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LIMITED PARTNERSHIP AGREEMENT OF THE CAMP RECOVERY CENTERS, L.P.

Limited Partnership Agreement

LIMITED PARTNERSHIP AGREEMENT OF THE CAMP RECOVERY CENTERS, L.P. | Document Parties: CAMP RECOVERY CENTERS, L.P. | CRC Recovery, Inc You are currently viewing:
This Limited Partnership Agreement involves

CAMP RECOVERY CENTERS, L.P. | CRC Recovery, Inc

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Title: LIMITED PARTNERSHIP AGREEMENT OF THE CAMP RECOVERY CENTERS, L.P.
Governing Law: California     Date: 6/21/2006

LIMITED PARTNERSHIP AGREEMENT OF THE CAMP RECOVERY CENTERS, L.P., Parties: camp recovery centers  l.p. , crc recovery  inc
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Exhibit 3.8

THIRD AMENDED AND RESTATED

AGREEMENT OF LIMITED PARTNERSHIP

OF

THE CAMP RECOVERY CENTERS, L.P.

A CALIFORNIA LIMITED PARTNERSHIP


TABLE OF CONTENTS

 

 

 

 

 

 

 

 

 

 

 

    

 

  

Page

SECTION 1 FORMATION AS LIMITED PARTNERSHIP

  

1

 

 

 

 

1.1

 

 

    

Name and Principal Office

  

1

 

 

 

 

1.2

 

 

    

Purpose

  

1

 

 

 

 

1.3

 

 

    

Addresses of the Partners

  

1

 

 

 

 

1.4

 

 

    

Term of the Partnership

  

2

 

 

 

 

1.5

 

 

    

Required Documents

  

2

 

 

SECTION 2 CAPITALIZATION OF THE PARTNERSHIP

  

2

 

 

 

 

2.1

 

 

    

Capital Contributions

  

2

 

 

 

 

2.2

 

 

    

Admission of Substituted or Additional Limited Partners

  

3

 

 

 

 

2.3

 

 

    

Withdrawal and Return of Capital

  

3

 

 

 

 

2.4

 

 

    

Loans to the Partnership

  

3

 

 

 

 

2.5

 

 

    

Limitation of Liability

  

4

 

 

 

 

2.6

 

 

    

Percentage Interests

  

4

 

 

SECTION 3 PARTNERSHIP ACCOUNTING AND DIVISION OF PROFITS

  

4

 

 

 

 

3.1

 

 

    

Fiscal Year/Accounting Method

  

4

 

 

 

 

3.2

 

 

    

Definitions

  

5

 

 

 

 

3.3

 

 

    

Allocation of Income and Losses

  

7

 

 

 

 

3.4

 

 

    

Non-Liquidating Distributions

  

10

 

 

 

 

3.5

 

 

    

Partnership Records

  

10

 

 

 

 

3.6

 

 

    

Partnership Reports and Tax Information

  

10

 

 

 

 

3.7

 

 

    

Tax Matters Partner

  

10

 

 

 

 

3.8

 

 

    

Valuation of Distributions in Kind

  

11

 

 

SECTION 4 ADMINISTRATIVE PROVISIONS

  

11

 

 

 

 

4.1

 

 

    

Power of Limited Partners

  

11


TABLE OF CONTENTS (CONT’D)

 

 

 

 

 

 

 

 

 

 

 

    

 

  

Page

4.2

 

 

    

Management by the General Partner

  

11

 

 

 

 

4.3

 

 

    

Financial Disclosures

  

13

 

 

 

 

4.4

 

 

    

Reimbursement of the Partners

  

13

 

 

 

 

4.5

 

 

    

Fees and Expenses

  

13

 

 

 

 

4.6

 

 

    

Competing Ventures

  

13

 

 

SECTION 5 TRANSFER OF A PARTNERSHIP INTEREST

  

14

 

 

 

 

5.1

 

 

    

Compliance With This Agreement

  

14

 

 

 

 

5.2

 

 

    

Substituted Limited Partner

  

14

 

 

 

 

