AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT
OF
API RED LION SHOPPING CENTER ASSOCIATES, L.P., A NEW YORK
LIMITED PARTNERSHIP
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This Amended and Restated Limited Partnership Agreement, effective as
of May 31, 2002, is entered into among Cedar - RL, LLC, a Delaware limited
liability company, as the General Partner, and Silver Circle Management Corp., a
Delaware corporation, and Philadelphia ARC-Cedar, LLC, a Virginia limited
liability company, as the Limited Partners. Philadelphia ARC-Cedar Manager, LLC
executes this Agreement solely with regard to the provisions of Section 8.4
hereof. Capitalized terms used herein have the meanings specified in Exhibit A
annexed hereto and made a part hereof.
W-I-T-N-E-S-S-E-T-H:
Whereas, the Partnership was formed as a New York limited partnership
as of October 1, 1987 between Silver Circle Management Corp., a Delaware
corporation, as sole general partner, and ▇▇▇ ▇. ▇▇▇▇▇▇ as sole limited partner
and was subject to an Agreement of Limited Partnership dated October 1, 1987, as
amended by amendments dated November 26, 1997 and February 7, 2000
(collectively, the "Original Partnership Agreement");
Whereas, the Partnership was previously known as API Red Lion Shopping
Center Associates, and pursuant to Certificate of Amendment of the Certificate
of Limited Partnership effective on the date hereof, the Partnership has changed
its name to API Red Lion Shopping Center Associates, L.P.
Whereas, ▇▇▇ ▇. ▇▇▇▇▇▇ has sold his entire Partnership Interest and has
withdrawn from the Partnership, and Silver Circle Management Corp. has sold a
portion of its Partnership Interest and has converted its status in the
Partnership from general partner to limited partner;
Whereas, Cedar - RL, LLC and Philadelphia ARC-Cedar, LLC, who purchased
the Partnership Interests of ▇▇▇ ▇. ▇▇▇▇▇▇ and Silver Circle Management Corp.
that were sold, have been admitted to the Partnership as Substituted Partners
with regard thereto; and by agreement of all of the parties Cedar - RL, LLC
shall serve as the Partnership's sole general partner;
Whereas, the parties wish to set forth their agreement regarding the
management and operation of the Partnership's property and the sharing of its
profit and loss and various related matters; and
Now, therefore, in consideration of the mutual covenants contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows.
1. Definitions. The meaning of the capitalized terms used in this
Agreement are set forth on Exhibit A and are incorporated herein.
2. Organization.
2.1 Filing. The Partnership has filed or intends to file
contemporaneously herewith an Amended and Restated Certificate of Limited
Partnership with the State of New York in accordance with the Act to reflect the
changes in the Partnership recited above. The Partnership will be operated in
accordance with the Act and on the terms of this Agreement. This Agreement
supersedes the Original Partnership Agreement in its entirety.
2.2 Name and Place of Business. The name of the Partnership is API Red
Lion Shopping Center Associates, L.P., a New York Limited Partnership, and its
principal place of business is ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇▇▇. The General Partner may change such place of business by giving the
other Partners prior written notice thereof.
2.3 Business and Purpose of the Partnership. The purpose of the
Partnership is to own, operate, lease, finance, refinance and dispose of the
Property and to perform any and all tasks necessary, incident, or related to the
accomplishment of the foregoing.
2.4 Term. The Partnership shall remain in existence until December 31,
2050, unless terminated sooner in accordance with Section 13.1 hereof.
2.5 Registered Office and Registered Agent. The General Partner may
change the Partnership's registered office and registered agent from time to
time provided that it gives the Partners prior notice of any such change.
2.6 Competition. Any Partner or any of their respective Affiliates may
engage in or possess an interest in any business or venture that competes with
the Partnership's business, including, but not limited to, the syndication,
acquisition, ownership, financing, leasing, operation, maintenance, management,
brokerage, construction and development of property similar to and in
competition with the Property.
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3. Capitalization and Financing.
3.1 Capital Contribution. The Partners or their predecessors in
interest have previously made capital contributions to the Partnership. The
Partners' Capital Accounts and their tax basis in their Partnership Interests as
of the day hereof are set forth on Exhibit B which is incorporated herein.
3.2 Additional Contributions. The Company will be subject to a Business
Privilege Tax and a Net Profits Tax that are imposed by the City of Philadelphia
(collectively, the "Philadelphia Taxes"). The expense of the Philadelphia Taxes
will be borne solely by Silver Circle who shall be obligated to contribute the
amount of the Philadelphia Taxes to the Partnership's capital each period in
time to enable the Partnership to pay such taxes promptly, and the Partnership
will charge the expense of the Philadelphia Taxes one hundred percent (100%) to
Silver Circle's Capital Account. If Silver Circle fails to make such
contributions promptly, the amount of any deficiency will constitute a demand
loan from the Partnership to Silver Circle that bears interest at a rate equal
to the Prime Rate plus three percent (3.00%) per annum, or if less, the highest
rate allowed by law. The Partnership may use all legal remedies to enforce such
obligation including, without limitation, the right to withhold distributions
otherwise due to Silver Circle.
3.3 Liabilities of Partners. Except as specifically provided in this
Agreement, no Partner shall be (i) required to make any additional contributions
to the Partnership, (ii) liable for the debts, liabilities, contracts, or any
other obligations of the Partnership (except that the General Partner's
liability shall be determined in accordance with the law of the State of New
York), (iii) required to lend any funds to the Partnership, or (iv) required to
repay to the Partnership, any other Partner, any creditor of the Partnership or
any other person, any deficit balance in the Partner's Capital Account.
3.4 General Partner Loans. No Partner will have any obligation to make
loans to the Partnership. Subject to the provisions of Section 6.4 (regarding
Limited Partner consent), the General Partner may make loans to the Partnership
to pay operating expenses or for other bona fide business purposes. Any such
loan shall bear interest at the Prime Rate plus three percent (3.00%) per annum
or, if less, the maximum rate allowed by law.
3.5 Third Party Beneficiaries. No party shall be a third party
beneficiary or have any rights hereunder or be able to enforce any provision
contained herein.
3.6 Section 754 Election. The Partnership shall make a timely election
under Section 754 of the Code to adjust the basis of its property, in the case
of a distribution of property, in the manner provided in Section 734 and, in the
case of a transfer of a Partnership Interest, in the manner provided in Section
743. Such election shall be effective for the year that includes the date on
which Cedar - RL, LLC and Philadelphia ARC-Cedar, LLC, purchased the Partnership
Interest described in the recitals of this Agreement. The Partnership shall give
Philadelphia ARC-Cedar, LLC a copy of such election and evidence of its timely
filing. All parties acknowledge and agree that the effectiveness of such
election was a material inducement in the purchase of a Partnership Interest by
Philadelphia ARC-Cedar, LLC.
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3.7 Use of Reserves. Silver Circle shall have right to use the amount
of reserves held by the Lender on the date hereof to pay for future tenant
improvements and/or leasing commissions in accordance with (i) the Agreement for
Purchase and Sale of Partnership Interests dated as of February 6, 2002, among
Silver Circle, ▇▇▇ ▇. ▇▇▇▇▇▇ and Philadelphia ARC-Cedar, LLC and (ii) the
Agreement for Purchase and Sale of Partnership Interests dated as of February 6,
2002, among Silver Circle and Cedar-RL, LLC.
4. Allocations.
4.1 Generally.
a. Philadelphia Taxes. Each year, the expense of the
Philadelphia Taxes shall be allocated solely to the Capital Account of Silver
Circle in accordance with Section 3.2 hereof.
b. After giving effect to the special allocations contained in
Sections 4.2, 4.3 and 4.1(a), Net Income and Net Loss shall be allocated among
the Partners in proportion to their Percentage Interests.
4.2 Special Allocations.
a. Qualified Income Offset. Except as provided in Section
4.2(c), if any Partner unexpectedly receives any adjustments, allocations, or
distributions described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4),
1.704-1(b)(2)(ii)(d)(5), or 1.704-1(b)(2)(ii)(d)(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 Regulations, the Adjusted
Capital Account Deficit created by such adjustment, allocation or distribution
as quickly as possible.
▇. ▇▇▇▇▇ Income Allocation. Net Loss shall not be allocated to
any Partner to the extent such allocation would cause any Partner to have an
Adjusted Capital Account Deficit at the end of a fiscal year. In the event any
Partner has an Adjusted Capital Account Deficit at the end of any fiscal year,
each such Partner shall be specially allocated items of Partnership gross income
and gain in the amount of such Adjusted Capital Account Deficit as quickly as
possible.
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c. Partnership Minimum Gain Chargeback. Notwithstanding any
other provision of this Section 4, if there is a net decrease in Partnership
Minimum Gain during any fiscal year, 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, determined in accordance with Regulations Section
1.704-2(g)(2). This Section 4.2(c) is intended to comply with the partnership
minimum gain chargeback requirement in the Regulations and shall be interpreted
consistently therewith. This provisions shall not apply to the extent the
Partner's share of net decrease in Partnership Minimum Gain is caused by a
guaranty, refinancing, or other change in the debt causing it to become
partially or wholly recourse debt or Partner Nonrecourse Debt, and such Partner
bears the economic risk of loss (within the meaning of Regulations Section
1.752-2) for the newly guaranteed, refinanced or otherwise changed debt or to
the extent the Partner contributes cash to the capital of the Partnership that
is used to repay the Nonrecourse Debt, and the Partner's share of the net
decrease in Partnership Minimum Gain results from the repayment.
d. Partner Minimum Gain Chargeback. Notwithstanding any other
provision of this Section 4, except Section 4.2(c), if there is a net decrease
in Partner Minimum Gain, any Partner with a share of that Partner Minimum Gain
(as determined under Regulations Section 1.704-2(i)(5)) as of the beginning of
the year shall be 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 Minimum Gain, determined in accordance with
Regulations Section 1.704-2(g)(2). This Section shall not apply to the extent
the net decrease in Partner Minimum Gain arises because the liability ceases to
be Partner Nonrecourse Debt due to conversion, refinancing or other change in a
debt instrument that causes it to become partially or wholly a Nonrecourse Debt.
