Exhibit 3.38.3
AGREEMENT OF LIMITED
PARTNERSHIP
OF
BLC OF CALIFORNIA-SAN MARCOS,
L.P.
A DELAWARE LIMITED
PARTNERSHIP
Dated as of October 24,
2000
TABLE OF
CONTENTS
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ii
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AGREEMENT OF LIMITED
PARTNERSHIP
OF
BLC OF CALIFORNIA-SAN MARCOS, L.P.
A DELAWARE LIMITED PARTNERSHIP
This AGREEMENT OF LIMITED
PARTNERSHIP (this “Agreement”) is entered into this
24th day of October, 2000, by and between Brookdale Living
Communities of California-San Marcos, Inc., a Delaware
corporation (“ BLC of CA-SM Inc. ”), as the
General Partner, and Brookdale Living Communities, Inc., a
Delaware corporation (“ BLCI ”), as the Limited
Partner, pursuant to the provisions of the Delaware Revised Uniform
Limited Partnership Act, as amended, on the following terms and
conditions:
WITNESSETH:
ARTICLE I .
CERTAIN DEFINITIONS
For purposes of this Agreement, the
following terms shall have the meanings set forth in this
Article I (such meanings to be equally applicable in
both the singular and plural forms of the term defined).
1.1
“ Act ” means
the Delaware Revised Uniform Limited Partnership Act, as amended
from time to time (or any corresponding provisions of succeeding
law).
1.2
“ Adjusted
Capital Account Deficit ” means, with respect
to any Partner, the deficit balance, if any, in such
Partner’s Capital Account as of the end of the relevant
Partnership taxable year, after giving effect to the following
adjustments:
(i)
Credit to such
Capital Account any amounts which such Partner is obligated to
restore pursuant to any provision of this Agreement or pursuant to
Regulations Section 1.704-1(b)(2)(ii)(c) or is deemed to
be obligated to restore pursuant to the penultimate sentences of
Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5);
and
(ii)
Debit to such
Capital Account the items described in Regulations Sections
1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) and
1.704-1(b)(2)(ii)(d)(6).
The foregoing definition of Adjusted Capital
Account Deficit is intended to comply with the provisions of
Regulations Section 1.704-1(b)(2)(ii)(d) and shall be
interpreted consistently therewith.
1.3
“ Affiliate
” means any (i) Person owning a majority interest in any
corporate Partner; (ii) Person owning an interest as a general
partner of any Partner or a majority interest as a limited partner
of any Partner; (iii) Person who is an officer, director,
trustee, partner or stockholder of any Partner or of any Person
described in the preceding clause (ii); or (iv) Person that is
controlling, controlled by or under common control with a Partner
or any Person described in the preceding clauses (i), (ii) or
(iii).
1.4
“ Agreement
” or “ Partnership Agreement ” means this
Agreement of Limited Partnership, as amended from time to time.
Words such as “herein,” “hereinafter,”
“hereof,” and “hereunder” refer to this
Agreement as a whole, unless the context otherwise
requires.
1.5
“ Assignee
” means any Person who has acquired a beneficial interest in
the Interest of a Partner in the Partnership.
1.6
“ Available
Ca sh Flow ” means, with respect to the
applicable period of measurement (i.e., any period beginning on the
first day of the fiscal year or other period commencing immediately
after the last day of the calculation of Available Cash Flow which
was distributed, and ending on the last day of the month, quarter
or other applicable period immediately preceding the date of
calculation) the excess, if any, of the gross cash receipts of the
Partnership for such period from all sources whatsoever, including,
without limitation, the following:
(a)
(i) all fees
rents, revenues, income and proceeds derived by the Partnership
from its operations from any source whatsoever; (ii) all
proceeds and revenues received on account of any sales of property
of the Partnership or received by the Partnership for payments of
principal, interest, costs, fees, penalties or otherwise on account
of any loans made by the Partnership or financings or refinancings
of any property of the Partnership; (iii) the amount of any
insurance proceeds and condemnation awards received by the
Partnership; (iv) all Capital Contributions received by the
Partnership from its Partners; (v) all cash amounts previously
reserved by the Partnership, if the specific purposes for which
such amounts were reserved are no longer applicable; and
(vi) the proceeds of liquidation of the Partnership’s
property in accordance with this Agreement:
over the sum of:
(b)
(i) all
operating costs and expenses of the Partnership and capital
expenditures made during such period (without deduction, however,
for any capital expenditures, charges for depreciation or other
expenses not paid in cash or expenditures from reserves described
in (vii) below); (ii) all costs and expenses expended or
payable during such period in connection with the sale or other
disposition, or financing or refinancing, of property of the
Partnership or the recovery of insurance or condemnation proceeds;
(iii) all fees provided for under this Agreement;
(iv) all debt service, including principal and interest, paid
during such period on all indebtedness of the Partnership;
(v) all Capital Contributions, advances, reimbursements or
similar payments made to any Person (whether a partnership,
corporation or other entity) in which the Partnership
has
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an interest;
(vi) all loans made by the Partnership; and (vii) any and
all reserves reasonably determined by the Managing General Partner
to be necessary or appropriate for working capital, capital
improvements, payments of periodic expenditures, debt service or
other purposes.