5.3

 

 

    

Additional Limited Partners

  

15

 

 

 

 

5.4

 

 

    

Removal of the General Partner

  

15

 

 

SECTION 6 DISSOLUTION/TERMINATION OF PARTNERSHIP

  

15

 

 

 

 

6.1

 

 

    

Dissolving Events

  

15

 

 

 

 

6.2

 

 

    

Successor General Partner

  

15

 

 

 

 

6.3

 

 

    

Winding Up of the Partnership

  

16

 

 

 

 

6.4

 

 

    

Incorporation

  

17

 

 

SECTION 7 LIABILITY AND INDEMNIFICATION OF THE GENERAL PARTNER

  

18

 

 

 

 

7.1

 

 

    

Liability

  

18

 

 

 

 

7.2

 

 

    

Indemnification

  

18

 

 

SECTION 8 POWER OF ATTORNEY

  

18

 

 

SECTION 9 GENERAL PROVISIONS

  

19

 

 

 

 

9.1

 

 

    

Special Meetings

  

19

 

 

 

 

9.2

 

 

    

Entire Agreement

  

19

 

 

 

 

9.3

 

 

    

Amendments

  

19

 

ii


TABLE OF CONTENTS (CONT’D)

 

 

 

 

 

 

 

 

 

 

 

    

 

  

Page

9.4

 

 

    

Severability

  

19

 

 

 

 

9.5

 

 

    

Counterparts

  

19

 

 

 

 

9.6

 

 

    

Survival of Rights

  

19

 

 

 

 

9.7

 

 

    

Additional Documents

  

20

 

 

 

 

9.8

 

 

    

Arbitration and Attorney’s Fees

  

20

 

 

 

 

9.9

 

 

    

Notices

  

20

 

 

 

 

9.10

 

 

    

Gender

  

20

 

 

 

 

EXHIBIT A

 

EXISTING LIMITED PARTNER COUNTERPART SIGNATURE PAGE FOR THIRD AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF THE CAMP RECOVERY CENTERS, L.P.

 

 

EXHIBIT B

 

EXISTING EMPLOYEE/CONTRACTOR LIMITED PARTNER COUNTERPART SIGNATURE PAGE FOR THIRD AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF THE CAMP RECOVERY CENTERS, L.P.

 

 

EXHIBIT C

 

DECEMBER 1998 NEW INVESTMENT LIMITED PARTNER COUNTERPART SIGNATURE PAGE FOR THIRD AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF THE CAMP RECOVERY CENTERS, L.P. A CALIFORNIA LIMITED PARTNERSHIP

 

iii


THIRD AMENDED AND RESTATED

AGREEMENT OF LIMITED PARTNERSHIP

OF

THE CAMP RECOVERY CENTERS, L.P.

THE THIRD AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP (the “Agreement”) of The Camp Recovery Centers, L.P., a California limited partnership (the “Partnership”), executed among CRC Recovery, Inc., a Delaware corporation, as General Partner and the Existing Partners, as defined herein, is amended and restated in its entirety effective as of December 15, 1998 (the “Effective Date”), by admitting the persons listed as new December 1998 Investment Limited Partners who have executed counterpart signatures pages in the forms attached as Exhibit C and otherwise restating the Agreement in its entirety as set forth herein.

IN CONSIDERATION OF the terms and conditions herein, the Partners agree as follows:

SECTION 1

FORMATION AS LIMITED PARTNERSHIP

1.1 Name and Principal Office . The Partnership was formed as a limited partnership pursuant to the California Revised Limited Partnership Act (the “Act”) on September 7, 1995. The business of the Partnership shall continue to be conducted under the name of The Camp Recovery Centers, a California limited partnership. The principal office of the Partnership is located at 1111 Middle Avenue, Menlo Park, California 94025, or at such other place as may be designated in writing by the General Partner.

1.2 Purpose . The purpose of the Partnership is to operate the Camp and Azure Acres, to acquire and operate one or more other alcohol and drug abuse treatment facilities for adults and adolescents and to engage in any and all such activities necessary or incidental to the foregoing.