This Section is intended to comply with the partner minimum gain chargeback
requirements in the Regulations and shall be interpreted consistently therewith
and applied with the restrictions attributable thereto.
e. Nonrecourse Deductions. Nonrecourse Deductions for any
fiscal year or other period shall be allocated among the Partners in proportion
to their Percentage Interests.
f. Partner Nonrecourse Deductions. Partner Nonrecourse
Deductions for any fiscal year shall be allocated to the Partners who bear the
economic risk of loss, in the ratio in which they bear such risk as set forth in
Regulations Section 1.752-2 with respect to the Partner Nonrecourse Debt.
g. Code Section 754 Adjustments. To the extent an adjustment
to the adjusted tax basis of any Partnership asset pursuant to Code Section
734(b) or Code Section 743(b) is required, pursuant to Regulations Section
1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts,
the amount of such adjustment to the Capital Accounts shall be treated as an
item of gain or loss and such gain or loss shall be allocated to the Partners in
a manner consistent with the manner in which their Capital Accounts are required
to be adjusted pursuant to such section of the Regulations.
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4.3 Curative Allocations. Notwithstanding any other provision of this
Agreement, the provisions of Section 4.2 hereof (the "Regulatory Allocations")
shall be taken into account in allocating items of income, gain, loss and
deduction among the Partners under Section 4.1 hereof so that, to the extent
possible, the net amount of such allocations of other items and the Regulatory
Allocations to each Partner shall be equal to the net amount that would have
been allocated to each such Partner if the Regulatory Allocations had not
occurred.
4.4 Contributed and Booked-Up Property. The Partners' shares of
Partnership depreciation recapture income under Section 1245 and 1250 of the
Code on any item of property shall be proportional to the cumulative
depreciation deductions allocated to them for such property.
4.5 Recapture Income. The Partner's distributive share of Partnership
Net Income that is characterized as ordinary income pursuant to Section 1245 or
1250 of the Code shall be proportionate to the amount of Net Income or Net Loss
which included the corresponding depreciation deductions that were allocated to
such Partner as compared with the amount of depreciation deductions allocated to
all Partners.
4.6 Assignment. Net Income and Net Loss during the year in which the
assignment of a Partnership Interest occurs shall be apportioned between the
transferor and the transferee based upon the number of days of their respective
ownership during such year, or, if the parties agree and pay the accounting
costs associated therewith, on an interim-closing-of-the-books method.
4.7 Withholding Obligations. If the Partnership is required (as
determined in good faith by the General Partner) to make payments to any
governmental authority with respect to any Partner's tax liability that is
attributable to such Partner's Partnership Interest ("Tax Payment"), the amount
of any such Tax Payment shall constitute a demand loan from the Partnership to
such Partner, which shall bear interest at the Prime Rate plus three percent
(3.00% per annum, or if less, the highest rate allowed by law. The Partnership
shall be entitled to offset any distribution due to a Partner in satisfaction of
any such demand loan.
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5. Distributions.
5.1 Cash Available for Distribution. Cash Available for Distribution
shall be distributed among the Partners in proportion to their Percentage
Interests.
5.2 Restrictions. The Partnership intends to make periodic
distributions of all of its cash except such cash that (a) is required to pay
Company expenses and debt service obligations and make repairs and replacements
reasonably required to maintain the Property in good condition; (b) is required
by the terms of its Mortgage Loan to be set aside in a reserve; (c) is
determined by the General Partner in its reasonable judgment appropriate to
reserve for operating or tenant improvements in the ordinary course of business
relative to specific vacancies (current or projected) in accordance with Exhibit
E and capital items which relate to safety and/or integrity of roofs, parking
deck and/or buildings up to the estimated amount of such required expenditures;
or (d) is otherwise approved by a Majority in Interest of the Partners to be set
aside in a reserve or used for other purposes.
5.3 Reimbursement of Advances. The Partners acknowledge that
immediately prior to the execution hereof, cash in the Partnership's operating
accounts, equal to $________, would have been distributable to Silver Circle.
Accordingly, such amounts shall be treated as an advance to the Partnership (the
"Advance"). Upon any sale of the Property or refinancing of the Salomon Brothers
Loan, the Partnership shall make a priority distribution to Silver Circle in the
amount of the Advance before any other distributions are made to the Partners.
6. Compensation to the General Partner and Affiliates
6.1 Compensation. The General Partner and its Affiliates shall receive
compensation from the Partnership for services rendered or to be rendered only
as expressly specified in this Agreement and the Brentway Property Management
Agreement.
6.2 Partnership Expenses. The Partnership shall reimburse the General
Partner for the actual costs and expenses, including administrative expenses,
that the General Partner incurs in the Partnership's operations. However, the
Partnership shall not reimburse the General Partner for any overhead expenses
incurred by the General Partner in connection with its responsibilities as
General Partner unless explicitly contemplated by the Brentway Property
Management Agreement.
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6.3 Policies with Respect to Conflicts of Interest. It is the policy of
the Partnership that the Partnership's relationship with the General Partner and
each of its Affiliates and each of their respective agents will be conducted on
terms that are fair to the Partnership and are commercially reasonable. Except
to the extent described herein, any agreement under which the General Partner or
its Affiliate furnishes goods or services to the Partnership shall be subject to
the following conditions:
a. such General Partner or its Affiliate must be qualified to
render such services or to furnish such goods;
b. such agreement shall be fair to the Partnership and contain
commercially reasonable terms and shall be embodied in a written agreement which
describes all compensation to be paid and the other terms thereof;
c. no General Partner or Affiliate, or any of their agents may
receive a rebate or a kickback or participate in any reciprocal business
arrangement which would have the effect of circumventing the provisions of this
clause;
d. no agreement for which the Limited Partners have given
approval may be amended in such manner as to increase materially the fees or
other compensation payable or to decrease materially the goods or services to be
furnished in the absence of prior approval of a Majority in Interest of the
Limited Partners; and
e. such agreement, shall comply with the provisions of the
Mortgage Loan.
6.4 Termination of Brentway Property Management Agreement. If the
Partnership has any right to terminate the Brentway Property Management
Agreement or any other agreement with any Affiliate of the General Partner or to
make a claim against an Affiliate of the General Partner, the decision of
whether or not to take such action shall be made by a Majority in Interest of
the Limited Partners.
7. Authority, and Responsibilities of the General Partner
7.1 Number and Tenure. The Partnership shall have one General Partner,
which shall be Cedar - RL, LLC. The General Partner shall hold office until the
occurrence of a Withdrawal Event with regard to the General Partner.
7.2 Management. The General Partner shall be responsible for managing
the Partnership's business and affairs as a fiduciary for the Limited Partners.
Except as otherwise provided in Section 7.3 or elsewhere herein, the General
Partner shall have the authority, power and discretion to make all decisions,
execute all documents and perform all such other acts it deems necessary or
desirable in connection with the Partnership, without obtaining any other
Partner's prior consent, including, without limitation, the following:
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a. To the extent the Partnership's financial resources will
permit the General Partner to do so, carry out the Partnership's obligations
under the Salomon Brothers Mortgage Loan or other Mortgage Loan obtained by the
Partnership, execute the Brentway Property Management Agreement and, subject to
Section 7.3 hereof, satisfy the Company's obligations under such loan and
agreement;
b. Subject to Section 7.3 hereof, operate, maintain, improve,
repair, replace, lease and convey the Property;
c. Subject to Section 7.3 hereof, borrow money, issue
evidences of indebtedness, secure the same by mortgage, pledge, or other lien
and prepay, refinance, recast, increase, modify, and extend liabilities;
d. Subject to Section 7.3 hereof, hire and engage the services
of employees and/or independent contractors, including without limitation,
rental agents, management companies and lawyers and accountants on such terms as
the General Partner considers appropriate;
e. Collect income, disburse Partnership funds to the persons
entitled to receive them and supervise the deposit of Partnership monies in such
federally insured banking institutions, money market funds and other instruments
as the General Partner reasonably considers appropriate;
f. Purchase insurance for the protection of the Property and
the Partnership's business;
g. Control and manage Partnership assets, arrange for
collections, disbursements and other matters in connection therewith,
h. Prepare and file tax returns;
i. Institute, prosecute, defend, settle, compromise, and
dismiss lawsuits and similar proceedings and engage counsel in connection
therewith;
j. Execute applications for permits and licenses and execute
such leases, promissory notes, deeds, contract and other documents as are
necessary or appropriate to effect the foregoing;
k. Supervise the implementation of all agreements to which the
Company is a party and carry out all Company obligations thereunder and under
the law;
l. Determine the appropriate accounting method or methods to
be used by the Partnership;
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m. Serve as the Partnership's "tax matters partner" in accordance
with Section 7.5 hereof; and
n. Execute, acknowledge and deliver any and all documents to
implement the foregoing and take all other such action in connection therewith
as the General Partner considers necessary or appropriate. Any and all documents
may be executed on behalf and in the name of the Partnership by the General
Partner.
7.3 Restrictions on General Partner's Authority. The General Partner
must obtain the prior written consent of a Majority in Interest of the Limited
Partners in order to take any of the following action on the Partnership's
behalf:
a. Lease the Property (except leases entered into in the ordinary
course of business, specifically including the leasing of any retail store not
substantially below market rates and consistent with Exhibit E), or sell,
exchange or otherwise dispose of substantially all of the Property, except as
provided in Section 8.3 (regarding various rights of Philadelphia ARC-Cedar, LLC
to purchase the Property or to compel a sale) or Section 8.4 (regarding the
right of certain Option Holders to purchase the Property) hereof;
b. Materially modify or prepay any Mortgage Loan or obtain a new
Mortgage Loan except as provided in Section 8.3 hereof;
c. Enter into a merger or consolidation with any other business
entity;
d. Except as otherwise provided in Section 13.1 hereof, dissolve
and terminate the Company;
e. Establish any reserve (except reserves created under Section 5.2
hereof which do not require Limited Partner consent); and
f. Enter into, modify or terminate any agreement under which the
General Partner or an Affiliate of the General Partner will furnish the
Partnership goods or services except as otherwise permitted under Section 6.3 or
Section 6.4 or Section 8.3 hereof.