1.7
“ BLCI ”
means Brookdale Living Communities, Inc., a Delaware
corporation.
1.8
“ BLC of C
A-SM Inc ” means Brookdale Living Communities of
California-San Marcos, Inc., a Delaware
corporation.
1.9
“ Capital Ac
count ” means, with respect to any Partner, the
Capital Account maintained for such Partner in accordance with the
following provisions:
(i)
To each
Partner’s Capital Account there shall be credited the amount
of cash and the Gross Asset Value of any Property contributed by
such Partner to the Partnership, such Partner’s distributive
share of Profits and any items in the nature of income or gain
which are specially allocated pursuant to Sections 4.3 or
4.4 hereof, and the amount of any Partnership liabilities
assumed by such Partner or which are secured by any Property
distributed to such Partner.
(ii)
To each
Partner’s Capital Account there shall be debited the amount
of cash and the Gross Asset Value of any Property distributed to
such Partner pursuant to any provision of this Agreement, such
Partner’s distributive share of Losses and any items in the
nature of expenses or losses which are specially allocated pursuant
to Sections 4.3 or 4.4 hereof, and the amount of any
liabilities of such Partner assumed by the Partnership or which are
secured by Property contributed by such Partner to the
Partnership.
(iii)
In determining
the amount of any liability for purposes of the foregoing
subparagraphs (i) and (ii), there shall be taken into account
Code Section 752(c) and any other applicable provisions
of the Code and Regulations.
The foregoing provisions and the
other provisions of this Agreement relating to the maintenance of
Capital Accounts are intended to comply with Regulations Sections
1.704-1(b) and 1.704-2, and shall be interpreted and applied
in a manner consistent with such Regulations. In the event the
Managing General Partner shall determine that it is prudent to
modify the manner in which the Capital Accounts, or any debits or
credits thereto (including, without limitation, debits or credits
relating to liabilities which are secured by contributed or
distributed property or which are assumed by the Partnership,
General Partner or the Limited Partners) are computed in order to
comply with such Regulations, the Managing General Partner may make
such modification, provided that it is not likely to have a
material adverse effect on the amounts distributable to any Partner
pursuant to Article IX hereof upon the dissolution of
the Partnership. The Managing General Partner also shall
(i) make any adjustments that are necessary or appropriate to
maintain equality between the Capital Accounts of the Partners and
the amount of Partnership capital reflected on the
Partnership’s balance sheet, as computed for book purposes,
in accordance with Regulations Section 1.704-1(b)(2)(iv)(q),
and (ii) make any
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appropriate modifications in the event
unanticipated events might otherwise cause this Agreement not to
comply with Regulations Sections 1.704-1(b) or
1.704-2.
1.10
“ Capital
Contribut ions ” means, with respect to any
Partner, the amount of money and the initial Gross Asset Value of
any property (other than money), net of the amount of any debt to
which such property is subject, contributed to the Partnership with
respect to the Interest in the Partnership held by such
Partner. The principal amount of a promissory note which is
not readily tradable on an established securities market and which
is contributed to the Partnership by the maker of the note shall
not be included in the Capital Account of any Person until the
Partnership makes a taxable disposition of the note or until (and
to the extent) such Partner makes principal payments on the note,
all in accordance with Regulations
Section 1.704-1(b)(2)(iv)(d)(2).
1.11
“ Certific
ate ” shall mean the Certificate of Limited
Partnership of the Partnership filed with the Secretary of State of
Delaware in accordance with the Act or the applicable predecessor
statute thereof, as such Certificate may be amended from time to
time.
1.12
“ Cod e
” means the Internal Revenue Code of 1986, as amended from
time to time (or any corresponding provisions of succeeding
law).
