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EXHIBIT 10.56
AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
TRIAD SENIOR LIVING I, L.P.
(FORMERLY KNOWN AS TRI POINT COMMUNITIES, L.P.)
THIS AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP is
dated effective as of April 1, 1998, by and between Capital Retirement Group,
Inc., a Texas corporation (the "Withdrawing General Partner"), Triad Senior
Living, Inc., a Texas corporation (the "General Partner"), ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
("▇▇▇▇"), ▇▇▇ Trust ("▇▇▇" and, together with ▇▇▇▇, the "Withdrawing Limited
Partners"), ▇▇▇▇▇ ▇. Fail ("Fail") and Capital Senior Living Properties, Inc., a
Texas corporation ("Capital Senior Living" and, together with Fail, the "Limited
Partners").
WHEREAS, the Withdrawing General Partner and the Withdrawing Limited
Partners entered into that certain Agreement of Limited Partnership of Tri Point
Communities, L.P. (the "Partnership"), dated November 6, 1997 (the "Original
Agreement"); and
WHEREAS, the General Partner desires to purchase the Withdrawing
General Partner's interest in the Partnership and the Withdrawing General
Partner desires to withdraw from the Partnership; and
WHEREAS, Fail desires to purchase the Withdrawing Limited Partners'
interests in the Partnership and the Withdrawing Limited Partners desire to
withdraw from the Partnership; and
WHEREAS, Capital Senior Living desires to make a capital contribution
to the Partnership in exchange for the issuance of a limited partner interest in
the Partnership; and
WHEREAS, the Withdrawing General Partner, the Withdrawing Limited
Partners, the General Partner and the Limited Partners desire to effect such
transfers and issuances, all as more fully set forth herein; and
WHEREAS, the General Partner and the Limited Partners desire to
continue the existence of the Partnership and to amend and restate the terms and
provisions of the Original Agreement, including changing the name of the
Partnership to "Triad Senior Living I, L.P.";
NOW THEREFORE, in consideration of the foregoing and of the mutual
covenants, conditions and agreements hereinafter set forth, the parties hereby
agree as follows:
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ARTICLE I
ADDITIONAL DEFINITIONS
As used herein, the following terms shall have the following meanings:
"Accountant" - means any independent firm of certified public
accountants as may be engaged by the General Partner for the Partnership.
"Affiliate" - means (a) a General Partner; (b) a Limited Partner; (c) a
member of the immediate family of a partner, shareholder, of a General Partner
or a Limited Partner; (d) a legal representative of any Person, referred to in
the preceding clauses (a) through (c); (e) a trustee for the benefit of any
Person referred to in the preceding clauses (a) through (c); (f) a corporation,
joint venture, partnership or other business entity which is controlled by such
person or entity and/or any one or more of the Persons referred to in the
preceding clauses (a) through (c); (g) a corporation, joint venture, partnership
or other business entity which controls or is under common control with such
person or entity, and/or with a person or entity referred to in the preceding
clauses (a) through (c); or (h) the partners, officers, directors and key
employees of such entity and/or any corporation, joint venture, partnership or
other business entity referred to in the preceding clauses (a), (b), (c), (f) or
(g).
"Agreement" or "this Agreement" - means this Agreement of Limited
Partnership, as amended from time to time.
"Capital Contributions" - means the gross amount of contributions
actually made to the capital of the Partnership by a Partner or all the
Partners, as the case may be. Loans to the Partnership by any Partner shall not
be considered a Capital Contribution.
"Certificate" - means the Certificate of Limited Partnership of this
Partnership filed with the Secretary of State of the State of Texas, as such
Certificate may be further amended and filed from time to time.
"Certificate of Occupancy" - means that certain certificate of
occupancy which has been issued for any building at a Property.
"Code" - means the Internal Revenue Code of 1986, as amended.
"Development Agreement" - means the development agreement between the
Partnership and Capital Senior Development, Inc. relating to the Properties, as
such agreement may be amended from time to time.
"Fiscal Year" - means the fiscal year of the Partnership as set forth
in Section 11.1 hereof.
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"General Partner" - means Triad Senior Living, Inc., and any additional
or successor General Partner(s) designated in any case as such in accordance
with the provisions of this Agreement, and, from time to time, holding such
position in accordance with such provisions.
"Gross Receipts" - means all revenues received by the Partnership from
the operations of its business attributable to a particular period as determined
in accordance with the cash receipts and disbursements method of accounting, and
including, without limitation, any loans from Partners and third parties, and
other amounts paid by Partners and third parties to the Partnership, but not
including capital contributions.
"Limited Partners" - means ▇▇▇▇▇ ▇. Fail and Capital Senior Living
Properties, Inc., and any additional or substitute Limited Partner(s) as may be
designated as such in accordance with the provisions of this Agreement.