7.4 Responsibilities of the General Partner. The General Partner shall:
a. Have a fiduciary responsibility for the safekeeping and use of
all the Partnership's assets;
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b. Devote such time and effort to the Partnership's business as the
General Partner shall in its reasonable discretion, exercised in good faith,
determines to be necessary to properly conduct such business;
c. Use good faith efforts to file and publish all certificates,
statements, or other instruments required by law for formation, qualification
and operation of the Partnership and for the conduct of its business;
d. Use good faith efforts to cause the Partnership to be protected
by public liability, property damage and other insurance determined by the
General Partner in its discretion to be appropriate to the Partnership's
business; and
e. Use good faith efforts to meet applicable requirements for the
Partnership to be taxed as a partnership.
7.5 Tax Matters Partner. The General Partner shall act as the "tax
matters partner" of the Partnership within the meaning of the Code. The tax
matters partner shall represent the Partnership and the Partners in discussions
with the Internal Revenue Service regarding the tax treatment of Partnership
items and, if deemed by the tax matters partner in its reasonable business
judgment to be in the best interest of the Partners, shall agree to final
Partnership administrative adjustments or file a petition for a readjustment of
the Partnership items in question with the applicable court.
7.6 Indemnification of General Partner. The General Partner, any
Affiliate and any member, manager, affiliate, officer, director, partner,
employee, agent and assign of any of them, shall not be liable for, and shall be
indemnified and held harmless (to the full extent of the Partnership's assets
and to the maximum extent permitted by applicable law) from, any loss or damage
incurred by them, the Partnership or the Limited Partners in connection with the
business of the Partnership, including by way of illustration, but not
limitation, costs and reasonable attorneys' fees and any amounts expended in the
settlement of any claims of loss or damage resulting from any act or omission
performed or omitted in good faith pursuant to the authority granted, to promote
the interests of the Partnership, except for any such act or omission which
constitutes a material breach of this Agreement, negligence, malfeasance or
self-dealing, The General Partner shall not be liable to the Partnership or the
Partners because any taxing authority disallows or adjusts any deduction or
credit on the Partnership income tax returns.
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7.7 Authority as to Third Persons.
a. Partnership Bound. No third party dealing with the Partnership
shall be required to investigate the authority of the General Partner or secure
the approval or confirmation by any Limited Partner of any act of the General
Partner in connection with the Partnership's business. No lender or purchaser of
any property or interest owned by the Partnership shall be required to determine
the right to borrow or sell or the authority of the General Partner to sign and
deliver any note or instrument of transfer on behalf of the Partnership, or to
see to the application or distribution of revenues or proceeds paid or credited
in connection therewith. The General Partner shall have full authority to
execute on behalf of the Partnership any and all agreements, contracts,
conveyances, deeds, mortgages and other instruments, and the execution thereof
by one or more officers of the General Partner, executing on behalf of the
Partnership, shall be the only execution necessary to bind the Partnership
thereto. No signature of any Limited Partner shall be required.
b. Delegation. The General Partner shall have the right by separate
instrument or document to authorize one or more individuals or entities to
execute leases and lease-related documents on behalf of the Partnership and any
leases and documents executed by such agent shall be binding upon the
Partnership as if executed by the General Partner.
8. Rights, Authority and Voting of the Partners
8.1 Not Agents. No Limited Partner is an agent of the Partnership nor
can any Limited Partner in such capacity bind or execute any instrument on
behalf of the Partnership.
8.2 Voting by Limited Partners. As otherwise described in this
Agreement, the Limited Partners shall be entitled to vote upon the following
matters:
a. establishment of a reserve as provided in Section 7.3(e) hereof
(but not as provided in Section 5.2 hereof);
b. agreements with the General Partner or an Affiliate as provided
in Section 6.3 and 6.4 hereof;
c. management matters set forth in Section 7.3 hereof;
d. removal of the General Partner as provided in Section 9.2
hereof;
e. transfer of a Partner's Partnership Interest as provided in
Section 10 hereof and admission of the transferee as a Substitute Partner as
provided in Section 11 hereof;
f. election to obtain audited financial statements as set forth in
Section 12.3 hereof;
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g. termination and winding up of the Partnership as set forth in
Section 13.1 hereof;
h. election to continue the business of the Partnership after the
occurrence of an Event of Withdrawal with regard to the General Partner in
accordance with Section 13.1(c); and
i. amendment of this Agreement as provided in Section 14 hereof.
8.3 Philadelphia ARC-Cedar, LLC. In addition to other rights contained
herein, Philadelphia ARC-Cedar, LLC shall have, subject at all times to the
Lender's rights under the Mortgage Loan and related documents, the rights set
forth in this Section 8.3. Any transferee of Philadelphia ARC-Cedar, LLC's
Partnership Interest shall succeed to its rights under this Section 8.3.
a. Right to Compel Sale after April 1, 2009. At any time after
April 1, 2009, Philadelphia ARC-Cedar, LLC shall have the right to require the
Partnership to market the Property in the manner and subject to Cedar-RL, LLC's
right set forth in this Section 8.3(a). To exercise such right, Philadelphia
ARC-Cedar, LLC shall advise the Partnership of the minimum purchase price that
it is willing to accept for the Property ("Stipulated Price"). During the sixty
(60) day period following the receipt of such notice ("A Option Period"),
Cedar-RL, LLC shall have a right to give notice of its election to purchase the
Property for the Stipulated Price or to purchase Philadelphia ARC-Cedar, LLC's
Partnership Interest for the amount that Philadelphia ARC-Cedar, LLC would be
entitled to receive under Section 5 hereof if the Partnership had sold the
Property for the Stipulated Price, satisfied its obligations and made
distributions to the Partners in liquidation of their Partnership Interests.
Such option may be exercised only by a written notice delivered to Philadelphia
ARC-Cedar, LLC by the end of the A Option Period. Settlement of any purchase
pursuant to exercise of such option shall be made within ninety (90) days after
the end of the A Option Period and payment shall be made all in cash at
settlement. If Cedar-RL, LLC does not exercise its right to purchase the
Property or Philadelphia ARC-Cedar, LLC's Partnership Interest, the Partnership
shall market the Property for a period of six (6) months and may accept any
purchase offer that at least equals the Stipulated Price.
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b. Right of First Refusal on Offer to Buy Property. Other than in
connection with a sale triggered by Philadelphia ARC- Cedar, LLC, under Sections
8.3(a), (c) or (d), if the Partnership receives an offer to purchase the
Property which the General Partner wishes to accept, the Partnership shall give
Philadelphia ARC-Cedar, LLC notice thereof. During the thirty (30) day period
beginning on the date of the giving of such notice ("B Option Period"),
Philadelphia ARC-Cedar, LLC shall have an option to purchase the Property for
the same price and other terms as those offered by the third party. Such option
may be exercised only by giving the Partnership written notice with applicable
down payment thereof by the end of the B Option Period. If such option is not
exercised by the end of the B Option Period, the Partnership shall be free for a
period of one hundred twenty (120) days thereafter to sell the Property to the
third party provided that the purchase price and other terms of sale are not
more favorable to the third party than those contained in the original offer. If
such option is not exercised, then the consent of a Majority in Interest of the
Limited Partners to such sale strictly in accordance with Section 8.3 hereof
shall be deemed given. If the option is exercised by Philadelphia ARC-Cedar,
LLC, closing under the option must occur in cash within ninety (90) days, or
Philadelphia ARC-Cedar, LLC will forfeit the down payment.
c. Right on ▇▇▇▇▇▇'▇ Loss of Control. If ▇▇▇ ▇▇▇▇▇▇ ceases to serve
as the President of the General Partner or Chairman of Brentway Management, LLC,
the Partnership shall promptly give notice thereof to Philadelphia ARC-Cedar,
LLC. During the one hundred eighty (180) day period beginning on the date of the
giving of such notice ("C Option Period"), Philadelphia ARC-Cedar, LLC shall
have an option to require the Partnership to market the Property or to terminate
the Brentway Property Management Agreement and enter into a new Property
Management Agreement with an unrelated third party reasonably acceptable to the
General Partner and a Majority in Interest of the Limited Partners. Such option
may be exercised by giving the Partnership written notice thereof by the end of
the C Option Period. If such option is not exercised by the end of the C Option
Period, the Partnership's ownership of the Property and the Brentway Property
Management Agreement shall remain subject to the other terms of this Agreement.
If Philadelphia ARC-Cedar, LLC elects to require the Partnership to market the
Property, Philadelphia ARC-Cedar, LLC shall advise the Partnership of the
minimum purchase price that it is willing to accept for the Property (the
"Proposed Price") and the General Partner shall have a right of first refusal to
purchase at such price. If the General Partner elects to purchase the Property,
settlement of the purchase shall be made within ninety (90) days of the General
Partner's exercise of its rights and payment shall be made in cash at
settlement. If the General Partner does not elect to purchase within sixty (60)
days of its notice from Philadephia-ARC Cedar, LLC containing the Proposed
Price, then the Partnership shall market the Property for six (6) months and
accept any purchase offer that at least equals the Proposed Price or such lower
Proposed Price as Philadelphia ARC-Cedar, LLC may determine from time to time,
provided the General Partner's right of first refusal shall be re-activated in
connection with any price decrease. If Philadelphia ARC-Cedar, LLC elects to
exercise its rights in accordance with this Section 8.3(c) to require the
Partnership to terminate the Brentway Property Management Agreement,
Philadelphia ARC-Cedar, LLC shall have the right to choose a new unrelated third
party Property Manager subject to the General Partner's reasonable approval and
the terms of a new Property Management Agreement, provided same are not more
favorable to the new property manager than the terms of the Brentway Property
Management Agreement.
