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AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
DELAWARE 1851 ASSOCIATES, LP,
A PENNSYLVANIA LIMITED PARTNERSHIP
DATED: AS OF DECEMBER 9TH, 2003
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TABLE OF CONTENTS
PAGE NO.
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ARTICLE 1
FORMATION AND OFFICES
Section 1.1 Continuation....................................................................................2
Section 1.2 Name............................................................................................2
Section 1.3 Purposes........................................................................................2
Section 1.4 Powers..........................................................................................3
Section 1.5 Term............................................................................................3
Section 1.6 Principal Office................................................................................3
Section 1.7 Agent for Service of Process....................................................................3
Section 1.8 Additional Covenants............................................................................3
ARTICLE 2
DEFINITIONS
Section 2.1 Definitions.....................................................................................3
ARTICLE 3
CAPITAL CONTRIBUTIONS
Section 3.1 Capital Contributions..........................................................................12
Section 3.2 Redemption of the Preferred Interests..........................................................13
Section 3.3 Common Percentage Interests of Partners........................................................14
Section 3.4 Limitation on Liability of Limited Partners....................................................14
Section 3.5 No Withdrawal of Capital Contributions.........................................................15
Section 3.6 Return of Capital Contributions................................................................15
Section 3.7 Intentionally Omitted..........................................................................15
Section 3.8 Termination of Affiliate Loans.................................................................15
Section 3.9 Intentionally Omitted..........................................................................15
Section 3.10 Sums Paid Under Guarantees or Indemnities......................................................15
ARTICLE 4
ALLOCATIONS OF PROFITS AND LOSSES
Section 4.1 Allocation of Profits..........................................................................15
Section 4.2 Allocation of Losses...........................................................................16
Section 4.3 Allocations to Reflect Priority Returns........................................................16
Section 4.4 Special Allocations............................................................................16
Section 4.5 Other Allocations..............................................................................17
Section 4.6 Tax Allocations: Code Section 704(c)...........................................................18
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ARTICLE 5
CASH DISTRIBUTIONS
Section 5.1 Distribution of Available Net Cash Flow........................................................19
Section 5.2 Distribution of Capital Event Proceeds.........................................................19
Section 5.3 Excess Reserves................................................................................20
Section 5.4 Restrictions on Distributions..................................................................20
Section 5.5 Pre-Closing Claims.............................................................................20
Section 5.6 Transfer Taxes.................................................................................21
ARTICLE 6
RIGHTS, OBLIGATIONS AND POWERS OF THE MEMBERS
Section 6.1 Management by Cedar GP; Duties and Powers of the Partners......................................21
Section 6.2 Restrictions on Powers of the Cedar GP.........................................................22
Section 6.3 Refinancing....................................................................................23
Section 6.4 Exculpation....................................................................................23
Section 6.5 Employment of Agents, Affiliate Transactions...................................................23
Section 6.6 Compensation of Partner........................................................................24
Section 6.7 Other Activities...............................................................................24
ARTICLE 7
TRANSFERABILITY OF MEMBERS' INTERESTS
Section 7.1 Prohibited Transfers of Preferred Holders......................................................24
Section 7.2 Certain Transfers Prohibited...................................................................25
Section 7.3 Admission of a Substituted Partner.............................................................25
Section 7.4 Withdrawal of a Partner........................................................................25
ARTICLE 8
DISSOLUTION AND LIQUIDATION OF THE COMPANY
Section 8.1 Events Causing Dissolution.....................................................................26
Section 8.2 Liquidating Trustee............................................................................26
Section 8.3 Liquidation....................................................................................26
Section 8.4 Termination....................................................................................27
ARTICLE 9
BOOKS AND RECORDS, ACCOUNTING, REPORTS, TAX ELECTIONS
Section 9.1 Books of Account; Records......................................................................27
Section 9.2 Annual Financial Reports.......................................................................27
Section 9.3 Tax Returns and Advances.......................................................................28
Section 9.4 Tax Elections..................................................................................28
Section 9.5 Bank Accounts..................................................................................28
Section 9.6 Partnership Expenses...........................................................................29
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ARTICLE 10
MISCELLANEOUS PROVISIONS
Section 10.1 Notices........................................................................................29
Section 10.2 Signatures; Amendments.........................................................................30
Section 10.3 Binding Provisions.............................................................................30
Section 10.4 Applicable Law.................................................................................30
Section 10.5 Waiver of Trial by Jury........................................................................30
Section 10.6 Counterparts...................................................................................30
Section 10.7 Separability of Provisions.....................................................................30
Section 10.8 Captions.......................................................................................30
Section 10.9 Partnership Property; No Partition.............................................................30
Section 10.10 No Benefit to Third Parties....................................................................31
Section 10.11 Pronouns.......................................................................................31
Section 10.12 Restatement....................................................................................31
Exhibit A Land
Exhibit B SPE Provisions
Exhibit 6.4(c) Property Management Agreement
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AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
DELAWARE 1851 ASSOCIATES, LP,
A PENNSYLVANIA LIMITED PARTNERSHIP
THIS AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP (as the same
may be amended from time to time, this "Agreement") OF DELAWARE 1851 ASSOCIATES,
LP, A PENNSYLVANIA LIMITED PARTNERSHIP (the "Partnership") is made and entered
into as of the ___ day of December, 2003, by and among Cedar-Columbus LLC, a
Delaware limited liability company ("Cedar GP"), CSC-Columbus LLC, a Delaware
limited liability company ("Cedar LP"), Welsh-Square, Inc., a Pennsylvania
corporation ("WSI"), Indenture of Trust of ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ dated as of June 9,
1998, a Pennsylvania trust ("1998 Trust") and Irrevocable Indenture of Trust of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ dated July 13, 1999, a Pennsylvania trust ("1999 Trust"; 1998
Trust and 1999 Trust are sometimes collectively referred to herein as "Original
LPs"; WSI and Original LPs are sometimes collectively referred to herein as the
"Preferred Holders").
W I T N E S S E T H
WHEREAS, the Partnership was formed as a limited partnership pursuant to
the Pennsylvania Revised Uniform Limited Partnership Act (as it may be amended
from time to time, or any successor statute, the "Act") by the filing of the
Certificate of Limited Partnership of the Partnership with the Pennsylvania
Secretary of State on April 23, 1999 (as the same has been and may hereafter be
amended from time to time, the "Certificate");
WHEREAS, pursuant to that certain Limited Partners Agreement of the
Partnership, dated April 21, 1999, by and between Original GP and The Blatstein
Family Trust II; as amended and corrected by that certain Amendment to Limited
Partners Agreement of the Partnership dated as of December 19, 2000 and that
certain Limited Partners Agreement of the Partnership executed on December 19,
2000 to be effective as of April 21, 1999; as further amended by that certain
Assignment, Assumption and Modification Agreement dated as of December 19, 2000;
and as further amended by that certain Amendment to Limited Partnership of the
Partnership, dated June 24, 2002 (collectively, the "Original Partnership
Agreement"), Original GP was the general partner and Original LPs were limited
partners in the Partnership;
WHEREAS, the Partnership is the owner of certain real property commonly
known as Columbus Crossing Shopping Center and located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ in the City and County of Philadelphia and Commonwealth of
Pennsylvania, as more particularly described on Exhibit A attached hereto (the
"Land"), together with all buildings, improvements, fixtures, equipment and
personal property now or hereafter situated on the Land, together with the
fixtures, equipment and personal property attached or appurtenant to the Land
and such buildings (collectively, the "Property");
WHEREAS, Preferred Holders and Cedar LP are parties to the Recap
Agreement (as that term is hereinafter defined);
WHEREAS, contemporaneously with the execution of this Agreement,
Preferred Holders' interests in the Partnership are being recapitalized into the
Preferred Interests (as that term is hereinafter defined);
WHEREAS, contemporaneously with the execution of this Agreement, Cedar
GP and Cedar LP shall make the capital contributions more particularly set forth
herein, and, in consideration of the foregoing, Cedar GP shall become the
managing general partner of the Partnership and acquire 1 % of the common
interests of the Partnership and Cedar LP shall become a limited partner of the
Partnership and acquire 99% of the common interests of the Partnership; and
WHEREAS, the Preferred Holders desire to admit Cedar GP and Cedar LP as
Partners of the Partnership, and the parties hereto desire to set forth the
amended and restated agreement of the parties.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements contained herein, the parties agree as follows:
ARTICLE 1
FORMATION AND OFFICES
Section 1.1 Continuation.
(a) The Partnership was formed as a limited partnership under the
provisions of the Act, and the parties hereto agree to continue the Partnership
under the Act on the terms and conditions set forth in this Agreement.
(b) The Partnership shall immediately, and from time to time
hereafter, as may be required by law, execute or cause to be executed all
amendments of the Certificate, and do all filing, recording and other acts as
may be appropriate under the Act and shall cause a copy of each such amendment
to be distributed to the Partners.
Section 1.2 Name. All Partnership business shall be conducted in the
name of the Partnership as set forth above or such other name as the Partners
may select from time to time and which is in compliance with all applicable
laws.
Section 1.3 Purposes.
(a) The Partnership's purpose shall be limited to owning, holding,
managing, operating, leasing, mortgaging, pledging, selling, assigning,
transferring and otherwise dealing with the Property. The Partnership shall
exercise all powers enumerated in the Act necessary or convenient to the
conduct, promotion or attainment of the business or purposes set forth herein.
(b) The Partnership shall not engage in any other business or
activity without the prior unanimous written consent of the Common Partners.
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Section 1.4 Powers. The Partnership shall have the power to do any
and all acts reasonably necessary, appropriate, proper, advisable, incidental or
convenient to or for the furtherance of the purposes and business described
herein and for the protection and benefit of the Partnership.
Section 1.5 Term. The Partnership commenced on the date of the
filing of the Certificate and shall continue in existence until December 31,
2053 or such earlier time as may be determined in accordance with the terms of
this Agreement.
Section 1.6 Principal Office. The principal office of the
Partnership shall be located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (it being agreed, however, that Preferred
Holders shall deliver to Cedar GP and Cedar LP, in accordance with Section 10.1
hereof and promptly after receipt of same, copies of all Notices related to the
Partnership or the Property that are received at their office), or at such other
place as Cedar GP may determine from time to time, and the Partnership shall
maintain records there as required by the Act.