"Lenders" - means Bank One, Texas, N.A. and the other Lenders (as such
term is defined therein) under the Master Loan Agreement dated December 23, 1997
by and among Tri Point Communities, L.P., Bank One, Texas, N.A., as Agent for
the Lenders, and the Lenders named therein, as the same may be modified, amended
or restated from time to time, GMAC Commercial Mortgage Corporation or their
successors and/or assigns.
"Loan" - means those certain loans from Lenders to the Partnership in
the original aggregate principal amount of $50,000,000.00 each.
"Loan Documents" - means all documents evidencing, securing or
otherwise entered into in connection with the Loan, including, without
limitation, Note, Deed of Trust, Security Agreement, Assignment of Rents and
Financing Statement, Assignment of Leases and Rents, and UCC-1 Financing
Statement.
"Management Agreement" means the management agreement between the
Partnership and Capital Senior Living, Inc. relating to the Properties, as such
agreement may be amended from time to time.
"Net Cash Flow" - means the amount, if any, by which Gross Receipts
plus cash reserves of the Partnership from the previous period exceed Operating
Expenses for such particular period, to the extent the General Partner
determines, in its sole discretion, that cash is not otherwise required for
Partnership purposes, including the setting up or continuing of a reasonable
working capital reserve for the Partnership. "Net Cash Flow" shall not include
or reflect any proceeds received or expenses incurred in connection with the
sale or other disposition of all or substantially all of the assets of the
Partnership or the termination and liquidation of the Partnership.
"Operating Expenses" - means all cash expenditures of any kind or
nature incurred by the Partnership attributable to a particular period, as
determined in accordance with the cash receipts and disbursements method of
accounting.
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"Partner" or "Partners" - means the General Partner or the Limited
Partners, or any of them.
"Partnership" - means the limited partnership evidenced by this
Agreement, as said limited partnership may from time to time be constituted,
amended and, if necessary, reconstituted, including any successor limited
partnership.
"Percentage Interests" - means the percentage set forth opposite the
name of such Partner under the column "Interest" in Exhibit B attached hereto
and made a part hereof for all purposes.
"Person" - means an individual, firm, corporation or other legal
entity.
"Properties" - means those certain tracts of land which have been
agreed to in writing by all of the Partners. Upon such written approval, the
General Partner shall attach the legal description for a Property hereto as
Exhibit A.
"Revised Act" - means the Texas Revised Limited Partnership Act, as
adopted and from time to time amended by the State of Texas.
ARTICLE II
FORMATION NAME AND OFFICE; PURPOSE
Section 2.1 Formation
The Partnership commenced on November 6, 1997 as a Texas limited
partnership effective upon the filing of the Certificate with the Secretary of
State of the State of Texas pursuant to the provisions of the Revised Act, and
shall continue for the purpose and upon the terms and conditions herein set
forth.
Section 2.2 Name, Registered Agent and Registered Office
The name of the Partnership shall be Triad Senior Living I, L.P. or
such other name as the General Partner shall hereafter designate by notice to
the Limited Partners and by amendment to the Certificate properly filed with the
Secretary of State of the State of Texas. The principal place of business in
Texas where books and records of the Partnership will be kept and made available
shall be ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, or such other place as the
General Partner may from time to time designate in a notice to the Limited
Partners and by amendment to the Certificate. The registered office of the
Partnership and the registered Agent shall be as set forth in the Certificate,
or such other registered Agent and registered office as the General Partner may
from time to time designate in a notice to the Limited Partners and by amendment
to the Certificate.
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Section 2.3 Purpose
The purpose of the Partnership shall be strictly limited to activities
relating to the acquisition, ownership, operation, and sale of the Properties,
and such other activities as are incidental thereto, including without
limitation, entering into the Loan and the performance of the Partnership's
obligations under the Loan Documents.
ARTICLE III
TERM
The term of the Partnership shall commence upon the filing of the
Certificate with the Secretary of State of the State of Texas, and shall
continue until December 31, 2050, on which date the Partnership shall terminate,
unless sooner dissolved upon the occurrence of any of the events of dissolution
or termination, as described in Article X.
ARTICLE IV
INTERESTS OF THE GENERAL PARTNER AND LIMITED PARTNERS
Section 4.1 General Partner
The General Partner is Triad Senior Living, Inc., and it shall have a
1% interest in the Partnership. Except as provided in Article IX of this
Agreement, no other Person shall become a General Partner in the Partnership.
The address of the General Partner is set forth on Exhibit B.
Section 4.2 Limited Partners
The Limited Partners are ▇▇▇▇▇ ▇. Fail and Capital Senior Living
Properties, Inc., which shall have the interests in the Partnership as shown on
Exhibit B. Except as provided in Article IX of this Agreement, no other Person
shall become a Limited Partner or substitute Limited Partner in the Partnership.