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d. Failure to Achieve Cash Flow. If (a) by the second (2nd)
anniversary of the date of this Agreement, Philadelphia ARC-Cedar, LLC's
cumulative distributions from the Partnership are less than eighty percent (80%)
of the distributions projected in the schedule attached hereto as Exhibit E and
(b) Brentway Management, LLC is then the Property Manager and (c) Philadelphia
ARC-Cedar, LLC determines in its reasonable discretion that Brentway Management,
LLC is not properly managing the Property, Philadelphia ARC-Cedar, LLC shall
have an option to require the Partnership to market the Property or to terminate
the Brentway Property Management Agreement and enter into a new Property
Management Agreement as described above. Such option shall continue in effect
until the cumulative distributions that Philadelphia ARC-Cedar, LLC receives as
of a particular date from the Partnership are equal to at least eighty percent
(80%) of the distributions projected in the schedule attached hereto as Exhibit
E to have been received as of such date ("D Option Period"). Such option may be
exercised by giving the Partnership written notice thereof by the end of the D
Option Period. If Philadelphia ARC-Cedar, LLC elects to require the Partnership
to either market the Property or to terminate the Brentway Property Management
Agreement, the procedure for marketing the Property or terminating the Brentway
Property Management Agreement, as the case may be, shall be the same as the
procedures set forth in Section 8.3 (c) hereof (including the right of first
refusal in favor of the General Partner).
e. Better Financing. At all times after the date of this Agreement,
Philadelphia ARC-Cedar, LLC shall have the right to compel the Partnership to
obtain a new Mortgage Loan that is a nonrecourse loan having a principal balance
not less (but General Partner shall have right to approve if more) than the then
outstanding balance of the Partnership's then current Mortgage Loan, has a fixed
interest rate that is less than the interest rate on the Mortgage Loan, a term
of at least sixty (60) months, a loan fee of one percent (1%) of the principal
balance or less, no prepayment penalty and, after penalties for prepayment of
existing Mortgage Loan and all closing costs and fees, including without
limitation, attorney fees, title charges, commissions and the like, are added to
the costs of the new Mortgage Loan, is still more favorable. To exercise such
option, Philadelphia ARC-Cedar, LLC shall give the Partnership written notice of
the ability to procure such financing. If any term is more onerous than the
Mortgage Loan or such financing requires any additional capital contribution,
the other Partners must approve the new financing.
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8.4 Cedar - RL, LLC and Others' Option to Purchase.
a. Option. Subject to the Lender's rights under the Mortgage Loan
and related documents and the provisions of Section 8.4(b) at all times
beginning one (1) year from the date hereof, (1) Cedar - RL, LLC and (2)
Philadelphia ARC-Cedar Manager, LLC (the "Option Holders") shall each have an
independent option to purchase the Property or all of Philadelphia ARC-Cedar,
LLC's Partnership Interest (including any Partnership Interest owned by a
transferee or successor of Philadelphia ARC-Cedar, LLC) for an amount equal to
its Fair Market Value. Such option may be exercised by giving written notice
thereof and a copy of the First Appraisal (as described below) to all of the
Partners and the giving of such notice in such manner shall constitute a binding
obligation of the Partnership or Philadelphia ARC-Cedar, LLC, as the case may be
("Seller") to sell and a binding obligation of the exercising Option Holder
("Buyer") to purchase. (Hereinafter, the date of such notice is referred to as
the "Exercise Date"). Settlement of any such purchase shall occur and the
purchase price shall be paid for the Property or Partnership Interest being
purchased by good funds at a closing within sixty (60) days after the Appraised
Value is finally determined as provided below. For Philadelphia ARC-Cedar
Manager, LLC to exercise such option, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ must own a majority
interest in the owner of Philadelphia ARC-Cedar Manager, LLC.
b. Right to Override Section 8.4(a) Options. If any Option Holder
wishes to exercise its option pursuant to Section 8.4(a) hereof, such Option
Holder shall give Philadelphia ARC-Cedar, LLC notice thereof prior to giving any
notice under Section 8.4(a) hereof. During the thirty (30) day period beginning
on the date of the giving of such notice ("E Option Period"), Philadelphia
ARC-Cedar, LLC shall have an option to purchase the Property or all of the other
Partners' Partnership Interests at the price and other terms required under this
Section 8.4, and such right shall have priority over any right of an Option
Holder under this Section 8.4. Such option may be exercised by giving the
Partnership and the Option Holder written notice thereof by the end of the E
Option Period. If such option is exercised, settlement of any such purchase
shall occur at a closing within sixty (60) days after the Appraised Value is
determined and as provided below. If such option is not exercised by the end of
the E Option Period, the Option Holder shall be required to exercise its option
described in such Option Holder's notice given under this Section under the
terms of Section 8.4(a) hereof.
c. Fair Market Value. For purposes hereof, the Fair Market Value of
the Property means its Appraised Value and the Fair Market Value of Philadelphia
ARC-Cedar, LLC's Partnership Interest means the amount that Philadelphia
ARC-Cedar, LLC would be entitled to receive under Section 5 hereof if the
Partnership sold the Property for its Appraised Value, satisfied its obligations
and made distributions to the Partners in liquidation of their Partnership
Interests.
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d. Appraised Value. The Appraised Value of the Property means the
value determined in accordance with this Section 8.4(c). The Buyer shall obtain
an appraisal of the Property from a qualified and disinterested MAI appraiser
experienced in valuing similar use real property in Northeast Philadelphia of
the Property's fair market value, which includes a 3.50% reduction for the
imputed costs of sale ("Qualified Appraisal") and deliver a copy thereof to the
Seller on the Exercise Date ("First Appraisal"). If the Seller notifies the
Buyer of its intent in writing within thirty (30) days after the Exercise Date,
the Seller shall have the right to submit a Qualified Appraisal ("Second
Appraisal") to the Buyer within sixty (60) days after the Exercise Date. If the
Seller fails to do so, value contained in the First Appraisal shall be
considered the Property's "Appraised Value" and shall be final and binding on
all parties. If the higher of the two appraisals exceeds the lower by not more
than ten percent (10%), the Appraised Value shall equal the average of the
values contained in the First Appraisal and the Second Appraisal. If the higher
of the two such appraisals exceeds the lower by more than ten percent (10%),
then the two Qualified Appraisers shall have thirty (30) days after the delivery
of the Second Appraisal to agree upon an Appraised Value. If the two Qualified
Appraisers fail to so agree upon an Appraised Value within such thirty (30) day
period, the two Qualified Appraisers shall appoint a third Qualified Appraiser
within fifteen (15) days after the end of such thirty (30) day period. If the
two Qualified Appraisers fail to appoint a third Qualified Appraiser within such
fifteen (15) day period, then the Buyer shall request the American Arbitration
Association to appoint a third Qualified Appraiser. The third Qualified
Appraiser shall determine the Appraised Value (must be between value designated
by other two appraisers) and shall notify the parties of such determination
within thirty (30) days after its appointment; and such determination by the
third Qualified Appraiser shall be final and binding, provided that if the
Appraised Value is more than 110% of the First Appraiser, then Buyer may retract
its exercise notice. The cost of the first Qualified Appraiser shall be borne by
the Buyer; the cost of the second Qualified Appraiser shall be borne by the
Seller and the cost of the third Qualified Appraiser (if any) shall be borne 50%
by the Buyer and 50% by the Seller.
e. Partnership. If the Partnership is the Seller, all elections by
the Partnership under this Section 8.4 shall be made by a Majority in Interest
of the Partners other than any Partner who is the Buyer or an Affiliate of the
Buyer.
f. Closing Costs. Notwithstanding any provision to the contrary
herein, the party that actually purchases the Property pursuant to one of the
options set forth above shall be responsible for all closing costs, transfer
taxes and expenses that typically would be borne by a purchaser consistent with
local practice and the other party shall bear all the costs, transfer taxes and
expenses that typically would be borne by a seller consistent with local
practice.
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8.5 Meetings and Votes of the Partners. Any Partner may at any time
call for a meeting of the Partners, or for a vote without a meeting, on matters
on which the Partners are entitled to vote or which are of significance to the
Partnership's affairs. The General Partner shall give notice of all such
meetings by sending the Partners written notice by certified U.S. Mail, with
return receipt, by Federal Express or other guaranteed overnight delivery
service. Except as otherwise provided in this Agreement, any vote of the
Partners may be taken with or without a meeting if a consent in writing, setting
forth the action so taken, shall be signed by Partners having not less than the
minimum number of votes that would be necessary to authorize or take such
action. If the Partners are requested to consent on a matter without a meeting,
each Partner shall be given not less than then (10), nor more than sixty (60),
days notice. All meetings shall either be telephonic or at the office of the
Partnership.
8.6 Rights of Partners. No Partner shall have the right or power to:
(i) withdraw or reduce its contribution to the capital of the Partnership,
except as a result of the dissolution and termination of the Partnership or as
otherwise provided in this Agreement or by law; (ii) bring an action for
partition against the Partnership; or (iii) demand property other than cash in
return for his capital contribution. Other than upon the termination and
dissolution of the Partnership as provided by this Agreement, there has been no
time agreed upon when the contribution of each Partner is to be returned.
8.7 Restrictions on the Partner. No Partner shall (i) disclose to any
non-Partner (other than its lawyers, accountants or similar agents) or
commercially exploit any of the Partnership's business practices, trade secrets
or any other information not generally known to the business community; or (ii)
do any act or deed with the intention of harming the business operations of the
Partnership.
9. Resignation and Termination.
9.1 Resignation or Withdrawal of General Partner. The General Partner
shall not resign or withdraw as the General Partner or do any act that would
require its resignation or withdrawal except as specifically authorized under
Section 10.1 hereof.
9.2 Removal for Cause. A Majority in Interest of the Limited Partners
shall have the right to remove the General Partner at any time solely "for
Cause." For purposes of this Agreement, removal of the General Partner "for
Cause" shall mean removal due to the (a) gross negligence, fraud or willful
misconduct of the General Partner, (b) material breach of this Agreement by the
General Partner, subject to the General Partner's right to cure within thirty
(30) days of receipt of written notice of such material breach, or (c)
bankruptcy, insolvency or inability generally of the General Partner to meet its
monetary obligations as the same come due. The General Partner shall not
participate in any vote of the Limited Partners to remove the General Partner.
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10. Assignment of Partnership Interests.
