Exhibit 3-218
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STATE DEPARTMENT OF ASSESSMENTS
AND TAXATION
APPROVED FOR RECORD
12/30/86 at 1:40 o.m.
MERIDIAN VALLEY VIEW LIMITED PARTNERSHIP
LIMITED PARTNERSHIP AGREEMENT
AND CERTIFICATE
Table of Contents
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ARTICLE I
Formation, Name, Resident Agent and Purpose
Section 1.1 Formation 1
Section 1.2 Name, Office, and Resident Agent 1
Section 1.3 Purpose 2
Section 1.4 Term and Dissolution 2
ARTICLE II
Partners and Capital
Section 2.1 Partners and Capital 2
Section 2.2 No Interest on Capital Contribution 3
Section 2.3 Withdrawal of Capital 3
Section 2.4 Capital Account 3
Section 2.5 Obligation to Return Capital Contribution 5
Section 2.6 No Liability of Limited Partners 5
ARTICLE III
Rights, Powers, and Duties of the General Partner
Section 3.1 Authority of the General Partner to Manage the Partnership 5
Section 3.2 Restriction on Authority 6
Section 3.3 Business Management and Control 6
Section 3.4 Limitation on Liability of General Partner; Indemnification 7
ARTICLE IV
Termination of a General Partner's Interest
Section 4.1 Sale of a General Partner's Interest 8
Section 4.2 Admission of a Successor or Additional General Partner 8
Section 4.3 Withdrawal of a General Partner 9
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ARTICLE V
Transferability of Limited Partner Interests
Section 5.1 Assignability of Limited Partner Interests 9
Section 5.2 Substitute Limited Partners 9
ARTICLE VI
Profit, Loss and Distributions
Section 6.1 Profits and Losses 10
Section 6.2 Distributions Prior to Termination of the Partnership 10
Section 6.3 Distributions and Payment Upon Termination and Winding Up 13
ARTICLE VII
Books and Records, Accounting, Tax Elections, Etc.
Section 7.1 Books, Records, and Reports; Accountants 13
Section 7.2 Bank Accounts 13
Section 7.3 Tax Elections 14
Section 7.4 Special Basis Adjustments 14
Section 7.5 Fiscal Year and Accounting Method 14
Section 7.6 Tax Matters Partner 14
ARTICLE VIII
General Provisions
Section 8.1 Notices 15
Section 8.2 Word Meanings 15
Section 8.3 Binding Provisions 16
Section 8.4 Applicable Law 16
Section 8.5 Paragraph Titles 16
Section 8.6 Amendment Procedure 16
Section 8.7 Entire Agreement 16
Section 8.8 Other Business Activities 16
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MERIDIAN VALLEY VIEW LIMITED PARTNERSHIP
LIMITED PARTNERSHIP AGREEMENT
AND CERTIFICATE
LIMITED PARTNERSHIP AGREEMENT AND CERTIFICATE, dated as of December __, 1986
by and among MERIDIAN NURSING CENTERS, INC., a Maryland corporation ("MNC"),
as a General Partner, and MERIDIAN/CONSTELLATION LIMITED PARTNERSHIP, a
Maryland limited partnership ("MCLP"), as a Limited Partner.
Preliminary Statement
Whereas, the parties hereto desire to form Meridian Valley View Limited
Partnership (the "Partnership") as a limited partnership under the laws of the
State of Maryland, the purpose of this Limited Partnership Agreement and
Certificate (this "Agreement") is to set out the rights, obligations and
duties of the General Partner and the Limited Partner.
NOW, THEREFORE, it is hereby agreed that the Agreement and Certificate of
Limited Partnership of Meridian Valley View Limited Partnership shall be as
follows:
ARTICLE I
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Formation, Name, Resident Agent and Purpose
Section 1.1 Formation
The parties hereto hereby agree to form a limited partnership known as
Meridian Valley View Limited Partnership as a Maryland Limited partnership
pursuant to the provisions of the Maryland Revised Uniform Limited Partnership
Act as embodied in Title 10 of the Corporations and Associations Article of
the Annotated Code of Maryland, as amended from time to time.