Section 1.7 Agent for Service of Process. The Partnership shall
maintain a registered agent and office in the Commonwealth of Pennsylvania. The
name and address of the registered agent of the Partnership in the Commonwealth
of Pennsylvania upon whom process may be served, and the address of the
registered office of the Partnership in the Commonwealth of Pennsylvania, is c/o
Cedar Shopping Centers Partnership, L.P., ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇ and
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn: ▇. ▇▇▇▇▇▇. At any time, the
Partnership may designate another registered agent and/or office.
Section 1.8 Additional Covenants. The Partnership shall comply with
the "separateness covenants" set forth on Exhibit B.
ARTICLE 2
DEFINITIONS
Section 2.1 Definitions. Defined terms used in this Agreement shall,
unless the context otherwise requires, have the following meanings:
"AAA" shall have the meaning set forth in Section 3.7(d) hereof.
"Acquisition Loan" shall have the meaning set forth in Section 3.2(c)
hereof.
"Act" shall have the meaning set forth in the recitals.
"Additional Capital Contribution" shall mean any Capital Contribution
made by a Partner, other than the Cedar Group Initial Capital.
"Adjusted Capital Account" shall mean, with respect to any Partner, the
balance, if any, in such Partner's Capital Account as of the end of the relevant
Fiscal Year, after giving effect to the following adjustments:
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(a) Credit to such Capital Account any amounts which such
Partner is obligated to restore pursuant to the terms of this Agreement or
is deemed to be obligated to restore pursuant to Treasury Regulations
Section 1.704-1(b)(2)(ii)(c) and the penultimate sentences of Treasury
Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5); and
(b) Debit to such Capital Account the items described in
paragraphs (4), (5) and (6) of Treasury Regulations Section
1.704-1(b)(2)(ii)(d).
The foregoing definition of Adjusted Capital Account is intended to comply
with the provisions of Section 1.704-1(b)(2)(ii)(d) of the Treasury Regulations
to the extent relevant thereto and shall be interpreted consistently therewith.
"Adjusted Preferred Interests" shall mean the Preferred Interests,
reduced by (i) the aggregate amount of distributions to Preferred Holders
pursuant to Section 5.2(b)(1) hereof and (ii) distributions and other adjustment
pursuant to Section 3.2 hereof.
"Adjustment Demand" shall have the meaning set forth in Section
5.5(b)(2).
"Affiliate" shall mean, when used with reference to a specified Person,
(i) any Person directly or indirectly controlling, controlled by (as manager or
otherwise), or under common control with the specified Person, (ii) a Person
owning or controlling, directly or indirectly, ten percent (10%) or more of the
outstanding voting securities of such specified Person, (iii) any person related
by blood or by marriage (including relatives by adoption) to such Person, the
estate of such Person and such Person's heirs and descendants, (iv) any officer
or director of such specified Person and (v) if such other Person is an officer
or director, any company for which such Person acts in such capacity.
"Agreement" shall mean this Agreement, as same may be amended from time
to time.
"Available Net Cash Flow" shall have the meaning set forth in Section
5.1 (a) hereof.
"Bankruptcy" or "Bankrupt" as to any Person shall mean the filing of a
petition for relief as to any such Person as debtor or bankrupt under the
Bankruptcy Code of 1978 or like provision of law (except if such petition is
filed by a Person other than the Person that is the debtor or bankrupt, such
filing is contested by the Person that is the debtor or bankrupt, and such
petition has been dismissed within one hundred twenty (120) days); insolvency of
such Person as finally determined by a court proceeding (except if such
adjudication is stayed or dismissed within one hundred twenty (120) days);
filing by such Person of a petition or application to accomplish the same or for
the appointment of a receiver or a trustee for such Person or a substantial part
of such Person's assets; or commencement of any proceedings relating to such
Person under any other reorganization, arrangement, insolvency, adjustment of
debt or liquidation law of any jurisdiction, whether now in existence or
hereafter in effect, either by such Person or by another, provided that if such
proceeding is commenced by another, such Person indicates such Person's approval
of such proceeding, consents thereto or acquiesces therein, or
4
such proceeding is contested by such Person and has not been finally dismissed
within one hundred twenty (120) days.
"Business Day" shall mean any day other than a Saturday, Sunday or any
other day on which banks in New York or Pennsylvania are required or permitted
to be closed.
"Capital Account" shall mean, with respect to any Partner, the Capital
Account maintained for such Partner in accordance with the provisions of
Treasury Regulations Section 1.704-1(b)(2)(iv) and the following provisions:
(a) To each Partner's Capital Account there shall be credited such
Partner's Capital Contributions, such Partner's share of Profits, and any items
in the nature of income or gain that are specially allocated to such Partner
pursuant to Section 4.3 and Section 4.4 hereof, and the amount of any
Partnership liabilities that are assumed by such Partner (other than liabilities
that are secured by any Partnership property distributed to such Partner).
(b) To each Partner's Capital Account there shall be debited the
amount of cash and the Gross Asset Value of any Partnership property distributed
to such Partner pursuant to any provision of this Agreement (net of liabilities
secured by such distributed property that such Partner is considered to assume
or take subject to under Code Section 752), such Partner's share of Losses, and
any items in the nature of expenses or losses that are specially allocated to
such Partner pursuant to Section 4.3 and Section 4.4 hereof, and the amount of
any liabilities of such Partner that are assumed by the Partnership (other than
liabilities that are secured by any property contributed by such Partner to the
Partnership).
(c) In the event any interest in the Partnership is transferred in
accordance with the terms of this Agreement, the transferee shall succeed to the
Capital Account of the transferor to the extent it relates to the transferred
interest. In the case of a sale or exchange of an interest in the Partnership at
a time when an election under Code Section 754 is in effect, the Capital Account
of the transferee Partner shall not be adjusted to reflect the adjustments to
the adjusted tax bases of Partnership property required under Code Sections 754
and 743, except as otherwise permitted by Treasury Regulations Section
1.704-1(b)(2)(iv)(m).
(d) In determining the amount of any liability for purposes of
clauses (a) and (b) of this definition of Capital Account, there shall be taken
into account Code Section 752(c) and the Treasury Regulations promulgated
thereunder, and any other applicable provisions of the Code and Regulations.
(e) In the event the Gross Asset Values of Partnership assets are
adjusted pursuant to clauses (b) and (d) of the definition of Gross Asset Value,
the Capital Accounts of all Partners shall be adjusted simultaneously to reflect
the manner in which unrealized income, gain, loss and deduction inherent in all
Partnership assets (that has not been previously reflected in the Capital
Accounts) would be allocated pursuant to Article 4 if there were a taxable
disposition of Partnership property at fair market value. Similarly, in the
event of a distribution of Partnership assets to a Partner (whether in
connection with a liquidation or otherwise), the Capital Accounts shall be
adjusted to reflect the manner in which unrealized income, gain, loss and
deduction inherent in such distributed assets (not previously reflected in
Capital Accounts) would be
5
allocated pursuant to Article 4 if there were a taxable disposition of such
distributed assets at fair market value.
(f) The foregoing provisions and the other provisions of this
Agreement relating to the maintenance of Capital Accounts are intended to comply
with Treasury 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 that Cedar GP shall determine that it is prudent to modify the manner in
which the Capital Accounts, or any debits or credits thereto, are computed in
order to comply with such Regulations or to reflect the intention of the parties
hereto, Cedar GP may make such modification, provided that it is not likely to
have a material effect on the amounts distributable to any Partner upon the
dissolution of the Partnership.
"Capital Contribution" shall mean, with respect to any Partner, the
amount of money and the initial Gross Asset Value of any property contributed or
deemed contributed by such Partner to the Partnership (net of any liabilities
secured by such property or to which such property is otherwise subject). Any
reference in this Agreement to the Capital Contribution of a Partner shall
include the Capital Contribution made by any predecessor of a Partner.
"Capital Event Proceeds" shall have the meaning set forth in Section
5.2(a) hereof.
"Cedar GP" shall have the meaning set forth in the preamble.
"Cedar Group" shall mean Cedar GP and Cedar LP and any party that shall
acquire all or any portion of the Partnership Interests that were originally
owned by Cedar GP and Cedar LP; provided, however, if Preferred Holders or a
member of the Preferred Group shall acquire the Partnership Interest of a member
of the Cedar Group, Preferred Holders or such member of the Preferred Group
shall not become a member of the Cedar Group.
"Cedar LP" shall have the meaning set forth in the preamble.
"Cedar Group Initial Capital" shall mean $______________, said amount
representing the sum of all legal fees, title insurance premiums and other
closing costs and adjustments paid by Cedar Group in connection with the
Closing, and any other amount deemed to be added to, and part of, the Cedar
Group Initial Capital pursuant to Section 3.2 hereof.
"Certificate" shall have the meaning set forth in the recitals.
"Closing" shall have the meaning set forth in the Recap Agreement.
"Code" shall mean the Internal Revenue Code of 1986, as amended, or any
corresponding provision or provisions of succeeding law.
"Common Partners" shall mean, collectively, Cedar GP, Cedar LP and any
Person or Persons who, at the time of reference thereto, has been admitted as a
successor Common Partner or as an additional Common Partner and, in the case of
any of the foregoing, has not
6
withdrawn from the Partnership, in each such Person's capacity as a Common
Partner. "Common Partner" shall mean any one of the Common Partners.
"Common Percentage Interest" shall mean the percentage of ownership
interest in the Partnership of each Partner, excluding the Preferred Interests.
The initial Common Percentage Interests are set forth in Section 3.3 hereof.
"Delivering Party" shall have the meaning set forth in Section 3.7(d)
hereof.
"Depreciation" shall mean, for each Fiscal Year or other period, an
amount equal to the depreciation, amortization, or other cost recovery deduction
allowable with respect to an asset for such Fiscal 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 Fiscal 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 Fiscal Year or other
period bears to such beginning adjusted tax basis.
"Dissolution Event" shall have the meaning set forth in Section 8.1
hereof.
"Distribution Sections" shall have the meaning set forth in Section
3.7(b) hereof.