10.1 General. A Partner may not sell, assign, hypothecate, encumber or
otherwise transfer any part or all of its Partnership Interest except as
permitted herein. The General Partner may pledge its Partnership Interest. In
addition, Silver Circle may sell, assign, hypothecate, encumber or otherwise
transfer all or any part of its Partnership Interest to the General Partner or
any Affiliate of either of them or the Partnership, free of the requirements of
Section 10.2.
10.2 Right of First Refusal. Subject to the rights of the Lender under
the Mortgage Loan and related documents, a Limited Partner (but not a General
Partner) who wishes to transfer all or any part of its Partnership Interest
("Selling Limited Partner") must first obtain a bona fide written third party
offer to purchase such Partnership Interest and deliver a copy of the offer to
the other Partners. During the thirty (30) day period beginning on the date that
they receive such copy ("F Option Period"), the other Partners shall have an
option to buy the Partnership Interest offered (in proportion to their
Percentage Interests if more than one Partner chooses to buy) on the terms
contained in the third party offer. Such option may be exercised by giving the
Selling Limited Partner written notice thereof by the end of the F Option
Period. If such option is not fully exercised by the end of the F Option Period,
the Selling Limited Partner shall be free for a period of sixty (60) days
thereafter to sell the Partnership Interest to the third party named in the
third party offer provided that the terms of sale are not more favorable to the
third party than those offered to the other Partners and provided the other
requirements of this Section 10 are satisfied. A third party transferee shall be
required to satisfy the requirements of Section 11. to be admitted as a
Substituted Partner. If the Selling Limited Partner's Partnership Interest is
not sold in accordance with the terms of the preceding sentence, the transfer of
such Partnership Interest shall again become subject to all of the restrictions
of this Section 10.2. The Selling Limited Partner shall be solely responsible
for any transfer taxes triggered by any transfer under this Section.
Notwithstanding the foregoing, if Philadelphia ARC - Cedar, LLC elects to
require the Partnership to terminate the Brentway Property Management Agreement,
Silver Circle shall have the right to transfer all of its Partnership Interests
to a third party upon satisfying the requirement of Sections 10.3-10.6 hereof,
subject to the right of Philadelphia ARC - Cedar Manager, LLC to purchase such
Partnership Interest as described above in connection with the F Option Period.
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10.3 Consent.
10.3.1 General Partner Interest. The General Partner may not
sell, assign or otherwise transfer (but may pledge) any part or all of its
Partnership Interest as a General Partner except with the consent of a Majority
in Interest of the Partners, which consent may not be unreasonably withheld but
which may be based on consideration of the experience and net worth of the
transferee and such other traits bearing on its suitability to serve as the
Partnership's general partner and such terms as the other Partners consider
appropriate, except as otherwise provided herein.
10.3.2 Limited Partner Interest. Except as otherwise provided
in Section 10.2, a Limited Partner may not sell, assign, hypothecate, encumber
or otherwise transfer any part or all of its Partnership Interest as a Limited
Partner except with the consent of all of the Partners, which consent may not be
unreasonably withheld.
10.4 Other Conditions. Notwithstanding any of the foregoing, a Partner
may not transfer a Partnership Interest (a) to any person who lacks capacity;
(b) in violation of any federal or state securities law or NASDAQ rules; (c) if
such transfer would cause the Partnership to be taxed as a Publicly Traded
Partnership, or to have tax-exempt use property; (d) if such transfer would
cause the Partnership to terminate for federal income tax purposes, except that
the transfers described in the recitals of this Agreement and any subsequent
transfer wherein the purchaser is Philadelphia ARC - Cedar, LLC are approved by
all of the Partners notwithstanding that they cause such a termination; (e) if
such transfer would cause Cedar Income Fund, Ltd. to lose its REIT status; (f)
if such transfer would violate the terms of any Mortgage Loan or other borrowing
properly approved by the Partners hereunder; (g) without a legal opinion
satisfactory to the Partnership's counsel in form and substance that the
foregoing requirements of this Section have been satisfied and that the transfer
is effective for all purposes under all applicable law; and (h) unless such
transfer is evidenced by a written agreement in form satisfactory to the
Partnership.
10.5 Fees. All costs of the transfer of a Partnership Interest shall be
borne by the transferor and the transferee, subject to any express allocations
to the contrary contained herein. Such costs shall include, without limitation,
legal and accounting fees to enable the Partnership to assure compliance with
the requirements of such transfer and transfer taxes, if triggered.
10.6 Transfer in Violation. Any pledge, hypothecation, assignment,
sale, exchange or other transfer of a Partnership Interest in contravention of
the provisions of this Section 10 shall be void and ineffective and shall not
bind or be recognized by the Partnership.
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11. Substituted Partners.
11.1 Consent of Partners. Except as otherwise expressly provided
herein, the consent of all of the other Partners shall be required to admit the
transferee of a Partnership Interest as a Substituted Partner. Such consent may
not be unreasonably withheld but may be based on consideration of the
transferee's experience and net worth and on the likelihood that a transferee
will observe the covenants contained herein.
11.2 Conditions to be Satisfied. Subject to Section 11.1 hereof, the
transferee of a Partnership Interest may be admitted as a Substituted Partner
only if (a) it receives a written assignment agreement which sets forth the
agreement of the assignor that the assignee succeed to the assignor's place as a
Substituted Partner; (b) the transferee has executed such other documents as the
Partnership's counsel considers desirable to evidence his agreement to be bound
by the terms of this Agreement; and (c) the transferee has paid the Partnership
such amount as is necessary to cover all reasonable expenses connected with such
substitution and all other conditions are satisfied.
11.3 Rights of Unadmitted Transferee. The transferee of a Partnership
Interest who is not admitted to the Partnership as a Substituted Partner shall
be entitled to receive allocations and distributions from the Partnership
attributable to the assigned Partnership Interest but shall have no right to
inspect the Partnership's books or records, to vote on Partnership matters, or
to exercise any other right or privilege as a Partner, until admitted to the
Partnership as Substituted Partner. This Section does not apply to any
transferee under a transfer that is in violation of this Agreement, which shall
be subject to Section 10.6 hereof and shall be void and ineffective.
12. Books, Records, Accounting and Reports.
12.1 Records, Audits and Reports. The Partnership shall maintain at its
principal office the Partnership's records and accounts of all operations and
expenditures of the Partnership including (a) a list of the name and address of
each Partner and its share in profits and losses; (b) a copy of the Certificate
of Limited Partnership; (c) copies of the Partnership's Federal, state, and
local income tax or information returns and reports, if any, for the three most
recent taxable years; (d) copies of this Agreement; (e) copies of any financial
statements of the Partnership, if any, for the three most recent years; and (f)
the Partnership's books and records as they relate to the internal affairs of
the Partnership for at least the current and past three fiscal years.
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12.2 Delivery to Partners and Inspection. Each Partner has the right,
upon reasonable written request for purposes related to the interest of that
person as a Partner, to receive from the Partnership (a) true and full
information regarding the status of the business and financial condition of the
Partnership; (b) promptly after becoming available, a copy of the Partnership's
federal, state and local income tax returns for each year; (c) a current list of
the name and address of each Partner; (c) a copy of this Agreement and the
Certificate of Limited Partnership; (d) a statement of each Partner's
contributions and distributions and the balance of its Capital Account; and (e)
all of the information listed in Section 12.1 hereof and all other information
that a Partner is entitled to obtain under the Act and other applicable law.
12.3 Annual Report and Notices.
a. Unaudited Statements. The General Partner will cause the
Partnership, at the Partnership's expense, to prepare an unaudited annual report
containing a year end balance sheet, income statement and a statement of changes
in financial position. Copies of such statements shall be distributed to each
Partner within one hundred twenty (120) days after the close of each fiscal year
of the Partnership.
b. Audited Statements. Upon the request of a Majority in Interest
of the Partners, the General Partner will use its good faith efforts to obtain
audited financial statements for the Property's operation for the year in which
such request is made and all subsequent years. Such audited financial statements
shall be at the Partnership's sole cost and expense.
12.4 Tax Information. The General Partner shall use its best efforts to
cause the Partnership, at the Partnership's expense, to prepare and timely file
income tax returns for the Partnership with the appropriate authorities, and
shall use its best efforts to cause all Partnership information necessary in the
preparation of the Partners' individual income tax returns to be distributed to
the Partners not later than April 15 after the end of the Partnership's fiscal
year.
12.5 Third Party Notices. The General Partner shall promptly give the
other Partners prompt notice of any significant event affecting the Partnership
and the Property which the General Partner has notice of, including without
limitation, notice of the Partnership's or another party's material default or
noncompliance under any material contract, agreement, instrument, law or
ordinance affecting the Partnership or the Property.
13. Termination and Dissolution of the Partnership.
13.1 Termination of Partnership. The Partnership shall dissolve and its
assets shall be disposed of, and its affairs wound up upon the earliest to occur
of the following ("Liquidation Events"):
a. The agreement of a Majority in Interest of the Partners to
terminate the Partnership;
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b. The sale of the Property or, if later, the receipt of final
payment on any seller financing provided by the Partnership on such sale;
c. The occurrence of a Withdrawal Event with regard to the General
Partner unless the business of the Partnership is continued by the unanimous
consent of the Limited Partners within ninety (90) days following the occurrence
of the event and there are at least two remaining Limited Partners; and
d. Upon the happening of any event of dissolution specified in the
Amended and Restated Certificate of Limited Partnership.
13.2 Certificate of Cancellation. As soon as possible following the
occurrence of a Liquidating Event, the General Partner who has not wrongfully
dissolved the Partnership or, if none, the Limited Partners, shall execute and
file a Certificate of Cancellation as is required by the Act.
13.3 Liquidation of Assets. Upon the occurrence of a Liquidating Event,
the General Partner (or in case there is no General Partner, the person
designated by a Majority in Interest of the Limited Partners) shall take full
account of the Partnership assets and liabilities, shall liquidate the assets as
promptly as is consistent with obtaining the fair market value thereof, and
shall apply and distribute the proceeds therefrom in the following order:
a. To the payment of creditors of the Partnership;
b. To the setting up of any reserves as required by law for any
contingent liabilities or obligations of the Partnership; provided, however,
that said reserves shall be deposited with a bank or trust company in escrow at
interest for the purpose of disbursing such reserves for the payment of any of
the aforementioned contingencies and, at the expiration of a reasonable period,
for the purpose of distributing the balance remaining in accordance with
remaining provisions of this Section 13.3; and
c. To the Partners in accordance with Section 5.1 hereof.