Section 1.2 Name, Office, and Resident Agent
The Partnership shall conduct business under the name and style of MERIDIAN
VALLEY VIEW LIMITED PARTNERSHIP. The principal office of the Partnership shall
be 00 Xxxx Xxxx, Xxxxxx, Xxxxxxxx 00000. The Partnership shall have such other
or additional offices as may, from time to time, be determined necessary by
the General Partner. The name and address of the resident agent of the
Partnership is Meridian Nursing Centers, Inc., 00 Xxxx Xxxx, Xxxxxx, Xxxxxxxx
00000.
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Section 1.3 Purpose
The purposes of the Partnership are (i) to acquire, own and operate a
nursing center known as Valley View Nursing Homes at 0000 Xxxx Xxxx, Xxxxxxxxx
Xxxxxx, Xxxxxxxx (the "Facility"), and (ii) to do and perform all acts
necessary, incidental, or convenient to carry out the Partnership's business
purpose.
Section 1.4 Term and Dissolution
A. The Partnership shall continue in full force and effect until December
30, 2036, except that the Partnership shall be dissolved and wound up prior to
that date upon the happening of (a) the sale or other disposition of all or
substantially all the assets of the Partnership and the collection in full of
the sales price of the assets, (b) the withdrawal from the Partnership of the
General Partner, or (c) the election to dissolve the Partnership made in
writing by the General Partner with the consent of the Limited Partner.
B. Upon dissolution of the Partnership, the General Partner (or the trustee,
receiver, successor, or legal representative of a General Partner if such
General Partner is unable or unwilling to do so) shall, unless the Partnership
is continued pursuant to Article IV, liquidate the Partnership assets and apply
and distribute the proceeds thereof in accordance with Section 6.3.
Notwithstanding the foregoing, in the event the General Partner or its
representative shall determine that an immediate sale of part or all of the
Partnership's assets would cause undue loss to the Partners, the General Partner
or its representative may, in order to avoid, such loss, either (i) defer
liquidation of, and withhold from distribution for a reasonable time, any assets
of the Partnership except those necessary to satisfy the Partnership debts and
obligations, or (ii) distribute the assets to the Partners in kind; provided,
however, that the proceeds of any sale or other disposition of Partnership
assets shall be distributed in the fiscal year of the Partnership in which the
proceeds are collected by the Partnership.
ARTICLE II
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Partners and Capital
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Section 2.1 Partners and Capital
A. The names, addresses, Percentage Interests, and type of interests (i.e.
whether General or Limited) of the Partners are as follows:
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Percentage and
Names & Addresses Type Interest
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Meridian Nursing Centers, Inc. 0% Xxxxxxx
00 Xxxx Xxxx
Xxxxxx, Xxxxxxxx 00000
Meridian/Constellation Limited
Partnership
00 Xxxx Xxxx 99% Limited
Towson, Maryland 21204
100%
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B. Upon formation of the Partnership, MNC shall contribute $1.00 and MCLP
shall contribute $99.00 to the capital of the Partnership. Upon the closing of
the acquisition of the Facility by the Partnership, MNC shall contribute
$11,468 in cash and MCLP shall contribute $1,135,304 in cash to the capital of
the Partnership. In addition, MNC shall lend $45,871 and MCLP shall lend
$4,541,215 to the Partnership. Each such loan shall be evidenced by a
promissory note which shall be made payable to MNC and MCLP, respectively,
shall have a term to maturity of 365 days and shall bear interest at the rate
of 9% per annum.
C. Upon the closing of the acquisition of the Facility by the Partnership
or such later time as provided in the Purchase Agreement for the acquisition
of the Facility dated December 19, 1986, MNC and MCLP shall contribute as
additional capital 1% and 99%, respectively, of the closing costs.
Section 2.2 No Interest on Capital Contribution
No interest shall be paid on any capital contribution to the Partnership.
Any Partner may, however, loan to the Partnership such additional funds as may
be agreed upon by the General Partner, with interest and on such terms as the
General Partner may determine. The amount of any such loan shall not increase
the Partner's Capital Account or affect in any way his share in the profits,
losses, or distributions of the Partnership.
Section 2.3 Withdrawal of Capital
No partner shall have the right to withdraw from the Partnership all or any
part of his capital contribution until December 31, 2036. No Partner shall
have any right to demand and receive property (other than cash) of the
Partnership in return of his capital contribution except as may be
specifically provided in this Agreement or as may be otherwise agreed to by
the General Partner with the consent of the Limited Partners.