1.13
“ Depreciati
on ” means, for each Partnership taxable year or other
period, an amount equal to the depreciation, amortization or other
cost recovery deduction allowable with respect to an asset for such
year or other period, except that, if the Gross Asset Value of an
asset differs from its adjusted basis for federal income tax
purposes at the beginning of such year or other period,
Depreciation shall be an amount which bears the same ratio to such
beginning Gross Asset Value as the federal income tax depreciation,
amortization or other cost recovery deduction for such year or
other period bears to such beginning adjusted tax basis;
provided , however , that, if the federal income tax
depreciation, amortization or other cost recovery deduction for
such year is zero, Depreciation shall be determined with reference
to such beginning Gross Asset Value using any reasonable method
selected by the Managing General Partner; and provided
further , however , that to the extent the
“remedial” method described in Regulations
Section 1.704-3 is elected pursuant to the terms of this
Agreement, Depreciation will be determined in a manner consistent
therewith.
1.14
“ Facili
ty ” means the senior independent and assisted living
facility, consisting of 210 units, located in San Marcos,
California, and currently know as Atria of San Marcos.
1.15
“ General Pa
rtner ” means any Person which (i) is referred to
as such in the first paragraph of this Agreement or has become a
General Partner pursuant to the terms of this Agreement and
(ii) has not ceased to be a General Partner pursuant to the
terms of this Agreement. “ General Partners
” means all such Persons if at any time there shall be more
than one General Partner. All references in this Agreement to
a majority in interest or a specified percentage of the General
Partners shall mean General Partners whose combined Percentage
Interests represent more than 50% or such specified percentage,
respectively, of the Percentage Interests then held by all General
Partners.
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1.16
“ Gross Asset
V alue ” means, with respect to any asset, the
asset’s adjusted basis for federal income tax purposes,
except as follows:
(i)
The initial Gross
Asset Value of any asset contributed by a Partner to the
Partnership shall be the gross fair market value of such asset, as
determined by the contributing Partner and the
Partnership;
(ii)
The Gross Asset
Values of all Partnership assets shall be adjusted to equal their
respective gross fair market values, as reasonably determined by
the Managing General Partner, as of the following times:
(a) the acquisition of an additional Interest in the
Partnership by any new or existing Partner in exchange for more
than a de minimis Capital Contribution; (b) the distribution
by the Partnership to a Partner of more than a de minimis amount of
Partnership assets, including money, as consideration for an
Interest in the Partnership; and (c) the liquidation of the
Partnership within the meaning of Regulations
Section 1.704-1(b)(2)(ii)(g); provided, however, that
adjustments pursuant to clauses (a) and (b) above shall
be made only if the Managing General Partner reasonably determines
that such adjustments are necessary or appropriate to reflect the
relative economic interests of the Partners in the
Partnership;
(iii)
The Gross Asset
Value of any Partnership asset distributed to any Partner shall be
the gross fair market value of such asset on the date of
distribution; and
(iv)
The Gross Asset
Values of Partnership assets shall be increased (or decreased) to
reflect any adjustments to the adjusted basis of such assets
pursuant to Code Section 734(b) or 743(b), but only to
the extent that such adjustments are taken into account in
determining Capital Accounts pursuant to Regulations
Section 1.704-1(b)(2)(iv)(m) and the definition of
“Capital Account” hereof; provided, however, that Gross
Asset Values shall not be adjusted pursuant to this subparagraph
(iv) to the extent the Managing General Partner determines
that an adjustment pursuant to the foregoing subparagraph
(ii) of this definition hereof is necessary or appropriate in
connection with a transaction that would otherwise result in an
adjustment pursuant to this subparagraph (iv).
If the Gross Asset Value of an asset has been
determined or adjusted pursuant to any of the foregoing
subparagraphs (i), (ii) or (iv), such Gross Asset Value shall
thereafter be adjusted by the Depreciation taken into account with
respect to such asset for purposes of computing Profits and
Losses.
1.17
“ Intere
st ” means a Partner’s ownership interest in the
Partnership, including any and all benefits to which the holder of
such an Interest may be entitled as provided in this Agreement,
together with all obligations of such Partner to comply with the
terms and provisions of this Agreement.
1.18
“ La nd
” means the real property on which the Facility is
located.
1.19
“ Limited
Part ner ” means the Person (i) the name
of which is set forth on Exhibit A attached hereto and
designated as such or who has become a Limited Partner pursuant to
the terms of this Agreement and (ii) who holds an
Interest. “ Limited Partners ” means all
such
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Persons if at any time there shall be more than
one Limited Partner. All references in this Agreement to a
majority in interest or a specified percentage of the Limited
Partners shall mean Limited Partners whose combined Percentage
Interests represent more than 50% or such specified percentage,
respectively, of the Percentage Interests then held by all Limited
Partners.
1.20
“ Managing
Gen eral Partner ” means the General Partner
elected as such pursuant to this Agreement, as described in
Section 6.1(a) .
