to designate
one or more Persons as additional General Partner(s). Notice of any such
designation shall be promptly given to all the Limited Partners. Any such
Person so
12
designated as an additional General Partner shall, after having received the
Consent of the Limited Partners, become such upon his acceptance in writing of
such position and, if such Person is not already a Partner of the Partnership,
his agreeing to be bound by all of the terms and conditions of this Agreement as
the same may theretofore have been amended. Provided the Consent of the Limited
Partners to the admittance of an additional General Partner shall have been
obtained, the consent of all Limited Partners to such admission shall
conclusively be deemed to have been given for all purposes. If any Person
designated as an additional General Partner under this Article VI shall have
theretofore been a Limited Partner of the Partnership, such Person shall be
allocated as a General Partner all or such portion as shall be agreed upon by
the General Partner(s) and such Person of the percentage of profits, losses and
distributions as were previously allocated to him as a Limited Partner. It any
Person so designated as an additional General Partner shall not theretofore have
been a Partner of the Partnership, his interest as a General Partner shall be
such interest as shall thereupon be voluntarily assigned to him by any General
and/or Limited Partners.
Section 6.5. Amendment to Certificate. Upon the admission of an
------------------------
additional or successor General Partner, Schedules I and III hereto shall be
--------- - ---
amended to reflect such admission and an amendment to the Certificate reflecting
such admission shall be filed in accordance with the Uniform Act. Subject to
the provisions of Article IX hereof, the General Partners, acting singly, are
hereby constituted, and empowered to act as, the attorney-in-fact of each
Limited Partner, with authority to execute, acknowledge, swear to and deliver
such instruments as may be necessary or appropriate to carry out the foregoing
provisions of this Article VI, including amendments to the aforesaid Schedules
hereto, amendments to the Certificate required by the Uniform Act, and such
consents or ratifications as may be required for purposes of the Uniform Act,
business certificates and the like.
Section 6.6. Special Restrictions. No General Partner shall sell,
--------------------
mortgage, hypothecate, transfer, or otherwise dispose of his General Partner
interest in the Partnership except (i) dispositions pursuant to Section 6.3 or
6.4, or (ii) dispositions made with the written consent of all other General
Partners.
ARTICLE VII
-----------
TRANSFERABILITY OF LIMITED PARTNER INTERESTS
--------------------------------------------
Section 7.1. Restrictions on Transfer.
------------------------
(a) Except as otherwise expressly provided in this Article VII or as
required by law, no Limited Partner may voluntarily or involuntarily transfer,
sell, alienate, assign or otherwise dispose of all or any part of his interest
in the Partnership without the written consent of the General Partner.
(b) If, notwithstanding the preceding paragraph (a), a Limited Partner's
interest in the Partnership is, in whole or in part, pledged, hypothecated,
encumbered, assigned or transferred (whether by operation of law or otherwise)
to any person or persons (except with the prior written consent of the General
Partner), or if any attempt is made to effect any such assignment
13
or transfer (a "Prohibited Transfer"), then such Limited Partner shall be deemed
-------------------
automatically to have made an offer to sell to the Partnership and the
Partnership shall have the option in the sole discretion of the General Partner
to purchase, all or any portion of such Limited Partner's interest in the
Partnership, at a purchase price (prorated in the event of the General Partner's
election to purchase less than all of such Partnership interest) equal to the
Appraised Value of the Limited Partner's interest to be repurchased, determined
in accordance with the procedure set, forth in Section 7.4(b) through 7.4(h).
(c) In the event that the provisions of the preceding paragraphs (a) and
(b) shall be held unenforceable in connection with any proposed or purported
assignment or transfer of all or any portion of a Limited Partner's interest in
the Partnership, such Prohibited Transfer shall be automatically subject to the
prior right of the Partnership to repurchase such interest in the Partnership,
and such assignment or transfer shall not be recognized as consummated by the
Partnership until the General Partner shall have declined to exercise such
right, at a price and upon terms (subject to Section 7.1(d) hereof) no less
favorable than those which the proposed transferring Limited Partner would
receive from such assignment or transfer.
(d) The General Partner may exercise the Partnership's option under the
preceding paragraphs (b) or (c) by giving written notice of exercise to the
Limited Partner whose interest in the Partnership is subject of the Prohibited
Transfer and the person or persons who are the transferees or potential
transferees pursuant to such Prohibited Transfer. The General Partner's written
notice of exercise may be given at any time prior to sixty (60) days after the
General Partner receives written notice of the Prohibited Transfer (including at
any time prior to receipt of such written notice). The Partnership, upon
delivery of the General Partner's notice of exercise, shall be obligated to
purchase such Partnership interest. The closing of any repurchase of a Limited
Partner's Partnership interest under the provisions of paragraphs (b) or (c)
shall be held within a reasonable time, not to exceed thirty (30) days after the
later of the determination of the Appraised Value of the interest to be
purchased (solely in the case of a purchase pursuant to Section 7.1(b)) or
delivery of the General Partner's notice of exercise. Payment for such
repurchased Partnership interest shall be made either in full in cash, or
partially in cash together with a promissory note, in accordance with the
provisions of Section 7.4(g) below notwithstanding any provisions of Section
7.1(c) hereof.