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Section 2.4 Capital Account
A. The Partnership shall establish and maintain for each Partner a Capital
Account. Each Partner's Capital Account shall be increased by:
(a) the amount of its cash capital contributions to the Partnership;
(b) the fair market value of property contributed by it to the Partnership
(net of liabilities secured by such contributed property that the Partnership
assumes or takes subject to);
(c) allocations to it of Partnership income and gain (or items thereof),
including income and gain exempt from tax and, in the case of property that is
reflected on the books of the Partnership at a book value that differs from
its adjusted basis for federal income tax purposes, solely the amount of
income and gain recognized by the Partnership for book purposes with respect
to such property; and
and shall be decreased by:
(d) the amount of money distributed to it by the Partnership,
(e) the fair market value of property distributed to it by the Partnership
(net of liabilities secured by such distributed property that such Partner
assumes or takes subject to),
(f) allocations to it of expenditures of the Partnership described in
Section 705(a)(2)(B) of the Code, and
(g) allocations of Partnership loss and deduction (or items thereof),
including, in the case of property that is reflected on the books of the
Partnership at a book value that differs from its adjusted basis for federal
income tax purposes, solely the amount of loss and deduction recognized by the
Partnership for book purposes with respect to such property.
Each Partner's Capital Account shall be further adjusted as may be necessary
in order for the Partners' Capital Accounts to be determined and maintained in
accordance with Income Tax Regulations ss.1.704-1(b) (2) (iv).
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B. In the event of any transfer of an interest in the Partnership, the
transferee shall succeed to the Capital Account of the transferrer in respect
of the interest transferred.
Section 2.5 Obligation to Return Capital Contribution
No Partner shall be personally liable for the return of the capital
contributions of the Partners, or any portion thereof, it being expressly
understood that any such return of contributions shall be made solely from the
Partnership assets.
Section 2.6 No Liability of Limited Partners
No Limited Partners shall be liable for any debts, liabilities, contracts or
obligations of the Partnership. After his capital contribution has been made,
no Limited Partner shall be obligated to make any further contributions to the
capital of the Partnership.
ARTICLE III
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Rights, Xxxxxx, and Duties of the General Partner
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Section 3.1 Authority of the General Partner to Manage the Partnership
Subject to the provisions of this Agreement, the General Partner shall have
the exclusive right and authority to manage the business of the Partnership
and is hereby authorized to take any action and to do anything it deems
necessary, except for transactions described in Section 3.2, to carry out the
purposes of the Partnership in accordance with the provisions of this
Agreement and applicable law, including the following:
(i) To acquire by purchase, lease or otherwise the Facility and any other
interest in real or personal property which may be necessary, convenient or
incidental to the accomplishment of the purposes of the Partnership;
(ii) To construct, rehabilitate, demolish, rebuild, repair, operate,
maintain, finance and improve, and to own, sell, convey, assign, mortgage or
lease any or all of the real estate and any personal property necessary,
convenient or incidental to the accomplishment of the purposes of the
Partnership;
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(iii) To borrow money and issue evidences of indebtedness 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;
(iv) To prepay in whole or in part, refinance, recast, increase, modify or
extend any mortgages affecting the assets of the Partnership and in connection
therewith to execute any extensions, renewals or modifications of any such
mortgages on the assets of the Partnership;
(v) To employ a management company, including a company owned wholly or
partially by any one or more affiliated persons, or who is a General Partner
or an affiliate of a General Partner, to manage the assets of the Partnership
and to pay reasonable compensation for such services;
(vi) To execute any note, mortgage and/or loan agreement in order to secure
a loan to the Partnership; and
(vii) To enter into any kind of activity and to perform and carry out
contracts of any kind necessary to or in connection with, or incidental to the
accomplishment of the purposes of the Partnership, so long as said activities
and contracts may be lawfully carried on or performed by a partnership under
the laws of the State of Maryland.
Section 3.2 Restrictions on Authority
Notwithstanding the provisions of Section 3.1, the General Partner shall not
have the authority to do any of the following without the consent of MCLP:
(1) to enter into any transactions that are not in the ordinary course of
business;
(2) to sell, assign, transfer or otherwise dispose of all or substantially
all of the assets of the Partnership;
(3) to place mortgage financing on the Facility or to refinance an
existing mortgage on the Facility;
(4) to employ the General Partner or an affiliate of the General Partner
in any capacity except pursuant to a Contract for services under which
compensation is for less than $10,000 on an annual basis;
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(5) to acquire any interest in improved real property other than the
Facility or to acquire an interest in any other partnership, corporation or
other business entity; and
(6) to admit a new General Partner to the Partnership.