1.3 Addresses of the Partners .

(a) General Partner . The name and place of business of the General Partner are as follows:

CRC Recovery, Inc.

1111 Middle Avenue

Menlo Park, CA 94025

(b) Limited Partners . The name and address of each of the Limited Partners is set forth on his respective counterpart signature page attached hereto.

 

1


1.4 Term of the Partnership . The Partnership commenced as a Limited Partnership on September 7, 1995, and shall continue until December 31, 2015, unless earlier dissolved and terminated in accordance with Section 6 of this Agreement, by operation of law or unless continued by agreement of all the Partners.

1.5 Required Documents .

(a) Partnership Documents . The General Partner shall execute, acknowledge, and cause to be filed, recorded and amended, as necessary, any amendments to the Certificate of Limited Partnership of the Partnership, and any other documents required, pursuant to applicable law.

(b) Other Documents . The Limited Partners shall execute and acknowledge as requested by the General Partner such documents as may be required from time to time in order to reflect any change in the composition of the Partnership or amendment of this Agreement agreed to by the requisite Partners under this Agreement.

SECTION 2

CAPITALIZATION OF THE PARTNERSHIP

2.1 Capital Contributions . The Partners have made or shall make the capital contributions to the Partnership as follows:

(a) General Partner . The General Partner has previously made a capital contribution of Twelve Thousand One Hundred Dollars ($12,100) to the Partnership. The General Partner shall not be required to make any additional Capital Contributions to the Partnership except as set forth in this Section 2.1(a) or in Section 3.3(d).

(b) Limited Partners .

(i) (A) Each person identified as an “Existing Limited Partner” on his counterpart signature page attached hereto in the form of Exhibit A, has previously made a capital contribution in that capacity to the Partnership as set forth on such counterpart signature page.

(B) Each person identified as an “Existing Employee/Contract Limited Partner” on his counterpart signature page, attached hereto in the form of Exhibit B, has previously made a capital contribution to the Partnership as set forth on that counterpart signature page.

(ii) Except as otherwise set forth in this Section 2.1(b)(ii), the General Partner shall hold one or more closings not later than January (each of which is referred to as a “Closing”) of the Partnership upon the acceptance of subscriptions from investors, including any Existing Partner, (each of those investors is referred to hereafter as a “December 1998 New Investment Limited Partner”) for interests as Limited Partners representing in the aggregate not

 

2


less than One Million Five Hundred Thousand Dollars ($1,500,000), the “Minimum Amount” and not more than Three Million Dollars ($3,000,000), the “Maximum Amount”. No December 1998 New Investment Limited Partner may be admitted subsequent to January 31, 1999 (the “Final Closing”), except as provided in Sections 2.2 or 5 or as otherwise set forth in this Section 2.1(b)(ii), without the consent of the General Partner and a Majority-in-Interest of the Limited Partners. Notwithstanding the foregoing, if December 1998 New Investment Limited Partners have not committed to make aggregate capital contributions to the Partnership equal to the Maximum Amount by January 31, 1999, the General Partner, in its sole discretion, may extend the date of the Final Closing to April 1, 1999. Except as determined in the General Partner’s discretion, the minimum subscription from a December 1998 New Investment Limited Partner shall be Fifty Thousand Dollars ($50,000).

(iii) The Capital Contribution of each December 1998 New Investment Limited Partner, will be paid in cash (or in the discretion of the General Partner by contribution of property or cancellation of Partnership indebtedness to such Partner) on or before the Closing at which the December 1998 New Investment Limited Partner is admitted to the Partnership.

2.2 Admission of Substituted or Additional Limited Partners .

(a) The General Partner may without the consent of any Limited Partner admit any Substituted Limited Partner pursuant to Section 5.2 and admit any Additional Limited Partner pursuant to Section 5.3.

(b) The admission of an additional Limited Partner or a Substituted Partner shall not cause dissolution of the Limited Partnership.