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14. Amendment of Agreement.
14.1 Amendments Without Consent of the Limited Partners. The General
Partner may amend this Agreement, without the consent of any of the Partners, to
(i) change the name and/or principal place of business of the Partnership, or
(ii) admit any Substitute Partner in accordance with the provisions of this
Agreement, (iii) to cure any ambiguity or mistake, to correct or supplement any
provision herein that may be inconsistent with any other provision herein, or to
make any other provision with respect to matters or questions arising under this
Agreement that will not be inconsistent with the provisions of this Agreement;
(iv) to delete or add any provision of this Agreement required to be so deleted
or added for the benefit of the Limited Partners by the staff of a state "Blue
Sky" Commissioner or similar official, provided such revision does not change
the financial arrangements among the parties or increase the liability of any
other Partner; and (v) as reasonably required by Mortgagee.
14.2 Other Amendments. Except for amendments otherwise authorized
herein, this Agreement may be amended only in a writing executed by all the
Partners.
15. Salomon Mortgage Loan Provisions. On or about February 7, 2000 the
Partnership entered into the Salomon Brothers Mortgage Loan Agreement in
connection with the Salomon Brothers Loan in the maximum principal amount of
$17,000,000 from Solomon Brothers Realty Corp. ("Lender").
15.1 Effective. During the time that the Salomon Brothers Mortgage Loan
remains outstanding, the provision of this Section 15 shall remain effective and
shall take precedence over every other provision of this Agreement.
15.2 Purpose. The Partnership's business and purpose shall consist
solely of the acquisition, ownership, operation and management of the Property
which consists of the real estate project known as Red Lion Shopping Center,
located in Philadelphia, Pennsylvania and such activities as are necessary,
incidental or appropriate in connection therewith.
15.3 Powers and Duties.
a. Notwithstanding any other provision of this Agreement and
so long as any obligation secured by that certain Mortgage dated February 8,
2000, in favor of Salomon Brother Realty Corp. as lender (the "Mortgage")
remains outstanding and not discharged in full, without the prior written
consent of the holder of the Mortgage, the General Partner and the Partnership
shall have no authority to:
(i) borrow money or incur indebtedness on behalf of the
Partnership other than normal trade accounts payable and lease obligations in
the ordinary course of business, or grant consensual liens on the Partnership's
property; except, however, that the General Partner is hereby authorized to
secure financing for the Partnership pursuant to the terms of the Salomon
Brothers Mortgage and other indebtedness expressly permitted therein or in the
documents related to the Salomon Brothers Mortgage, and to grant a mortgage,
lien or liens on the Partnership's Property to secure the Salomon Brothers
Mortgage loan;
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(ii) dissolve or liquidate the Partnership;
(iii) sell or lease, or otherwise dispose of all or
substantially all of the assets of the Partnership; or
(iv) merge or consolidate with any other entity.
b. So long as any obligations secured by the Salomon Brothers
Mortgage remain outstanding and not discharged in full, the General Partner and
the Partnership shall have no authority, unless such action has been approved by
the unanimous vote of the General Partner's board of directors (including the
Independent Directors thereof) or managers and the unanimous vote of all other
Partners, to file a voluntary petition or otherwise initiate proceedings to have
the Partnership adjudicated bankrupt or insolvent, or consent to the institution
of bankruptcy or insolvency proceedings against the Partnership, or file a
petition seeking or consenting to reorganization or relief of the Partnership as
debtor under any applicable federal or state law relating to bankruptcy,
insolvency, or other relief for debtors with respect to the Partnership; or seek
or consent to the appointment of any trustee, receiver, conservator, assignee,
sequestrator, custodian, liquidator (or other similar official) of the
Partnership or of all or any substantial part of the properties and assets of
the Partnership, or make any general assignment for the benefit of creditors of
the partnership, or admit in writing the inability of the Partnership to pay its
debts generally as they become due or declare or effect a moratorium on the
Partnership debt or take any action in furtherance of any action.
c. So long as any obligation secured by the Salomon Brothers
Mortgage remains outstanding and not discharged in full, the Partnership shall
have a corporate (or limited liability company) general partner having articles
of incorporation (or an operating agreement, if a limited liability company)
containing the restrictions and terms substantially as set forth in Articles
THIRD, THIRTEENTH and FOURTEENTH of the Silver Circle's Articles of
Incorporation as of the date hereof, and the Partnership shall have no other
general partners.
15.4 Title to Partnership Property. All property owned by the
Partnership shall be owned by the Partnership as an entity and, insofar as
permitted by applicable law, no Partner shall have any ownership interest in any
Partnership property in its individual name or right, and each Partner's
Partnership Interest shall be personal property for all purposes.
15.5 Separateness/Operations Matters. The Partnership shall conduct its
business and operations in accordance with the following provisions:
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a. maintain books and records and bank accounts separate from
those of any other person;
b. maintain its assets in such a manner that it is not costly
or difficult to segregate, identify or ascertain such assets;
c. hold regular Partnership meetings, as appropriate, to
conduct the business of the Partnership, and observe all other Partnership
formalities;
d. hold itself out to creditors and the public as a legal
entity separate and distinct from any other entity;
e. prepare separate tax returns and financial statements, or
if part of a consolidated group, then it will be shown as a separate member of
such group;
f. allocate and charge fairly and reasonably any common
employee or overhead shared with affiliates;
g. transact all business with affiliates on an arm's-length
basis and pursuant to enforceable agreements;
h. conduct business in its own name, and use separate
stationery, invoices and checks;
i. not commingle its assets or funds with those of any other
person;
j. not assume, guarantee or pay the debts or obligations of
any other person;
k. correct any known misunderstanding as to its separate
identity;
l. not permit any affiliate to guarantee or pay its
obligations (other than limited guarantees set forth in the Mortgage or related
documents); and
m. not make loans or advances to any other person.
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15.6 Effect of Bankruptcy, Death or Incompentency of a Limited Partner.
The bankruptcy, death, dissolution, liquidation, termination or adjudication of
incompetency of a Limited Partner shall not cause the termination or dissolution
of the Partnership and the business of the Partnership shall continue. Upon any
such occurrence, the trustee, receiver, executor, administrator, committee,
guardian or conservator of such Limited Partner shall have all the rights of
such Limited Partner for the purpose of settling or managing its estate or
property, subject to satisfying conditions precedent to the admission of such
assignee as a substitute Limited Partner. The transfer by such trustee,
receiver, executor, administrator, committee, guardian or conservator of any
Partnership Interest shall be subject to all of the restrictions, hereunder to
which such transfer would have been subject if such transfer had been made by
such bankrupt, deceased, dissolved, liquidated, terminated or incompetent
Limited Partner.
16. Miscellaneous.
16.1 Counterparts. This Agreement may be executed in several
counterparts, and all so executed shall constitute one Agreement, binding on all
of the parties hereto, notwithstanding that all of the parties are not signatory
to the original or the same counterpart.
16.2 Successors and Assigns. The terms and provisions of this Agreement
shall be binding upon and shall inure to the benefit of the successors and
assigns of the respective Limited Partners.
16.3 Severability. In the event any sentence or Section of this
Agreement is declared by a court of competent jurisdiction to be void, such
sentence or Section shall be deemed severed from the remainder of this Agreement
and the balance of this Agreement shall remain in full force and effect.
16.4 Notices. All notices under this Agreement shall be in writing and
shall be given to the Partners by personal service or by mail, posted to the
address maintained by the Partnership for such person or at such other address
as he may specify in writing.
16.5 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York, where this Agreement is
deemed to be made and entered into.
16.6 Captions. Section titles or captions contained in this Agreement
are inserted only as a matter of convenience and reference. Such titles and
captions in no way define, limit, extend or describe the scope of this Agreement
nor the intent of any provisions hereof.
16.7 Gender. Whenever required by the context hereof, the singular
shall include the plural, and vice versa, the masculine gender shall include the
feminine and neuter genders, and vice versa.
16.8 Time. Time is of the essence with respect to this Agreement.
27
16.9 Descriptions. All descriptions referred to in this Agreement are
expressly incorporated herein by reference as if set forth in full, whether or
not attached hereto.
16.10 Binding Arbitration. Any controversy arising out of or related to
this Agreement or the breach thereof shall be settled by arbitration in New York
City, New York in accordance with the rules of The American Arbitration
Association, and judgment entered upon the award rendered may be enforced by
appropriate judicial action. The arbitration panel shall consist of one person
agreed to by all of the parties to the dispute within thirty (30) days following
notice by one party that he desires that a matter be arbitrated. If the parties
are unable within such thirty (30) day period to agree upon an arbitrator, then
the panel shall consists of one arbitrator selected by the New York City office
of The American Arbitration Association, which arbitrator shall be experienced
in the area of real estate and limited partnerships and shall be knowledgeable
with respect to the subject matter of the dispute. The party or parties who
substantially prevail in such proceeding, as determined by the arbitrator, shall
be reimbursed by the other parties for any fees and expenses of the arbitrator,
other tribunal fees and expenses, reasonable attorney's fees, any costs of
producing witnesses and any other reasonable costs or expenses incurred by the
prevailing party. The arbitration panel shall render a decision within thirty
(30) days following the close of presentation by the parties of their cases and
any rebuttal. The parties shall agree within thirty (30) days following
selection of the arbitrator to any prehearing procedures or further procedures
necessary for the arbitration to proceed, including interrogatories or other
discovery.
16.11 Integrated and Binding Agreement. This Agreement contains the
entire understanding and agreement among the Partners with respect to the
subject matter hereof, and there are no other agreements, understandings,
representations or warranties among the Partners other than those set forth
herein except as set forth in (a) that certain Purchase and Sale Agreement dated
as of February 6, 2002 between Silver Circle and ▇▇▇ ▇. ▇▇▇▇▇▇ (collectively as
Seller) and Philadelphia ARC-Cedar, LLC (as Buyer) and (b) that certain Purchase
and Sale Agreement between Silver Circle and Cedar-RL, LLC dated as of February
6, 2002.