Section 3.3 Business Management and Control
A. The General Partner shall be responsible for the management and
operation of the business and affairs of the Partnership. The General Partner
shall devote to the day-to-day management and operation of the business and
affairs to the Partnership as much of its time as it, in its sole discretion,
determines to be reasonably necessary for the efficient operation of the
Partnership.
B. The General Partner shall be fully and entirely reimbursed by the
Partnership for any and all reasonable out-of-pocket costs and expenses
incurred by the General Partner in connection with the management and
supervision of the Partnership business; provided, however, that, with respect
to any such reimbursement, the General Partner shall deliver to the
Partnership such invoices and receipts as are necessary to substantiate such
out-of-pocket costs and expenses.
C. In furtherance of the provisions of this Section 3.3, the General
Partner may contract with any person, firm, or corporation, including, without
limitation, persons affiliated with the General Partner, at reasonable and
competitive rates of compensation, commission, or remuneration, for the
performance of any and all services which may at any time be necessary,
proper, convenience, or advisable to carry on the business of the Partnership.
Section 3.4 Limitation on Liability of General Partner: Indemnification
The General Partner (or any Person directly or indirectly owning an interest
in the General Partner or any officer or employee or partner of any such
Person) shall not be liable, responsible or accountable in damages or
otherwise to any other Partner or to the Partnership for any acts performed or
failure to act by the General Partner (or any Person directly or indirectly
owning an interest in the General Partner or any officer or partner or employee
of any such Person) in good faith and in a manner reasonably believed by it to
be within the scope of authority granted to it by this Agreement, unless such
act or failure to act is attributable to gross negligence, willful misconduct,
or any breach of its
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fiduciary duty with respect to such act or failure to act. The Partnership (but
not any Partner) shall indemnify and hold harmless the General Partner (and each
Person directly or indirectly owning an interest in the General Partner or any
officer or employee or partner of any such Person) for any loss, damage,
liability, cost or expense (including reasonable attorneys fees) arising out of
any act or failure to act by the General Partner (or any Person directly or
indirectly owning an interest in the General Partner or any officer or employee
or partner of any such Person), if such act or failure to act is in good faith
and in a manner reasonably believed by it to be within the scope of the
authority granted to it by this Agreement and is not attributable to gross
negligence, willful misconduct, or any breach of its fiduciary duty with respect
to such act or failure to act. Any indemnity under this Section 3.4 shall be
paid from, and only to the extent of, Partnership assets and no Partner shall
have any personal liability on account thereof.
ARTICLE IV
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Termination of a General Partner's Interest
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Section 4.1 Sale of a General Partner's Interest
A. The General Partner may not, without the consent of the Limited Partner
and then only upon admission of a substitute General Partner who satisfies the
requirements of Section 4.2, withdraw as a General Partner of the Partnership,
nor sell any portion of its interest as a General Partner of the Partnership.
B. In the event that the General Partner withdraws from the Partnership or
sells, transfers or assigns its entire interest pursuant to Section 4.1.A, it
shall be and shall remain liable for all obligations and liabilities incurred
by it as General Partner before such withdrawal, sale, transfer or assignment
shall have become effective, but shall be free of any obligation or liability
incurred on account of the activities of the Partnership from and after the
rime such withdrawal, sale, transfer or assignment shall have become
effective.
C. The General Partner may at any time designate additional persons to be
General Partners, whose interest in the Partnership shall be such as agreed
upon by the General Partner and such Additional General Partner, provided that
the Limited Partner shall consent to such admission and the interest of the
Limited Partner shall not be affected thereby. Such additional Persons shall
become successor or Additional General Partners only upon meeting the
conditions provided in Section 4.2.
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Section 4.2 Admission of a Successor or Additional General Partner
A person shall be admitted as a General Partner of the Partnership only if
the following terms and conditions are satisfied:
A. The successor and additional person shall have accepted and agreed to be
bound by all the terms and provisions of this Agreement, by executing such
documents or instruments that may be required or appropriate to effect the
admission of such person as a General Partner and such documents shall have
been filed for recordation and all other actions required in connection with
such admission shall have been performed; and
B. If a successor or additional person is a corporation, it shall have
provided the Partnership with evidence satisfactory to counsel for the
Partnership of its authority to become a General Partner and to be bound by
the terms and provisions of this Agreement.