The address of the Limited Partners are set forth on Exhibit B.
ARTICLE V
CAPITAL CONTRIBUTIONS
Section 5.1 Capital Contribution of the General Partner
The General Partner has contributed to the Partnership the amount set
forth on Exhibit B. The General Partner shall not be obligated to pay any
Partnership expenses or make any capital contributions to the Partnership except
as provided in this Section 5.1 and Section 5.3.
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Section 5.2 Capital Contribution of the Limited Partners
The Limited Partners have contributed or will contribute to the
Partnership the amounts set forth on Exhibit B. The Limited Partners shall not
be obligated to make any other capital contributions to the Partnership except
as provided in this Section 5.2 and Section 5.3.
Section 5.3 Additional Capital Contributions
The Partners may, but are not required to, make their pro rata share
(based on Percentage Interests) of any additional capital contributions to the
Partnership. In the event that any Partner does not make such additional capital
contribution, the Partnership shall return the amounts contributed by the
Limited Partners for such additional capital contributions. The additional
capital contributions shall be due only upon the written notice from the General
Partner to the Partners.
The General Partner shall contribute to the capital of the Partnership
in the amount required and at the time specified in Section 2.2(d) of Exhibit C
attached hereto.
Section 5.4 Return or Withdrawal of Capital Contributions; Distributions
Except as otherwise expressly provided in this Agreement, none of the
Partners shall be entitled to demand a refund or return of any Capital
Contribution or to withdraw any part of its capital account or to receive any
distribution from the Partnership.
Section 5.5 Capital Accounts
A capital account shall be established and maintained for each Partner
as set forth in Exhibit C attached hereto.
Section 5.6 Loans by the Partners.
If the General Partner determines that the Partnership needs additional
capital, it may request that the Partners make loans to the Partnership. Then
each Partner shall have the option, but not the obligation, to loan to the
Partnership some or all of the aggregate amount of the requested loan. Any loans
made by the Partners shall not be considered to be contributions to the capital
of the Partnership.
ARTICLE VI
LIMITED PARTNERS
Section 6.1 Powers: Actions
The Limited Partners shall neither participate in the management or
control of the Partnership's business nor shall they transact any business for
the Partnership, nor shall they have the power to sign for or bind the
Partnership, said powers being vested solely and exclusively in the General
Partner.
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Section 6.2 Limitation of Liability
Anything to the contrary herein expressed or implied notwithstanding,
the Limited Partners shall not be personally liable for any of the debts of the
Partnership or any of the losses thereof in excess of their respective shares of
Partnership assets, capital contributions which they have made or are obligated
to make to the Partnership, and their share of the Partnership's income and
gains; provided, however, that to the extent required by applicable law, if a
Limited Partner receives a distribution at a time when it knew that, after
giving effect to the distribution, all liabilities of the Partnership, other
than liabilities to the Partners with respect to the partnership interests and
liabilities for which the recourse of creditors is limited to specific
Partnership assets, exceed the fair value of the Partnership's assets (except
that the fair value of property that is subject to a liability for which there
is recourse of creditors is limited shall be included in the Partnership's
assets only to the extent that the fair value of that property exceeds that
liability), then the Limited Partner receiving such distribution shall be liable
for the return of such distribution.
ARTICLE VII
GENERAL PARTNER
Section 7.1 Powers; Actions
The General Partner shall manage and control the business and affairs
of the Partnership. Without limiting the generality of the foregoing, the
General Partner shall have full power to (i) manage the Partnership; (ii)
execute such documents as it may deem advisable for Partnership purposes,
including, without limitation, the Loan Documents and all documents necessary
for the acquisition, financing, refinancing, ownership, operation and sale of
the Property; (iii) acquire, sell, lease, transfer, assign, convey, mortgage,
refinance, or otherwise dispose of or deal with all or any part of the Property
on such terms as it deems reasonable; (iv) establish and maintain, to the extent
Partnership funds are available, reasonable reserves for anticipated and
unanticipated expenses relating to the activities of the Partnership; (v)
perform or cause to be performed the Partnership's obligations, and exercise or
cause to be exercised all of the Partnership's rights, under any agreement to
which the Partnership or any nominee of the Partnership is a party; and (vi) on
behalf of the Partnership, employ, engage, retain or deal with any Person,
including any Affiliate, to perform services in connection with the ownership
and operation of the Property, provided in all such cases such services are
deemed by the General Partner to be advisable and the compensation therefor is
reasonable.
Section 7.2 Restrictions on the General Partner
(a) Notwithstanding the foregoing in Section 7.1 or any other
provision of this Agreement, the Partnership shall be subject to the
following restrictions and the General Partner shall have no authority
to take and shall not take any action on behalf of the Partnership in
violation of any of the following restrictions:
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(i) No bankruptcy or insolvency filing or similar proceeding
for the Partnership may be commenced, and no bankruptcy or
insolvency filing or similar proceeding may be commenced as to
the General Partner on its own behalf or as General Partner on
behalf of the Partnership.