"Entity" shall mean any general partnership, limited partnership,
limited liability company, corporation, joint venture, trust, business trust,
cooperative or association.
"Fiscal Year" shall mean the calendar year, except that the last Fiscal
Year of the Partnership shall end on the date on which the Partnership shall
terminate and commence on the January 1 immediately preceding such date of
termination.
"Governmental Entity" shall mean the United States, the Commonwealth of
Pennsylvania, any other state that shall have jurisdiction over the Partnership
and any Partner, any municipality, and political subdivision of any of the
foregoing, and any agency, authority, department, court, commission or other
legal entity of any of the foregoing.
"Gross Asset Value" shall mean, with respect to any asset, the asset's
adjusted basis for federal income tax purposes, except as follows:
(a) 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 Partners;
(b) The Gross Asset Values of all Partnership assets shall be
adjusted to equal their respective gross fair market values, as reasonably
determined by Cedar GP, as of the following times: (i) the acquisition of an
interest or an additional interest in the Partnership by any new or existing
Partner in exchange for more than a de minimis Capital Contribution; (ii) the
distribution by the Partnership to a Partner of more than a de minimis amount of
property or money as consideration for an interest in the Partnership; and (iii)
the liquidation of the Partnership within the meaning of Treasury Regulations
Section 1.704-1(b)(2)(ii)(g); provided, however, that adjustments pursuant to
clauses (i) and (ii) above shall be made only if Cedar GP
7
shall reasonably determine that such adjustments are necessary or appropriate to
reflect the relative economic interests of the Partners;
(c) The Gross Asset Value of any Partnership asset distributed to a
Partner shall be adjusted to the gross fair market value of such asset on the
date of distribution, as determined under Section 5.4 hereof;
(d) 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 Code Section 743(b), but only to the extent
that such adjustments are taken into account in determining Capital Accounts
pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m); provided,
however, that Gross Asset Values shall not be adjusted pursuant to this clause
(d) to the extent Cedar GP determines that an adjustment pursuant to clause (b)
hereof is necessary or appropriate in connection with a transaction that would
otherwise result in an adjustment pursuant to this clause (d); and
(e) If the Gross Asset Value of an asset has been determined or
adjusted pursuant to clauses (a), (b), or (d), 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.
"Group" shall mean the Preferred Group or the Cedar Group.
"Indirect Interest" shall mean an ownership interest (whether direct or
indirect) in a Partner (as opposed to a Partner's ownership interest in the
Partnership).
"Indirect Owner" shall mean a Person holding an Indirect Interest.
"Land" shall have the meaning set forth in the recitals.
"Lender" shall mean any unaffiliated lender that shall provide a loan to
the Partnership.
"Liquidating Trustee" shall have the meaning set forth in Section 8.2
hereof.
"Loan" shall mean any loan or loans made to the Partnership, evidenced
and/or contemplated by the Loan Documents.
"Loan Documents" shall mean the note(s), mortgage(s), loan agreement(s)
and other documents delivered by the Partnership or a Guarantor to a Lender in
connection with a Loan.
"Net Expenditures" shall mean the Partnership's total direct and
indirect expenditures incurred in connection with the transaction to purchase
the Redemption Property, including without limitation any down payments (until
such time as such payments are either refunded or applied), brokers fees,
transfer taxes, loan fees (to the extent not deducted from loan proceeds), legal
fees
8
of the counsel designated by Preferred Holders and the reasonable legal fees of
the counsel designated by the Partnership to review the purchase transaction,
less any amounts funded by Preferred Holders and any proceeds from any
Acquisition Loans.
"Nonrecourse Deductions" shall have the meaning set forth in Treasury
Regulations Section 1.704-2(b)(1). The amount of Nonrecourse Deductions for a
Fiscal Year shall equal the excess, if any, of the net increase, if any, in the
amount of Partnership Minimum Gain during that Fiscal Year, over the aggregate
amount of any distributions during that Fiscal Year of proceeds of a Nonrecourse
Liability that are allocable to an increase in Partnership Minimum Gain,
determined according to the provisions of Treasury Regulations Section
1.704-2(c).
"Nonrecourse Liability" shall have the meaning set forth in Treasury
Regulations Section 1.704-2(b)(3).
"Notices" shall have the meaning set forth in Section 10.1 hereof.
"Operating Documents" shall mean all contracts and agreements of all
kinds entered into by or on behalf of the Partnership in connection with the
business purposes thereof.
"Original LPs" shall have the meaning set forth in the preamble.
"Original Partnership Agreement" shall have the meaning set forth in the
recitals.
"Outside Date" shall mean the tenth (10th) anniversary of the date of
this Agreement.
"Partner Nonrecourse Debt" has the meaning set forth in Treasury
Regulations Section 1.704-2(b)(4).
"Partner Nonrecourse Debt Minimum Gain" shall mean an amount, with
respect to each Partner Nonrecourse Debt, equal to the Partnership Minimum Gain
that would result if such Partner Nonrecourse Debt were treated as a Nonrecourse
Liability, determined in accordance with Treasury Regulations Section
1.704-2(i)(2) and (3).
"Partner Nonrecourse Deductions" shall have the meaning set forth in
Treasury Regulations Section 1.704-2(i)(2). For any Fiscal Year, the amount of
Partner Nonrecourse Deductions with respect to a Partner Nonrecourse Debt equals
the excess, if any, of the net increase, if any, in the amount of the Partner
Nonrecourse Debt Minimum Gain over the aggregate amount of any distributions
during such Year to the Partner that bears the economic risk of loss for such
Partner Nonrecourse Debt to the extent such distributions are from proceeds of
such Partner Nonrecourse Debt and are allocable to an increase in Partner
Nonrecourse Debt Minimum Gain, determined according to the provisions of
Treasury Regulations Section 1.704-2(i)(2).
"Partners" shall mean, collectively, Cedar GP, Cedar LP, the Preferred
Holders, and any Person or Persons who, at the time of reference thereto, has
been admitted as a successor Partner or as an additional Partner and, in the
case of any of the foregoing, has not withdrawn
9
from the Partnership, in each such Person's capacity as a Partner. "Partner"
shall mean any one of the Partners.
"Partnership" shall mean Delaware 1851 Associates, LP, a Pennsylvania
limited partnership, as the same may from time to time be constituted, and any
successor limited partnership.
"Partnership Accountants" shall mean such accountants that shall be
selected by Cedar GP to be the accountants for the Partnership.
"Partnership Interest" shall mean the entire ownership interest of a
Partner in the Partnership at any particular time, including the rights and
obligations of such Partner under this Agreement.
"Partnership Minimum Gain" shall have the meaning set forth in Treasury
Regulations Section 1.704-2(d).
"Person" shall mean any individual or Entity, and the heirs, executors,
administrators, legal representatives, successors and assigns of such Person
where the context so permits.
"Pre-Closing Claims" shall have the meaning set forth in Section 5.5(a)
hereof.
"Preferred Group" shall mean Preferred Holders and any party that shall
acquire all or any portion of the Partnership Interests that were originally
owned by Preferred Holders; provided, however, if Cedar GP, Cedar LP or a member
of the Cedar Group shall acquire the Partnership Interest of a member of the
Preferred Group, Cedar GP, Cedar LP or such member of the Cedar Group shall not
become a member of the Preferred Group.
"Preferred Holders" shall have the meaning set forth in the preamble.
"Preferred Interests" shall mean the preferred limited partnership
interests in the Partnership of the Preferred Holders in an amount equal to Six
Million Six Hundred Seventeen Thousand ($6,617,000) Dollars.
"Preferred Priority Return" shall mean an amount equal to 6.5% per
annum, cumulative, compounded annually (prorated for any partial year) of the
Adjusted Preferred Interests existing from time to time during the period to
which the Preferred Priority Return relates.
"Profits" and "Losses" shall mean, for each Fiscal Year or other period,
an amount equal to the Partnership's taxable income or loss for such Fiscal Year
or period (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 and each item of income, gain, expense,
deduction and loss shall be allocable to the Partners in accordance herewith),
with the following adjustments for purposes of adjusting Capital Accounts and
maintaining the same in accordance with Treasury Regulations Section
1.704-1(b)(2)(iv):
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(a) Any income of the Partnership that is exempt from federal income
tax (except for rental income accrued on the Partnership's financial statement
on a straight line basis for GAAP purposes) and not otherwise taken into account
in computing Profits or Losses pursuant to this definitional section shall be
added to such taxable income or loss;
(b) 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
Treasury Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into
account in computing Profits or Losses, shall be subtracted from such taxable
income or loss;
(c) In the event the Gross Asset Value of any Partnership asset is
adjusted pursuant to subsections (b), (c) or (d) of the definition of "Gross
Asset Value", 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;
(d) Gain or loss resulting from any disposition of Partnership
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;
(e) 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 Fiscal Year or other
period, computed in accordance with the definition of Depreciation; and
(f) Notwithstanding any other provision of this definitional
section, any items which are specially allocated pursuant to Section 4.3 and
Section 4.4 hereof shall not be taken into account in computing Profits or
Losses.
"Property" shall have the meaning set forth in the recitals.
"Property Management Agreement" shall have the meaning set forth in
Section 6.5(c) hereof.
"Recap Agreement" shall mean that certain agreement, dated as of October
2, 2003, between the Partnership, Preferred Holders and Cedar LP, as amended by
that certain Amendment to Recapitalization Agreement, dated as of November 3,
2003, between the Partnership, Preferred Holders and Cedar LP, and that certain
Second Amendment to Recapitalization Agreement, dated as of December 9th, 2003,
between the Partnership, Preferred Holders and Cedar LP.
"Recapitalization" shall mean, collectively, (i) the admission of the
Cedar Group to the Partnership, and (ii) the recapitalization of Preferred
Holders' entire interest in the Partnership.
"Recipient Party" shall have the meaning set forth in Section 3.7(d)
hereof.
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"Redemption Price" shall mean an amount equal to the balance of the
Preferred Interests, including any accrued and unpaid Preferred Priority Return,
immediately prior to the redemption of the Preferred Interests, less any Net
Expenditures incurred by the Partnership not yet debited against the balance of
the Preferred Interests.