(e) Any Limited Partner who shall assign all his interest in the
Partnership (other than by pledge or conditional assignment made with the
consent of the General Partner and which has not yet become effective) shall
cease to be a Limited Partner of the Partnership, and shall no longer have any
rights or privileges of a Limited Partner except that, unless and until the
assignee of such Limited Partner is admitted to the Partnership as a Substituted
Limited Partner in accordance with Section 7.2, said assigning Limited Partner
shall retain the statutory obligations of an assignor limited partner under the
Uniform Act.
(f) Upon any assignment made in accordance with this Section 7.1, there
shall be filed with the Partnership a duly executed and acknowledged counterpart
of the instrument making such assignment, which instrument shall evidence the
written acceptance of the assignee to be bound by all the provisions of this
Agreement and shall otherwise be in form satisfactory to
14
the General Partner; and if such an instrument is not so filed, the Partnership
need not recognize any such assignment for any purpose.
(g) An assignee of a Limited Partner interest who does not become a
Substituted Limited Partner as provided in Section 7.2 and who desires to make a
further assignment of his interest shall be subject to all the provisions of
this Article VII to the same extent and in the same manner as any Limited
Partner desiring to make an assignment of his interest.
Section 7.2. Substituted Limited Partners.
----------------------------
(a) Except as otherwise provided in this Article VII, no Limited Partner
shall have the right to substitute an assignee as a Limited Partner in his
place.
(b) Upon the transfer of the interest of a Limited Partner to an assignee
and the substitution of such assignee as a Substituted Limited Partner, Schedule
--------
II and, to the extent appropriate, Schedule III, shall be amended to reflect the
-- -------- ---
name and address of such assignee as a Substituted Limited Partner and to
eliminate the name and address of the predecessor Limited Partner. Each
Substituted Limited Partner shall, as a condition of his admission to the
Partnership as a Substituted Limited Partner, execute such instrument or
instruments as shall be required by the General Partner to signify his agreement
to be bound by all the provisions of this Agreement.
(c) Subject to the provisions of Article IX hereof, each of the General
Partners is hereby constituted and empowered to act singly as the attorney-in-
fact for the Limited Partners with authority to execute, swear to and deliver
such instruments as may be necessary or appropriate to carry out the provisions
of this Article VII, including amendments to the aforesaid Schedules hereto,
amendments to the Certificate, business certificates and the like.
Section 7.3. Additional Restrictions.
-----------------------
(a) In no event shall all or any part of a Limited Partner interest in the
Partnership be assigned or transferred to a minor (other than to a Related
Person by reason of death) or to an incompetent.
(b) The General Partner may, in addition to any other requirement it may
impose, require, as a condition of sale, transfer, exchange or other disposition
of any interest in the Partnership, that the transferor (i) assume all costs
incurred by the Partnership in connection therewith and (ii) furnish it with an
opinion of counsel satisfactory (both as to opinion and counsel) to the General
Partner that such sale, transfer, exchange or other disposition complies with
applicable federal and state securities laws.
(c) Any sale, exchange, transfer or other disposition in contravention of
any of the provisions of this Article VII shall be void and ineffectual and
shall not bind, or be recognized by, the Partnership.
15
Section 7.4. Purchase of Limited Partner Interest Upon Termination of
--------------------------------------------------------
Employment.
----------
(a) Notwithstanding anything to the contrary provided elsewhere in this
Agreement, upon the cessation for any reason whatsoever or for no reason
(including without limitation by reason of death, voluntary termination of
employment or involuntary termination with or without cause) of any individual
Limited Partner's employment by the General Partner and all Affiliated Persons
of the General Partner, the entire Limited Partner interest held by such
individual Limited Partner shall be sold by such Limited Partner and purchased
by the Partnership, or its nominee (provided if purchased by a nominee the
Partnership shall guaranty payment of amounts due) at an aggregate purchase
price equal to the aggregate Appraised Value thereof.
(b) For purposes of this Section 7.4, "Appraised Value", with respect to
--------- -----
each Limited Partner interest subject to repurchase, shall mean the amount such
Limited Partner would receive if the Partnership's total assets and business
were sold, and it was liquidated. For purposes hereof the sale value shall be
determined by valuing the Partnership's total assets and business as a going
concern, determined in accordance with the following subsections (c) through (h)
of this Section 7.4 and after taking into account all fixed and contingent
liabilities as set forth in the books of account maintained by the Partnership.
(c) A Limited Partner whose interest is subject to repurchase under this
Section 7.4 (or his Legal Representative in the event of his death or
incapacity) and the Partnership (x) shall undertake in good faith to reach
mutual agreement upon an Appraised Value of the Partnership within thirty (30)
days of the termination of employment giving rise to repurchase under this
Section 7.4; and (y) failing such mutual agreement, within five (5) days of the
end of such thirty-day period each of the Partnership and such Limited Partner
(or his Legal Representative in the event of his death or incapacity) shall
engage an appraiser, who shall, within sixty (60) days of the termination of
such employment, deliver a report to such Limited Partner (or his Legal
Representative in the event of his death or incapacity) and the Partnership
setting forth the value of the Partnership net of all Indebtedness (as defined
below). If either the Limited Partner, on the one hand, or the Partnership, on
the other hand, fails to name an appraiser in a timely manner or an appraiser
fails to deliver a report of value in a timely manner, the appraiser named by
the other party or the appraiser delivering the timely value report, as
applicable, shall determine that value alone. If the net values determined by
the two appraisers differ by ten percent (10%) or less (measured as a percentage
of the higher of the two appraisals), the average net value shall be the
Appraised Value of the Partnership, and the Limited Partner, on the one hand,
and the Partnership on the other hand, shall each bear the cost of its or their
appraiser. If the two appraisers are not within such range, then a third
appraiser shall be engaged, either by the two appraisers agreeing on such person
or else by applying to a court for a decision; and the Appraised Value of the
Partnership shall be the average of the third appraiser's determination and that
of the other appraiser closest in value thereto. If a third appraiser is
engaged to determine the Appraised Value, the cost of all of the appraisers and
all other costs of the appraisal process with respect to determining the
Appraised Value of the Partnership shall be borne by the Limited Partner, on the
one hand, or the Partnership on the other hand, whose designated appraiser's
determination is not taken into account under the immediately preceding
sentence. If any appraiser is unable or unwilling to serve, his successor shall
be chosen within fifteen (15) days of
16
his failing or ceasing to serve in the same manner as he was chosen.