Section 4.3 Withdrawal of a General Partner
A. Upon the occurrence of any event described in Section 10-402, Title 10
of the Corporations and Associations Article of the Annotated Code of Maryland
involving all General Partners (if there then be more than one) or the sole
General Partner (if there then be only one), the Partnership shall be
dissolved unless it is continued pursuant to Section 4.3.B hereof. In the
event that the Partnership is continued pursuant to Section 4.3.B, the General
Partner who has suffered an event described in Section 10-402, Title 10 of the
Corporations and Associations Article, or its successor in interest, shall
have its interest converted to that of a Limited Partner.
B. If an event described in Section 4.3.A occurs, the remaining Partners
may elect by unanimous consent to continue the business of the Partnership in
accordance with the provisions of this Agreement. If the remaining Partners do
not so elect, the Partnership shall be dissolved and liquidated pursuant to
Section 6.3.
ARTICLE V
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Transferability of Limited Partner Interests
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Section 5.1 Assignability of Limited Partner Interests
A. No Limited Partner shall have the right to sell, assign, pledge, or
transfer all or any portion of his interest in the Partnership without the
consent of the General Partner.
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B. Any sale, exchange, transfer, or other disposition in contravention of
the provisions of this Section 5.1. shall be void and ineffectual and shall
not bind or be recognized by the Partnership.
Section 5.2 Substitute Limited Partners
A. No Limited Partner shall have the right to substitute an assignee as a
Limited Partner in his place. The General Partner shall, however, have the
right in its exclusive discretion to consent to the admission of an assignee
of the interest of a Limited Partner as a Substitute Limited Partner.
B. Any Substitute Limited Partner shall, as a condition of receiving any
interest in the Partnership, agree to be bound by the provisions of this
Agreement and to make any representations contained in this Agreement to the
same extent as the Limited Partners.
ARTICLE VI
Profit, Loss and Distributions
Section 6.1 Profits and Losses
A. Allocation of Net Income and Loss. Except as otherwise provided in this
Section 6.1, all net income and net loss (including gains and losses from
Capital Transactions), for each fiscal year shall be allocated to the Partners
in accordance with their Percentage Interests. For purposes of this Article
VI, a "Capital Transaction" means any sale, exchange, condemnation, casualty
or other disposition of the Facility, the first placement of any mortgage
financing on the Facility or a refinancing of any mortgage loan on the
Facility, the proceeds from which are not Net Cash Flow (as defined in Section
6.2).
B. Section 754 Election. All allocations of net income and net loss,
including gain or loss on a Capital Transaction, pursuant to this Section 6.1
shall be made without regard to any elections made by the Partnership under
Section 754 of the Code. After such allocations are made, however, appropriate
adjustments shall be made in the net income and net loss, including gain or
loss on a Capital Transaction, so allocated to each Partner to give effect to
such elections.
C. Allocations to the General Partner. Notwithstanding anything to the
contrary that may be expressed or implied in this Agreement, if at any time
the allocation provisions of Section 6.1 do not result in the allocation to
the General Partner(s), of an aggregate of at least 1% of the net income and
net loss including gain or loss on a Capital Transaction being allocated, the
General Partner(s) shall be allocated 1% thereof.
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Section 6.2 Distributions Prior to Termination of the Partnership.
A. Definition of Cash Flow from operations. For purposes, of this
Agreement, the term "Cash Flow from Operations" for any calendar year or
fraction of a calendar year shall mean all gross revenue accrued from the
operation of the Facility including interest income but excluding Capital
Proceeds, less all operating expenses accrued in connection with the ownership
and operation of the Facility and the administration of the Partnership,
determined in accordance with generally accepted accounting principles and as
audited by the accountants, adjusted as follows:
(a) The following items shall be added in determining Cash Flow from
Operations:
(i) amounts previously set aside as reserves, when and to the extent
that the General Partner no longer regards those amounts of reserves as
reasonably necessary in the efficient conduct of the business of the
Partnership;
(ii) income received in the current year but accrued in a prior year;
(iii) expenses prepaid in a prior year but accrued in the current year;
and
(iv) depreciation and any other non-cash expenditures; and
(b) The following items shall be subtracted in determining Cash Flow from
Operations:
(i) repayment of principal and payment of interest on any loan to the
Partnership, deposits to escrows, and any other cash expenses not
previously deducted;
(ii) expenses paid in the current year but accrued in a prior year;
(iii) prepaid expenses;
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(iv) income accrued in the current year but not yet collected;
(v) any additions to reserves; and
(vi) payments of any expenses from the proceeds of a mortgage or any
other loan, from insurance or condemnation proceeds, or from capital
contributions.