"Redemption Property" shall have the meaning set forth in Section 3.2(c)
hereof.
"Repayment Capital Contribution" shall have the meaning set forth in
Section 3.2(b) hereof.
"Reserves" shall mean amounts allocated to reserves maintained for
working capital or for contingencies of the Partnership.
"Sale" shall mean a sale or other disposition of all or any portion of
the Property (other than pursuant to an involuntary conversion, foreclosure or
deed in lieu of foreclosure given to an unrelated third party or a tax-free
exchange that would not result in the recognition of gain by the Preferred
Holders).
"SEC" shall have the meaning set forth in Section 9.2 hereof.
"Substituted Partner" shall mean a person who is admitted to the
Partnership as a Substituted Partner in accordance with Section 7.3 hereof.
"Tax Matters Partner" shall have the meaning set forth in Section 9.4
hereof.
"Transfer" shall have the meaning set forth in Section 7.1(a) hereof.
"WSI" shall have the meaning set forth in the Preamble.
ARTICLE 3
CAPITAL CONTRIBUTIONS
Section 3.1 Capital Contributions.
(a) Upon the execution of this Agreement, the Cedar Group shall be
deemed to have contributed to the capital of the Partnership the Cedar Group
Initial Capital.
(b) Following the payments set forth in Section 3.1(a):
(1) Cedar GP's Capital Account as of the date of this
Agreement shall be equal to $__________, said amount representing 1% of the
Cedar Group Initial Capital.
(2) Cedar LP's Capital Account as of the date of this
Agreement shall be equal to $__________, said amount representing 99% of the
Cedar Group Initial Capital.
(3) Preferred Holders' Capital Account as of the date of
this Agreement shall be equal to Six Million Six Hundred Seventeen Thousand
($6,617,000) Dollars.
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(c) Except as set forth in this Agreement, no Partner shall be
required or obligated to contribute any capital to the Partnership or to lend
any funds to the Partnership. In no event shall Preferred Holders be required or
entitled to contribute any capital to the Partnership or to lend any funds to
the Partnership, and no event or action, other than pursuant to Section 3.2,
shall cause the reduction or diminution of the Preferred Interests.
(d) Additional Capital Contributions. If available cash and
available working capital are insufficient for the operation of the Partnership,
Cedar GP shall have the right to request Additional Capital Contributions from
the Common Partners, and the Common Partners agree that any such Additional
Capital Contributions that shall be required by the Company shall be made by the
Common Partners in proportion to their respective Common Percentage Interests.
Any Additional Capital Contributions made by a Common Partner pursuant to this
Section 3.1(d) shall not increase such Common Partner's Common Percentage
Interest.
Section 3.2 Redemption of the Preferred Interests.
(a) The Partnership shall redeem the Preferred Interests for cash or
property (or a combination thereof), at Preferred Holders' election at any time
after the date of this Agreement, in an amount equal to the Redemption Price.
Preferred Holders may elect to have the Preferred Interests redeemed in part,
provided that (i) Preferred Holders may elect a redemption of the Preferred
Interests on no more than four (4) separate occasions, (ii) Preferred Holders
must elect to have the Preferred Interests redeemed in full on the fourth (4th)
election, if made, and (iii) the balance of the Preferred Interests (including
any accrued and unpaid Preferred Priority Return) shall be decreased by (1) any
cash paid by the Partnership in redemption of the Preferred Interests, (2) the
Net Expenditures paid by the Partnership in connection with any property
distributed by the Partnership in redemption of the Preferred Interests, and (3)
any other reduction required pursuant to this Agreement. Any payments made
pursuant to clause (iii) of this Section 3.2(a) shall be applied first in
reduction of the Preferred Interests and then in reduction of the Preferred
Priority Return.
(b) Upon Preferred Holders' election to redeem all or a portion of
the Preferred Interests (and Preferred Holders having obtained the consent of
the Cedar Group to the extent such consent is required pursuant to the terms of
this Agreement), each member of the Cedar Group shall be required to contribute
to the capital of the Partnership, pari passu in accordance with such member's
Common Interest Percentage, an amount equal to the Preferred Interests being
redeemed at such time (any such Capital Contribution, a "Repayment Capital
Contribution"). The Repayment Capital Contribution that shall be made by Cedar
Group shall be deemed to be added to, and be part of, the Cedar Group Initial
Capital.
(c) If Preferred Holders shall elect to receive property (the
"Redemption Property") in redemption of the Preferred Interests, the Partnership
shall be obligated to purchase the Redemption Property designated by Preferred
Holders and to borrow money in connection therewith, provided that (i) any loan
is arranged for, or provided, by Preferred Holders (the "Acquisition Loan"),
(ii) either (x) the Partnership has no obligations under the Acquisition Loan,
or (y) the Acquisition Loan is secured by the Redemption Property and is
nonrecourse to the Partnership, (iii) the Partnership shall not be obligated to
incur Net Expenditures in excess of
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the Redemption Price, unless Preferred Holders fund the balance of any
difference, (iv) Preferred Holders shall deliver or cause to be delivered any
and all guarantees or indemnities that may be required in connection with such
Acquisition Loan, (v) Preferred Holders shall deliver an amount equal to the
transfer, stamp or similar taxes payable in connection with the purchase of the
Redemption Property by the Partnership and the subsequent distribution of the
Redemption Property by the Partnership, and (vi) the Lender consents to, or has
preapproved in accordance with Section 6.3, the acquisition by the Partnership
of the Redemption Property. Preferred Holders may fund any additional monies
needed to purchase the Redemption Property in any reasonable manner selected by
Preferred Holders and reasonably approved by Cedar GP (e.g., through a third
party escrow arrangement). In connection with the purchase of the Redemption
Property, the Partnership shall help Preferred Holders to create a separate
legal entity through which to purchase the Redemption Property, the Partnership
shall retain counsel designated by Preferred Holders and reasonably satisfactory
to the Partnership, and the Partners shall cooperate in obtaining from the
Lender (in the event such transaction was not preapproved in accordance with
Section 6.3) its consent to the acquisition by the Partnership of the Redemption
Property.
(d) The Partnership shall not have (i) any unreimbursed liability
with respect to the Redemption Property or the transaction pursuant to which
such Redemption Property is acquired or attempted to be acquired if such
transaction does not close for any reason (other than Net Expenditures not in
excess of the Redemption Price), or (ii) any obligation to incur Net
Expenditures in excess of the Redemption Price. In the event the Redemption
Property is not purchased for any reason, the balance of the Preferred Interests
(including any accrued and unpaid Preferred Priority Return) shall be reduced by
the amount of the Net Expenditures incurred in connection with the transaction
to purchase such Redemption Property in lieu of any reimbursement pursuant to
this Section 3.2(d). Such Net Expenditures shall be applied first in reduction
of the Preferred Interests and then in reduction of the Preferred Priority
Return.
(e) The Partnership may redeem the Preferred Interests (including
any accrued but unpaid Preferred Priority Return) in full, but not in part, for
an amount of cash equal to the Redemption Price at any time from and after (i)
the Outside Date, or (ii) the date that Preferred Holders shall commence an
action against any of the other Partners with respect to the Partnership or its
assets, other than to enforce its rights under this Agreement.
Section 3.3 Common Percentage Interests of Partners.
(a) Upon the execution of this Agreement:
(1) Cedar GP's Common Percentage Interest shall be 1.0%; and
(2) Cedar LP's Common Percentage Interest shall be 99.0%.
(b) The Common Percentage Interests of the Partners shall be
adjusted to account for admissions, transfers and conveyances pursuant to
Article 7 hereof.
Section 3.4 Limitation on Liability of Limited Partners. The liability
of each Partner, other than Cedar GP or any successor general partner of the
Partnership, shall be limited to such Partner's Capital Contributions and
Additional Capital Contributions, and no Partner, other than
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Cedar GP or any successor general partner of the Partnership, shall, subject to
the provisions of the Act, have any personal liability in respect of any
liabilities or obligations of the Partnership or the Partners, beyond the amount
that it shall, in accordance with this Agreement, contribute (or be required to
contribute) to the capital of the Partnership.
Section 3.5 No Withdrawal of Capital Contributions. Except upon
dissolution and liquidation of the Partnership, no Partner shall have the right
to withdraw, reduce or demand the return of its Capital Contribution, or any
part thereof, or any distribution thereon. Except as otherwise provided herein,
no Partner shall have the right to receive property other than cash in
connection with a distribution or return of capital. Except as otherwise
provided in this Agreement, no Partner shall be entitled to receive interest on
such Partner's Capital Contributions to the Partnership.
Section 3.6 Return of Capital Contributions.
(a) Except upon dissolution and liquidation of the Partnership or as
provided in Article 5 hereof, there is no agreement, nor time set, for the
return of any Capital Contribution or Additional Capital Contribution of any
Partner.
(b) None of the Partners, nor any of their respective Affiliates,
nor any officer, director, shareholder, employee or agent of any of the Partners
or their Affiliates, shall be personally liable for the return or repayment of
any Capital Contribution or Additional Capital Contribution.
Section 3.7 Intentionally Omitted.
Section 3.8 Termination of Affiliate Loans. As of the date hereof,
Preferred Holders shall have caused any sums owed by the Partnership to any
Affiliate of Preferred Holders to be repaid in full such that no balance is
outstanding with respect to any such sums.
Section 3.9 Intentionally Omitted.
Section 3.10 Sums Paid Under Guarantees or Indemnities. If the Preferred
Owners or any Affiliate of the Preferred Owners shall make a payment under any
guaranty or indemnity on account of an event that occurred prior to the date of
this Agreement, the party making such payment shall not be entitled to any
reimbursement by any of the other Partners or the Partnership on account of such
payment, and such payment shall not increase the Capital Account of the
Preferred Owners, and such payment shall not be deemed to be a Capital
Contribution.
ARTICLE 4
ALLOCATIONS OF PROFITS AND LOSSES
Section 4.1 Allocation of Profits. After giving effect to the special
allocations set forth in Section 4.3 and Section 4.4 hereof, Profits for any
Fiscal Year shall be allocated to the Common Partners in proportion to their
respective Common Percentage Interests.