Notwithstanding the foregoing provisions of this subsection (c) the parties may
at any time by agreement determine the Appraised Value of the Partnership and
terminate the appraisal process. Each appraiser designated pursuant to this
subsection (c) shall be a reputable appraiser with at least five (5) years'
professional experience.
(d) For purposes of this Section 7.4, "Indebtedness" shall mean all
------------
obligations of the Partnership, fixed and contingent as set forth in the books
of account maintained by the Partnership.
(e) The Appraised Value determined by each appraiser pursuant to this
Section 7.4 shall take into account and use as a standard the price that a
ready, willing and able buyer under no compulsion to buy, and a willing seller
under no compulsion to sell, would establish for the Partnership as of the
applicable date on a freely-negotiated basis and assuming that the purchase
price were to be paid in cash at the time of closing. Any cash or liquid
investments held by the Partnership as of the relevant date shall be taken into
account in determining the Appraised Value.
(f) All appraisers selected hereunder shall have at least ten (10) years
experience in valuing businesses, shall have appraised companies with an
aggregate value for all appraisals of at least $100,000,000 and shall have
appraised a single company with an appraised value of at least $25,000,000. The
Appraised Value of the Partnership determined pursuant to this Section 7.4 shall
be binding and conclusive on all parties, and award based thereon may be entered
in any court of competent jurisdiction and shall be final and binding on all
parties.
(g) Payment of the repurchase price for the Limited Partner interest
subject to repurchase pursuant to this Section 7.4 shall be made, at the
closing, either (i) in full, in cash or by certified or bank check, or (ii) in
cash or by certified or bank check in an amount equal to the greater of twenty-
five percent (25%) of the total repurchase price or $500,000, and by a
promissory note of the Partnership in the form of Exhibit A annexed hereto (the
------- -
"Note"), in a principal amount equal to the balance of such total purchase
----
price. The principal amount of any such promissory note shall be paid in one or
a series of installments, each installment except the final installment being in
an amount equal to the greater of one-third of such principal amount or
$500,000, payable on each anniversary of the date of the repurchase closing
until paid in full. Any such promissory note shall bear interest on the unpaid
principal balance thereof at an annual rate equal to one percent (1%) above the
rate of interest in effect on the date of the closing designated by The First
National Bank of Boston at its head office as its base rate. Interest shall be
payable in arrears on each principal installment payment date. If payment is
made in installments hereunder the selling Limited Partner shall obtain at the
time of closing of his sale a perfected security interest in the Partnership
interest sold to secure payments under the Note.
(h) In determining Appraised Value, the appraisers shall not take into
account the fact that any Limited Partner, or any Limited Partner's predecessor
in interest, ceasing to be an employee of the General Partner and all Affiliated
Persons of the General Partner may significantly adversely affect the value of
the Partnership. Notwithstanding anything otherwise
17
provided, the right of the General Partner or an Affiliated Person to terminate
a Limited Partner's employment, with or without cause shall not be restricted
even if the timing of such termination of employment may have a significant
adverse effect on the Limited Partner's investment in this Partnership. Nothing
contained in this Agreement shall be construed to create any employment rights
whatsoever in any Limited Partner or Related Person of a Limited Partner.
ARTICLE VIII
------------
BORROWINGS AND LOANS
--------------------
(a) All Partnership borrowings shall be subject to the terms of this
Agreement. To the extent borrowings are permitted, they may be made from any
source, including Partners and Affiliated Persons. The Partnership may issue
suitable promissory notes to evidence such loans.
(b) If any Partner shall lend any moneys to the Partnership, the amount of
any such loan shall not constitute an increase in the amount of his Capital
Contribution nor affect in any way his share of the profits, losses and
distributions of the Partnership. Subject to the provisions of this Article
VIII, any loans made by a Partner shall be obligations of the Partnership of
equal rank with obligations to unsecured third-party creditors, and any interest
payable thereon shall be at the same rate applicable to the Note.
ARTICLE IX
----------
PROFITS, LOSSES AND CREDITS; DISTRIBUTIONS
------------------------------------------
Section 9.1. Profits, Losses and Credits.
---------------------------
(a) All profits and losses of the Partnership and all credits of the
Partnership except those arising from Capital Transactions shall be allocated
for all purposes (including federal and state income tax purposes) among the
Partners listed on Schedule IIIA in accordance with the Profit-Sharing Ratios
-------- ----
set forth therein.