(ii) The Partnership and the General Partner are prohibited
from creating, incurring or assuming any indebtedness other
than the Loan and any subordinate financing permitted under
the Loan Documents.
(iii) The Partnership and the General Partner are prohibited
from liquidating or dissolving or consenting to the
liquidation or dissolution, in whole or in part, of either the
Partnership or the General Partner.
(iv) The Partnership and the General Partner may not
consolidate, merge, or enter into any form of combination with
or into any other entity or convey, transfer or lease its
assets substantially as an entirety to any entity, except for
a transfer of the Property to the manager pursuant to the
purchase option in the Management Agreement or permit any
entity to consolidate, merge or enter into any form of
combination with or into the Partnership or the General
Partner, as the case may be, or convey, transfer or lease its
assets substantially as an entirety to the Partnership or the
General Partner, as the case may be.
(b) Notwithstanding anything in this Agreement to the
contrary, the General Partner shall not have the right or the power to
make any commitment or engage in any undertaking on behalf of the
Partnership in respect of a Major Decision (as hereinafter defined)
unless and until such Major Decision has been approved in writing by
all of the Limited Partners. The term "Major Decision," as used in this
Agreement, means any decisions with respect to the following matters:
(i) All financing and refinancing decisions pertaining to
indebtedness owing, directly or indirectly, to and/or by the
Partnership.
(ii) Any amendment, modification, change or restatement of
this Agreement.
(iii) Any capital expenditures in excess of $50,000 on any
Property that has already been developed.
(iv) The assignment of any interests in the Partnership except
as expressly provided by the terms of this Agreement.
(v) Any amendment, modification or change to the Management
Agreement or the Development Agreement.
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(vi) The engagement by the Partnership in any business other
than as set forth in Section 2.3 above.
(vii) The transaction of business with Affiliates of Partners
except as set forth herein.
(viii) The execution of any guarantees, indemnities, sureties
or similar commitments on behalf of the Partnership.
(ix) Any decision to cause the Partnership to loan funds to
any person, and the terms on which any such loan is made.
(x) Any act in contravention of this Agreement.
(xi) The addition of a tract of land to the defined term
"Properties" or a change in the use of the Property.
(xii) The admission of any new Partners to the Partnership
(except as otherwise allowed herein) or the appointment of any
additional General Partner.
(xiii) Any other act which the Revised Act specifically
requires to be approved by all the Partners.
Section 7.3 Duties and Obligations of the General Partner
The General Partner shall manage and control the Partnership, its
business and affairs. During the continuance of the Partnership, the General
Partner shall diligently and faithfully devote such time to the management of
the business of the Partnership as it deems reasonably necessary.
Section 7.4 Tax Matters Partner. See Section 4.4 of Exhibit C attached
hereto.
Section 7.5 Liability; Indemnification
The General Partner and its Affiliates shall not be liable to the
Partnership or the Limited Partners for any act or omission performed or omitted
by it pursuant to the authority granted to it by this Agreement, other than for
fraud, willful malfeasance or gross negligence. The Partnership shall and hereby
does indemnify and save harmless the General Partner, the Limited Partners and
their Affiliates to the greatest extent permitted by the Revised Act from any
loss, damage, claim or liability, including but not limited to, reasonable
attorney's fees and expenses, incurred by them by reason of any act performed by
the General Partner, the Limited Partners or their Affiliates on behalf of the
Partnership, including, without limitation, their activities in winding up and
liquidating the Partnership, or in furtherance of the Partnership's interests,
except that the General Partner and its Affiliates shall not be indemnified for
actions by the General Partner or its Affiliates which constitute a breach of
any of their obligations under this Agreement, fraud, willful malfeasance or
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gross negligence, provided, however, that the indemnity and save harmless
provided for in this sentence shall be satisfied out of Partnership assets only
and no Partner shall have any personal liability on account thereof.
Section 7.6 Fees to and Reimbursement of the General Partner
The Limited Partners acknowledge that the General Partner or its
Affiliates will receive $5,833 per month beginning April 1, 1998 as an asset
management fee. The General Partner and its Affiliates shall also be entitled to
receive reimbursement of their expenses, but shall not be entitled to receive
any other fees. The General Partner and its Affiliates shall receive
reimbursement for all reasonable expenses advanced by the General Partner and
its Affiliates on behalf of the Partnership and all expenses incurred during the
operation of the Partnership.
ARTICLE VIII
ALLOCATIONS; DISTRIBUTIONS
Section 8.1 Allocations of Income and Loss
All items of income or loss of the Partnership shall be allocated to
the Partners in accordance with the provisions of Exhibit C attached hereto,
which are hereby incorporated by reference for all purposes of this Agreement.