28
In witness whereof, the undersigned have set their hands to this
Agreement as of the date first set forth in the preamble.
GENERAL PARTNER:
Cedar - RL, LLC
a Delaware limited liability company
By: Cedar Income Fund Partnership,
L.P. Sole Member
By: Cedar Income Fund, Ltd.
General Partner
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------
▇▇▇ ▇. ▇▇▇▇▇▇
President
LIMITED PARTNERS:
Silver Circle Management Corp.,
a Delaware corporation,
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
▇▇▇ ▇. ▇▇▇▇▇▇, President
Philadelphia ARC-Cedar, LLC, a
Virginia limited liability company
By Philadelphia ARC-Cedar Manager,
LLC, a Virginia limited liability
company, as Manager
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
29
Philadelphia ARC-Cedar Manager, LLC executes the Agreement solely for
the purpose of Section 8.4 hereof.
Philadelphia ARC-Cedar Manager, LLC
a Virginia limited liability company
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
30
EXHIBIT A
DEFINITIONS
"Act" means the Revised New York Uniform Limited Partnership Act, as
the same may be amended from time to time.
"Adjusted Capital Account Deficit" means, with respect to any Limited
Partner, the deficit balance, if any, in such Limited Partner's Capital Account
as of the end of the relevant fiscal year, after giving effect to the following
adjustments:
(i) Credit to such Capital Account any amounts which the
Limited Partner is obligated to restore and the Limited Partner's share of
Limited Partner Minimum Gain and Partnership Minimum Gain and;
(ii) Debit to such Capital Account the items described in
Regulations Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), and
1.704-1(b)(2)(ii)(d)(6).
"Affiliate" shall mean (i) any person directly or indirectly
controlling, controlled by or under common control with another person; (ii) a
person owning or controlling 10% or more of the outstanding voting securities of
such other person; (iii) any officer, director or partner of such other person;
and (iv) if such other person is an officer, director or partner, any company
for which such person acts in any capacity. The term "person" shall include any
natural person, corporation, partnership, trust, unincorporated association or
other legal entity.
"Agreement" shall mean this Limited Partnership Agreement, as amended
from time to time.
"Certificate of Limited Partnership" means the Certificate of Limited
Partnership of the Partnership as filed with the Secretary of State of the State
of New York as the same may be amended or restated from time to time.
"Book Gain" means the excess, if any, of the fair market value of the
Property over its adjusted basis for federal income tax purposes at the time a
valuation of the Property is required under this Agreement or Regulations
Section 1.704-1(b) for purposes of making adjustments to the Capital Accounts.
"Book Loss" means the excess, if any, of the adjusted basis of Property
for federal income tax purposes over its fair market value at the time a
valuation of the Property is required under this Agreement or Regulations
Section 1.704-1(b) for purposes of making adjustments to the Capital Accounts.
A-1
"Book Value" means the adjusted basis of Property for federal income
tax purposes increased or decreased by Book Gain, Book Loss, Built-In Gain and
Built-In Loss as reduced by depreciation, amortization or other cost recovery
deductions, or otherwise, based on such Book Value.
"Brentway Property Management Agreement means that agreement dated
January 1, 1995, between the Partnership and SKR Management Corp. and assigned
to Brentway Management, LLC January 1, 1996, as property manager, with respect
to the management and operation of the Property, a true copy of which is
attached as Exhibit C and incorporated herein by reference.
"Built-In Gain (or Loss)" means the amount, if any, by which the agreed
value of contributed Property exceeds (or is lesser than) the adjusted basis of
Property contributed to the Partnership by a Partner immediately after its
contribution by the Partner to the capital of the Partnership.
"Capital Account" with respect to any Partner (or such Limited
Partner's assignee) means such Partner's initial capital contribution adjusted
as follows:
(i) A Partner's Capital Account shall be increased by:
(a) such Partner's share of Net Income;
(b) any income or gain specially allocated to a
Partner and not included in Net Income or Net Loss;
(c) any additional cash capital contribution
made by such Partner to the Partnership; and
(d) the fair market value of any additional
capital contribution consisting of property contributed by such Partner to the
capital of the Partnership reduced by any liabilities assumed by the Partnership
in connection with such contribution or to which the property is subject.
(ii) A Partner's Capital Account shall be reduced by:
(a) such Partner's share of Net Loss;
(b) any deduction specially allocated to a
Partner and not included in Net Income or Net Loss;
(c) any cash distribution made to such Partner;
and
A-2
(d) the fair market value, as agreed to by a
Supermajority in Interest of the Partners of any property (reduced by any
liabilities assumed by the Partner in connection with the distribution or to
which the distributed property is subject) distributed to such Partner; provided
that, upon liquidation and winding up of the Partnership, unsold property will
be valued for distribution at its fair market value and the Capital Account of
each Limited Partner before such distribution shall be adjusted to reflect the
allocation of gain or loss that would have been realized had the Partnership
then sold the Property for its fair market value. Such fair market value shall
not be less than the amount of any nonrecourse indebtedness that is secured by
the property.
Property of the Partnership may not be revalued for purposes of
calculating Capital Accounts unless a Supermajority in Interest of the Partners
agree on the fair market value of the Property and Partnership complies with the
requirements of Regulations Section 1.704-1(b)(2)(iv)(f) and (g); provided,
however, for purposes of calculating Book Gain or Book Loss (but not for
purposes of adjusting Capital Accounts to reflect the contribution and
distribution of such Property), the fair market value of Property shall be
deemed to be no less than the outstanding balance of any nonrecourse
indebtedness secured by such Property.
The Capital Account of a Substituted Partner shall include the Capital
Account of his transferor. Notwithstanding anything to the contrary in this
Agreement, the Capital Accounts shall be maintained in accordance with
Regulations Section 1.704-1(b). References in this Agreement to the Regulations
shall include corresponding subsequent provisions.
"Cash Available for Distribution" means the net cash realized by the
Partnership from the operation of the Property and any capital transaction with
respect to the Property after payment of Partnership expenses, debt service
obligations and such other items as are set forth in Section 5.2 hereof.
"Code" means the Internal Revenue Code of 1986, as amended, or
corresponding provisions of subsequently enacted federal revenue laws.
"Event of Insolvency" shall occur when an order for relief against the
General Partner is entered under Chapter 7 of the federal bankruptcy law, or (i)
the General Partner: (a) makes a general assignment for the benefit of
creditors, (b) files a voluntary petition under the federal bankruptcy law, (c)
files a petition or answer seeking for that General Partner a reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief under any statute, law or regulation, (d) files an answer or other
pleading admitting or failing to contest the material allegations of a petition
filed against the General Partner in any proceeding of this nature, or (e)
seeks, consents to, or acquiesces in the appointment of a trustee, receiver, or
liquidator of that General Partner or of all or a substantial part of that
General Partner's properties, or (f) the expiration of 90 days after either (i)
the commencement of any proceeding against the General Partner seeking
reorganization, arrangement, composition, readjustment, liquidation, dissolution
or similar relief under any statute, law, or regulation, if the proceeding has
not been dismissed, or (ii) the appointment without the General Partner's
consent or acquiescence of a trustee, receiver, or liquidator of the General
Partner or of all or any substantial part of the General Partner's properties,
if the appointment has not been vacated or stayed (or if within 90 days after
the expiration of any such stay, the appointment is not vacated).
A-3
"General Partner" means the general partner of the Partnership. The
General Partner currently is Cedar - RL, LLC, a Delaware limited liability
company.
"Limited Partners" means the limited partners of the Partnership. The
Limited Partners currently are Silver Circle Management Corp., a Delaware
corporation, and Philadelphia ARC-Cedar, LLC, a Virginia limited liability
company
"Liquidation Event" has the meaning stated in Section 13.1 hereof.
"Majority in Interest" of the Partners or of a class of Partners means
Partners holding at least fifty percent (50%) of the Percentage Interests owned
by all Partners or by such class of Partners.
"Mortgage Loan" means (a) the Salomon Brothers Mortgage Loan and (b)
any other Partnership loan that is secured by a mortgage or a deed of trust on
Partnership real property and was approved by the Partners as required herein.
"Net Income" or "Net Loss" means, respectively, for each taxable year
of the Partnership the taxable income and taxable loss (exclusive of Built-In
Gain or Loss) of the Partnership as determined for federal income tax purposes
in accordance with Section 703(a) or the Code (including all items of income,
gain, loss, or deduction required to be separately stated pursuant to Section
703(a)(1) of the Code) (other than any specific item of income, gain (exclusive
of Built-In Gain), loss (exclusive of Built-In Loss), deduction or credit
subject to special allocation under this Agreement), with the following
modifications:
(i) The amount determined above shall be increased by any
income exempt from federal income tax;
(ii) The amount determined above shall be reduced by any
expenditures described in Section 705(a)(2)(B) of the Code or expenditures
treated as such pursuant to Regulations Section 1.704-1(b)(2)(iv)(i);
A-4
(iii) Depreciation, amortization and other cost recovery
deductions shall be computed based on Book Value instead of on the amount
determined in computing taxable income or loss. Any item of deduction,
amortization or cost recovery specially allocated to a Limited Partner and not
included in Net Income or Net Loss shall be determined for Capital Account
purposes in a similar manner; and
(iv) For purposes of this Agreement, Book Gain and Book Loss
attributable to a revaluation of Property attributable to unrealized gain or
loss in such Property shall be treated as Net Income and Net Loss.
"Nonrecourse Debt" has the meaning set forth in Regulations Section
1.704-2(b)(3).
"Nonrecourse Deductions" has the meaning, and the amount thereof shall
be, as set forth in Regulations Section 1.704-2(c).
"Partner Minimum Gain" means "partner nonrecourse debt minimum gain" as
determined under Regulations Section 1.704-2(i)(3).