(b) All profits of the Partnership arising from a Capital Transaction
shall be allocated for all purposes (including federal and state income tax
purposes) first among the Partners listed on Schedule IIIB(1) in accordance with
----------------
the Profit-Sharing Ratios set forth therein up to the amount of the Preferred
Return reduced by any prior allocation under this clause first and then among
the Partners listed on Schedule IIIB(2) in accordance with the Profit-Sharing
----------------
Ratios set forth therein.
(c) All losses of the Partnership arising from a Capital Transaction shall
be allocated among the Partners pro rata in accordance with their positive
Capital Account balances and after such Capital Account balances have been
reduced to zero to the Partners in accordance with the Profit-Sharing Ratios set
forth on Schedule IIIB(1).
-------- -------
(d) All profits and losses allocated to a Partner shall be credited or
charged, as the case may be, to his capital account. The terms "profits",
"losses" and "credits" as used in this
18
Agreement shall mean taxable income, gains, losses and credits (and items of
income, gains, losses and credits entering into the computation thereof), all as
determined for federal income tax purposes using the accounting methods followed
by the Partnership.
Section 9.2. Distributions Prior to Dissolution.
----------------------------------
(a) All Cash Flow of the Partnership, shall be distributed as follows:
First, among the Partners listed in Schedule IIIA up to the amount of the
-------- ----
then aggregate pre-tax net income, (as calculated for generally accepted
accounting principles) of the Partnership reduced by any distributions under
this clause First, and
Second, in accordance with the Profit-Sharing Ratios specified on Schedule
--------
IIIB(1) hereto, and exclusively among the Partners specified in Schedule
------- --------
IIIB(1), as in effect from time to time.
-------
(b) All Net Cash Proceeds from Capital Transactions shall be allocated
first among the Partners listed in Schedule III(B)(1) in accordance with the
-------- ---------
Profit-Sharing Ratios set forth therein up to the amount of the Preferred Return
reduced by any prior allocation under this clause first and under clause Second
of 9.2(a) and then among the Partners listed on Schedule IIIB(2) in accordance
-------- -------
with the Profit-Sharing Ratios set forth therein.
(c) The respective Profit-Sharing Ratios specified on Schedule III may be
-------- ---
changed at any time by the unanimous written consent of the Partners then
specified on much Schedule who are adversely affected by such change. Such
distributions shall be made by the General Partner from time to time, but not
less frequently than annually, as they may deem consistent with the operating
needs of the Partnership.
(d) Notwithstanding the foregoing provisions of this Section 9.2, if, in
the opinion of the General Partner, any Net Cash Proceeds from Capital
Transactions are required to be used by the Partnership to repay indebtedness of
the Partnership, or retained for a contingent future payment of such
indebtedness, such Net Cash Proceeds shall not be distributed to the Partners,
but rather shall be so used or retained by the Partnership until additional cash
shall become available for distribution to the Partners in the manner specified
in Article VIII hereof, but on expiration of the contingency, the Net Cash
Proceeds so retained shall be distributed to those Partners who, but for such
retention, would have received such Net Cash Proceeds.
Section 9.3. Distributions Upon Dissolution.
------------------------------
(a) Upon dissolution of the Partnership, unless the Partnership shall be
reconstituted as specified in Article VI hereof, the assets of the Partnership
shall, first be applied to payment of, or the establishment of adequate reserves
for the future payment of, the debts of or obligations of the Partnership,
including loans by Partners and Affiliated Persons and accrued interest thereon.
The remaining assets of the Partnership (or the proceeds of sales or other
dispositions in liquidation of the Partnership assets which the remaining or
surviving General Partners have determined to sell or dispose of) shall then be
distributed to the Partners in the respective
19
manners set forth in Section 9.2(b); provided, however, that the General Partner
-------- -------
shall contribute to the capital of the Partnership an amount equal to (and shall
in no event be obligated to contribute more than) the lesser of (i) any negative
amount of its Capital Account existing after the distributions and allocations
required hereunder or (ii) 1.01% of the Capital Contributions made by the
Limited Partners. Any amount so contributed by the General Partner shall be
distributed to the Limited Partners in the respective manners set forth in
Section 9.2.
(b) If any assets of the Partnership are to be distributed in kind, such
assets shall be distributed on the basis of the fair market value thereof and
any Partner entitled to any interest in such assets shall receive such interest
therein as a tenant-in-common with all other Partners so entitled. The fair
market value of such assets shall, to the extent necessary, be determined by an
independent appraiser to be selected by the General Partner.
Section 9.4. Adjustment of Shares of Profits, Losses and Distributions to
------------------------------------------------------------
Insure 1% to the General Partner. Notwithstanding the foregoing provisions of
--------------------------------
this Article IX, in no event shall there be allocated or distributed to the
General Partner or, the General Partners as a group, as the case may be
hereunder less than 1% of the aggregate of the profits, losses, credits and cash
distributions to be allocated or distributed to the Partners hereunder (the "One
---
Percent Share"). If the amounts of profits, losses or credits allocable or cash
-------------
distributable to the General Partners in connection with any allocation or
distribution to the Partners hereunder shall not otherwise equal or exceed the
One Percent Share without giving effect to this provision, then all such amounts
otherwise allocable and distributable to the Limited Partners hereunder shall be
proportionately reduced in order to assure the General Partner of their One
Percent Share.
ARTICLE X
---------
BOOKS AND RECORDS; ACCOUNTING; TAX ELECTIONS
--------------------------------------------
Section 10.1. Books and Records.