1.21
“ Nonrecourse
D eductions ” has the meaning set forth in
Regulations Section 1.704-2(b). The amount of
Nonrecourse Deductions for a Partnership taxable year equals the
excess, if any, of the net increase, if any, in the amount of
Partnership Minimum Gain during that Partnership taxable year over
the aggregate amount of any distributions during that Partnership
taxable year of proceeds of a Nonrecourse Liability that are
allocable to an increase in Partnership Minimum Gain, determined
according to the provisions of Regulations
Section 1.704-2(c).
1.22
“ Nonrecourse
Liability ” has the meaning set forth in Regulations
Section 1.704-2(b)(3).
1.23
“ Partner
Minim um Gain ” has the meaning set forth in
the definition of “partner nonrecourse debt minimum
gain” in Regulations Section 1.704-2(i)(2), and will be
computed as provided in Regulations
Section 1.704-2(i)(3).
1.24
“ Partner
Nonrecourse Debt ” has the meaning set forth
in Regulations Section 1.704-2(b)(4).
1.25
“ Partner
Nonreco urse Deductions ” has the meaning set
forth in Regulations Section 1.704-2(i). The amount of
Partner Nonrecourse Deductions with respect to a Partner
Nonrecourse Debt for a Partnership taxable year equals the excess,
if any, of the net increase, if any, in the amount of Partnership
Minimum Gain attributable to such Partner Nonrecourse Debt during
that Partnership taxable year over the aggregate amount of any
distributions during that Partnership taxable year to the Partner
that bears the economic risk of loss for such Partner Nonrecourse
Debt to the extent such distributions are from the proceeds of such
Partner Nonrecourse Debt and are allocable to an increase in
Partnership Minimum Gain attributable to such Partner Nonrecourse
Debt, determined in accordance with Regulations
Section 1.704-2(i).
1.26
“ Partne
rs ” means the General Partners and the Limited
Partners, where no distinction is required by the context in which
the term is used herein. “Partner” means any one
of the Partners. All references in this Agreement to a
majority interest or a specified percentage of the Partners shall
mean Partners whose combined Percentage Interests represent more
than 50% or such specified percentage, respectively, of the
Percentage Interests then held by all Partners.
1.27
“ Partners
hip ” means the partnership formed pursuant to this
Agreement and the partnership continuing the business of this
Partnership in the event of dissolution as herein
provided.
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1.28
“ Partnership
M inimum Gain ” has the meaning set forth in
Regulations Section 1.704-2(b)(2), and will be computed as
provided in Regulations Section 1.704-2(d).
1.29
“ Percentage
I nterest ” means the percentage set forth for
the General Partners and Limited Partners on Exhibit A
hereto.
1.30
“ Person ”
means any individual, general partnership, limited partnership,
corporation, limited liability company, trust or other association
or entity.
1.31
“ Profits
” and “ Losses ” and reference to any item
of income, gain, loss or deduction thereof, means, for each
Partnership taxable year or other period, an amount equal to the
Partnership’s taxable income or loss for such year or period,
determined in accordance with Code Section 703(a) (for
this purpose, all items of income, gain, loss or deduction required
to be stated separately pursuant to Code
Section 703(a)(1) shall be included in taxable income or
loss), with the following adjustments:
(i)
Any income of the
Partnership that is exempt from federal income tax and not
otherwise taken into account in computing Profits or Losses
pursuant to this definition shall be added to such taxable income
or loss;
(ii)
Any expenditures
of the Partnership described in Code
Section 705(a)(2)(B) or treated as Code
Section 705(a)(2)(B) expenditures pursuant to Regulations
Section 1.704-1(b)(2)(iv)(i) and not otherwise taken into
account in computing Profits or Losses pursuant to this definition
shall be subtracted from such taxable income or loss;
(iii)
In the event the
Gross Asset Value of any Partnership asset is adjusted pursuant to
subparagraph (ii) or (iv) of the definition of Gross
Asset Value hereof, the amount of such adjustment shall be taken
into account as gain or loss from the disposition of such asset for
purposes of computing Profits or Losses;
(iv)
Gain or loss
resulting from any disposition of property with respect to which
gain or loss is recognized for federal income tax purposes shall be
computed by reference to the Gross Asset Value of the property
disposed of notwithstanding that the adjusted tax basis of such
property differs from its Gross Asset Value;
(v)
In lieu of the
depreciation, amortization and other cost recovery deductions taken
into account in computing such taxable income or loss, there shall
be taken into account Depreciation for such Partnership taxable
year or other period, computed in accordance with the definition of
Depreciation herein; and
(vi)
Notwithstanding
any other provision of this definition of “Profits” and
“Losses,” any items which are specially allocated
pursuant to Sections 4.3 or 4.4 hereof shall not be
taken into account in computing Profits or Losses.