2.3 Withdrawal and Return of Capital .

(a) Withdrawal of Capital . A Limited Partner may not withdraw any portion of such Limited Partner’s capital contribution to the Partnership except with the prior written consent of the General Partner, or as otherwise specifically provided in this Agreement. Except as provided in this Agreement, the General Partner may not withdraw any portion of the General Partner’s capital contribution to the Partnership without the prior consent of a Majority-in-Interest of the Limited Partners.

(b) Return of Capital Not Guaranteed . The General Partner shall not be personally liable for the return of the capital contributions of the Limited Partners, or any portion thereof, except as provided by law or this Agreement.

2.4 Loans to the Partnership . Any permitted loan to the Partnership or permitted advance of money for the benefit of the Partnership made by a Partner (a “Lending Partner”) shall not increase the Lending Partner’s Capital Account, entitle the Lending Partner to any greater share of Partnership distributions, or subject the Lending Partner to any greater proportion of Partnership Income or Losses. The amount of the loan or advance shall be a debt owed by the Partnership to the Lending Partner bearing interest and on other terms and conditions as are agreed to by the Lending Partner and the General Partner.

 

3


2.5 Limitation of Liability . The liability of each Limited Partner for Partnership losses shall in no event exceed, at any time, the aggregate amount of such Limited Partner’s required capital contributions to the Partnership. The foregoing shall not limit a Limited Partner’s obligation to return Partnership distributions to the extent required by Section 15666 of the Act.

2.6 Percentage Interests . The Partners shall have Units as follows:

 

 

 

 

Name

  

Units

General Partner

  

2400 + (.0002 x Proceeds)

 

 

Existing Limited Partners based on their respective Capital

Contributions as of December 14, 1998

  

8400 + (.0007 x Proceeds) – Units allocable to December 1998 New Investment Limited Partners

 

 

December 1998 New Investment Limited Partners based on their

respective Capital Contributions

  

1 Unit per $1,000 (minimum of 1,500 and maximum of 3,000)

 

 

Employee/Contract Limited Partners

  

1200 + (.0001 x Proceeds)

 

 

Existing Employee/Contract Limited Partners admitted pursuant

to this Section 2.6 prior to the Effective Date based on their

Units as of December 14, 1998

  

292.15/484 x [1200 + Proceeds x (1/10,000 - 1/7,000)]

In addition, for any year or part thereof of the Partnership, the General Partner may, but shall not be required to, allocate additional Units calculated as follows: 475.661157 + (Proceeds x 0.000125869) to one or more additional Employee/Contract Limited Partners, other than Dr. Barry W. Karlin and Daniel S. Newby, who perform services for the Partnership or the General Partner in connection with the Partnership’s business and who are admitted pursuant to the provisions of Section 5.3. The Percentage Interest of each Partner for any year or part thereof of the Partnership, shall be the percentage determined by dividing the Partner’s total Units (as adjusted pursuant to the provisions of this Agreement) by the total Units of all of the Partners for such year or part thereof.

SECTION 3

PARTNERSHIP ACCOUNTING AND DIVISION OF PROFITS

3.1 Fiscal Year/Accounting Method . The fiscal year of the Partnership shall be the calendar year. Contributions by Partners shall be kept in a bank account of the Partnership for the benefit of the Partnership to assure application of such funds for Partnership purposes. The

 

4


Partnership books shall be kept on the cash or accrual basis as determined by the General Partner. Partnership funds shall not be commingled with the funds of a General Partner or any other person.

3.2 Definition.

(a) “ Affiliate ” of a Partner means any person or entity that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with such Partner. For purposes of this Agreement, Barry W. Karlin and Daniel S. Newby shall be considered Affiliates of the General Partner.

(b) “ Azure Acres ” means the alcohol and drug abuse treatment facility currently operated by the Partnership in Sebastpol, California, known as Azure Acres and any and all related outpatient facilities.

(c) “ Camp ” means the alcohol and drug abuse treatment facility currently operated by the Partnership in Scotts Valley, California, known as the “Camp” and any and all related outpatient facilities.