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Section 4.2 Allocation of Losses. After giving effect to the special
allocations set forth in Section 4.3 and Section 4.4 hereof, Losses for any
Fiscal Year shall be allocated to the Common Partners in proportion to their
respective Common Percentage Interests.
Section 4.3 Allocations to Reflect Priority Returns. For each Fiscal
Year of the Partnership, before any allocations of Profits and Losses shall be
made to the Partners pursuant to Section 4.1 or Section 4.2, items of gross
income and gain of the Partnership shall be allocated to Preferred Holders in an
amount equal to the excess, if any, of (i) the accrued Preferred Priority Return
for the current Fiscal Year and all prior Fiscal Years, whether or not paid,
over (ii) the cumulative amount of items of gross income or gain allocated to
Preferred Holders pursuant to this Section 4.3 for the current Fiscal Year and
all prior Fiscal Years.
Section 4.4 Special Allocations.
(a) Partnership Minimum Gain Chargeback. Notwithstanding any other
provision of this Article 4 and except as otherwise provided in Section
1.704-2(f) of the Treasury Regulations, if there is a net decrease in
Partnership Minimum Gain during any Fiscal Year of the Partnership, each Partner
shall be specially allocated items of Partnership income and gain for such year
(and, if necessary, subsequent years) in an amount equal to such Partner's share
of the net decrease in Partnership Minimum Gain, as determined under Treasury
Regulations Section 1.704-(2)(g). The items to be so allocated shall be
determined in accordance with Treasury Regulations Section 1.704-2(f). This
Section 4.4(a) is intended to comply with the minimum gain chargeback
requirement in such Section of the Treasury Regulations and shall be interpreted
consistently therewith.
(b) Partner Minimum Gain Chargeback. Notwithstanding any other
provision of this Article 4, if there is a net decrease in Partner Nonrecourse
Debt Minimum Gain attributable to a Partner Nonrecourse Debt, then, except as
otherwise provided in Treasury Regulations Section 1.704-2(i), each Partner who
has a share of the Partner Nonrecourse Debt Minimum Gain attributable to such
Partner Nonrecourse Debt, determined in accordance with Treasury Regulations
Section 1.704-2(i), shall be specially allocated items of Partnership income and
gain for such year (and, if necessary, subsequent years) in an amount equal to
such Partner's share of the net decrease in Partner Nonrecourse Debt Minimum
Gain attributable to such Partner Nonrecourse Debt, determined in accordance
with Treasury Regulations Section 1.704-2(i)(4). Allocations pursuant to the
previous sentence shall be made in proportion to the respective amounts required
to be allocated to each Partner pursuant thereto. The items to be allocated
shall be determined in accordance with Treasury Regulations Section
1.704-2(i)(4) and (j)(2). This Section 4.4(b) is intended to comply with the
minimum gain chargeback requirement in Section 1.704-2(i)(4) of the Treasury
Regulations and shall be interpreted consistently therewith.
(c) Qualified Income Offset. In the event any Partner unexpectedly
receives any adjustments, allocations, or distributions described in Treasury
Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6), items of Partnership
income and gain shall be specially allocated to such Partner in an amount and
manner sufficient to eliminate, to the extent required by the Treasury
Regulations, any deficit balance in such Partner's Adjusted Capital Account as
quickly
16
as possible, provided that an allocation pursuant to this Section 4.4(c)
shall be made only if and to the extent that such Partner would have a deficit
balance in its Adjusted Capital Account after all other allocations provided for
in this Section have been tentatively made as if this Section 4.4(c) were not in
the Agreement.
(d) Nonrecourse Deductions. Nonrecourse Deductions for any Fiscal
Year or portion thereof shall be allocated solely to the Cedar Group.
(e) Partner Nonrecourse Deductions. Any Partner Nonrecourse
Deductions for any Fiscal Year of the Company or portion thereof shall be
allocated to the Partner who bears the economic risk of loss with respect to the
nonrecourse debt to which such Partner Nonrecourse Deductions are attributable,
in accordance with Treasury Regulations Section 1.704-2(i)(1).
(f) Excess Non-Recourse Liabilities. The "excess non-recourse
liabilities" of the Partnership within the meaning of Treasury Regulations
Section 1.752-3(a)(3) shall be allocated to the Common Partners pro rata in
accordance with their respective Common Percentage Interests.
(g) Deficit Restoration Obligation. Cedar LP shall have the right to
provide the Partnership with an unconditional obligation to restore the deficit
balance, if any, in its Adjusted Capital Account. Cedar LP shall have the right
to satisfy such obligation by contributing to the Partnership its right to
receive any amounts owed to Cedar LP by any other Partner.
(h) Loss Allocation Limitation. Notwithstanding the provisions of
Section 4.2 hereof, Losses (or items of loss) allocated pursuant to Section 4.2
hereof shall not exceed the maximum amount of Losses (or items of loss) that can
be so allocated without causing any Partner to have a deficit balance in its
Adjusted Capital Account at the end of any Fiscal Year. In the event some but
not all of the Partners would have deficit balances in their Adjusted Capital
Accounts as a result of an allocation of Losses (or items of loss) pursuant to
Section 4.2 hereof, the limitation set forth in this Section 4.4(h) shall be
applied on a Partner by Partner basis so as to allocate the maximum permissible
Losses (or items of loss) to each Partner under Treasury Regulations Section
1.704-1(b)(2)(ii)(d). All Losses (or items of loss) in excess of the limitation
set forth in this Section 4.4(h) shall be allocated to other Partners in
accordance with the provisions of Section 4.2, provided that no Losses (or items
of loss) shall be allocated to any Partners who are not permitted to be
allocated any Losses (or items of loss) under this Section 4.4(h).
Section 4.5 Other Allocations.
(a) If the respective interests of the existing Partners in the
Partnership change or if a Partnership Interest is transferred to any other
Person, then, for the Fiscal Year of transfer, all income, gains, losses,
deductions, tax credits and other tax incidents resulting from the operations of
the Partnership shall be allocated between transferor and transferee, as
reasonably determined by Cedar GP using any method permissible under Section 706
of the Code. A transferee of an interest in the Partnership shall succeed to the
Capital Account of the transferor
17
Partner to the extent it relates to the transferred interest. With respect to
the change in ownership of the Partnership resulting from the Recapitalization,
the Partnership shall use the closing of the books method described in Section
706(c) of the Code or such other method selected by Cedar GP.
(b) For each Fiscal Year, items of Partnership income, gain, loss,
deduction and expenses shall be allocated for federal, state and local purposes
among the Partners in the same manner as the Profits and Losses or other gains
or losses to which such items relate were allocated pursuant to Section 4.1,
Section 4.2, Section 4.3 and Section 4.4 hereof.
Section 4.6 Tax Allocations: Code Section 704(c).
(a) In accordance with Code Section 704(c) and the Treasury
Regulations thereunder, income, gain, loss, and deduction with respect to any
property contributed to the capital of the Partnership shall, solely for tax
purposes, be allocated among the Partners so as to take account of any variation
between the adjusted basis of such property to the Partnership for federal
income tax purposes and its initial Gross Asset Value.
(b) In the event the Gross Asset Value of any Partnership asset is
adjusted pursuant to any provision of this Agreement in accordance with the
definition of Gross Asset Value, subsequent allocations of income, gain, loss
and deduction with respect to such Partnership asset shall take into account any
variation between the adjusted basis of such Partnership asset for federal
income tax purposes and its Gross Asset Value in the same manner as under Code
Section 704(c) and the Treasury Regulations thereunder.
(c) Consistent with Section 4.6(b) hereof, immediately prior to the
execution of this Agreement the Gross Asset Value of the Property has been
adjusted to equal Twenty Four Million One Hundred Seventeen Thousand
($24,117,000) Dollars. For purposes of this Agreement, based on the
Partnership's tax basis as of the date of this Agreement, the tax basis of the
Property is Sixteen Million Two Hundred Thousand ($16,200,000) Dollars. The
Partners agree to account for the resulting variation between the Gross Asset
Value of the Property and its tax basis using "the traditional method with
curative allocations" contemplated by Treasury Regulations Section
1.704-3(c)(3)(iii)(B). Thus, notwithstanding anything to the contrary in this
Agreement, the Partners agree that upon a taxable disposition of the Property
(i) to the extent of Twenty Four Million One Hundred Seventeen Thousand
($24,117,000) Dollars of consideration, the Cedar Group shall not be allocated
taxable income or gain attributable to such disposition in an amount that
exceeds the total amount of tax depreciation deductions allocated to the Cedar
Group in the current Fiscal Year and all prior Fiscal Years from the Property
(not including for this purpose any tax depreciation attributable to
improvements made to the Property after the date this Agreement has been
executed), and (ii) taxable income or gain attributable to such disposition on
account of consideration in excess of Twenty Four Million One Hundred Seventeen
Thousand ($24,117,000) Dollars, if any, shall be allocated to the Cedar Group.
(d) Any elections or other decisions relating to the allocations
required under this Section 4.6 shall be made by Cedar GP; provided, however,
that any such election or decision that is not otherwise contemplated by this
Agreement and which increases, other than to a de minimis extent, the tax
obligation of the Preferred Holders (as compared to what such
18
obligation would have been absent such election) shall require the consent of
the Preferred Holders (not to be unreasonably withheld, conditioned, or
delayed). Allocations pursuant to this Section 4.6 are solely for purposes of
Federal, state, and local taxes and shall not affect, or in any way be taken
into account in computing, any Partner's Capital Account or share of Profits and
Losses, other items, or distributions pursuant to any provision of this
Agreement.
ARTICLE 5
CASH DISTRIBUTIONS
Section 5.1 Distribution of Available Net Cash Flow.
(a) As used in this Agreement, the term "Available Net Cash Flow"
means the gross cash proceeds from Partnership operations, including all
refinancings of all or any portion of the Property and/or any other property of
the Partnership and, in connection with a partial casualty or condemnation, the
proceeds of condemnation proceedings or settlement of any insurance claims
resulting in insurance proceeds not used in repair or restoration of the
Property that, in each instance, shall not be required to be paid to a Lender,
less (1) all costs incurred by the Partnership in connection with the
refinancing or restoration of the Property and (2) any portion thereof used to
establish Reserves, all as determined by Cedar GP, for certain expenses and
liabilities of the Partnership, including, without limitation, debt payments
(including interest and principal) on Loans, capital improvements, repairs,
replacements, contingencies, real estate taxes and leasing commissions, all as
determined in accordance with this Agreement. Available Net Cash Flow shall not
be reduced by depreciation, cost recovery deductions or similar allowances.