"Partner Nonrecourse Debt" means "partner nonrecourse debt" as set
forth in Regulations Section 1.704-2(b)(4).
"Partner Nonrecourse Deductions" means of "partner nonrecourse
deductions," and the amount thereof shall be, as set forth in Regulations
Section 1.704-2(i).
"Partners" means the General Partner and the Limited Partners.
"Partnership" means API Red Lion Shopping Center Associates, L.P., a
New York Limited Partnership.
"Partnership Interest" means a Partner's interest in the Partnership
and all of the rights and obligations attributable thereto as determined under
this Agreement and applicable law.
"Percentage Interest" of the Partners means (a) CEDAR - RL, LLC, -
twenty percent (20.00%); (b) Philadelphia ARC-Cedar, LLC - - sixty nine percent
(69%), and (c) Silver Circle Management Corp - eleven percent (11%).
"Philadelphia Taxes" has the meaning set forth in Section 3.2 hereof.
"Prime Rate" means the reference rate announced from time-to-time by
the Wall Street Journal, and changes in the Prime Rate shall be deemed to occur
on the date that changes in such rate are announced.
A-5
"Property" means the improved real property known as the Red Lion Plaza
Shopping Center in Philadelphia, Pennsylvania.
"Property Management Agreement" means (a) the Brentway Property
Management Agreement and any other agreement with the Partnership providing for
management of the Property that is approved by the Limited Partners in
accordance with Section 8.3(d) hereof.
"Property Manager" means Brentway Management, LLC, a New York limited
liability company, and an Affiliate of the General Partner or such other person
who serves as such under the Property Management Agreement.
"Regulations" means the Treasury Regulations promulgated under the
Code.
"Salomon Brothers Mortgage Loan" means that loan which is evidenced by
a promissory note dated February 7, 2000 from the Partnership to Salomon
Brothers Realty Corp. having an original principal amount of approximately
$17,000,000 and a balance as of December 31, 2001 of approximately
$16,822,137.00, a copy of which is attached and incorporated as Exhibit D.
"Silver Circle" means Silver Circle Management Corp., a Delaware
corporation.
"Substituted Limited Partner" means any person admitted as a
substituted Limited Partner pursuant to this Agreement.
"Tax Payment" has the meaning set forth in Section 4.11.
"Withdrawal Event" means with respect to the General Partner one or
more of the following: the death, insanity, withdrawal, retirement, resignation,
expulsion, Event of Insolvency, dissolution and termination or occurrence of any
other event which terminates the continued ownership of a Partnership Interest
by the General Partner.
[BALANCE OF PAGE LEFT INTENTIONALLY BLANK]
A-6
EXHIBIT B
PARTNERS' CAPITAL ACCOUNTS
Tax Book
Capital Account Capital Account
--------------- ---------------
Cedar-RL, LLC
Silver Circle Management Corp.
Philadelphia ARC-Cedar, LLC $4,081,000.00 $4,081,000.00
B-1
EXHIBIT C
BRENTWAY PROPERTY MANAGEMENT AGREEMENT
Already incorporated as Exhibit 10.1 hereto.
C-1
EXHIBIT D
SALOMON BROTHERS NOTE
D-1
EXHIBIT E
PROJECT OPERATING STATEMENTS
E-1
TABLE OF CONTENTS
Page
----
1. Definitions...............................................................................................2
-----------
2. Organization..............................................................................................2
------------
2.1 Formation...............................................................................................2
---------
2.2 Name and Place of Business..............................................................................2
--------------------------
2.3 Business and Purpose of the Partnership.................................................................2
---------------------------------------
2.4 Term....................................................................................................2
----
2.5 Registered Office and Registered Agent..................................................................2
--------------------------------------
2.6 Competition.............................................................................................2
-----------
3. Capitalization and Financing..............................................................................3
----------------------------
3.1 Capital Contribution....................................................................................3
--------------------
3.2 General Partner Additional Contributions................................................................3
----------------------------------------
3.3 Liabilities of Partners.................................................................................3
-----------------------
3.4 General Partner Loans...................................................................................3
---------------------
3.5 Third Party Beneficiaries...............................................................................3
-------------------------
3.6 Section 754 Election....................................................................................3
--------------------
3.7 Use of Reserves.........................................................................................4
---------------
4. Allocations...............................................................................................4
-----------
4.1 Generally...............................................................................................4
---------
4.2 Special Allocations.....................................................................................4
-------------------
4.3 Curative Allocations....................................................................................6
--------------------
4.4 Contributed Property....................................................................................6
--------------------
4.5 Recapture Income........................................................................................6
----------------
4.6 Assignment..............................................................................................6
----------
4.7 Withholding Obligations.................................................................................6
-----------------------
5. Distributions.............................................................................................7
-------------
5.1 Cash Available for Distribution.........................................................................7
-------------------------------
5.2 Restrictions............................................................................................7
------------
5.3 Reimbursement of Advances...............................................................................7
-------------------------
6.1 Compensation............................................................................................7
------------
6.2 Partnership Expenses....................................................................................7
--------------------
6.3 Policies with Respect to Conflicts of Interest..........................................................7
----------------------------------------------
6.4 Termination of Brentway Property Management Agreement...................................................8
-----------------------------------------------------
7.1 Number and Tenure.......................................................................................8
-----------------
7.2 Management..............................................................................................8
----------
7.3 Restrictions on General Partner's Authority............................................................10
-------------------------------------------
7.4 Responsibilities of the General Partner................................................................11
---------------------------------------
7.5 Tax Matters Partner....................................................................................11
-------------------
7.6 Indemnification of General Partner.....................................................................11
----------------------------------
7.7 Authority as to Third Persons..........................................................................12
-----------------------------
8.1 Not Agents.............................................................................................12
----------
8.2 Voting by Limited Partners.............................................................................12
--------------------------
8.3 Philadelphia ARC-Cedar, LLC............................................................................13
---------------------------
(i)
8.4 Cedar - RL, LLC and Others' Option to Purchase.........................................................16
----------------------------------------------
8.5 Meetings and Votes of the Partners.....................................................................18
----------------------------------
8.6 Rights of Partners.....................................................................................18
------------------
8.7 Restrictions on the Partner............................................................................18
---------------------------
9. Resignation and Termination..............................................................................18
---------------------------
9.1 Resignation or Withdrawal of General Partner...........................................................18
--------------------------------------------
9.2 Removal for Cause......................................................................................18
-----------------
10. Assignment of Partnership Interests......................................................................19
-----------------------------------
10.1 General.............................................................................................19
-------
10.2 Right of First Refusal..............................................................................19
----------------------
10.3 Consent.............................................................................................20
-------
10.4 Other Conditions....................................................................................20
----------------
10.5 Fees................................................................................................20
----
10.6 Transfer in Violation...............................................................................20
---------------------
11. Substituted Partners.....................................................................................21
--------------------
11.1 Consent of Partners.................................................................................21
-------------------
11.2 Conditions to be Satisfied..........................................................................21
--------------------------
11.3 Rights of Unadmitted Transferee.....................................................................21
-------------------------------
12. Books, Records, Accounting and Reports...................................................................21
--------------------------------------
12.1 Records, Audits and Reports.........................................................................21
---------------------------
12.2 Delivery to Partners and Inspection.................................................................22
-----------------------------------
12.3 Annual Report and Notices...........................................................................22
-------------------------
12.4 Tax Information.....................................................................................22
---------------
12.5 Third Party Notices.................................................................................22
-------------------
13. Termination and Dissolution of the Partnership...........................................................23
----------------------------------------------
13.1 Termination of Partnership..........................................................................23
--------------------------
13.2 Certificate of Cancellation.........................................................................23
---------------------------
13.3 Liquidation of Assets...............................................................................23
---------------------
14. Amendment of Agreement...................................................................................24
----------------------
14.1 Amendments Without Consent of the Limited Partners..................................................24
--------------------------------------------------
14.2 Other Amendments....................................................................................24
----------------
15. Salomon Mortgage Loan Provisions.........................................................................24
--------------------------------
15.1 Effective...........................................................................................24
---------
15.2 Purpose.............................................................................................24
-------
15.3 Powers and Duties...................................................................................24
-----------------
15.4 Title to Partnership Property.......................................................................25
-----------------------------
15.5 Separateness/Operations Matters.....................................................................26
-------------------------------
15.6 Effect of Bankruptcy, Death or Incompentency of a Limited Partner...................................27
-----------------------------------------------------------------
16. Miscellaneous............................................................................................27
-------------
16.1 Counterparts........................................................................................27
------------
16.2 Successors and Assigns..............................................................................27
----------------------
16.3 Severability........................................................................................27
------------
16.4 Notices.............................................................................................27
-------
16.5 Governing Law.......................................................................................27
-------------
16.6 Captions............................................................................................27
--------
16.7 Gender..............................................................................................28
------
(ii)
16.8 Time................................................................................................28
----
16.9 Descriptions........................................................................................28
------------
16.10 Binding Arbitration...............................................................................28
-------------------
16.11 Integrated and Binding Agreement..................................................................28
--------------------------------
EXHIBIT A - Definitions...........................................................................................1
EXHIBIT B - Capital Accounts......................................................................................1
EXHIBIT C - Brentway Property Management Agreement................................................................1
EXHIBIT D - Salomon Brothers Note.................................................................................1
EXHIBIT E - Project Operating Statements..........................................................................1
(iii)
AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT
OF
API RED LION SHOPPING CENTER ASSOCIATES, L.P., A NEW YORK
LIMITED PARTNERSHIP
THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPROVED OR DISAPPROVED BY THE UNITED
STATES SECURITIES AND EXCHANGE COMMISSION OR BY THE SECURITIES REGULATORY
AUTHORITY OF ANY STATE, NOR HAS ANY COMMISSION OR AUTHORITY PASSED UPON OR
ENDORSED THE MERITS OF THIS OFFERING OR THE ACCURACY OR ADEQUACY OF ANY
DISCLOSURE MADE IN CONNECTION THEREWITH. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE. THE SECURITIES OFFERED HEREBY MAY NOT BE RESOLD WITHOUT
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE STATE
SECURITIES LAWS OR EXEMPTION THEREFROM.