(d) “ Capital Account ” shall be maintained for each Partner. Each Partner’s capital account in such capacity shall be:

(i) increased by (1) the aggregate amount of cash contributions to the Partnership in such capacity by such Partner, (2) such Partner’s share of Partnership Income in such capacity, (3) the fair market value of property contributed by the Partner in such capacity net of liabilities secured by such property that the Partnership is considered to assume or take subject to under Section 752 of the Code, and (4) the amount of any other upward adjustment to the Partner’s capital account required under Treasury Regulation Section 1.704-1(b), or any successor thereto; and

(ii) decreased by (1) cash distributions to such Partner in such capacity from the Partnership (other than to any Partner in repayment of any loan or advance), (2) such Partner’s share of Partnership Losses in such capacity, (3) the fair market value of property distributed to the Partner in such capacity by the Partnership net of liabilities secured by such property that such Partner is considered to assume or take subject to under Section 752 of the Code, and (4) the amount of any other downward adjustment to the Partner’s capital account required under Treasury Regulation Section 1.704-1(b), or any successor thereto.

For purposes of computing the balance in a Partner’s capital account, no credit shall be given for any capital contribution which the Partner is obligated to make until such contribution is actually made. For purposes of this Agreement, a transferee of any part of the interest of a Partner who is admitted as a Partner shall be deemed to have made the capital contributions which were made by the Partner with respect to the interest to which the transferee succeeds and to have received from the Partnership the credits, allocations and charges received from the Partnership by such transferor Partner with respect to the transferred interest.

 

5


Notwithstanding any other provision in this Agreement, the capital accounts of the Partners shall be maintained in accordance with Treasury Regulation Section 1.704-1(b), or any successor thereto.

(e) “ Capital Contribution ” means a contribution made by a Partner to the capital of the Partnership pursuant to Section 2.

(f) “ Closing ” means the Closing at which one or more New Investment Limited Partners are admitted to the Partnership pursuant to Section 2.1(b)(ii).

(g) “ Code ” shall mean the Internal Revenue Code of 1986, as amended.

(h) “ December 1998 New Investment Partner ” means a person who has executed a counterpart signature page in the form attached as Exhibit C.

(i) “ Distributable Cash ” means any cash of the Partnership available after paying all ordinary and necessary expenses of the Partnership (including the Management Fee) and current amortization of any debt of the Partnership, and after establishing reserves to meet current or reasonably expected obligations of the Partnership and other purposes and uses of the Partnership to the extent the General Partner determines that such reserves are necessary or advisable; provided, however, that Distributable Cash shall not include any cash if the payment of such cash to the Partners would be restricted or prohibited by any note, mortgage, deed of trust or other agreement to which the Partnership is a party or by which the Partnership is bound.

(j) “ Effective Date ” means December 15, 1998.

(k) “ Employee/Contract Limited Partner ” means a person who performs services for the General Partner or the Partnership and is allocated one or more Units by the General Partner pursuant to Section 2.6.

(1) “ Existing Employee/Contract Limited Partner ” means a person who was admitted as an Employee/Contract Limited Partner prior to the Effective Date.

(m) “ Existing Limited Partner ” means any Limited Partner, admitted to the Partnership prior to the Effective Date other than an existing Employee/Contract Limited Partner.

(n) “ Existing Partner ” means any Partner admitted to the Partnership prior to the Effective Date.

(o) “ Final Closing ” has the meaning set forth in Section 2.1(b)(ii).

(p) “ Income” and “Losses .” The Partnership’s “Income” and “Losses” shall be determined as of December 31 or any other year end of each year of the Partnership, and shall be deemed to mean the income and losses of the Partnership for Federal income tax purposes as determined by the General Partner on the advice of the certified public accountant who prepares the Partnership’s federal income tax returns. “Income” shall include income exempt from Federal income taxation and “Losses” shall include expenditures described in

 

6


Section 705(a)(2)(B) of the Code or treated as such under Treasury Regulation Section 1.704-1(b). Income or Losses upon the disposition of any property contributed to the Partnership shall be determined with respect to the book basis of such property instead of its income tax basis. Any items of gross income allocated pursuant to Sections 3.3(c)(ii) or 3.3(c)(iii) shall be excluded in determining Income or Losses for the year in which allocated.