Available Net Cash Flow shall not be deemed to include any Capital Event
Proceeds or any expenses related thereto.
(b) Available Net Cash Flow, if any, shall be distributed or paid,
as applicable, at such times as Cedar GP may determine, in the following order
of priority:
(1) First, to Preferred Holders, until Preferred Holders
have received an aggregate amount of distributions under this Section 5.1(b)(1)
and Section 5.2(b)(2) below equal to the Preferred Priority Return (as adjusted
for distributions and other adjustments under Section 3.2 above);
(2) Second, pari passu to the Common Partners in proportion
to their respective Common Percentage Interests.
Section 5.2 Distribution of Capital Event Proceeds.
(a) As used in this Agreement, the term "Capital Event Proceeds"
shall mean the net cash proceeds from all sales and other dispositions (other
than in the ordinary course of business) including, in connection with a total
casualty or condemnation in which no repair or restoration is contemplated, the
proceeds of condemnation proceedings or settlement of any insurance claims
resulting in insurance proceeds, shall not be required to be paid to a Lender,
less, in each instance, (1) all costs incurred by the Partnership in connection
with the sale, refinancing or restoration of the Property and (2) any portion
thereof used to establish Reserves, all as determined by Cedar GP. Capital Event
Proceeds shall include all principal and interest
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payments with respect to any note or other obligation received by the
Partnership in connection with sales and other dispositions (other than in the
ordinary course of business) of Partnership property.
(b) Any Capital Event Proceeds shall be distributed promptly after
the receipt thereof, in the following order of priority:
(1) First, to Preferred Holders until Preferred Holders have
received an amount of distributions under this Section 5.2(b)(1) equal to the
Adjusted Preferred Interests;
(2) Second, to Preferred Holders, until Preferred Holders
have received an aggregate amount of distributions under this Section 5.2(b)(2)
and Section 5.1(b)(1) above equal to the Preferred Priority Return (as adjusted
for distributions and other adjustments under Section 3.2 above);
(3) Third, pari passu to the Common Partners in proportion
to their respective Common Percentage Interests.
Section 5.3 Excess Reserves. Any Reserves established by the
Partnership, which were established from Available Net Cash Flow, and which
Cedar GP determines shall no longer be required by the Partnership, shall be
distributed to the Partners pursuant to the provisions of Section 5.1 (b)
hereof, and any Reserves established by the Partnership which were established
from Capital Event Proceeds, and which Cedar GP determines shall no longer be
required by the Partnership, shall be distributed to the Partners pursuant to
the provisions of Section 5.2(b) hereof.
Section 5.4 Restrictions on Distributions. A Partner shall have no
right to demand and receive any distribution from the Partnership in any form
other than cash. No Partner may be compelled to accept a distribution of an
asset in kind from the Partnership to the extent that the percentage of the
asset distributed to such Partner exceeds the percentage in which such Partner
is then entitled to share in distributions from the Partnership. Any in-kind
distributions of Partnership property shall be valued by an established,
reputable, independent and qualified appraiser.
Section 5.5 Pre-Closing Claims. The Partnership may pursue (including
the commencement of a plenary action) or defend any claims relating to the
period prior to the date of this Agreement (collectively, the "Pre-Closing
Claims"). The Preferred Holders shall cooperate in the prosecution of any such
Pre-Closing Claims. Subject to Preferred Holder's rights to contest a
Pre-Closing Claim as hereinafter set forth, in the event that the Partnership
shall owe money on account of a Pre-Closing Claim, and Cedar GP shall give
notice thereof on or before the date which is one (1) year after the date of
this Agreement, Preferred Holders shall make such payment within Ten (10)
Business days after receipt of notice from Cedar GP. Any payment by Preferred
Holders made pursuant to this Section 5.5(b)(1) shall not increase the Capital
Account of Preferred Holders, such payment shall not be deemed to be a Capital
Contribution, and any expense to which such payments relate shall be deemed to
be expenses of Preferred Holders. Upon prior notice to the Cedar GP (given
within Ten (10) business days after such notice from Cedar GP), the Preferred
Holders shall be entitled, at their sole cost and
20
expense, to contest any such Pre-Closing Claim, provided, however, that during
the pendency of such Pre-Closing Claim (A) neither the Property nor any portion
thereof or interest therein would be in imminent danger of being sold, forfeited
or lost, and (B) neither Property nor any interest therein would be subject to
the imposition of any lien as a result of the failure to comply with a
requirement prior to and while such contest is proceeding, unless Preferred
Holders shall cause any such lien, promptly after obtaining knowledge of the
existence of the lien, to be discharged of record by payment, deposit, bond or
otherwise.
Section 5.6 Transfer Taxes.
(a) To the extent Preferred Holders elect to receive Redemption
Property in redemption of their interests, all transfer, stamp or other similar
taxes in connection with the purchase and subsequent distribution of the
Redemption Property, if any, including any tax that is imposed on Transfers by
any Partner or by any Indirect Owner that is aggregated with the purchase and
distribution of the Redemption Property, shall be the obligation of Preferred
Holders, without regard to whether same is assessed against Preferred Holders,
the Partnership or any other Partner.
(b) Each Partner shall be solely liable for any real property and
controlling interest transfer taxes that result from a Transfer of such
Partner's interest in the Partnership (or of the interest of an Indirect Owner
of such Partner), including any tax that is imposed on Transfers that are
aggregated with such Transfers, without regard to whether same is assessed
against such Partner, the Partnership or any other Partner.
ARTICLE 6
RIGHTS, OBLIGATIONS AND POWERS OF THE MEMBERS
Section 6.1 Management by Cedar GP; Duties and Powers of the Partners.
(a) Subject to the provisions of this Article 6, Cedar GP shall have
the right and power to conduct the business and affairs of the Partnership and
to do all things necessary to carry on the business of the Partnership, and is
hereby authorized to take any action of any kind and to do anything and
everything Cedar ▇▇ ▇▇▇▇▇ necessary or appropriate in accordance with the
provisions of this Agreement and applicable law. Subject to the provisions of
this Article 6, Cedar GP will have full power and authority to execute and
deliver in the name of and on behalf of the Partnership such documents or
instruments as Cedar ▇▇ ▇▇▇▇▇ appropriate for the conduct of the Partnership's
business in accordance with this Agreement. No person, firm or corporation
dealing with the Partnership will be required to inquire into the authority of
Cedar GP to take any action or make any decision. Cedar GP shall be required to
devote to the conduct of the operations of the Partnership only such time and
attention as shall be necessary to accomplish the purposes, and to conduct
properly the operations, of the Partnership. In performing its obligations under
this Section 6.1, Cedar GP shall not be required at any time to expend funds
other than those of the Partnership.
(b) Without limiting the generality of the foregoing, but subject to
the specific limitations of this Agreement, Cedar GP is authorized on behalf of
the Partnership, without the consent of any Partner, to:
21
(1) expend the capital and revenues of the Partnership in
furtherance of the Partnership's operations and pay in accordance with the
provisions of this Agreement all debts and obligations of the Partnership, to
the extent that funds of the Partnership are available therefor;
(2) take such actions as shall be required for the
Partnership to comply with the Loan Documents;
(3) execute, deliver and thereafter amend the Loan
Documents;
(4) lease the Property (other than pursuant to a lease which
would constitute a taxable sale for federal income tax purposes);
(5) establish and maintain separate bank accounts in the
name of, and on behalf of, the Partnership;
(6) bring and defend, actions at law or in equity;
(7) make investments in United States treasury securities
and certificates of deposit in federally insured banks, pending disbursement of
the Partnership's funds or to provide a source from which to meet contingencies;
(8) enter into and/or terminate agreements and contracts
with third parties, and give receipts, releases and discharges with respect to
all of the foregoing and any matters incident thereto;
(9) maintain, at the expense of the Partnership, adequate
records and accounts of all operations and expenditures;
(10) purchase, at the expense of the Partnership, liability,
casualty and other insurance and bonds to protect the Partnership's properties,
operations, members and employees and to protect (to the extent required
thereby, and as customary and reasonable) Cedar GP and its respective control
persons, officers, directors and employees;
(11) execute and deliver any and all agreements, documents
and other instruments necessary or incidental to the conduct of the operations
of the Partnership and of the Property; and
(12) do and perform all such other things as may be in
furtherance of the Partnership's business purposes described in Section 1.3
hereof subject to the limitations set forth herein.
Section 6.2 Restrictions on Powers of the Cedar GP. Notwithstanding
anything to the contrary contained in Section 6.1 above, the Partnership shall
not consummate a Sale prior to the Outside Date, without the consent of
Preferred Holders.
22
Section 6.3 Refinancing. In connection with any financing of the
Property, Cedar Group shall undertake in good faith to obtain from the
prospective Lender its preapproval to the acquisition by the Partnership, or an
affiliate thereof, of Replacement Property in connection with a redemption of
the Preferred Interests. Preferred Holders, in cooperation with Cedar Group,
shall have the right to endeavor to obtain such preapproval from such
prospective Lender; provided, however, if such prospective Lender shall not
grant such preapproval, the Partnership may, nevertheless, accept financing from
such prospective Lender.