Section 8.2 Partnership Distributions of Cash
During the term hereof, periodically, but not less frequently than
annually, Net Cash Flow of the Partnership shall be distributed to the Partners
in accordance with their Percentage Interests.
ARTICLE IX
ASSIGNABILITY OF GENERAL PARTNER'S
AND LIMITED PARTNER'S INTERESTS; PURCHASE OPTION
Section 9.1 Restrictions on Transfers
Except as provided in Section 9.5 hereof, a Partner may not sell,
assign, transfer, encumber, or dispose of, by operation of law or otherwise, any
interest in the Partnership or in the property or assets of the Partnership
without the prior written consent of the other Partners, which in the other
Partners' absolute discretion may be withheld. Additionally, any such
disposition must comply with the provisions hereinafter stated in this Article
IX.
Section 9.2 Assignment of a Limited Partner's Interest
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(a) Except as otherwise provided in this Agreement, an
assignee of the whole or any portion of a Partner's interest in the
Partnership shall not have the right to become a Partner in place of
its assignor unless (i) its assignor shall have designated such
intention in the instrument of assignment; (ii) the written consent of
the other Partners to such substitution shall have been obtained, which
consent, in the other Partners' absolute discretion, may be withheld;
(iii) the assignment instrument shall have been in form and substance
satisfactory to the other Partner; (iv) the assignor and assignee named
therein shall have executed and acknowledged such other instrument or
instruments as the other Partners may deem necessary or desirable to
effectuate such admission; and (v) the assignee shall have accepted,
adopted and approved in writing all of the terms and provisions of this
Agreement, as the same may have been amended.
(b) In any event, the Partnership and the other Partners shall
be entitled to treat an assignor of a Partner's interest as the
absolute owner thereof in all respects, and shall incur no liability
for distributions made in good faith to such assignor, until such time
as the foregoing requirements have been satisfied.
(c) The Partnership shall, upon satisfaction of the foregoing
requirements, thereafter pay all further distributions or profits or
other compensation by way of income or return of capital on account of
the interest so assigned to the assignee. In the absence of notice to
the other Partners and approval thereof in writing by them of the
assignment of a Partner's interest, whether by operation of law or
otherwise, any payment to an assigning Partner, or to his assigns,
executors, administrators, or legal representative, shall acquit the
Partnership of liability to the extent of such payment as to any other
person, whether claiming as a remote or immediate assignee of the
Partner, or by reason of its death, legal disability, bankruptcy,
insolvency, or otherwise.
(d) All costs (including, without limitation, legal and other
professional fees) incurred by the Partnership, the other Partners, and
the assigning Partner relating to any transfer contemplated by this
Article IX, shall be charged to, and shall be the sole expense of, the
assigning Partner.
Section 9.3 Withdrawal of a Partner
Except as otherwise specifically permitted by this Agreement, no
Partner shall be entitled to withdraw or retire from the Partnership.
Section 9.4 Death, Legal Incompetency, Bankruptcy or Dissolution of
Limited Partner
The death, legal incompetency, bankruptcy, dissolution or other
disability of a Limited Partner shall not dissolve or terminate the Partnership.
Upon the death, legal incompetency, bankruptcy, dissolution or other disability
of a Limited Partner, the estate, personal representative, trustee, guardian or
other successor in interest of such Limited Partner shall have all the rights
and obligations and be liable for all the liabilities of the Limited Partner in
the Partnership to the extent
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of such Limited Partner's interest therein, subject to the terms and conditions
of this Agreement, and, with the prior written consent of the General Partner
which may be withheld at its sole discretion, may be substituted for such
Limited Partner.
Section 9.5 Purchase Option of Capital Senior Living Properties, Inc.
At any time, Capital Senior Living shall have the right, but not the
obligation, to purchase all, but not less than all, of the interests owned by
the General Partner and Fail for an amount equal to the amount of money that
each such Partner paid for their respective interests in the Partnership, plus
non-compounding interest of 12% per annum from the date such amounts were paid
to the date the option described herein is exercised. The Partners, by executing
this Agreement, hereby agree that the future value of such interests is
speculative and that the formula set forth above is the Partners' best estimate
of the fair market value of such interests as of the date of the exercise of
such option.
ARTICLE X
DURATION, DISSOLUTION, TERMINATION,
WINDING UP, REMOVAL OF THE GENERAL
PARTNER AND RESIGNATION OF THE GENERAL PARTNER
Section 10.1 Dissolution and Termination
Subject to the provisions of Section 7.2(c) hereof, the Partnership
shall be dissolved only upon the occurrence of any of the following events:
(a) The expiration of the fixed term of the Partnership;
(b) The withdrawal or removal of the General Partner, the
assignment by the General Partner of all its interest in the
Partnership, or any other event that causes the General Partner to
cease to be a general partner under the Revised Act, provided that any
such event shall not constitute a event of dissolution if the
Partnership is continued pursuant to Section 10.2;
(c) The sale or other disposition of all or substantially all
of the assets of the Partnership and the collection of the proceeds
therefrom; and
(d) The mutual consent of the Partners.