(q) “ Limited Partner ” means any person admitted as a Limited Partner.

(r) “ Majority-in-Interest of the Limited Partners .” A “Majority-in-Interest of the Limited Partners” shall mean as of any date, Limited Partners who hold a majority of the Percentage Interests of all Limited Partners as of that date.

(s) “ Maximum Amount ” has the meaning set forth in Section 2.1(b)(ii).

(t) “ Minimum Amount ” has the meaning set forth in Section 2.1(b)(ii).

(u) “ Management Fee ” has the meaning set forth in Section 4.5.

(v) “ Original Existing Partner ” means any Partner who held Units on December 31, 1997.

(w) “ Partner ” means any of the Limited Partners or the General Partners.

(x) “ Percentage Interests ” has the meaning set forth in Section 2.6.

(y) “ Proceeds ” means the aggregate Capital Contributions committed to the Partnership by the December 1998 New Investment Limited Partners pursuant to Section 2.1(b)(ii).

(z) “ Substituted Limited Partner ” has the meaning set forth in Section 5.2.

(aa) “ Transfer ” means any sale, exchange, transfer, gift, encumbrance, assignment, pledge, mortgage or other hypothecation or disposition, whether voluntary or involuntary; and

(bb) “ Units ” have the meaning set forth in Section 2.6.

3.3 Allocation of Income and Losses .

(a) Partnership Income . Partnership Income shall be allocated among the Partners as follows:

(i) First to the Partners in proportion to and to the extent of the amount by which the cumulative Loss allocations to them pursuant to first Section 3.3(b)(iii) and then Section 3.3(b)(ii) exceed cumulative income allocations to them pursuant to this Section 3.3(a)(i);

 

7


(ii) Next, if such Income is from a sale or disposition of substantially all the assets of the Partnership:

(A) The first One Million One Hundred Eighty Thousand Dollars ($1,180,000) of such Income shall be allocated to the Original Existing Partners in proportion to and to the extent of their respective Units as of December 31, 1997; and

(B) The next Three Million Nine Hundred Eighty-Seven Thousand Dollars ($3,987,000) of such Income shall be allocated to the Existing Partners in proportion to and to the extent of their respective Units as of the date immediately preceding the Effective Date;

(iii) The balance to the Partners in accordance with their Percentage Interests.

(b) Partnership Losses . Partnership Losses shall be allocated among the Partners as follows:

(i) First, to the Partners in proportion to and to the extent of the amount by which the cumulative Income allocations to them pursuant to Section 3.3(a)(iii) exceed the cumulative Loss allocations to them pursuant to this Section 3.3(b)(i);

(ii) Next, to the Partners in proportion to and to the extent of the positive balances in their respective Capital Accounts;

(iii) The balance to the Partners in accordance with their Percentage Interests.

(c) Compliance with Allocation Requirements of the Code .

(i) Allocations of book and tax items with respect to property contributed by any Partner shall be made solely for federal income tax purposes as required by section 704(c) of the Code using the traditional method. Following any revaluation of the Partnership’s assets and the adjustment of any Partner’s Capital Account pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(f) to reflect such revaluation, the Partners’ Capital Accounts shall be adjusted for various items as computed for book purposes with respect to such revealed assets as required by Treasury Regulation Section 1.704-1(b) and the Partners’ shares of such items as computed for tax purposes with respect to such items shall be determined as required by Treasury Regulation Section 1.701-1(b).

(ii) Any provisions as are required to have a “qualified income” offset within the meaning of Treasury Regulation Section 1.704-1(b)(2)(ii)(d), or any successor thereto, and the provisions of that section defining a qualified income offset are included in this Agreement.

 

8


(iii) Notwithstanding any other provision of this Agreement to the contrary, if in any year there is a net decrease in the amount of the Partnership’s Minimum Gain (within the meaning of Treasury Regulation section 1.704-2(d))


 
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