-----------------
(a) The General Partner shall keep or cause to be kept complete and
accurate books and records of the Partnership in accordance with generally
accepted accounting principles, which books and records shall be maintained and
be available at the principal office of the Partnership for examination by any
Partner, or his duly authorized representatives, at any and all reasonable
times. The Partnership may maintain such other books and records and may
provide such financial or other statements as the General Partner deems
advisable.
(b) The General Partner shall maintain at the Partnership's principal
office in Massachusetts the following documents: (i) a current list of the full
name and last known business address of each Partner set forth in alphabetical
order, (ii) a copy of the Certificate and all amendments thereto, together with
executed copies of any powers of attorney pursuant to which the Certificate or
any such amendment has been executed, (iii) copies of the Partnership's federal,
state and local income tax returns and reports, if any, for the three most
recent years, and (iv) copies of this Agreement as then in effect and of any
financial statements of the Partnership for the three most recent years. Such
documents are subject to inspection and copying at the reasonable request, and
at the expense, of any Partner during ordinary business hours.
20
(c) In addition, the Partnership will furnish a list of the names and
addresses of all Limited Partners, together with their respective Capital
Contributions, to any Limited Partner who makes a written request therefor to
the Partnership. Except to the extent requested by any Limited Partner, the
General Partner shall have no obligation to deliver or mail a copy of the
Partnership's Certificate or any amendment thereto to the Limited Partners.
(d) Each Limited Partner shall also have the right to obtain from the
General Partner from time to time upon reasonable demand: (i) true and full
information regarding the status of the business and financial condition of the
Partnership, (ii) promptly after becoming available, a copy of the Partnership's
federal, state and local income tax returns for each year, and (iii) other
information regarding the affairs of the Partnership as is just and reasonable.
Section 10.2. Bank Accounts. The bank accounts of the Partnership shall
-------------
be maintained in such banking institutions as the General Partner shall
determine, and withdrawals shall be made therefrom on such signature or
signatures as the General Partner shall determine.
Section 10.3. Accountants. The Accountants for the Partnership shall be
-----------
such firm of public or certified public accountants as shall be engaged by the
General Partner from time to time.
Section 10.4. Reports to Partners. For each Limited Partner who shall be
-------------------
entitled to share in the Partnership's income, losses or credits during any
fiscal year (based upon such Partner's interest as reflected in the General
Partner shall cause to be prepared and sent to such Limited Partner a statement
indicating the share of such Limited Partner of the net income, net loss,
depreciation recapture, gain, loss and other relevant items of the Partnership
sufficient to enable such Limited Partner to prepare his own respective federal
and state tax return for the calendar year in which such fiscal year of the
Partnership was completed. Such statement shall be delivered within ninety (90)
days after the close of each such calendar year, provided that no cause of
action shall accrue to any Partner under this Section 10.4 if the General
Partner shall have acted in good faith in attempting to meet their obligations
under this Section.
Section 10.5. Tax Elections; Special Basis Adjustments. The General
----------------------------------------
Partner shall, in their reasonable discretion, make all tax elections on behalf
of the Partnership. In the event of a transfer of all or any part of the
interest of any Partner for an amount in excess of the adjusted basis for such
interest for federal income tax purposes, the Partnership may elect, pursuant to
Section 754 of the Code (or corresponding provisions of succeeding law), to
adjust the basis of the Partnership property. Such adjustment shall be made
only if the General Partner, in its discretion, determines such election should
be made. Notwithstanding anything contained in Article IX of this Agreement,
any adjustments made pursuant to Section 754 shall affect only the successor in
interest to the transferring Partner. Each Partner will furnish the Partnership
with all information necessary to give effect to such election.
Section 10.6. Maintenance of Books for Accounting and Tax Purposes; Fiscal
------------------------------------------------------------
Years. Subject to the foregoing provisions of this Article X, the books of the
-----
Partnership shall be kept on such basis as the General Partner may determine.
In connection therewith, the General Partner shall select such fiscal year(s)
for accounting and tax purposes as they deem appropriate.
21
ARTICLE XI
----------
GENERAL PROVISIONS
------------------
Section 11.1. Transfer of All Partners' Interest in Exchange. In the
----------------------------------------------
event that, at any time, one or more Limited Partner, whose aggregate Capital
Contributions (as reflected on Schedule II hereto) represent at least seventy
-------- --
percent (70%) of the total Capital Contributions of the Limited Partners (the
"Controlling 70%") elect to transfer their Limited Partners' interests in this
----------- ---
Partnership to another entity in exchange for equity interests therein, in
connection with or in contemplation of a public offering of the equity of any
class of such entity pursuant to an effective registration statement filed with
the Securities and Exchange Commission under the Securities Act of 1933, as
amended, then the Controlling 70% may by a notice sent to each Limited Partner
require such Limited Partner to transfer his Limited Partner's interests in this
Partnership to such entity on terms identical to the terms applicable to the
Controlling 70%.
Section 11.2. Appointment of General Partner as Attorney-in-Fact.