B. Cash Flow from Operations shall be determined separately for each
calendar year or portion thereof and shall not be cumulative. Cash Flow from
Operations shall be distributed to the Partners in accordance with their
Percentage Interests. Distributions of Cash Flow from Operations to the
Partners shall be made at such reasonable intervals during the fiscal year as
shall be determined by the General Partner, but in any event shall be
distributed no less often than annually and no later than 90 days after the
close of each fiscal year.
C. Distributions of Capital Proceeds. Capital Proceeds shall be distributed
as follows:
First, to the discharge, to the extent required by any lender or creditor
(other than a lender or creditor who is also Partner), of debts and
obligations of the Partnership;
Second, to fund reserves for contingent liabilities to the extent deemed
necessary by the General Partner;
Third, to the repayment of any loan made by a Partner to the Partnership;
and
Fourth, the balance thereof to the Partners according to their Percentage
Interests.
For purposes of this Agreement, "Capital Proceeds" shall mean the net cash
proceeds received by the Partnership from a Capital Transaction (including
insurance proceeds, damage recoveries or condemnation awards, unless such
amounts were applied to repair or replace any improvement or invest in any
other property, or unless such payments resulted from business or rental
interruption insurance or recovery with respect to a business or rental
interruption) after payment of all related expenses but prior to payment of
debts and obligations of the Partnership or funding of reserves.
D. Notwithstanding the foregoing, in no event shall the General Partner
receive under Sections 6.2.B and 6.2.C less than 1% of the aggregate of the
amounts distributed to the Limited Partner under Sections 6.2.B and 6.2.C. In
the event that the amount distributable to the General Partners does not equal
at least 1% of the aggregate amount distributable to the Limited Partner
without regard to this provision, then the amounts otherwise distributable to
the Limited Partner shall be reduced in order to assure the General Partner of
its 1% share.
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Section 6.3 Distributions and Payment Upon Termination and Winding Up
Upon termination and winding up of the Partnership, the remaining assets of
the Partnership as determined by the remaining or surviving General Partner(s)
remaining after payment of all liabilities of the Partnership, and funding all
reserves, to the extent deemed necessary by the General Partner, shall be
distributed to the Partners in accordance with their respective Capital
Account balances determined after all allocations pursuant to Section 6.1 and
all prior distributions pursuant to Section 6.2, but before any distributions
pursuant to this Section 6.3.
ARTICLE VII
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Books and Records, Accounting Tax Elections, Etc.
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Section 7.1 Books, Records, and Reports: Accountants
A. The General Partner shall keep or cause to be kept complete and accurate
books and records of the Partnership and supporting documentation of
transactions with respect to the conduct of the Partnership's business, which
shall be maintained in accordance with generally accepted accounting
principles and shall 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 during normal business hours at the office of the
Partnership. In the event such books of account and other records are
requested to be examined by a firm of certified public accountants, the
Partner requesting the examination shall pay the expense of the examination.
B. The accountants for the Partnership shall be Price Waterhouse & Co. or
such other firm of certified public accountants as may be engaged by the
General Partner.
Section 7.2 Bank Accounts
The bank accounts of the Partnership shall be maintained in such banking
institutions as the General Partner shall determine. Withdrawals shall be made
only in the regular course of business.
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Section 7.3 Tax Elections
Subject to the provisions of Section 7.4, all elections required or
permitted to be made by the Partnership under the Internal Revenue Code shall
be made by the General Partner.
Section 7.4 Special Basis Adjustments
In the event of a transfer of all or any part of the interest of any
Partner, including a transfer upon the death of a Partner, and a transfer of
an interest pursuant to Article V, the Partnership, upon request of the
transferor or transferee shall elect, pursuant to Section 754 of the Internal
Revenue Code of 1986, as amended (or corresponding provisions of succeeding
law), to adjust the basis of the Partnership's property. Notwithstanding
anything contained in Article VI of this Agreement, any adjustments made
pursuant to Section 754 shall affect only the successor in interest. Each
Partner will furnish the Partnership with all information necessary to give
effect to such election.