Section 6.4 Exculpation. No Partner or any of its Affiliates, nor any of
their respective officers, directors, partners, shareholders, members, employees
or agents, shall be liable, in damages or otherwise, to the Partnership or to
any of the other Partners, for any act or omission performed or omitted by such
Partner pursuant to the authority granted by this Agreement, except if such act
or omission results from (a) the negligence, misconduct or bad faith of a
Partner, its Affiliates or their respective officers, directors, partners,
shareholders, members, employees or agents or (b) a Partner acting beyond the
scope of authority granted by this Agreement. To the extent permitted by the
Act, the Partnership shall indemnify, defend and hold harmless each Partner, its
Affiliates and their respective officers, directors, partners, shareholders,
members, employees and agents, from and against any and all claims or
liabilities of any nature whatsoever, including reasonable attorneys' fees,
arising out of or in connection with any action taken or omitted by such Partner
pursuant to the authority granted by this Agreement, except where attributable
to (i) the negligence, misconduct or bad faith of such Partner, its Affiliates
or their respective officers, directors, partners, shareholders, members,
employees or agents or (ii) a Partner acting beyond the scope of authority
granted by this Agreement. Each Partner shall be entitled to rely in good faith
on the advice of counsel, public accountants or other independent experts
experienced in the matter at issue, and any act or omission of a Partner
pursuant to such advice shall in no event subject the Partner to liability to
the Partnership or any Partner. Any indemnity provided under this Section 6.4
shall be paid out of and to the extent of the assets of the Partnership only,
and no Partner shall have any personal obligation with respect thereto.
Section 6.5 Employment of Agents, Affiliate Transactions.
(a) Cedar GP may employ or cause to be employed, on behalf of the
Partnership, such firms or corporations as it shall deem advisable for the
operation of the Partnership and on such terms and for such compensation as
Cedar GP shall determine, provided such terms and services are reasonably
necessary and customary.
(b) Except as expressly provided in this Agreement, no Partner or
any Affiliate of a Partner shall enter into any agreement or other arrangement
for the furnishing to or by the Partnership, of goods or services (including any
construction work) with any Person which is an Affiliate of such Partner or any
partner, shareholder or other owner of an equity interest in such Partner unless
such agreement or arrangement has been approved by Cedar GP after the nature of
the relationship or affiliation and the terms of such agreement or arrangement
have been disclosed in writing.
23
(c) The Partners hereby acknowledge and confirm that,
contemporaneously with the execution of this Agreement, Cedar Shopping Centers
Partnership, L.P., is entering into a property management and leasing agreement
with the Partnership, in substantially the form set forth in Exhibit 6.4(c)
attached hereto and made a part hereof (the "Property Management Agreement"),
with Cedar Shopping Centers Partnership, L.P., as the managing and leasing agent
for the Property.
Section 6.6 Compensation of Partner. Except as otherwise expressly
provided herein, the Partners shall not be entitled to any salary or other
compensation from the Partnership except for their respective cash distributions
as set forth in the Distribution Sections.
Section 6.7 Other Activities. Any Partner (including any Affiliate of
the Partners) may engage in or possess an interest in other business ventures of
any nature or description, independently or with others, whether presently
existing or hereafter created, including those in competition with the
operations of the Partnership, and neither the Partnership nor any Partner
(including any of the Partners or any Affiliate of the Partners) shall have any
rights in or to such independent ventures or the income or profits derived
therefrom.
ARTICLE 7
TRANSFERABILITY OF MEMBERS' INTERESTS
Section 7.1 Prohibited Transfers of Preferred Holders.
(a) Preferred Holders may not, directly or indirectly, sell, assign,
transfer or otherwise dispose of (collectively, "Transfer") all or any part of
its Partnership Interest, whether voluntarily or by foreclosure, assignment in
lieu thereof or other enforcement of a pledge, hypothecation or collateral
assignment, without the prior written consent of Cedar GP, which consent can be
withheld in Cedar GP's sole discretion. There shall be no restriction on the
ability of any member of the Cedar Group to, directly or indirectly, Transfer
all or any part of its Partnership Interest.
(b) Notwithstanding the foregoing or any other provisions of this
Article 7, Preferred Holders may not, directly or indirectly, pledge,
hypothecate or collaterally assign all or any portion of its Partnership
Interest, or the proceeds thereof or distributions on account thereof, without
the prior written consent of Cedar GP, which consent can be withheld in Cedar
GP's sole discretion. Subject to the terms of Section 7.2 below, there shall be
no restriction on the ability of any member of the Cedar Group to, directly or
indirectly, pledge, hypothecate or collaterally assign all or any portion of its
Partnership Interest, or the proceeds thereof or distributions on account
thereof, and a foreclosure resulting from any such pledge, hypothecation or
assignment shall be permitted under the terms of this Agreement. Notwithstanding
the foregoing, in no event shall any member of the Cedar Group, without the
consent of the Preferred Holders (which consent shall not be unreasonably
withheld, conditioned, or delayed), transfer its entire Partnership Interests,
if the assignee is not at least as qualified as the Cedar Group, both with
respect to its financial capabilities and its operational expertise.
24
(c) For purposes of this Agreement, any sale, assignment, transfer
or other disposition of the capital stock or other equity interest in any
Partner or the issuance of capital stock or additional partnership interests or
membership interests shall constitute a Transfer.
Section 7.2 Certain Transfers Prohibited. Notwithstanding the provisions
of Section 7.1 hereof to the contrary, no Transfer by a Partner shall be
permitted which would result in (i) the violation of the terms of any Loan
Document or other agreement to which the Partnership is a party or by which its
assets are affected, including, without limitation, the Operating Documents, or
(ii) the termination of the Partnership as a limited partnership pursuant to the
terms of the Act or, unless otherwise agreed, within the meaning of Section 708
of the Code, or (iii) the violation of any applicable law.
Section 7.3 Admission of a Substituted Partner.
In the event that a Partner shall Transfer its Partnership Interest
pursuant to, and in accordance with, the terms of this Agreement, the transferee
thereof shall become a substituted partner ("Substituted Partner") only upon
receipt by the Partnership of all of the following (as determined by Cedar GP):
(i) the transferee's acceptance of, and agreement to pay all
costs of such Transfer and to be bound by, all of the terms and provisions of
this Agreement, in form and substance satisfactory to the Partnership;
(ii) evidence reasonably satisfactory to Cedar GP of the
authority of such Substituted Partner to become a Partner and to be bound by all
of the terms and conditions of this Agreement;
(iii) the written agreement of the Substituted Partner to
continue the business of the Partnership in accordance with the terms and
provisions of this Agreement;
(iv) such other documents or instruments as may reasonably be
required under the Act or otherwise in order to effect the admission of the
Substituted Partner as a Partner under this Agreement; and
(v) evidence reasonably satisfactory to Cedar GP that such
Transfer (A) would not violate (1) any Federal and state securities laws and
rules and regulations of the Securities and Exchange Commission, state
securities commissions, and any other Governmental Entity with jurisdiction over
such disposition, (2) any of the Operating Documents or (3) any Loan Documents,
(B) would not jeopardize the Partnership's classification for Federal income tax
purposes as a partnership, and (C) would not affect the Partnership's existence
as a limited partnership under the Act.
Section 7.4 Withdrawal of a Partner. A Partner may not voluntarily
withdraw or resign from the Partnership, retire or dissolve, except pursuant to
a Transfer of all of such Partner's Partnership Interest as a Partner in
accordance with this Article 7. Resignation from the Partnership shall not
entitle a Partner to receive the fair value of his Partnership Interest or any
other distributions from the Partnership.
25
ARTICLE 8
DISSOLUTION AND LIQUIDATION OF THE COMPANY
Section 8.1 Events Causing Dissolution.
The Partnership shall dissolve and its affairs wound up upon the
happening of any of the following events (each of the following being herein
reference to as a "Dissolution Event"):
(a) the sale or disposition of all or substantially all of the
Property (unless replacement property is acquired by the Partnership in
connection with a tax-free exchange);
(b) the dissolution of the Partnership by the unanimous written
agreement of the Partners;
(c) December 31, 2053;
(d) the entry of a decree of judicial dissolution under the Act;
(e) the happening of any event which makes it unlawful for the
Partnership business to be continued; and
(f) the occurrence of any event which requires dissolution of a
limited partnership under the Act.
Section 8.2 Liquidating Trustee. Upon dissolution of the Partnership,
Cedar GP will act as the "Liquidating Trustee".
Section 8.3 Liquidation. As soon as possible after dissolution of
the Partnership, the Liquidating Trustee will wind up the Partnership's business
and affairs as follows:
(a) The Liquidating Trustee will prepare or cause to be prepared and
delivered to each Partner an accounting with respect to all Partnership accounts
and the Capital Account of each Partner and with respect to the Partnership's
assets and liabilities and its operations from the date of the last previous
audit of the Partnership delivered to the Partners to the date of dissolution.
(b) The Liquidating Trustee will liquidate all Partnership assets
which, in its sole discretion, it determines may be sold for such assets' fair
market value or where it determines such liquidation is otherwise in the best
interests of the Partners.
(c) In settling accounts after dissolution, the assets of the
Partnership shall be distributed as follows:
(i) to creditors, including, to the extent not prohibited by
law, Partners who are creditors, in satisfaction of liabilities of the
Partnership;
26
(ii) pay all expenses incurred in connection with the
termination, liquidation and dissolution of the Partnership and distribution of
its assets as herein provided;
(iii) to the establishment of Reserves for contingencies or
unforeseen liabilities and obligations of the Partnership, which Reserves shall
be paid over to a bank or other party chosen by the Partners, to be held in
escrow for payment of such contingent or unforeseen liabilities; and
(iv) to the Partners in accordance with the provisions of
Section 5.2(b) hereof.
At the expiration of such time period as the Partners shall deem
advisable, the remaining balance of any Reserve established in accordance with
clause (iii) shall be distributed in the manner set forth in clause (iv).
(d) If the Liquidating Trustee and all of the Partners shall
determine that it is in the best interest of the Partners to distribute certain
Partnership assets in kind, such assets will be distributed subject to such
liens, encumbrances, restrictions, contracts, obligations, commitments or
undertakings as existed with respect to such asset prior to the dissolution of
the Partnership and have not been discharged by payments made pursuant to
Section 8.3(c)(i) hereof.
Section 8.4 Termination. Upon completion of the distribution of the
Partnership property as provided in this Article 8, the Partnership shall be
terminated, and Cedar GP or other agent appointed as set forth in Section 8.2
hereof in charge of winding-up the Partnership's business (or such other persons
as the Act may require) shall file articles of dissolution with the Secretary of
State of the Commonwealth of Pennsylvania, cancel any applications to do
business or similar filings made in foreign jurisdictions and take such other
actions as may be necessary to terminate the Partnership.