--------------------------------------------------
(a) Without limiting the effect of provisions elsewhere in this Agreement
appointing the General Partner as attorney-in-fact for all those who become
Limited Partners (including Substituted or additional Limited Partners) under
this Agreement in connection with the doing of certain acts and the filing of
certain papers, each Limited Partner (including a Substituted or additional
Limited Partner) by the execution of this Agreement or any counterpart hereof
irrevocably constitutes, appoints and empowers the General Partner as such
Limited Partner's true and lawful agent and attorney-in-fact with full power and
authority in such Limited Partner's name, place and stead to execute,
acknowledge, swear to, deliver and file all such instruments, agreements and
other documents, and to take all such other actions, as may be necessary or
appropriate, as determined by the General Partner, to carry out the intentions
and purposes of this Agreement (provided that the General Partner shall have
--------
given such Limited Partner not less than three business days' prior written
notice of the General Partner's intention to take any such action as such
Limited Partner's attorney-in-fact under this Section 11.2(a)), including,
without limitation, any of the transactions for transfer of Limited Partner
interests set forth in Sections 7.1, 7.2, 7.4 or 11.1 hereof, and all amendments
to this Agreement and the Schedules hereto effected in accordance with this
Agreement, the Certificate and all amendments thereto effected in accordance
herewith, and all business certificates and other certificates and amendments
thereto to be executed and/or filed from time to time in accordance with
applicable laws.
(b) The foregoing appointment shall be deemed to be a power coupled with
an interest in recognition of the fact that each of the Partners under this
Agreement will be relying upon the foregoing appointment of the General Partner
as attorney-in-fact for each Limited Partner, and the power of the General
Partner to act in such capacity as contemplated by this Agreement. The foregoing
power of attorney shall be irrevocable and shall survive the death, incapacity
or dissolution of any Limited Partner, and the assignment by any Limited Partner
of the whole or any part of his interest hereunder.
22
(c) Each of the Limited Partners is aware that the terms of this Agreement
permit certain instruments to be executed, certain transfers to be effected,
certain amendments of this Agreement, the Schedules hereto and the Certificate
to be effected and certain other actions to be taken or omitted by, or with
respect to, the Partnership, in each case with the approval of less than all the
Limited Partners if, as applicable; (A) such amendment or action will have an
adverse effect upon less than all of the Limited Partners, or (B) the Consent of
the Limited Partners (as herein defined) shall have been given in favor of such
action, or (C) an election is made by a Controlling 70% in accordance with
Section 11.1. If, as, and when:
(i) such an amendment is proposed or such an action is proposed to
be taken or omitted by, or with respect to, the Partnership which requires,
under the terms of this Agreement, (x) consent only of the Limited Partners
who are adversely affected thereby, or (y) the Consent of the Limited
Partners, or (z) election by a Controlling 70%;
(ii) any of (x) the consent of those Limited Partners who would be
adversely affected by such amendment or action, or (y) the Consent of the
Limited Partners, or (z) election by a Controlling 70%, as appropriate, has
been given in the manner contemplated by this Agreement; and
(iii) a Limited Partner has failed or refused to consent to such
amendment or action (hereinafter referred to as a "Non-consenting Limited
----------------------
Partner"), then each Non-consenting Limited Partner agrees that each
-------
attorney-in-fact specified above, with full power of substitution, is
hereby authorized and empowered to execute, acknowledge, make, swear to,
verify, deliver, record, file and/or publish, for and in behalf of such
Non-consenting Limited Partner, and in his name, place and ▇▇▇▇▇, any and
all instruments and documents which may be necessary or appropriate under
the Uniform Act and any and all other applicable laws and regulations to
permit such amendment to be lawfully made or action lawfully taken or
omitted, provided that the General Partner shall have given such Limited
Partner not less than three business days prior written notice of the
General Partner's intention to take any action as such Limited Partner's
attorney-in-fact under this Section 1l.2(c)(iii). Each consenting and Non-
consenting Limited Partner is fully aware that he and each other Limited
Partner have executed this special power of attorney and that each Limited
Partner will rely on the effectiveness of such powers with a view to the
orderly administration of the Partnership's affairs.
Section 11.3. Notices. Any notice or communication required or permitted
-------
to be given pursuant to this Agreement shall be deemed to have been duly and
sufficiently given for all purposes if in writing and delivered personally to
the party or to an officer, trustee or other representative of the party to whom
such notice is directed or if sent, postage prepaid, by courier service (e.g.,
----
Federal Express), or by certified or registered mail, postage and registration
prepaid, return receipt requested. Any such notice shall be deemed to have been
given on the date on which the same was personally delivered or mailed, as
applicable. All such mailed notices in order to be effective shall be addressed
to the last address of record on the Partnership books when given by the General
Partner and intended for the Limited Partner; and to the
23
address of the Partnership when given by the Limited Partner and intended for
the General Partner.
Section 11.4. Word Meanings. Words such as "herein", "hereinafter",
-------------
"hereof" and "hereunder" refer to this Agreement as a whole and not merely to a
subdivision in which such words appear unless the context otherwise requires.
The singular shall include the plural and the masculine gender shall include the
feminine and neuter, and vice versa, unless the context otherwise requires.
Section 11.5. Other Agreements. This Agreement shall govern exclusively
----------------
the affairs of the Partnership and the Partners as to the matters herein
described, but shall not be deemed to affect any other agreement between any
General or Limited Partner and the Partnership or any other Partner respecting
matters not herein described.
Section 11.6. Binding Effect. The covenants and agreements contained
--------------
herein shall be binding upon and inure to the benefits of, the heirs, legal
representatives, successors and assigns of the respective parties hereto.
Except to the extent required by the Uniform Act and for fees, rights to
reimbursement, and other compensation provided for hereunder as such, none of
the provisions of this Agreement shall be for the benefit of or be enforceable
by any creditor of the Partnership.