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1.32
“ Projec t
” means the ownership or lease, and the management and
operation, of the Facility.
1.33
“ Proper
ty ” means the land and the Facility and all the real
property and personal property acquired by the Partnership and any
improvements thereto and shall include both tangible and intangible
property.
1.34
“ Recaptu re
Gain ” has the meaning set forth in
Section 4.6(e) .
1.35
“ Regulat
ions ” means the Income Tax Regulations, including
Temporary Regulations, promulgated under the Code, as such
regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
1.36
“ Tax Matters
Partner ” shall mean BLC of CA-SM Inc. or any
successor Managing General Partner.
1.37
“ Transfe
r ” means, as a noun, any voluntary or involuntary
transfer, sale, pledge, hypothecation or other disposition or
encumbrance and, as a verb, voluntarily or involuntarily to
transfer, sell, pledge, hypothecate or otherwise dispose of or
encumber.
1.38
“ Transfere
e ” has the meaning set forth in
Section 4.5(c) .
ARTICLE II.
THE PARTNERSHIP
2.1
Organization
. The
Partners hereby agree to organize and operate the Partnership as a
limited partnership pursuant to the provisions of the Act and upon
the terms and conditions set forth in this Agreement.
2.2
Partnership
Name . The name of the
Partnership shall be “BLC of California-San Marcos,
L.P.” and all business of the Partnership shall be conducted
in such name or such other name as the Managing General Partner
shall determine. The Partnership shall hold all of its
property in the name of the Partnership and not in the name of any
Partner.
2.3
Purpose
. The
purpose and business of the Partnership shall be to acquire or
lease and hold the Land and the Facility, to operate and manage (or
cause the operation and management by independent contractors
including a Partner or its Affiliates of) the Facility and any
other Property owned by the Partnership, to acquire, lease, own,
mortgage or otherwise encumber personal property, fixtures and real
property to accomplish the foregoing, and otherwise deal in and
with the business and assets of the Partnership; to do any and all
other acts which may be necessary or incidental to any of the
foregoing or the promotion or conduct of the business of the
Partnership or any of the Partnership Property, including, without
limitation, being a partner in another partnership or other
partnerships; and to pursue or conduct any other business or
activity approved by the Partners.
2.4
Principal
Place of Business . The principal place
of business of the Partnership shall be c/o Brookdale Living
Communities, Inc., 330 North Wabash Avenue, Suite
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1400, Chicago, Illinois
60611 or such other location as may be designated from time to time
by the Managing General Partner.
2.5
Term . The term of the
Partnership commenced on the date on which the Certificate is filed
in the office of the Secretary of State of Delaware in accordance
with the Act and shall continue until the winding up and
liquidation of the Partnership and its business is completed, as
provided in Article IX hereof.
2.6
Filings; Agent
for Service of Process .
(a)
The Certificate
has been filed in the office of the Secretary of State of Delaware
in accordance with the provisions of the Act. The Managing
General Partner shall take any and all other actions reasonably
necessary to perfect and maintain the status of the Partnership as
a limited partnership under the laws of the State of
Delaware. The Managing General Partner shall cause amendments
to the Certificate to be filed whenever required by the Act.
Such amendments may be executed by the Managing General Partner
only.
(b)
The Managing
General Partner shall execute and cause to be filed original or
amended Certificates and shall take any and all other actions as
may be reasonably necessary to perfect and maintain the status of
the Partnership as a limited partnership or similar type of entity
under the laws of any other states or jurisdictions in which the
Partnership engages in business.
(c)
The agent for
service of process on the Partnership in the State of Delaware, and
the address of such agent, shall initially be Corporation Trust
Center, 1209 Orange Street, in the City of Wilmington, County of
New Castle, Delaware, or any successor as appointed by the Managing
General Partner. The Managing General Partner, in it sole and
absolute discretion, may change the registered agent and appoint
successor registered agents and shall appoint registered agents in
all jurisdictions in which in the Managing General Partner
determines to be appropriate.
(d)
Upon the
dissolution of the Partnership, the Managing General Partner (or,
in the event there is no Managing General Partner, the Person
responsible for winding up and dissolution of the Partnership
pursuant to Article IX hereof) shall promptly execute
and cause to be filed certificates of dissolution in accordance
with the Act and the laws of any other states or jurisdictions in
which the Partnership has filed certificates.
2.7
Reservation of
Other Business Opportunities . No business
opportunities other than those actually exploited by the
Partn
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