Section 7.5 Fiscal Year and Accounting Method
The fiscal year of the Partnership shall be the calendar year and the
accounting method to be used by the Partnership shall be the accrual method.
Section 7.6 Tax Matters Partner
MNC in its capacity as General Partner shall be the "Tax Matters Partner" of
the Partnership for federal income tax purposes.
The Tax Matters Partner shall cause to be prepared and filed with the proper
federal, state or local governmental authority all tax returns and statements
required to be filed by the Partnership. Such returns and statements shall be
prepared in accordance with methods and principles determined by the General
Partner with the consent of the Limited Partner.
Such Tax Matters Partner shall have all the authority granted by the Code
and Treasury Regulations (as amended from time to time) to the Tax Matters
Partner, including the authority, after approval of the Limited Partner
(regardless of anything to the contrary contained in the Code):
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(1) to enter into a settlement agreement with the Internal Revenue
Service which purports to bind Partners other than the Tax Matters
Partner.
(2) to file a petition as contemplated in Section 6226(a) or 6228 of
the Code;
(3) to intervene in any action as contemplated in Section 6226(b)(5) of
the Code;
(4) to file any request contemplated in Section 6227(b) of the Code;
and
(5) to enter into an agreement extending the period of limitations as
contemplated in Section 6229(b) (1) (B) of the Code.
The Tax Matters Partner shall receive no compensation for its services. All
third party costs and expenses Incurred by the Tax Matters Partner in
performing its duties shall be borne by the partnership. Nothing herein shall
be construed to restrict the Partnership from engaging an accounting firm or
law firm to assist the Tax Matters Partner in discharging its duties
hereunder.
ARTICLE VIII
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General Provisions
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Section 8.1 Notices
A. Any and all notices called for under this agreement shall be deemed
adequately given only if in writing and sent by registered or certified mail,
postage prepaid, to the party or parties for whom such notices are intended.
B. All such notices in order to be effective shall be addressed to a
Partner's last address of record on the Partnership books. The address of the
Partnership shall be its principal office.
Section 8.2 Word Meanings
The singular shall include the plural and the masculine gender shall include
the feminine and neuter, and vice versa, unless the context otherwise
requires.
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Section 8.3 Binding Provisions
A. The covenants and agreements contained herein shall be binding upon, and
inure to the benefit of the legal representatives, successors, and assigns of
the respective parties hereto.
B. None of the provisions of this Agreement shall be for the benefit of, or
enforceable by, any creditor of the Partnership.
Section 8.4 Applicable Law
This Agreement shall be construed and enforced in accordance with the laws
of Maryland.
Section 8.5. Paragraph Titles
Captions contained in this Agreement are inserted only as a matter of
convenience and in no way define, limit, extend, or describe the scope of this
Agreement or the intent of any provision hereof.
Section 8.6 Amendment Procedure
This Agreement may be modified or amended only with the consent of all of
the Partners.
Section 8.7 Entire Agreement
This Agreement sets forth all (and is intended by all parties hereto to be
an integration of all) of the promises, agreements, conditions,
understandings, warranties and representations among the parties hereto with
respect to the Partnership, the Partnership business, end the Property, and
there are no promises, agreements, conditions, understandings, warranties, or
representations, oral or written, express or implied, among them other than as
set forth herein.
Section 8.8 Other Business Activities
Any of the Partners may engage in and possess any interest in other business
or ventures of every nature and description, independently or with others, and
neither the Partnership nor the Partners shall have any rights in and to said
independent ventures or the income or profits derived therefrom.
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WITNESS the execution under seal the 30th day of December, 1986.
WITNESS: GENERAL PARTNER
MERIDIAN NURSING CENTERS, INC.,
a Maryland corporation
/s/ [graphic of signature] By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------ -------------------------------------
Its: President
-------------------------------------
WITNESS: LIMITED PARTNER
MERIDIAN/CONSTELLATION LIMITED
PARTNERSHIP, a Maryland limited
partnership
By Meridian Nursing Centers, Inc.,
General Partner
/s/ [graphic of signature] By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------ -------------------------------------
By CPI Health Services, Inc.,
General Partner
/s/ [graphic of signature] By: /s/ [graphic of signature]
------------------------------------ -------------------------------------
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