Section 11.7. Applicable Law; Supremacy of Uniform Act. This Agreement
----------------------------------------
shall be construed and enforced in accordance with the laws of The Commonwealth
of Massachusetts. Notwithstanding any other provision of this Agreement, no
action may be taken under this Agreement unless such action is taken in
compliance with the provisions of the Uniform Act.
Section 11.8. Counterparts. This Agreement may be executed in several
------------
counterparts (including separate signature pages) and all so executed shall
constitute one agreement binding on all parties hereto, notwithstanding that all
parties have not signed the same counterpart or that any such counterpart does
not have attached copies of all Schedules and signature pages hereto as then in
effect. No counterpart of this Agreement or of any such Schedule or signature
page shall be binding unless signed by one or more of the General Partners. The
General Partner shall maintain at the principal office of the Partnership a
counterpart of this Agreement (including separate signature pages) as executed
by all Partners and to which shall be attached copies of all Schedules hereto as
then in effect, which counterpart shall be available for inspection by any
Partner.
Section 11.9. Separability of Provisions. Each provision of this
--------------------------
Agreement shall be considered separable and (i) if for any reason any provision
or provisions herein are determined to be invalid and contrary to any existing
or future law, such invalidity shall not impair the operation of or affect those
portions of this Agreement which are valid, or (ii) if for any reason any
provision or provisions herein would cause the Limited Partners who are not also
specifically designated herein as General Partners to be bound by the
obligations of the Partnership as General Partners under the laws of the
Commonwealth of Massachusetts as the same may now or hereafter exist, such
provision or provisions shall be deemed void and of no effect.
24
Section 11.10. Waiver. No consent to or waiver of any breach or default
------
in the performance of any obligations of the parties under this Agreement shall
be deemed or construed to be a consent to or waiver of any other breach or
default in the performance of any of the same or any other obligations
hereunder. Subject to Section 11.11, no waiver hereunder shall be effective
unless it is in writing, executed by the party waiving a breach or a default
hereunder.
Section 11.11. No Jury Trial; Liability; Statute of Limitations; Venue;
--------------------------------------------------------
Jurisdiction. All parties hereto waive all rights to a jury trial with respect
------------
to any dispute hereunder. If any Partner brings any litigation against the
Partnership or any other Partner, or if the Partnership brings any litigation
against any Partner, in each case based on any rights such party may have under
this Agreement, or if any Partner or the Partnership fails to take actions
required of such party hereunder which the Partnership or any Partner,
respectively, contests by litigation, then the party which prevails in such
litigation shall be entitled to have all its costs and expenses (including legal
fees and court costs) in connection with such litigation paid by the other
party. Any cause of action or matter in dispute is hereby waived unless
judicial proceedings are initiated by the complaining party within one year from
the later of the accrual of cause of the action or the date upon which the cause
of action should reasonably have been discovered. The parties hereto agree that
any dispute hereunder shall be submitted to the federal or appropriate state
court having jurisdiction and located in Boston, Massachusetts, and the parties
consent to the venue and jurisdiction of such courts.
Section 11.12. Advice of Counsel. Each Partner in executing and
-----------------
delivering the signature pages attached hereto represents that he, she or it has
reviewed this Agreement with counsel of his, her or its choosing.
Section 11.13. Amendments. This Agreement may be amended or modified by
----------
the General Partner with the Consent of the Limited Partners, provided, however,
-------- -------
that (i) no amendment shall increase the liability or obligations of any Partner
without the written consent of such Partner, (ii) except as otherwise
specifically provided herein, no amendment shall reduce any Partner's rights to
share in the Partnership's Cash Flow, Net Cash Proceeds, or profits, losses and
credits without the written consent of such Partner, and (iii) the written
consent of all Partners must be obtained for any amendment which would amend
this Section 11.13.
Section 11.14. Effective Date. Notwithstanding the separate dates of
--------------
execution hereof, all parties hereto agree that this Agreement shall become
effective as of the date first set forth above. In the event Schedule III shall
-------- ---
hereafter be amended as provided herein to change any Profit-Sharing Ratio
specified thereon, the effective date of such change shall be as specified on
such Schedule as amended.
25
Section 11.15. Limited Partner Signature Pages. The Limited Partner
-------------------------------
signature pages attached hereto constitute part of this Agreement.
WITNESS the execution hereof under seal as of the date first set forth
above.
KHI CORPORATION, as General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇, President
26
HARBORSIDE HEALTHCARE LIMITED PARTNERSHIP
LIMITED PARTNERS SIGNATURE PAGE
-------------------------------
The undersigned hereby executes as Limited Partner under seal the Agreement
of Limited Partnership dated as of May 28, 1987, as amended and restated as of
July 1, 1995, of Harborside Healthcare Limited Partnership, and hereby adopts
and agrees to be bound by all the provisions thereof effective as of July 1,
1995.