Section 10.2 Continuation of Business
The Partners hereby agree that notwithstanding any provision of the
Revised Act, the Partnership shall not dissolve prior to the occurrence of any
event set forth in Section 10.1 above. Upon the occurrence of any event set
forth in Section 10.1 above, the Partnership shall not be
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dissolved or required to be wound up if (i) at the time of such event there is a
remaining General Partner and that General Partner carries on the business of
the Partnership or (ii) within ninety (90) days after such event all remaining
Partners agree in writing to continue the business of the Partnership and to the
appointment, effective as of the date of such event, of one or more additional
General Partners.
Section 10.3 Winding Up of the Partnership
Upon dissolution of the Partnership as provided in Section 10.1, the
Partnership shall be wound up, and the General Partner (or if there is no
General Partner, a substitute General Partner elected by the Limited Partner)
will take full account of the Partnership's assets and liabilities, the assets
will be liquidated as promptly as is consistent with obtaining the fair market
value thereof, and the proceeds therefrom, to the extent sufficient therefor,
will be applied and distributed in accordance with the provisions of Section
10.4. Notwithstanding the foregoing, the General Partner, with the consent of
the Limited Partners, may determine not to sell all or any portion of the assets
of the Partnership, in which event there shall be distributed to each of the
Partners its interest in the remaining assets of the Partnership.
Section 10.4 Sale or Liquidation
In the case of a sale or other disposition of all or substantially all
of the assets of the Partnership or termination and liquidation of the
Partnership, the net proceeds of such sale or liquidation, shall be applied and
distributed, after crediting or charging the Partners' capital accounts pursuant
to Article VIII and as cash is received by the Partnership in the following
order of priority on or before the end of the taxable year in which the
Partnership liquidates (or, if later, within 90 days after the date of such
liquidation):
(a) To the payment of the debts and liabilities of the
Partnership (other than debts of the Partnership to the Partners) and
the expenses of sale and liquidation.
(b) To the setting up of any reserves which the General
Partner determines are reasonably necessary for any contingent or
unforeseen liabilities or obligations of the Partnership or of the
Partners arising out of, or in connection with, the Partnership. Such
reserves may be held by the General Partner for the purpose of
disbursing such reserves in payment of any of the aforementioned
contingencies, and at the expiration of such period as the General
Partner may deem advisable, to distribute the balance thereafter
remaining as provided herein.
(c) To the Partners in repayment of debts of the Partnership
to the Partners.
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(d) To the Partners in proportion to and to the extent of the
remaining amounts of their respective positive capital accounts, as
such accounts have heretofore been adjusted pursuant to this Agreement.
(e) The remaining assets, if any, shall be distributed to the
Partners in accordance with their Percentage Interests.
Should assets other than cash be distributed, the amount by which the
fair market value of the assets, if any, to be distributed exceeds or is less
than the basis of such assets shall, to the extent not otherwise recognized by
the Partnership, be taken into account in computing gain or loss of the
Partnership for purposes of crediting or charging the capital accounts of, and
distributing proceeds to, the Partners.
Section 10.5 Removal and Replacement of the General Partner
The General Partner may be removed by either Limited Partner without
further action for "cause," which means (i) any petition shall be filed by the
General Partner, or any petition shall be filed against the General Partner and
not vacated within 30 days, under any section or chapter of the present or
future federal Bankruptcy Code or under any similar state or federal law, (ii)
upon final judicial determination that the General Partner (1) was grossly
negligent in its failure to perform its obligations under this Agreement, or (2)
committed a fraud upon the Partners or upon the Partnership, or (3) committed a
felony in connection with the management of the Partnership or its business, or
(4) was in material breach of its obligations under this Agreement, or (iii)
transfer of the General Partner's interest in the Partnership or withdrawal from
the Partnership without approval of the Limited Partners. In the event of
removal or resignation of the General Partner, it shall be deemed to have
surrendered to the Partnership its entire interest in the Partnership and shall
be entitled to no compensation therefor.
ARTICLE XI
ACCOUNTS AND RECORDS: ACCOUNTANTS
Section 11.1 Accounting Methods: Fiscal Year
The books of account of the Partnership shall be kept on the accrual
method of accounting. The fiscal year of the Partnership shall end on December
31 of each year except upon termination.
Section 11.2 Records and Books of Account
(a) The General Partner shall maintain, or cause to be
maintain complete and accurate records and books of account of all
transactions of the Partnership wherein shall be entered all
transactions, matters and things relating to the Partnership's business
as are usually entered into books of account kept by persons engaged in
a business of a like
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character, all on the method of accounting determined in accordance
with Section 11.1, consistently applied.