ARTICLE 9
BOOKS AND RECORDS, ACCOUNTING, REPORTS, TAX ELECTIONS
Section 9.1 Books of Account; Records. At all times during the
continuance of the Partnership, Cedar GP shall keep, or cause to be kept, full
and true books of account in which shall be entered, fully and accurately, all
transactions of the Partnership. All of said books of account, together with a
certified copy of the Certificate, any amendments thereto, and an executed copy
of such other instruments as the Partners may execute to carry out and give
effect to the provisions of this Agreement shall at all times be maintained at
the principal office of the Partnership, or at such other office of the
Partnership as may be designated for such purpose by Cedar GP, and each Partner
may, at any time during reasonable business hours, at its own expense, inspect,
examine and make photocopies of the books and records of the Partnership or
cause them to be examined by its representative, or by an attorney and/or a
certified public accountant designated by such Partner.
Section 9.2 Annual Financial Reports. Cedar GP shall cause to be
delivered to the Partners, (A) within one hundred twenty (120) days after the
expiration of each Fiscal Year of the Partnership, annual reports of the
Partnership, including (i) an annual balance sheet and profit and loss statement
and statement regarding sources and uses of funds, which statements shall be
27
audited by the Partnership Accountants if so required by the Loan Documents,
(ii) a statement showing the distributions to the Partners and the allocation
among the Capital Accounts of the Partners of taxable income, gains, losses,
deductions, credits and other relevant items of the Partnership for such Fiscal
Year, and (iii) a statement setting forth the amount of Available Net Cash Flow
and Capital Event Proceeds for the just completed Fiscal Year, which statement
shall be audited by the Partnership Accountants if so required by the Loan
Documents, and (B) such other financial statements as may be prepared by the
Partnership to fulfill Securities and Exchange Commission ("SEC") requirements
if, as and when such financial statements may be required by the SEC.
Section 9.3 Tax Returns and Advances. Cedar GP shall cause all
income tax and information returns for the Partnership to be prepared by the
Partnership Accountants. Cedar GP shall cause such tax and information returns
to be timely filed with the appropriate authorities, shall use reasonable
efforts to provide such tax returns in a timely manner to the Partners with the
necessary information with respect to the operation of the Partnership
(including K-1 Information Returns for the respective Partners) to allow the
Partners to file their respective tax returns, and shall provide to the Partners
such other tax information as may be prepared by the Partnership to fulfill SEC
requirements if, as and when such tax information may be required by the SEC.
Copies of such tax and information returns (including K-1 Information Returns
for the respective Partners) shall also be kept at the principal office of the
Partnership where they shall be available for inspection by the Partners and
their representatives during normal business hours.
Section 9.4 Tax Elections. Cedar GP shall make any and all elections for
Federal, state, and local tax purposes, including, without limitation, an
election under Section 754 of the Code upon a redemption of all or a portion of
the Preferred Interests; provided, however, in connection with any Transfer of a
Partnership Interest, Cedar GP shall cause the Partnership, at the written
request of the transferor or the transferee, on behalf of the Partnership and at
the time and in the manner provided in Treasury Regulations Section 1.754-1(b),
to make an election to adjust the basis of the Partnership's property in the
manner provided in Sections 734(b) and 743(b) of the Code, and, provided
further, that any such election to be made by Cedar GP that is not otherwise
contemplated by this Agreement and which increases the tax obligation, other
than to a de minimis extent, of the Preferred Holders (as compared to what such
obligation would have been absent such election), shall require the consent of
the Preferred Holders (not to be unreasonably withheld, conditioned, or
delayed). Cedar GP is designated as the "Tax Matters Partner" (as defined in the
Code) of the Partnership and is authorized and required to represent the
Partnership (at the expense of the Partnership) in connection with all
examinations of the affairs of the Partnership by any Federal, state, or local
tax authorities, including any resulting administrative and judicial
proceedings, and to expend funds of the Partnership for professional services
and costs associated therewith.
Section 9.5 Bank Accounts. The funds of the Partnership (other than
those deposited in non-interest bearing checking accounts to pay current
expenses of the Partnership) shall be invested or deposited in interest bearing
accounts in such banks as Cedar GP shall determine, which investments and
accounts shall be in the name of the Partnership, and withdrawals from such
accounts shall only be made by such persons as Cedar GP may designate.
28
Section 9.6 Partnership Expenses. The Partnership shall pay all usual
and customary expenses incurred in connection with the conduct of the
Partnership's business and the administration of its affairs.
ARTICLE 10
MISCELLANEOUS PROVISIONS
Section 10.1 Notices. All notices, demands, requests or other
communications (collectively, "Notices") which may be or are required to be
given, served, or sent by any party to any other party pursuant to this
Agreement shall be in writing and shall be hand delivered or mailed by
first-class, registered or certified mail, return receipt requested, postage
prepaid, or transmitted by facsimile (with the original to be sent the same day
by Federal Express or other recognized overnight delivery service) or by Federal
Express or other recognized overnight delivery service addressed to the
recipient at its address set forth below (or at such other address as the
recipient may theretofore have designated in writing). Each Notice which shall
be hand delivered or mailed in the manner described shall be deemed sufficiently
given, served, sent, received, or delivered for all purposes on the first
Business Day following the day the Notice is delivered to the addressee (with
the return receipt, the delivery receipt, or the affidavit of messenger being
deemed conclusive (but not exclusive) evidence of such delivery) or the first
Business Day following the day that delivery of the Notice is refused by the
addressee upon presentation. Each Notice which shall be faxed in the manner
described above shall be deemed sufficiently given, served, sent, received, or
delivered for all purposes on the first Business Day following the date of such
facsimile. Subject to the above, all Notices shall be addressed as follows:
TO THE PARTNERSHIP c/o Cedar Shopping Centers Partnership, L.P.
OR GENERAL PARTNER ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
OR LIMITED PARTNER: Port ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇ ▇. ▇▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: Stroock & Stroock & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇, Esq.
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
TO PREFERRED HOLDERS: c/o Tower Investments, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
29
Section 10.2 Signatures; Amendments. No amendment, change or alteration
of this Agreement will be binding unless it is in writing and signed by Cedar GP
and Cedar LP. Notwithstanding, no amendment, change or alteration of this
Agreement that would result in any negative tax or other financial consequence
(other than consequences of a de minimis nature) will be binding upon Preferred
Holders, unless it is in writing and signed by Cedar GP, Cedar LP and Preferred
Holders. Any amendment of this Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same document.
Section 10.3 Binding Provisions. The covenants and agreements contained
herein shall be binding upon, and inure to the benefit of, the heirs, executors,
administrators, personal representatives, and permitted successors and assigns
of the respective parties hereto.
Section 10.4 Applicable Law. This Agreement shall be construed according
to and governed by the laws of the Commonwealth of Pennsylvania, excluding any
conflict of laws rules. To the extent permitted by applicable law, the
provisions of this Agreement shall override the provisions of the Act to the
extent of any inconsistency or contradiction between them. It is the intent of
the Partners upon execution hereof that this Agreement shall be deemed to have
been prepared by all of the parties to the end that no Partner shall be entitled
to the benefit of any favorable interpretation or construction of any term or
provision hereof under any rule or law.
Section 10.5 Waiver of Trial by Jury. THE PARTNERS HEREBY WAIVE TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER ARISING IN TORT OR
CONTRACT) BROUGHT BY ANY PARTNER AGAINST ANOTHER ON ANY MATTER ARISING OUT OF OR
IN ANY WAY CONNECTED WITH THIS AGREEMENT.
Section 10.6 Counterparts. This Agreement may be executed in several
counterparts, all of which together shall constitute one agreement binding on
all parties hereto, notwithstanding that all the parties have not signed the
same counterpart.
Section 10.7 Separability of Provisions. Each provision of this Agreement
shall be considered separable and if, for any reason, any provision or
provisions hereof 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.
Section 10.8 Captions. Article and Section titles and any table of
contents are for convenience of reference only and shall not control or alter
the meaning of this Agreement as set forth in this text.
Section 10.9 Partnership Property; No Partition. No Partner or successor
in interest to any Partner may have any property of the Partnership partitioned,
or file a complaint or institute any proceeding at law or in equity to have the
property partitioned, and each Partner for itself, its successors,
representatives, and assigns, hereby waives any right to proceed under any
applicable law or otherwise to partition any Partnership property. Any creditor
of a Partner shall have recourse only against such Partner's interest in the
Partnership, but such creditor shall not have
30
any recourse against the property of the Partnership. A Partner's Partnership
Interest shall be personal property for all purposes.
Section 10.10 No Benefit to Third Parties. It is the intention of the
Partners that no Person other than the Partners and the Partnership is or shall
be entitled to bring any action to enforce any provision of this Agreement
against any Partner or the Partnership and that the covenants, undertakings and
agreements set forth in this Agreement shall be solely for the benefit of, and
shall be enforceable only by, the Partners (or their respectively successors and
assigns as permitted hereunder) and the Partnership.
Section 10.11 Pronouns. All pronouns and any variations thereof shall be
deemed to refer to the masculine, feminine, and neuter, singular and plural, as
the identity of the party or parties may require.
Section 10.12 Restatement. This Agreement amends, restates and supersedes
in its entirety the Original Partnership Agreement, and the Partners agree that
this Agreement is a valid amendment and restatement of the Original Partnership
Agreement.
[Signature Page Follows]
31
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
CEDAR-COLUMBUS LLC
By: CEDAR SHOPPING CENTERS
PARTNERSHIP, L.P.,
its member
By: CEDAR SHOPPING CENTERS, INC.
its general partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
CSC-COLUMBUS LLC
By: CEDAR SHOPPING CENTERS
PARTNERSHIP, L.P.,
its member
By: CEDAR SHOPPING CENTERS, INC.
its general partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
WELSH-COLUMBUS LLC
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: President
INDENTURE OF TRUST OF ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
DATED AS OF JUNE 9, 1998
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Co-Trustee
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Co-Trustee
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Co-Trustee
IRREVOCABLE INDENTURE OF TRUST OF
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ DATED JULY 13, 1999
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Co-Trustee
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Co-Trustee
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