KHC Partners Limited Partnership
By: KHI CORPORATION, as General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇, President
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
/s/ DAMIAN DELL'ANNO
-------------------------------------------
Damian Dell'Anno
Accepted as of the date specified herein:
KHI Corporation as General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇, President
27
Schedule I
----------
GENERAL PARTNER
---------------
General Partner Business Address Capital Contribution
--------------- ----------------- --------------------
KHI Corporation ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ $1.00
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Total: $1.00
Schedule II
-----------
LIMITED PARTNERS
----------------
Limited Partners Business Address Capital Contribution
---------------- ---------------- --------------------
KHC Partners Limited ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ $91.50
Partnership ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ $ 6.00
▇▇▇▇▇▇ , ▇▇ ▇▇▇▇▇
Damian Dell'Anno ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ $ 1.50
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Total: $99.00
Schedule III
------------
PROFIT-SHARING RATIOS
---------------------
A. Allocations Among Partners Per Sections 9.1(a) and 9.2(a)
---------------------------------------------------------
General Partner Profit-Sharing Ratio
--------------- --------------------
KHI CORPORATION 1.0%
Limited Partners
----------------
KHC Partners Limited Partnership 99.0%
-----
Total 100.0%
B.(1) Allocations Among Partners Per Sections 9.1(b) and 9.2(a) and (b)
-----------------------------------------------------------------
General Partner Profit-Sharing Ratio
--------------- --------------------
KHI CORPORATION 1.0%
Limited Partners
----------------
KHC Partners Limited Partnership 93.0%
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 6.0%
-----
Total 100.0%
B.(2) Allocations Among Partners Per Sections 9.1(b) and 9.2(b)
---------------------------------------------------------
General Partner Profit-Sharing Ratio
--------------- --------------------
KHI CORPORATION 1.0%
Limited Partners
----------------
KHC Partners Limited Partnership 91.0%
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 6.0%
Damian Dell'Anno 2.0%
-----
Total 100.0%
Accepted and agreed as of
July 1,1995
KHI CORPORATION,
as General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇, President
KHC PARTNERS LIMITED PARTNERSHIP
By: KHI Corporation, as General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇, President
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
/s/ DAMIAN DELL'ANNO
------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇, President
EXHIBIT A
---------
NONNEGOTIABLE PROMISSORY NOTE
-----------------------------
$__________________________ [Date]
FOR VALUE RECEIVED, the undersigned, [Harborside Healthcare Limited
Partnership or nominee], (together with its successor, the "Debtor"), by this
------
Promissory Note (this "Note"), absolutely and unconditionally promises to pay to
----
________________________ (the "Payee") the principal sum of
-----
_______________________________ Dollars ($_______________) and to pay interest
on the principal sum outstanding hereunder from time to time from the date
hereof until the said principal sum or the unpaid portion thereof shall have
become due and payable at the rate of _____ percent (__%) per annum [1% above
the Base Rate of The First National Bank of Boston on the date of issuance].
The principal hereof shall be paid in ______________ annual installment[s],
equal to [$500,000/one-third (1/3) of the original principal amount] and a final
installment equal to the remaining principal balance, payable on the first
________ anniversaries of the date of this Note, with a final maturity on
________. Interest accruing hereunder shall be paid on each principal
installment payment date and at the stated or any accelerated maturity hereof.
All payments of principal and interest hereunder shall be made at the principal
residence or business address of the holder hereof.
The Debtor shall have the right, to prepay the unpaid principal amount of
this Note in full at any time, or in part from time to time, without premium or
prepayment penalty, with all interest accrued to the date of prepayment on the
principal amount prepaid. The Debtor shall give the holder hereof at least
three business days prior written notice of each, if any, proposed date of
prepayment and shall specify the portion of the unpaid principal amount of this
Note to be prepaid on such date. Each partial prepayment of principal shall be
applied to the installments of principal due hereunder in the inverse order of
maturity.
This Note is made and delivered by the Debtor to the Payee pursuant to
Amended and Restated Agreement of Limited Partnership of Harborside Healthcare
Limited Partnership, dated as of May 28, 1987, as amended and restated as of
July 1, 1995 (the "Partnership Agreement"). This Note and all payments on or in
---------------------
respect of this Note are subject to the provisions of the Partnership Agreement,
to which reference is hereby made.
Anything implied herein to the contrary notwithstanding in the event that
(i) the Debtor shall fail to pay when due any installment of principal or
interest on this Note, (ii) the Debtor shall make an assignment of the whole or
a substantial part of its assets for the benefit of creditors, or (iii) there
shall be commenced by or against the Debtor any proceeding, which in the case of
a proceeding against the Debtor shall not have been dismissed within sixty (60)
days of its commencement, then the holder hereof may, in his, her or its
discretion, without notice to or demand upon the Debtor declare the entire
unpaid principal of this Note and all of the unpaid interest accrued thereon to
be immediately due and payable, whereupon all of the unpaid principal of this
Note and all of the unpaid interest accrued thereon shall (if not already due
and payable) forthwith become and be due and payable to the order of the holder.
A-1
Every Obligor waives presentment, notice, protest and all other demands and
notices and assents to any extension of the time of payment or any other
indulgence, to any substitution, exchange or release of collateral and/or to the
release of any other Obligor. As used herein "Obligor" means any person
-------
primarily or secondarily liable hereunder or in respect hereto.
The failure of the holder to exercise any of its rights, remedies, powers
or privileges hereunder in any instance shall not constitute a waiver thereof in
that or any other instance.
The Debtor will pay on demand all costs of collection including all court
costs and reasonable attorneys' fees paid or incurred by the holder in enforcing
this Note on default.
This Note is delivered in and shall be governed by and interpreted and
determined in accordance with the laws of the Commonwealth of Massachusetts.
WITNESS the hand and seal of the undersigned on the day and in the year
first above written.
[NAME OF DEBTOR]
By: ________________________________
Title:__________________________
A-2