(b) All of such records and books of account together with all
other documents and files of the Partnership, including but not limited
to copies of all documents prepared by the General Partner and all
correspondence, shall, at all times, be kept at the main office of the
Partnership or such other place as may be designated by the General
Partner and to which the Partners shall have reasonable access as
hereinafter provided, and all such records, books of account, documents
and files shall be the exclusive property of the Partnership. In the
event of the termination of the Partnership interest of the General
Partner, all such records, books of account, documents and files shall
remain in the exclusive possession of the Partnership. At any time and
from time to time while the Partnership continues and until its
complete liquidation (but only during reasonable business hours), each
Partner may, at its own expense and upon reasonable prior written
notice to the General Partner, fully examine, inspect, make copies and
audit the Partnership's books, records, accounts and assets, including
but not limited to bank balances and physical inspection of the
Property or an audit to be made by any competent accountant or other
professional employed by it at its expense.
Section 11.3 Annual Examination and Tax Returns
(a) The books of the Partnership shall be brought to date
annually each year by the General Partner or the Accountants. The
General Partner or the Accountants shall determine and prepare for such
fiscal year, using the method of accounting determined in accordance
with Section 11.1, consistently applied, such financial statements as
are required by the Loan.
(b) The General Partner or the Accountants shall also prepare
all tax returns which the Partnership is required to file and the same
shall be filed by the General Partner within the time prescribed by law
for the filing of each such return.
(c) At the election of the General Partner, the Accountants
shall perform an audit in accordance with generally accepted auditing
standards. The financial statements and audit report shall be delivered
to each Partner in the Partnership.
Section 11.4 Bank Accounts
The cash Capital Contributions of the Partners and other funds of the
Partnership shall be deposited in a bank account or accounts which shall be
separately owned by the Partnership and maintained by the General Partner.
Withdrawals shall be made only in the regular course of partnership business on
the signature of the General Partner or its designee. All funds not needed in
the operation of the business may be deposited, to the extent permitted by
applicable law, in interest bearing accounts or invested in short-term U.S.
Government obligations, U.S. Government guaranteed obligations, bank
certificates of deposit or other liquid high-grade investments, maturing, in any
event, within one year.
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Section 11.5 Reports to Limited Partners
As soon as reasonably practicable but no later than thirty (30) days
after the end of each month, the General Partner shall cause to be prepared and
furnished to the Limited Partners income statements and balance sheets for such
month. As soon as reasonably practicable but no later than seventy-five (75)
days after the end of each fiscal year, the General Partner shall cause to be
prepared and furnished to the Limited Partners the following: (i) all necessary
tax reporting information required by the Limited Partners for preparation of
their respective income tax return and (ii) all information necessary for such
Limited Partner to comply with all reporting requirements imposed by the
securities laws of the United States or any state thereof. Upon the reasonable
request of the Limited Partners for further information with respect to any
matter with respect to the Partnership, the General Partner shall furnish such
information within ten (10) days after such request.
ARTICLE XIII
GENERAL PROVISIONS
Section 12.1 Recipient of Distributions and Payments
All distributions and payments of cash or property to be made pursuant
to the provisions of this Agreement shall be made directly to the parties who
are entitled thereto at their respective addresses indicated on Exhibit B or
elsewhere in this Agreement or at such other address as shall have been set
forth in a notice sent pursuant to the provisions of Section 12.2.
Section 12.2 Communications
Except as otherwise expressly provided in this Agreement, any offer,
acceptance, election, approval, consent, objection, certification, request
waiver, notice or other document required or permitted to be made or given
pursuant to any provisions of this Agreement shall be deemed duly made or given,
as the case may be, if in writing, signed by or on behalf of the person making
or giving the same, and shall be deemed completed when either personally
delivered (with receipt acknowledged by the recipient) or three days after
deposited through the U.S. mail, registered or certified, first class, postage
prepaid, addressed to the person or persons to whom such offer, acceptance,
election, approval, consent, certification, request, waiver or notice is to be
made or given at their respective addresses indicated on Exhibit B and, in the
case of the Partnership, at the office of the Partnership specified in Section
2.2 of this Agreement, or, in any case, at such other address as shall have been
set forth in a notice sent pursuant to the provisions of this Section 12.2.
Section 12.3 Entire Agreement; Applicable Law; Effect
This Agreement contains the entire agreement by and among the parties
and supersedes any prior understandings and agreements among them respecting the
subject hereof. THIS AGREEMENT SHALL BE CONSTRUED, ENFORCED AND GOVERNED IN
CONFORMITY WITH THE LAWS OF THE STATE OF TEXAS, and within the County of Dallas,
State of Texas,
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without giving effect to principles of conflicts of law, and whether in state or
federal courts. This Agreement shall be binding upon the parties hereto, their
successors, heirs, devisees, permitted assigns, legal representatives, executors
and administrators but shall not be deemed for the benefit of creditors or any
other Persons.
Section 12.4 Modification; Waiver or Termination
Except as otherwise expressly provided in this Agreement, no
modification, waiver, or termination of this Agreement, or any part hereof,
shall be effective unless made in writing signed by the party or parties to be
bound thereby, and no failure to pursue or elect any remedy shall constitute a
waiver of any default under or breach of any provision of this Agreement, nor
shall any waiver of any default under or breach of any provision of this
Agreement be deemed to be a waiver of any other subsequent or similar or
different default under or breach of such or any other provision or of any
election or remedies available in connection therewith. Receipt by any party of
any money or other consideration due under this Agreement, with or without
knowledge of any breach or default, shall not constitute a waiver of such breach
or default of any provision of this Agreement.
Section 12.5 Counterparts
This Agreement may be executed in one or more counterparts and,
notwithstanding that all of the parties did not execute the same counterpart,
each of such counterparts shall, for all purposes, be deemed to be an original,
and all of such counterparts shall constitute one and the same instrument
binding on all of the parties hereto.
Section 12.6 Separability
Each provision of this Agreement shall be considered separable and (a)
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, and (b) if for any reason any provision or provisions of this Agreement
would subject the Limited Partners to any personal liability for the obligations
of the Partnership under the laws of the State of Texas or any other laws, as
the same may now or hereafter exist, such provision or provisions shall be
deemed void and of no effect.
Section 12.7 Article and Section Headings
Article and Section titles or captions contained in this Agreement are
inserted only as a matter of convenience and for reference, and shall not be
construed in any way to define, limit, extend or describe the scope of any of
the provisions hereof.
Section 12.8 Word Meanings
The 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
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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 12.9 Exhibits
All exhibits annexed hereto and any documents or instruments delivered
simultaneously herewith are expressly made a part of this Agreement, as fully as
though completely set forth herein, and all references to this Agreement herein
or in any of such writings or elsewhere shall be deemed to refer to and include
all such writings.
Section 12.10 Further Actions
Each of the Partners shall hereafter execute and deliver such further
instruments and do such further acts and things as may be required or useful to
carry out the intent and purpose of this Agreement and as are not inconsistent
with the revisions hereof.
Section 12.11 Prohibition Re Partition
Each of the parties hereto does hereby permanently waive and relinquish
any and all rights it may have to cause the assets of the Partnership to be
partitioned, it being the intention of the parties to prohibit any parties
hereto from bringing a suit for partition against the other parties hereto.
Section 12.12 Agreements with Capital Affiliates and the Loan
The Partnership hereby ratifies and agrees to be bound by agreements
that the Partnership has entered into with Affiliates of Capital Senior Living,
including, the Management Agreement, the Development Agreement and that certain
Development and Turnkey Services Agreement by and between the Partnership and
Capital Senior Development, Inc. In addition, the Partnership hereby ratifies
and agrees to be bound by the Loan and the Loan Documents.
Section 12.13 Noncompete of General Partner
The General Partner agrees that as long as the General Partner is the
general partner of the Partnership and for one (1) year after the General
Partner is no longer the general partner of the Partnership neither the General
Partner nor its Affiliates will acquire, own, develop, complete the development
of, or manage any senior living facility providing the same level of services as
any senior living facility owned or leased by the Partnership within a seven and
one-half mile radius of a senior living facility owned or leased by the
Partnership.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
GENERAL PARTNER:
Triad Senior Living, Inc.,
a Texas corporation
By:/s/ ▇▇▇▇▇ ▇. FAIL
-----------------------------------------
Name: ▇▇▇▇▇ ▇. Fail
---------------------------------------
Title: President
--------------------------------------
LIMITED PARTNERS:
Capital Senior Living Properties, Inc.
a Texas corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------
Title: Vice President
--------------------------------------
--------------------------------------------
▇▇▇▇▇ ▇. Fail
WITHDRAWING GENERAL PARTNER:
Capital Retirement Group, Inc.,
a Texas corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------
Title: Chief Operating Officer
--------------------------------------
WITHDRAWING LIMITED PARTNERS:
▇▇▇ Trust
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------
Title: Chief Operating Officer
--------------------------------------
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
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EXHIBIT "A"
Property Description
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EXHIBIT "B"
Capital Contribution Interest
-------------------- --------
General Partner
Triad Senior Living, Inc. $ 1.00 1%
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Limited Partners
▇▇▇▇▇ ▇. Fail $ 1,320,976.00 80%
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Capital Senior Living Properties, Inc. $ 330,243.00 19%
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
22
EXHIBIT "C"
Allocation Provisions